Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions concerning a proposal for a programme in support of the audiovisual industry (MEDIA Plus - 2001-2005)
Date: 1999-12-14
Institutions: European Commission
Subjects: EU aid, EU programme, audiovisual industry, audiovisual programme, vocational training

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 14.12.1999
COM(1999) 658 final

1999/0275 (COD)
1999/0276 (CNS)

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE
EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND
THE COMMITTEE OF THE REGIONS

concerning a proposal for a programme in support of the audiovisual industry
(MEDIA Plus – 2001-2005)

Proposal for a

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the implementation of a training programme for professionals in the European
audiovisual programme industry
(MEDIA - Training) (2001-2005)

Proposal for a

COUNCIL DECISION

on the implementation of a programme to encourage the development, distribution and
promotion of European audiovisual works
(MEDIA Plus - Development, Distribution and Promotion) (2001-2005)

(presented by the Commission)

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE
EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND
THE COMMITTEE OF THE REGIONS

concerning a proposal for a programme in support of the audiovisual industry
(MEDIA Plus – 2001-2005)

1.

Introduction

The development of digital technologies amounts to a revolution which will lead not only to a
radical change in the economics of the audiovisual sector, but also to new methods of creation
involving new players and new contents and services.

Against this background of the proliferation of methods of distribution, all those involved are
agreed that the production of content, and in particular audiovisual content, will be a major
value-added sector in the 21st century capable of strengthening economic growth and cultural
diversity in the European Union1.

For producers and distributors, the advent of the digital age offers new opportunities with the
diversification of direct and derived modes of exploiting works. It also presents challenges
because of the reduction and fragmentation of the returns from each distribution, making it
essential to develop financing and marketing strategies at international level.

In this framework, it is essential for the authorities - including the European authorities - to
back these initiatives with specific, complementary financial support measures aimed at
strengthening the presence and share of European content producers.

The Commission's proposal for a MEDIA Plus programme is a product of this approach.
Faced with a new environment marked by the de facto globalisation of the methods of
exploitation, the European audiovisual content industry, because of its fragmentation, is not
yet fully able to stand up to the growing world-wide competition. The Commission's
proposals are intended to establish optimum conditions based on a coherent strategy and clear
objectives, with a view to overcoming these difficulties and allowing European operators to
position themselves as best possible in these new markets while exploiting European cultural
diversity.

2.

A strategic sector: the audiovisual content industry

A strong potential for growth and a source of highly qualified jobs

The industries of the information society, including the audiovisual content industry, have
become one of the dynamic sectors of the European Union's economy. The audiovisual
industry employed 950 000 persons in the European Union in 1995, and 1 030 000 in 19972.

1

2

1999 Telecoms Review (Commission Communication on the Review of the Regulatory Framework
Infrastructure, Transmission and Access Services),
for Electronic Communications Services:
COM(1999) 539 final.
Job opportunities in the Information Society: Exploiting the potential of the information revolution,
COM(1998) 590 final.

2

Income from this market is expected to grow by 70% by 2005, and that could be reflected in
the creation of more than 300 000 highly qualified jobs during that period3.

This growth will be due, in particular, to the development of bouquets of digital channels
offering the consumer a range of diversified products. Even now, the number of television
channels available in Europe has increased sixfold between 1990 and 1998, from 104 to 659.
It is estimated that more than 1000 channels will be broadcast across Europe in 20004.

The introduction of the first search engine for the World Wide Web in 1994 marked the start
of the Internet as a mass medium. However, no-one could at the time could have foreseen the
explosive growth of this means of disseminating information, which now reaches 180 million
households throughout the world, of which 43 million are in Europe. Current developments in
technology hint at a wide range of possible applications: creation of new on-line services for
interactive television, video-on-demand (VOD), and electronic dissemination in cinemas. At
this stage, however, it is impossible not only to forecast when these technologies will be in a
position to become established on the market, but also to assess the real impact of these
changes on the habits and choices of consumers.

An analysis of the market and forward studies nevertheless indicate that these new methods of
distribution represent a real extension of the audiovisual markets, and not just a substitution
phenomenon.

the proliferation of

Existing methods of dissemination, such as cinema or video, are showing growth or
(pay-TV,
even a major upswing, despite
near-video-on-demand). For instance, with 814 million seats sold in 1998, cinemas in Europe
have returned to a level comparable to that of the early 1980s, before the advent of private TV
stations. The number of cinema films produced in Europe, as well as the number of films
distributed, is also increasing. At the same time, the video market - and sales in particular - is
continuing to grow despite the increased competition from television channels, including pay-
channels.

competing services

A changing economy

The development of digital dissemination techniques (bouquets, Internet, DVD) is raising
hopes because of the considerable increase in demand for content. This growth is reflected in
a diversification of the modes of exploitation, an increase in the marketing life of productions,
the emergence of new derived products and a globalisation of the market.

It is also raising some concerns because of the fragmentation of the audience for the new
channels and the new audiovisual services. For instance, the number of television channels
available in Europe tripled between 1995 and 1998, while the average time spent by
Europeans in front of the TV set was 205 minutes per day in 19985. This fragmentation is
reflected in a reduced financial capacity on the part of the distributors and by a longer
exploitation cycle for works. As an example, a television production which could in the past
pay for itself in one or two national broadcasts will now require a large number of broadcasts
over a long period of time in order to amortise its costs.

3

4

5

Study produced for the Commission by Norcontel Ltd, Economic Implications of New Communications
Technologies on the Audiovisual Markets, final report, 15 April 1997.
Screen Digest, May 1999.
IP Study (CLT-UFA), 1998.

3

One of the expected effects of the proliferation of means of electronic dissemination is the
disappearance of the bottlenecks caused, in particular, by the investment costs required for the
physical distribution of the products (printing, storage and transport of copies of cinema films
or video cassettes, for example), and this could promote the market access of a wider range of
works. However, against a background of increased competition to capture the attention of the
final consumer, the necessary investment will probably be devoted increasingly to advertising
and marketing, thereby raising new barriers to entering the market.

As things stand at present, there is also a growing concentration of resources on certain types
of programme (e.g. sport repeats), leaving fewer resources available for the production and
acquisition of creative content (documentaries, films and features, animated films).

In this context, the key to market access for producers and holders of European content will
lie more and more in defining marketing strategies developed at international level for the
entire range of means of distribution.

European content industry ill-prepared

Confronted with this new digital economy,
inadequately prepared and still suffers from structural weaknesses:

the European content

industry appears

• On top of the fragmentation of individual revenues as a result of the increasing number of
distribution channels there is also a fragmentation of the national or regional markets,
weakening the transnational movement of programmes within the European area.

• This fragmentation leads to a vicious circle of under-investment right from the conception
of audiovisual works, and then at the production and distribution stage, resulting in low
profitability of the works and hence a reduced investment capacity.

• Finally, this fragmentation is reflected in an under-capitalisation of undertakings that
jeopardises their industrial development strategy at international level, particularly in terms
of building up catalogues of rights which are sufficiently attractive to find different
windows of exploitation in all types of medium.

The challenge: exploiting works at international level

In the context of developing digital distribution methods, taking account of the international
dimension of the market is no longer an option for the producers and distributors of European
content, but a vital necessity.

In particular, mastering the diverse modes of distribution at
cornerstone of any strategy for developing the European content industry.

international

level

is the

3.

A new approach: audiovisual support policy in the digital age.

The growing economic importance of audiovisual content calls for the development of a
European industry which is competitive and able to benefit from the strong growth in demand
for content.

4

Since 1997, the Commission has been engaged in a detailed study of its audiovisual policy, in
particular as regards the current and future implications of the advent of the digital age. This
process was based above all on the wide-ranging consultation of professional circles, both at
the conferences held in Birmingham (April 1998) and Helsinki (September 1999) and in the
the
public consultations held in 1998 on the Green Paper on the convergence of
telecommunications, media and information technology6.

These consultations, and the remarks and contributions received in response to the report from
the High-Level Group on Audiovisual Policy7, have produced a new approach to support
policy at European level based on the following principles:

• The support mechanisms set up at European level must take account of national diversity
by being complementary to national and regional policies and by bringing the added value
of the European dimension.

• Community aid must therefore concentrate on attaining industrial and structural objectives,
while nevertheless bearing in mind the specific needs of countries and regions with a low
audiovisual production capacity and/or small geographical or language areas.

• The European Union must give priority to establishing automatic mechanisms or support
mechanisms for companies based on market performance with a view to generating
structural effects in the sector.

• The new opportunities for exploitation opened up by digital technology provide new scope
for both creation and distribution which must be taken into account. It is, however, difficult
at this stage to assess the real consequences of these developments in the medium and long
term. The approach adopted by the support systems in order to strengthen European
operators must be pragmatic, in synch with the audiovisual market and reflect the changes
in the sector (technological neutrality). To this end, it is necessary:

– to set up and develop an information system for monitoring developments in the market in

response to technological developments (pilot projects),

– to make regular assessments and make the necessary adjustments to the support

mechanisms,

– to set up an information system for exchanging experience with Member States with a

view to achieving synergy.

Given this new environment, the results of the evaluation of the MEDIA II programme and of
consultations undertaken by the Commission, an increase in the programme’s resources
appears to be necessary. This increase is, in particular, justified by:

-

6

7

a greater consideration of the specific needs of the industries in countries with lower
audiovisual capacity and/or restricted geographic and linguistic area;

are

COM(97) 623 final and COM (1999) 108 final; the conclusions of the Birmingham and Helsinki
and
following
conferences
http://presidency.finland.fi
The Digital Age: European Audiovisual Policy, report of the High-Level Group on Audiovisual Policy,
Luxembourg, 1998.

http://europa.eu.int/eac

web-sites:

available

the

at

5

-

-

-

the increased use of automatic support mechanisms based on market performance;

the emergence of new needs and new projects
digital technologies;

linked to the development of

the predominance which must be given to the transnational circulation of European
audiovisual works, within and outside the European Union.

4.

Principles of intervention under the MEDIA Plus programme

As with MEDIA II, the measures planned under the MEDIA Plus programme concern two
different fields of action: education and vocational training (Article 150 of the Treaty), and
industry (Article 157 of the Treaty)8. The two proposals for Council Decisions presented in
the Annex to this Communication reflect the new approach set out above and take into
account the following elements:

• the results and the mid-term assessment of the MEDIA II programme9 highlighted the
effectiveness of a number of mechanisms and the results obtained by the MEDIA II
programme, while proposing measures to adapt the objectives and support instruments to
the new challenges of the digital age; this assessment also vindicated the choice of the
transnational movement of works as the priority for the programme, as well as the
concentration of aid on three strategic sectors (vocational training, project development
and production, distribution and promotion companies).

• the complementarity and coherence with the other Community measures following a
common strategy, such as the education and training programmes, the support programmes
for SMEs and information society technologies. The review of existing financing
instruments to stimulate early stage financing in all parts of the Union as set out in
President Prodi's eEurope initiative launched on 8 of December 1999, should offer new
possibilities for start-ups developing and producing high-quality content using new
technologies. A close link should be established with the relevant actions of the
User-friendly information society programme under the 5th Framework Programme for
Research and Technological Development. The relevant key actions of the programme
develop technologies, test-beds, trials and services, which could be potential objects for
support by MEDIA Plus in the market phase. Coherence is also needed with the
forthcoming proposals for the follow-up of the INFO2000 and MLIS programmes.

• the desired complementarity with the policies implemented at national and regional level.
In particular, Community action must concentrate on those stages of the audiovisual chain
in which its interventions produce the greatest added value: upstream and downstream of
the production process.

8

9

The MEDIA II programme was also based on two Council Decisions:
in the field of training
(Article 127 of the Treaty), the programme was implemented by Council Decision 95/564/EC of
22 December 1995, OJ L 321, 30.12.1995, p. 33;
in the field of development and distribution
(Article 130 of the Treaty), the programme was implemented by Council Decision 95/563/EC of
10 July 1995, OJ L 321, 30.12.1995, p. 25.
Commission report on the results obtained under the MEDIA II programme (1996-2000) from
1.1.1996 - 30.6.1999, COM(1999) 91 final.

6

• The open-ended nature of

the programme:

following on from the cooperation
already embarked upon with the countries of the EEA and Cyprus,
the proposals
clearly state the readiness to extend the programme to include Malta, the associated
countries of Central and Eastern Europe, Turkey as well as the countries party to the
to their national
Council of Europe convention on Transfrontier Television, subject
legislation being substantially aligned with the acquis communautaire, and in particular the
provisions of the "Television without frontiers" Directive10. The existence of an adequate
legal framework in terms of copyright will also be taken into consideration, with specific
reference to the relevant Community directives11. Developing and strengthening the
audiovisual content industry will provide positive and specific support for the enlargement
process. Under certain conditions, the programme will also be open to other third countries
in Europe. Finally, the two proposals offer the possibility of cooperation with third
countries which share the European Union's objectives with regard to policy on
audiovisual content.

• With a view to the regular updating of the support measures to take account of
developments on the market for audiovisual content,
the proposals provide for the
implementation of pilot projects which, on the basis of conclusive results, may be used for
the immediate updating of the main support mechanisms under the programme.

4.1

Training (legal basis: Article 150 of the Treaty)

the measures

other
Alongside
Community programmes (such as Socrates and Leonardo), the measures proposed under the
MEDIA Training programme are aimed at the following fields:

implemented by the Member States

under

and

• application of the new technologies to the production and distribution of audiovisual

programmes with a high artistic value and a strong commercial potential;

• exploitation of the development potential of the European and international market;

• economic and commercial management,
production, marketing and distribution;

including the legal aspects,

financing of

• writing techniques, in particular for interactive programs intended for the new means of

electronic dissemination.

In addition, the programme will encourage:

• networking, cooperation and the exchange of know-how between the partners concerned
by the training activities (training establishments, professional associations, undertakings);

• training the trainers.

10

11

Directive 89/552/EEC, as amended by Directive 97/36/EC.
Council Directive 93/98/EEC of 29 October 1993 harmonizing the term of protection of copyright and
certain related rights; Council Directive 93/83/EEC of 27 September 1993 on the coordination of
certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting
and cable retransmission; Council Directive 92/100/EEC of 19 November 1992 on rental right and
lending right and on certain rights related to copyright in the field of intellectual property.

7

In these various fields, particular attention will be paid to training projects which use the new
technologies as training tools or vectors, as well as to projects in countries with a low
audiovisual capability or with a limited geographical/linguistic area.

The intensive training measures must ensure that a majority of the participants are of a
nationality other than that of the country in which the training is taking place. They will have
to comply with the rules established in the « framework for support to training » adopted by
the Commission in 199812.

4.2

Development (legal basis: Article 157 of the Treaty)

The production of high-quality audiovisual programmes capable of generating substantial
income on a growing number of media calls for considerable investment.

This investment must start at
the stage of preparing the projects through adequate
development to determine the feasibility of the project, the expected profitability of the work
in the light of the cost of its production, and its commercial potential.

This process, which is widespread in other sectors of industry, remains too restricted in the
case of audiovisual works and too often leads to the production of projects of limited
economic viability.

In this sector, and while respecting the necessary complementarity between Community
policy and national policies, the measures will aim to:

• encourage the investment of resources in the development of projects (writing and
finalisation of the script, establishment of the financing plan, etc.), while insisting that,
right from the development stage, there must be an international marketing strategy aimed
at exploiting the work on a large number of media (direct and derived exploitation);

• encourage the most dynamic independent producers to implement genuine commercial

development strategies based on packages of products.

The action lines implemented will be targeted at companies producing fiction, documentaries,
animated films and interactive products (on-line, off-line and hybrid).

4.3

Distribution and marketing (legal basis: Article 157 of the Treaty)

A command of distribution techniques and networks allowing the investments to be amortised
and generate profits is essential in order to ensure that European audiovisual content secures a
strong position on the market. In particular, this involves the compilation and - especially -
the exploitation of catalogues of programme works, such as cinema films,
fiction,
documentaries and animated works, which can be used and reused in many different formats.

Support for the distribution and marketing is thus the main component of the proposal for a
MEDIA Plus programme.

The aim of the Community's intervention will thus be to improve the transnational movement
of cinema and TV works and to stimulate European undertakings to use the new forms of
exploiting programmes (on-line dissemination, programme digitisation, DVD).

12

OJ C 343, 11.11.1998, pp. 10 to 16.

8

The measures proposed must make it possible to:

• improve the movement and profitability of European works on the European and world

market for all the media available to consumers;

• strengthen the competitiveness of distribution companies (cinema, video, TV) and the

compilation and exploitation of catalogues of European copyrights;

• develop networking and joint strategies at European level by developing the links between

distribution and production;

• increase the production of works intended for the European market (distribution-led

production), while respecting linguistic and cultural diversity;

• develop the public's knowledge of, and taste for, works from other European countries,

thereby strengthening European cultural identity in all its diversity (multilingualism);

• use pilot projects to encourage a permanent link between the programme and technological
change, in particular by promoting the programming of European audiovisual works on
digital special-interest channels.

4.4

Promotion and market access, festivals (legal basis: Article 157 of the Treaty)

The specific objectives of the support for promotion are generally similar to that for
distribution: however, mechanisms additional to those introduced for distribution are aimed at
improving access
for European works and
programmes.

to European and international markets

These mechanisms must make it possible to:

• encourage the presence of European professional and audiovisual programmes on both

traditional markets and the emerging European and international markets;

• encourage the participation of European professionals and audiovisual programmes in any
measure intended to promote the movement, exchange and sale of European programmes
inside and outside Europe;

• encourage the programming of European audiovisual works in European and international

events and/or festivals;

• encourage the Europe-wide networking of the national bodies for the promotion of exports

of audiovisual programmes;

• support the transnational dissemination of European films at festivals organised inside and

outside the European Union;

• strengthen networking between festivals by supporting cooperation projects for the

promotion of European films.

4.5

The actions implemented in development, distribution and promotion will have to
comply with the Treaty provisions concerning competition, namely the provisions
regarding State Aid.

9

5.

The instruments used

To implement the measures under the MEDIA Plus programme, and taking account of the
provisions of the Treaty, two instruments are proposed - one for training (Article 150 of the
Treaty) and the other for development, distribution and promotion (Article 157 of the Treaty).

The aim of these two instruments is to establish a policy which is in sync with the market and
strongly oriented towards optimising the advantages which the European audiovisual content
industry can derive for technological developments. To this end, the arrangements for the
financial support will be regularly assessed and adjusted.

On the basis of these assessments, the Commission may propose measures additional to these
two instruments.

10

EXPLANATORY MEMORANDUM

Training programme for professionals in the audiovisual content industry

1.

Introduction

An opportunity for jobs

The proliferation and diversification of the means of production and distribution are leading
to rapid growth in the range of services available and, hence, to an increase in the demand for
new audiovisual programmes.

However, if this rapid growth is to be translated into jobs, it needs a dynamic environment
and skilled labour for whom vocational training plays a decisive role.

An improvement
in the training available for European professionals in the audiovisual
industry is thus a sine qua non for strengthening the competitiveness of this sector, in
particular in the field in which the new digital technologies are applied.

Industry-oriented training

Apart from the basic training, the rapid changes in the economic environment and the ongoing
changes in the new audiovisual technologies call for continuous training which meets the
needs of the market. To achieve this, it is essential for the industry itself to be fully associated
from design to development of the training programmes, as well as in implementing them.

Reasons for Community action

is for

the public authorities to encourage and support vocational

training with a
It
view to medium-
in Luxembourg
(20-21 November 1997) stressed that continuous training can play a major role in the
employment policies of the Member States.

long-term action. The European Council

and

The importance of training policy in the European Union is recognised by the Treaty
(Article 150).

Initial training in the audiovisual industry is the subject of a number of initiatives in each
Member State. Action at Community level, subsidiary to the efforts at national level, is
justified because of:

• The need to encourage professionals to broaden their experience at European level. This
need is all the greater in an environment in which digital technologies are increasingly
eliminating national barriers;

• The need to ensure effective and lasting networking of the training centres and the

undertakings interested in this type of training at European level.

2.

The current situation

The Member States of the European Union have a large number of training schemes for
cinema and the audiovisual industry which cover initial training.

11

These courses are as follows:

• higher-level vocational training establishments providing technical training (production,

film directing, sound recording);

• universities and other institutions of higher education providing general training in the field

of communication and the media (essentially theoretical).

training there are also, particularly since the
In the field of continuous vocational
establishment of the MEDIA programme in 1991, a number of centres for specific training in
the content industry. However, there are often few bridges between these different centres
which, because of their more direct links with the industry, could benefit from networking
between Member States and between fields of training.

Levels of training

Initial: Europe has a large number of schools and centres for training in cinema and television.
They provide high-quality initial training which frequently does not include a direct initiation
into the economic and commercial aspects of the audiovisual market.

Continuous: Continuous training in the audiovisual sector was largely absent in Europe at the
start of the 1990s. The MEDIA programme supported the creation of specific activities
closely linked to the industry. Such measures are needed to allow professionals, authors,
producers and distributors to improve their professional skills within an expanded market.
This is all the more necessary in view of the globalisation of the new means of digital
dissemination.

Types of training

There are still some gaps in the existing training which make the following measures
necessary:

• strengthening training at European level for producers capable of managing a company in

economic, financial and legal terms in a world-wide market;

• developing training in distributing, disseminating, promoting and marketing audiovisual

content;

• continuing training in script-writing techniques which allow script-writers and producers to

widen their potential audience while maintaining their own cultural identity;

• considerably strengthening vocational training at European level in the use of the new

technologies for creation, production and distribution.

3.

3.1

Main lines for action at European level

Objectives

European Union action must have the general aim of meeting the industry's needs and
promoting its competitiveness by developing continuous training for professionals in the
audiovisual industry.

12

This training must be tackled Europe-wide and concentrate on:

• economic, legal and financial management at European level, with a view to allowing
European professionals who are already active on the market to benefit most from the
global dimension of the market for audiovisual content and encourage them to develop
audiovisual content and projects which meet the needs of the market;

• script-writing techniques (cinema,

television and multimedia)

targeted at a wider

audiences, thus meeting the needs of the international market for audiovisual content;

• the use of the new technologies and their application to the production of audiovisual

works intended for the European and international markets.

These three areas of training must also take advantage of the opportunities for distance
learning and pedagogic innovation offered by the new on-line technologies.

The measures must aim to ensure that collaboration between the various partners concerned
by the training (training establishments and centres, undertakings) is strengthened.

The measures must ensure the participation of partners from the professional sector.

When organising a training project, those benefiting from Community support must ensure
that the majority of participants are of a nationality different from that of the country where
the training is taking place.

The measures must take account of the structural objectives such as the development of SMEs
or the development of potential in restricted geographical and linguistic areas.

The Commission will
with other Community measures
Leonardo programme, and with the objectives of the European Structural Funds.

the measures proposed are consistent
the

take steps to ensure that

in particular under

in the field of

training,

To a lesser extent, the Union must also give priority to developing a number of initial training
activities, provided they are drawn up in close cooperation with the industry, show a real
European dimension and added value, and cannot be funded from other existing Community
programmes such as the Leonardo programme.

3.2

Priority measures:

Distance learning

Promoting the use of the new technologies in organising and imparting training with a view to
catering for distance learning.

Distribution professions

Putting the emphasis on training in the distribution, promotion and marketing of European
audiovisual works by taking advantage of the opportunities offered by the development of the
new digital technologies.

13

Multimedia professions

Developing continuous training programmes on the use of digital technologies for the on-line
and off-line creation and dissemination of audiovisual content. The professions involved are:
script-writers, computer graphics experts, Internet programme developers and webmasters.

Networking of the bodies providing the training

If the measures proposed are to have a structural effect, it will be necessary to ensure
cooperation and the transnational transfer of know-how between the different partners.

Promoting the importance of work experience

Organisation of work experience in other Member States in addition to the initial training.

Promoting the training of trainers

Organisation of workshops to train the trainers, so as to ensure the permanent recycling of
trainers in the light of developments and the needs of the industry, as well as of the new
digital technologies.

14

1999/0275 (COD)

Proposal for a

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the implementation of a training programme for professionals in the European
audiovisual programme industry
(MEDIA - Training) (2001-2005)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular
Article 150(4) thereof,

Having regard to the proposal from the Commission1,

Having regard to the opinion of the Economic and Social Committee2,

Having regard to the opinion of the Committee of the Regions3,

Acting in accordance with the procedure laid down in Article 251 of the Treaty,

Whereas:

(1)

(2)

(3)

From 6 to 8 April 1998, the Commission, in collaboration with the United Kingdom
presidency, held a European audiovisual conference on "Challenges and opportunities
of the digital age", in Birmingham. This consultation process highlighted the need for
an improved programme of training in the audiovisual sector which concentrated on
all the new aspects of the digital age.

The Culture/Audiovisual Council of 28 May 1998 took note of the final conclusions of
the European audiovisual conference on "Challenges and opportunities of the digital
age" and called for new schemes to be developed to encourage a strong and
competitive programme industry.

The Report of the High-Level Group on Audiovisual Policy of 26 October 1998,
entitled "The Digital Age: European Audiovisual Policy", concluded that, in this
environment, both initial and continuous training in the audiovisual sector should be
strengthened.

1

2

3

OJ C
OJ C
OJ C

15

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

In the Communication from the Commission to the European Parliament and the
Council of Ministers entitled "Audiovisual policy: next steps",
the Commission
recognises the considerable impact on employment which the digital age will have in
the audiovisual industry4.

The Green Paper on "The Convergence of the Telecommunications, Media and
Information Technology Sectors, and the Implications for Regulation" recognises that
the emergence of new services will lead to the creation of new jobs. Adapting to the
new markets requires staff trained in the use of the new technologies5.

The Commission's public consultation on the Green Paper confirmed the demand for
specialised vocational training adapted to the needs of the market6.

In its Conclusions of 27 September 1999 on the results of the public consultation on
the Green Paper7, the Council called upon the Commission to take account of those
results when drawing up proposals for measures to strengthen the European
audiovisual sector, including the multimedia sector.

The extraordinary European Council on Employment held in Luxembourg on 20 and
21 November 1997 recognised that continuous education and vocational training can
make a major contribution to the employment policies of the Member States with a
view to improving suitability for employment, adaptability and the spirit of enterprise,
and promoting equality of opportunities.

In its report to the European Council on job opportunities in the information society8,
the Commission noted that the new audiovisual services offered a strong potential for
job creation.

the European audiovisual

The Commission implemented an "Action programme to promote the development
of
adopted by
Council Decision 90/685/EEC9 and comprising,
in particular, support for training
activities to improve the professional skills of persons working in the audiovisual
programme industry.

industry (MEDIA)

(1991-1995)",

The Community strategy for developing and strengthening the European audiovisual
industry was confirmed under the MEDIA II programme adopted by Council Decision
95/563/EC10, and by Council Decision 95/564/EC11. On the basis of the achievements
of that programme, its continuation should be ensured in the light of the results
obtained.

4

5

6

7

8

9

10

11

COM(1998) 446 final of 14 July 1998.
COM(1997) 623 final of 3 December 1997.
SEC(1998) 1284 final of 29 July 1998.
OJ C 283, 6.10.1999, p. 1.
COM(1998) 590 final.
OJ L 380, 31.12.1990, p. 37.
OJ L 321, 30.12.1995, p. 25.
OJ L 321, 30.12.1995, p. 33.

16

(12)

(13)

(14)

(15)

(16)

(17)

(18)

(19)

(20)

The Commission's report on the results obtained under the MEDIA II (1996-2000)
programme, from 1 January 1996 to 30 June 1998, considers that the programme
meets the principle of the subsidiarity of Community funds to national funds, since the
field of intervention of MEDIA II supplements the traditionally predominant role of
the national schemes12.

The Commission recognised the positive impact of the MEDIA II programme on
employment in the audiovisual industry in its Communication on Community Policies
in Support of Employment13.

The emergence of a European audiovisual market calls for professional skills adjusted
to the new dimension of the market, particularly in the field of the economic, financial
and commercial management of audiovisual projects and in the use of the new
technologies in the design, development, production, distribution, marketing and
broadcasting of programmes.

Professionals should be given the professional skills to allow them to benefit fully
from the European and international dimension of the market
for audiovisual
programmes, and they must be encouraged to develop projects which meet the needs
of that market.

Equal opportunities are a basic principle in Community policies which must be taken
into account in the implementation of the present programme.

The initial training for professionals should comprise the essential economic, legal and
technological content. The rapid changes in these subjects makes continuous training
necessary.

The networking of vocational training centres should be encouraged in order to
facilitate the exchange of know-how.

Support for vocational training should take account of the structural objectives, such
as developing the potential for creation, production, marketing and distribution in
countries or regions where the capacity for audiovisual production is low or the
linguistic area is limited.

In accordance with the principles of subsidiarity and proportionality set out
in
Article 5 of the Treaty, and in view of the fact that the objectives of the proposed
measures concerning the implementation of vocational training policy cannot be
achieved by the Member States, in particular in view of the transnational partnerships
to be established between the training centres, the measures necessary to achieve them
must be implemented by the Community because of the transnational dimension of the
Community measures. This Decision is confined to the minimum required to achieve
these objectives and does not go beyond what is needed to achieve these objectives.

(21)

The measures proposed under this programme are all aimed at achieving transnational
cooperation which brings an added value to the measures being undertaken in the
Member States, in accordance with the aforementioned principle of subsidiarity.

12

13

COM(1999) 91 final, of 16.03.1999
COM (1999) 167 final.

17

(22)

(23)

The associated countries of Central and Eastern Europe, those EFTA countries which
are members of the EEA, Cyprus, Malta and Turkey are recognised as potential
participants in Community programmes on the basis of supplementary appropriations
and in accordance with the procedures to be agreed with those countries. Those
countries of Europe which have signed the transfrontier television Convention of the
Council of Europe belong to the European audiovisual area and may therefore, if they
wish, and taking into account budgetary considerations or other priorities of their
audiovisual
industries, participate in the programme or benefit under a limited
cooperation scheme, on the basis of the supplementary appropriations, in accordance
with the procedures to be established in the agreements between the interested parties.

the

compatibility of

The opening-up of the programme to European third countries may be submitted to
legislation with the
an examination of
Community acquis, and, in particular, the second subparagraph of Article 6(1) of
Council Directive 89/552/EEC14 of 3 October 1989 on the coordination of certain
provisions laid down by law, regulation or administrative action in Member States
concerning the pursuit of
television broadcasting activities, as amended by
European Parliament and Council Directive 97/36/EC15.

their national

(24) Cooperation in the field of vocational training on the part of the European bodies and
those in the third countries, on the basis of common interests, is likely to create an
added value for
industry. Such cooperation will be
developed on the basis of supplementary appropriations and in accordance with the
procedures to be established in the agreements between the interested parties.

the European audiovisual

(25)

(26)

(27)

In order to enhance the added value of the Community action, it is necessary to ensure,
at all levels, that the measures undertaken under this Decision are consistent with and
complementary to other Community interventions. It is desirable to coordinate the
activities laid down by the programme with those undertaken by international
organisations such as the Council of Europe.

This Decision lays down, for the entire duration of the programme, a financial
framework constituting the principal point of reference within the meaning of point 1
of the Declaration of the European Parliament, the Council and Commission of
6 March 199516, for the budgetary authority during the annual budgetary procedure;

In accordance with Article 2 of Council Decision 1999/468/EC of 28 June 1999,
laying down the procedures for the exercise of implementing powers conferred on the
Commission17, measures for the implementation of this Decision should be adopted by
use of the advisory procedure provided for in Article 3 of that Decision.

14

15

16

17

OJ L 298, 17.10.1989, p. 23.
OJ L 202, 30.7.1997, p. 60.
OJ C 102, 4.4.1996, p. 4.
OJ L 184, 17.7.1999, p. 23.

18

HAVE DECIDED AS FOLLOWS:

Article 1

A vocational training programme, hereinafter referred to as "the programme", is hereby
established for the period from 1 January 2001 to 31 December 2005.

The programme is intended to give professionals in the audiovisual industry the necessary
skills to allow them to take full advantage of the European and international dimension of the
market and of the use of new technologies.

1.

The objectives of the programme are as follows:

Article 2

(a)

To meet the industry's needs and promote competitiveness by improving the
continuous vocational training of professionals in the audiovisual industry,
with a view to giving them the know-how and skills needed to take account of
the European and other markets, in particular in the field of:

– application of the new technologies, and in particular digital technologies,
for the production of audiovisual programmes with a high commercial and
artistic added value;

– economic,

financial and commercial management,

including the legal
framework and the techniques for the financing, production and distribution
of audiovisual programmes;

– script-writing techniques.

Particular attention will be paid to the opportunities for distance learning and
pedagogic innovation offered by the development of on-line technologies.

Certain initial training measures in which the industrial sector is directly
involved, such as masters' degrees, may also be supported if no other
Community support is available and in fields for which there are no support
measures at national level.

(b)

To encourage cooperation and the exchange of know-how through networking
between the partners involved in the training, such as training establishments,
the professional sector and undertakings, as well as through developing
training for the trainers.

importance will be

Particular
encouraging the gradual
establishment of networks between the activities and the existing training
establishments.

attached to

19

2.

3.

To achieve the objectives set out in the first paragraph of point (a) and in point (b) of
paragraph 1, particular attention shall be devoted to the specific needs of countries or
regions with a low production capacity and/or a restricted geographical and linguistic
area, as well as to the development of an independent European production and
distribution sector, and in particular small and medium-sized enterprises.

The objectives set out
arrangements contained in the Annex.

in paragraph 1 shall be realised in accordance with the

Article 3

there is
In order to achieve maximum coordination,
collaboration between the training activities and the development projects supported under the
MEDIA Plus programme. In this context, information about the support mechanisms provided
by the programme shall be given to the professionals taking part in the continuous training
activities.

the Commission will ensure that

Article 4

1.

2.

3.

4.

5.

6.

The beneficiaries of Community support taking part in implementing the actions set
out in the Annex shall provide a substantial proportion of the funding, equivalent to
at least 50%, subject to the specific provisions set out in the Annex.

The beneficiaries of Community support shall ensure that a majority of the
participants in a training measure are of a nationality other than that of the country in
which the training takes place.

The Commission shall ensure that, as far as possible, at least 10% of the funding
available each year is reserved for new activities.

Community funding shall be determined according to the costs and nature of each
project planned.

The financial framework for implementing this programme for the period set out in
Article 1 shall be EUR 50 million.

The annual appropriations shall be authorised by the budgetary authority within the
limits of the financial perspectives.

The Commission shall be responsible for implementing the programme, in accordance with
the procedures referred to in Article 6(2) and with the rules contained in the Annex.

Article 5

Article 6

1.

The Commission shall be assisted by an advisory committee ("the MEDIA
Committee") composed of representatives of the Member States and chaired by the
representative of the Commission.

20

2.

1.

2.

3.

4.

5.

1.

2.

3.

4.

Where reference is made to this paragraph, the advisory procedure laid down in
Article 3 of Decision 1999/468/EC shall apply, in compliance with Article 7(3) and
Article 8 thereof.

Article 7

The programme shall be open to the participation of the associated countries of
Central and Eastern Europe, in accordance with the conditions laid down in the
association agreements or their additional protocols relating to participation in
Community programmes concluded or to be concluded with those countries.

The programme shall be open to the participation of Cyprus, Malta, Turkey and those
EFTA countries which are members of the EEA Agreement, on the basis of
supplementary appropriations, in accordance with the procedures to be agreed with
those countries.

The programme shall be open to the participation of the countries which are Parties
to the Council of Europe Convention on Transfrontier Television, other than those
referred to in paragraphs 1 and 2, on the basis of supplementary appropriations, in
accordance with the conditions to be established in the agreements between the
interested parties.

The opening-up of the programme to the European third countries referred to in
paragraphs 1, 2 and 3 may be subject to a prior examination as to the compatibility of
their national
including the second
subparagraph of Article 6(1), of Directive 89/552/EEC.

legislation with the Community acquis,

The programme shall also be open to the participation of other third countries on the
basis of supplementary appropriations and the specific arrangement to be established
in the agreement between the interested parties. The European third countries
referred to in paragraph 3 which do not wish to participate fully in the programme
may be eligible for cooperation under the conditions set out in this paragraph.

Article 8

The Commission shall ensure that measures taken under this Decision are subject to
prior appraisal, and to subsequent monitoring and evaluation.

The beneficiaries selected shall submit an annual report to the Commission.

After completion of the projects, the Commission shall evaluate the manner in which
they have been carried out and the impact of their implementation, in order to assess
whether the original objectives have been achieved.

the
The Commission shall present
Economic and Social Committee, and the Committee of the Regions an evaluation
report on the impact and effectiveness of the programme, on the basis of the results
after two years of implementation.

to the European Parliament,

the Council,

This report shall be accompanied, if need be, by any proposal regarding adjustment,
including budgetary adjustments.

21

5.

the programme,

On completion of
to the
European Parliament, the Council, the Economic and Social Committee, and the
Committee of the Regions a report on the implementation and results of the
programme.

the Commission shall present

Article 9

This Decision shall enter into force on 1 January 2001.

Done at Brussels,

For the European Parliament
The President

For the Council
The President

22

1.

MEASURES TO BE IMPLEMENTED

ANNEX

In support of and in addition to the measures being undertaken by the Member States, the
programme aims to permit professionals to adapt to the dimension of the market, and in
particular the European market, for audiovisual works, by promoting vocational training in
economic, financial and commercial management, including the legal framework, distribution
and marketing, as well as in the new technologies (including the conservation and exploitation
of the European film and audiovisual heritage) and script-writing techniques.

1.1.

Training in the new technologies

This training aims to develop the ability of professionals to use advanced creation techniques,
in particular in the fields of animation, computer graphics, multimedia and interactive
applications.

The measures proposed are as follows:

• promoting the development and updating of the modules for training in the new
audiovisual technologies, in parallel to the measures being taken by the Member States;

• networking the training courses, promoting exchanges of instructors and professionals by
awarding grants, organising work experience in undertakings in other Member States and
contributing to the training of trainers, particularly through distance learning, by promoting
exchanges and partnerships involving the regions with a low production capacity and/or a
limited geographical and linguistic area.

1.2.

Training in economic, financial and commercial management

This training aims to develop the ability of professionals to appreciate and use the European
dimension in the development, production, marketing and distribution/dissemination of
audiovisual programmes.

The measures proposed are as follows:

• promoting the development and updating of the modules for training in management, in
parallel to the measures being taken by the Member States and emphasising the European
dimension;

• networking the training courses, promoting exchanges of instructors and professionals by
awarding grants, organising work experience in undertakings in other Member States and
contributing to the training of trainers, particularly through distance learning, by promoting
exchanges and partnerships involving the regions with a low production capacity and/or a
limited geographical and linguistic area.

1.3.

Script-writing techniques

This training is intended for experienced script-writers with a view to improving their ability
to develop techniques based on both conventional and interactive script-writing methods.

23

The measures will be as follows:

• promoting the development and updating of the training modules for identifying target
audiences; publication and development of scripts for an international audience; relations
between the script-writer, the script editor, the producer and the distributor;

• encouraging exchanges and partnerships between countries and regions with a low

production capacity and/or a limited linguistic and/or geographical area.

1.4.

Networks of training courses

The objective is to encourage existing institutions and/or measures to step up coordination of
their activities in order to establish European networks.

1.5.

Initial training activities

Support may be provided for activities in some fields of initial training where no Community
or national funding is on offer. Such activities may include master's degrees in which there is
a link with industry in the form of a partnership and/or work experience.

2.

IMPLEMENTATION PROCEDURE

2.1.

Approach

In implementing the programme, the Commission will work closely with the Member States.
It will also consult the partners concerned. It will ensure that the participation of professionals
reflects adequately Europe's cultural diversity.

It will encourage designers of training modules to cooperate with institutions, the professional
sector and undertakings in their work.

It will facilitate the presence of trainees, particularly from countries and regions with a low
production capacity and/or a restricted linguistic and geographical area.

2.2.

Community contribution

Community cofinancing of the total training costs will be provided within a framework of
joint funding with public and/or private partners, generally up to a limit of 50%. This share
may be raised to 60% for training activities in countries or regions with a low production
capacity and/or a restricted linguistic and geographical area.

The procedure set out in Article 6(2) will be applied to determine the allocation of funding for
each type of measure eligible under point 1.

In accordance with the rules for Community funding, and in application of the procedure set
out in Article 6(2), the Commission will lay down a set of rules for funding in order to
determine the ceiling for each continuous training activity and professional trained.

Designers of modules and training centres using them will be selected by calls for proposals.

As far as possible, the Commission will ensure that at least 10% of the funds available each
year are allocated to new activities.

24

Implementation

2.3.1 The Commission shall implement the programme. To this end,
it may call upon
consultants and technical assistance offices to be selected, after a call for proposals, on the
basis of their expertise in the sector. The technical assistance will be financed by the
programme’s budget. In accordance with the procedure referred to in Article 6(2), the
Commission may also conclude partnerships for ad hoc operations with specialised bodies
such as Audiovisual Eureka, in order to implement joint measures which meet the objectives
of the programme in the field of training.

The Commission shall make the final selection of the beneficiaries of the programme and
shall decide on the financial support to be granted, in accordance with Article 5.

For the implementation of the programme, and in particular the assessment of the projects
receiving funding under the programme, and for the networking measures, the Commission
shall ensure that it makes use of the skills of recognised experts in the audiovisual sector in
the fields of training, development, production, distribution and promotion.

2.3.2 Through appropriate measures, the Commission shall make known the opportunities
offered by the programme and ensure its promotion.

In particular, the Commission and the Member States shall take the necessary measures, by
continuing the activities of the network of MEDIA Desks and Antennae, and by ensuring that
the skills of the latter are strengthened, in order to:

• ensure that the programme is publicised and promoted;

• encourage the greatest possible participation of professionals in the measures under the

programme;

• assist professionals in presenting their projects in response to calls for proposals;

• foster transfrontier cooperation between professionals;

• act as a relay between the various support bodies in the Member States with a view to
ensuring that the measures under this programme are complementary to the national
support measures.

25

FINANCIAL STATEMENT

1.

TITLE OF OPERATION

Training programme for professionals in the European audiovisual programme
industry (MEDIA Plus).

2.

BUDGET HEADING(S) INVOLVED

B 3 2010

3.

LEGAL BASIS

Article 150 of the Treaty establishing the European Community

4.

4.1

DESCRIPTION OF OPERATION

General objective

The development of digital technologies is spawning rapid growth in the range of
audiovisual programme on offer. The developments expected in the content industry
will generate employment only if the professionals in the sector have qualifications
which are in tune with the needs of the market. Similarly, the support mechanisms
for the audiovisual industry can be fully effective only if they are underpinned by
skills geared to meeting new challenges.

Occupational training nowadays goes beyond the school-education and academic
spheres. The relentless pace of change in the economic and technological
environment makes it essential
to bolster the provision of continuous training
throughout professional life.

The objectives set out in Article 150 of the Treaty recognise the importance attaching
to the European Union's training policy.

4.2

Period covered by the operation and arrangements for renewal

The MEDIA Plus Training Programme covers the period from 1 January 2001 to
31 January 2005. Its possible renewal will be the subject of a new decision-making
process based on the provisions set out in the Treaty.

5.

5.1

5.2

5.3

CLASSIFICATION OF EXPENDITURE OR REVENUE

Non-compulsory expenditure

Differentiated appropriations

N/A

26

6.

TYPE OF EXPENDITURE OR REVENUE

– Subsidy for joint financing with other sources in the public and/or private sector.

– No repayment or supplementary revenue is expected.

The Community will make a financial contribution towards training activities of up
to 50% (60% for training courses held in countries or regions having a low
audiovisual production capacity and/or restricted geographical and linguistic area) of
actual project costs, subject to a ceiling of one million euro per training centre per
year. Financial contributions will be awarded by means of contracts having a
maximum term of three years.

7.

7.1

FINANCIAL IMPACT

Method of calculating total cost of operation

The amounts were determined on the basis of two data sources:

(1)

(2)

The data available from the implementation of the MEDIA II Programme
(databases with figures broken down by sector of activity and by line of
action). These figures are derived from actual files submitted by tenderers
(representing at least 50% of the professionals in the sector).

Data contained in the following documents: proceedings of conferences on
the audiovisual media (European Audiovisual Conference in Birmingham,
Helsinki Forum on Audiovisual Policy), Report of the High-level Group on
Audiovisual Policy (Oreja Group), Mid-term Assessment of the MEDIA II
Programme (BIPE), Commission documents (Green Paper on Convergence,
Communication on the next steps in audiovisual policy), etc. These
documents, which incorporate macro-economic analyses, contain figures
relating to the sectoral needs of the European audiovisual industry.

In the implementation of the programme over the entire five-year period,
the
expenditure required in the first and the fourth year will be higher, as it will be for
projects running two or three years. The expenditure envisaged for the other three
years will be used to finance projects of shorter duration.

the budget devoted,

The proportion of
to "management", "new
technologies" and "script-writing techniques" will depend in each case on the cost of
the operation and the proposals received in response to calls for proposals. The
amounts given in this Financial Statement represent the total cost of Community
involvement, i.e. at most 60% of the actual cost of operation.

respectively,

27

7.2

Itemised breakdown of cost

Commitment appropriations
EUR million (current prices)

Breakdown

2001

2002

2003

2004

2005

Total

Planned number of calls for proposals

Envisaged number of applications for
support

Number of requests granted (forecast)

Total

1

90

30

1

40

12

1

55

15

1

65

17

1

40

12

5

290

86

14.3

7.3

9.3

8.8

6.8

46.5

In order to support training schemes running for two or three years, the amounts allocated for
the years 2001 and 2004 are higher than those for the other years, during which projects of a
shorter duration will be selected.

Actions vis-à-vis the sector

Commitment appropriations
EUR million (current prices)

2001

2002

2003

2004

2005

Total

– Studies

– Meetings of experts1

– Information and
publications

0.07

0.03

0.10

0.07

0.03

0.10

0.07

0.03

0.10

0.07

0.03

0.10

0.07

0.03

0.10

Total

0.20

0.20

0.20

0.20

0.20

0.35

0.15

0.50

1.00

1

Expenses meeting the criteria set out
in the Commission Communication dated 22 April 1992
(SEC(1992) 769). The expert meetings will be organised by the Commission to assist it in the selection
of projects for each call for proposals.

28

7.3

Operating costs, technical assistance, included in Part B of the budget

Commitment appropriations
EUR million (current prices)

– TAO2

Total

2001

2002

2003

2004

2005

0.50

0.50

0.50

0.50

0.50

0.50

0.50

0.50

0.50

0.50

Total

2.50

2.50

In order to conduct a selection among the proposals and to assist in the follow-up, the
Commission envisages calling upon external technical and/or administrative assistance. In the
framework of the MEDIA II and MEDIA I programmes, the Commission was assisted by
TAOs (Technical Assistance Offices) with expertise in the areas covered by the programme.
The type of external technical and/or administrative assistance used for the implementation of
the present programme will be determined in accordance with the guidelines established by
the Commission. If TAOs were to be used for the establishment of the present programme,
the College will be duly informed in accordance with the Vademecum concerning
Technical Assistance Offices.

7.4

Indicative schedule of commitment/payment appropriations

Commitment appropriations
EUR million

2001

2002

2003

2004

2005

Commitment appropriation

15.00

8.00

10.00

9.50

7.50

Payment appropriations

2001
2002
2003
2004
2005
2006
2007

Total

7.50
5.50
2.00
-
-
-
-

15.00

-
3.60
3.00
1.40
-
-
-

8.00

-
-
4.50
3.50
2.00
-
-

10.00

-
-
-
4.20
3.50
1.80
-

9.50

-
-
-
-
3.50
2.50
1.50

7.50

Total

50.0

7.50
9.10
9.50
9.10
9.00
4.30
1.50

50.0

2

The TAO will provide the Commission with technical and administrative assistance for the assessment
of the projects presented and the monitoring of the implementation of the selected projects. Calling on
the TAO does not imply any delegation of public power from the Commission who maintains the
entirety of its decision-making powers.

29

8.

FRAUD PREVENTION MEASURES

Programme beneficiaries are selected by way of a call for proposals procedure
published several times a year in the Official Journal of the European Communities.
Before approving a request for Community support, the Commission conducts a
careful assessment to determine whether it complies with Council Decisions and
meets the conditions set out in the call for proposals.

Applications for Community support must include:

– a financial plan setting out in detail all the components in the financing of the

projects, including the support applied for from the Commission;

– a provisional timetable of work;

– any other relevant information requested by the Commission in the specifications

set out in the call for proposals.

To make its selection from among the proposals, the Commission consults TAOs
(Technical Assistance Offices) with expertise in the areas covered by the
Programme. Projects judged eligible are first submitted to independent experts and
then to the MEDIA committee, which is made up of representatives of the countries
participating in the Programme, before the final decision is taken by the
European Commission. Above certain thresholds set out in the Decisions setting up
the Programme, the projects selected are submitted to the committee for its opinion.

Payment of financial contributions is subject to the prior production of supporting
documents for the activity reports, as well as to on-site checking (audit) and central
monitoring.

Moreover, various bodies (Court of Auditors, Financial Control and authorising
officer) carry out checks on the management of the operations carried out and on the
beneficiaries.

9.

9.1

ELEMENTS OF COST-EFFECTIVENESS ANALYSIS

Specific and quantified objectives, target population

The main objective is to upgrade the skills of European professionals in the
audiovisual industry through enhanced mastery of management
increased
focus on global markets and the European dimension in the various professions and,
finally, by dint of specific training in the use of new technologies. The expected
dividend, therefore, is greater competitiveness on the part of European audiovisual
enterprises.
In particular, MEDIA operation are aimed at remedying:

tools,

– the lack of commercial and legal training among managerial staff and the lack of
market focus which have long characterised part of Europe's industrial fabric;

– the insufficient focus on the European dimension in the development of projects

and of enterprises;

30

– the fragmentation of enterprises which means that adequate budgets cannot be

provided for training;

– the inadequate training given in new digital technologies.

Target population:

The beneficiaries of the operations to be undertaken fall into various categories:
professionals, trainers and enterprises. The sectors affected by the training operations
are management, script-writing and new technologies. The operations conducted
should translate, at European market level, into the generation of highly-skilled jobs,
the maintenance of a high-performance business fabric at European level, and the
incorporation of a European dimension into initial training programmes.

9.2

Grounds for the operation

Need for Community financial aid, particularly in the light of the principle of
subsidiarity:

The proposed support programme is in line with the European Union's audiovisual
policy.

It operates according to the principle of subsidiarity and is designed to complement
thus underpins and rounds off operations undertaken at
national
national level. It meets the objectives set out in the Treaty, particularly the stipulation
in Article 150 that Community action shall aim to :

initiatives. It

– facilitate adaptation to industrial change;

– improve initial and continuing vocational training;

– stimulate cooperation on training between educational or training establishments

and firms;

choice of ways and means.

The funds provided by the Community in the form of subsidies of up to 50% of the
cost of training courses held (60% for those held in countries or regions having a low
audiovisual production capacity and/or a restricted geographical and linguistic area)
are intended to give national/regional partners an incentive to supplement existing
training.

The Commission report on the results obtained under the MEDIA II Programme over
the period 1 January 1996 to 30 June 1998 stresses that the training courses held
under the MEDIA Programme "are meeting a real need in the European audiovisual
industry in both their content and in their international nature. (...) Finally, they have
enabled genuine networks of European professionals to be formed, facilitating joint
productions and sales, resulting in some cases in permanent partnerships".

31

-
9.3

Monitoring and evaluation of the operation

Performance indicators:

Initial training:

– number of course participants;

– number of non-domestics participating;

– number of training bodies involved in the network (per training project).

Continuous training:

– number of course participants;

– number of non-domestics participating;

– number of projects at the development stage dealt with during training;

– number of projects developed after training (and which were at the development

stage during training);

– number of itinerant courses.

the
The Commission monitors
implementation of
the contracts established with the
For
Commission, the beneficiaries of financial support will have to provide the relevant
information so as to allow the continuous, half term and ex-post evaluation.

the programme.

throughout

the most

indicators

pertinent

Details and frequency of planned evaluation:

The Commission will draw up two Programme evaluation reports.

Mid-term report: The first report will be drawn up two years after the start of the
Programme. It will set out to produce an initial assessment of the results obtained by
the mid-term stage with a view to making any necessary changes and adjustments for
the second part of the Programme. To this end, the Commission may call upon the
services of external consultants who will be selected on the basis of their expertise by
means of an invitation to tender. The Commission's report will be submitted to the
European Parliament, the Council and the Economic and Social Committee.

Final report: The second report will be drawn up at the end of the five years of
Programme implementation. It will set out to evaluate the results of the support
systems in the light of the objectives of the Programme. As in the case of the mid-
term report, the Commission may involve external consultants in this exercise, and
the final report will likewise be submitted to the European Parliament, the Council
and the Economic and Social Committee.

32

Moreover, the Commission plans, on the basis of the experience gained under the
to continue the practice of auditing beneficiaries
MEDIA II Programme,
(approximately 30 per year) in order to verify whether Community funds are being
put to appropriate use. The results of the audits will be the subject of a written report.

Assessment of the results obtained:

Information enabling the performance, results and impact of the Programme to be
measured will be derived from the following sources:

– statistical data compiled on the basis of information from applications and the

monitoring of the contracts with the beneficiaries;

– audit reports on a sample of beneficiaries of the Programme (30 per year);

– consultations with MEDIA Desks and Antennae and on national markets;

– consultations with experts and institutions (national and international professional

associations);

– consultations with audiovisual professionals and with specialised training bodies.

10.

ADMINISTRATIVE EXPENDITURE (SECTION III, PART A OF THE
BUDGET)

This section of the financial statement must be sent simultaneously to DGs BUDG and
ADMIN; the latter will then forward it to DG BUDG with its opinion.

the necessary administrative resources will depend on the
Actual mobilisation of
Commission’s annual decision on the allocation of resources, taking particular account of the
number of staff and additional amounts authorised by the budgetary authority.

10.1

Effect on the number of posts

Type of post

Staff to be assigned to managing
the operation

Posts supplied

Duration

Permanent
posts

Temporary
posts

1A; 1B; 1C

A
B
C

by using
resources
existing within
the DG or
department
concerned
1A

by using
additional
resources

1B; 1C

2001-2005

1A; 1B; 1C

1A

1B; 1C

5 years

Officials or
temporary staff

Other resources
Total

The administrative resources required may actually be mobilised in the framework of the
annual Commission decision on the allocation of resources, taking into account in particular
additional resources authorised by the budgetary authority.

33

Accordingly, DG EAC should take into account the risk that the budget authority, after the
Council having adopted the legislative proposal in question, does not grant the Commission
the necessary additional human resources. In that case,
if no redeployment from other
Commission services were possible, DG EAC would have to meet the related needs in term of
human resources by internal redeployment exclusively.

10.2

Overall financial impact of additional human resources

Per year in EUR

Amounts

Method of calculation

1 620 000

3 persons/year x 108 000 x 5 years = 1.620.000. Titles A1, A2,
A4, A5 and A7.

-

Officials

Temporary agents

Other resources
(Heading A 0 7002)

Total

1 620 000

The amounts express the total cost of the additional posts for the total length of the operation
if it is of a specific duration, of for 12 months if it is of unspecified duration.

10.3

Increase in other management expenditures resulting from the action, notably
expenditures for meetings and expert panels (EUR)

Budget Line

Amounts

Method of calculation

(No and heading)

1-7031 Obligatory
Committees

407 000 MEDIA Committee: 30 national experts (2 experts per
Iceland
delegation EUR 650 per expert) + 2 experts for
(EUR 900 per expert – calculation based on 1998 Commission
missions) + 2 experts for Norway (EUR 650 per expert –
calculation based on 1998 Commission missions). Total per
Committee meeting: EUR 22 600. The Committee meets once a
month x 5 years = 1 356 000. Percentage of contribution for the
MEDIA Training decision to the
the
MEDIA Committee: 30%.

functioning

of

Total

407 000

The expenses relating to heading A-7 appearing in point 10 will be covered by the overall
credits for DG EAC.

34

EXPLANATORY MEMORANDUM

Programme to encourage the development, distribution and promotion of European
audiovisual works

1.

Introduction

The development of methods of dissemination, particularly those involving digital
technologies, presents a new challenge to the European sector engaged in the production and
distribution of audiovisual programmes, in that it is gradually changing the economics of the
sector. Thus, the share of revenue generated by pay and pay-per-view television services rose
by more than 200% between 1988 and 1998, although the proportion stemming from
"traditional" methods of dissemination (cinema, video, television) still represents 87% of
overall income in by the audiovisual sector.

It has to be borne in mind, however, that digital TV channels have not yet replaced other
audiovisual dissemination methods to any significant extent. Indeed, quite the reverse has
been true in the cinema and video sectors (particularly on the sales side). Cinema attendance
increased by almost 38% between 1988 and 1998, with almost 7% of that rise occurring
between 1997 and 1998. At the same time, the video market has grown by 34% since 1992,
with a rise of 10% between 1997 and 1998.

The proliferation and diversity of dissemination methods has led to a significant rise in
thus enhancing the commercial potential of each
demand for audiovisual programmes,
individual production. However, audience fragmentation reduces the relative financing
capability of each channel. Moreover, against a backdrop of heightened competition to
capture the attention and purchasing power of viewers/consumers, new channels are focusing
their resources in particular on acquiring products which are attractive but have a short
exploitation time, e.g. sports events, games or entertainment programmes, making it more
difficult to put together the finance required for creative works such as films and dramas,
documentaries and animated works. Such productions are of strategic importance, however,
as they lend themselves in particular to multiple dissemination over a long period. It is on the
basis of such "staple" productions that long-term marketing and exploitation can develop.

The audiovisual sector is in the process of developing from a short-term economy focused on
national markets into a medium-
to long-term economy geared to the international
marketplace.

The European programme industry must be able to seize the opportunities opened up by the
development of digital channels and methods of exploitation by taking due account, in all its
strategic considerations, of the international dimension to the market. There is a serious risk
that the domination of the European market by imported programmes, particularly American
ones, will extend and increase with the new dissemination methods.

In this context, it is essential that operators be enabled to adopt an international development
strategy throughout the production and distribution chain. In accordance with the principle of
subsidiarity, the Community takes action only if and in so far as the objectives of the
proposed action cannot be adequately achieved by the Member States and can therefore, by
reason of the scale or effects of the proposed action, be achieved at Community level. Given
the results of the consultations conducted since 1997, and in particular the conclusions of the
Birmingham Conference, the selected course of Community action (development, distribution

35

and promotion) is to support and supplement the action of the Member States, whose own
support to the industry is focused on the production side.

2.

2.1

The situation

Lack of investment in development

The development of an audiovisual work represents a key phase and is the determining factor
for the decision as to whether the work should be produced or not. The development process
comprises three essential elements: conception of the work (particularly the writing of the
script),
technical, artistic and financial) partners, and the
establishment of the marketing plan. The development phase consists of specifying the details
of project so as to facilitate evaluation of:

the search for

(industrial,

• production feasibility;

• the commercial potential of the product;

• the cost and return on investment.

Too many projects in Europe enter production at the end of an inadequate development phase.
Put another way, they enter production without have benefited from sufficient investment at
the development stage, and this hampers their marketability and economic viability. Average
investment by the European audiovisual industry in project development is less than 5% of
that in production, compared with 10% for the United States.

This under-investment upstream translates at the production stage into a work that is less
attractive for potential distributors and broadcasters, which in turn means a lack of investment
in promotion and distribution, resulting in lower profitability. This vicious circle, exacerbated
by the under-capitalisation of companies, perpetuates the weakness of
the industry's
development strategy.

It is becoming essential for producers to take into account right from the development stage a
clear strategy for marketing and distributing the finished product in as many countries and
using as many media as possible. Moreover, this strategy must intermesh with a major
distribution and promotion effort geared to achieving optimum exploitation of the work and
achieving high revenue.

2.2

Obstacles to the transnational distribution of works

Most European markets are currently characterised by a double "bi-polarisation":

• Television programming mainly comprises programmes of national or American origin;
generally speaking, works of national origin predominate. On the drama side, American
productions account for 74% of programme imports in volume terms, compared with 14%
originating from other European countries.

• The cinema is dominated to varying degrees (from 60 to 95%) by works of American
origin, with the remaining market shares being taken mainly by nationally produced films.
Of the 550 cinema films produced annually in Europe, barely 20% are distributed outside
their principal country of production; this represents barely 7% of the market.

36

The consultations conducted since 1997 in the context of the EU audiovisual policy review
exercise have underlined, across the board, that Europe's biggest weakness lies in the low
circulation of non-domestic films and audiovisual programmes, which erodes the profitability
of these works and hinders the generation of revenue that could be ploughed back into the
production of new works.

Various underlying factors can be cited to explain this situation. First of all, the European
marketplace has traditionally been split up into national/language markets. National and
European works are distributed by a large number of companies operating in one and the
same country, which often sustains only a small market. Moreover, these companies are
under-capitalised, and are hard-pressed to keep pace with the constantly rising financial
investment that is needed to promote and publicise the works which they distribute. Finally,
few of them have the resources to engage in investment upstream of distribution in the form
of pre-purchases of distribution/dissemination rights and thus take an active part in financing
productions with high commercial potential.

Cooperation agreements and co-ordinated distribution strategies at European level are still a
rarity. They are nevertheless essential in the face of competition from far better structured
major companies and the growing internationalisation of transnational dissemination methods,
such as DVD video and international television channels. This necessary adaptation must,
however, take account of the fundamental role played by audiovisual content in cultural and
social terms. This contents must be accessible to all citizens, while respecting the cultural and
linguistic diversity with which Europe is so richly endowed.

2.3

Absence of a European image

The fragmentation of the production and distribution sector into a large number of often
under-capitalised small companies operating chiefly at national level also makes it difficult
for these companies to gain access to international trade events in the sector (in Europe and
beyond), given the high cost of participating. There are professional
initiatives and
associations in the Member States which put together logistical support packages for such
events, as well as providing assistance in promoting national works. The visibility and impact
of such activities, however, should be underpinned by better cooperation designed to exploit
European productions overall.

3.

3.1

Guidelines for European action

General principles

The experience gained under the MEDIA I and MEDIA II programmes and the assessments
of the results obtained have made it possible to establish general principles intended to
provide guidance in the implementation of financial support mechanisms at European level:

• strengthening of support mechanisms geared more towards structural funding, depending

on operators' commitments to medium-term objectives;

• setting-up of new, complementary mechanisms promoting the development of projects

using digital technologies at the production or dissemination stage;

• integrated approach making due allowance, by means of "positive discrimination"
the structural handicaps experienced by countries having a low

mechanisms,
audiovisual production capacity and/or restricted geographical and linguistic area.

for

37

The procedures for granting support are geared mainly towards mechanisms for direct
intervention in the market and mechanisms for support in step with market developments.

1.

2.

Project support is granted mainly on the basis of financial incentive mechanisms
encouraging the financial co-responsibility of the professional sector (conditionally
repayable loans);

Stepped-up support for companies aimed at bolstering their medium- to long-term
strategy: support granted automatically or on the basis of companies' performance in
the marketplace, and support
to companies submitting packages of projects
(slate-funding).

3.2

Development sector

Given the specific features and requirements of the market, there is a need to stimulate greater
investment by the industry in the development phase of audiovisual works, with the emphasis
on projects which are targeted at the European and international markets and offer the best
prospects for commercial success.

Similarly, the most dynamic production companies need incentives to implement medium-
term strategies for the development of their productions.

Particular attention should be paid to production projects using new creative technologies, and
also to the inclusion right from the development stage of all the dissemination methods which
could be used for commercial exploitation of the work.

The mechanisms put in place will have to accommodate all types of audiovisual works: drama
productions, films, documentaries, animation, interactive products (on-line, off-line, hybrids).

Priority operations:

Two types of operation are planned:

• co-financing of the development of individual projects (script-writing, search for financial
forward by European

and artistic partners, assessment and marketing studies) put
producers;

• co-financing of the medium-term strategies pursued by high-performance companies for

the development of "project packages" (slate-funding)

3.3

Distribution sector

Over the medium to long term, the development of new dissemination methods based on
digital
technologies is destined to change the distribution structures for audiovisual
productions, in particular by reducing the bottlenecks caused by the cost of the requisite
investment for the physical distribution of products (printing, storage and transport of copies
of cinema films or video cassettes, for example). This may enhance the scope for a wider
range of works to gain access to the market.

Set against a backdrop of heightened competition to capture the viewer's/consumer's attention,
however, the requisite investment will focus increasingly on advertising and marketing.

38

Optimum commercial exploitation of productions on all media requires major investment at
the beginning of the exploitation phase in order to maintain public interest over the entire
exploitation cycle. In particular, ever greater efforts are necessary when cinematographic
films are released for screening, since the profile and success of a film in the cinema
determines the revenue generated by exploitation of the film on other media (video, DVD,
sales to television).

The lengthening of exploitation cycles, the fragmentation of revenues over a growing number
in promotion and
of dissemination methods and the need for considerable investment
advertising call for the development of a distribution sector which is capable of:

• making the investment needed to promote and ensure the market success of European

works on various media;

• compiling competitive catalogues of European works for exploitation on the international

market;

• contributing towards the financing of new works.

this background,

in distribution and
Against
promotion on various types of media, from cinema screening to on-line distribution, and to
encourage the development of cooperative ventures and the structuring of distribution at
European level.

is appropriate to encourage investment

it

The economic structures of distribution companies need to be strengthened, with priority
being given to those companies which have the potential for development on the European
and international markets and put forward long-term strategies.

Priority operations:

(a)

Film distribution:

Selective support: a system of support in the form of conditionally repayable loans for film
distributors who distribute European cinema works outside their country of production.

This system makes it possible to:

• network European distributors,

in cooperation with international producers

and

distributors, so as to promote common strategies on the European market;

• encourage distributors to invest adequate amounts in the promotion and distribution of

European films, whatever their production budget;

• support multilingualism in European works (dubbing,

subtitling and multilingual

production).

Support for the production of international sound tracks (music and effects) for European
films: appropriate support for the production of international sound tracks (music and effects)
for European films with strong dissemination potential, aimed at facilitating exploitation of
the work in numerous countries and the production of high-quality versions in various
languages.

39

Automatic support: a system of automatic support for European distributors proportionate to
cinema attendance for non-domestic European films shown in the countries participating in
the Programme, up to an upper limit per film and graded according to country (corrective
mechanism for smaller countries).

Distributors can use this support solely for the purpose of investing in:

• the acquisition of non-domestic European films;

• editing-related work (copying, dubbing and subtitling), promotion and advertising for non-

domestic European films.

Support for sales agents: a system of support for European companies engaged in the
international distribution of cinema films (sales agents), the level of support being determined
according to their market performance over a given period. Distributors may use this support
solely for the purpose of investing in promotion, or for investing, including at the production
stage, in new European works for the European and international market.

Support for cinemas: an appropriate level of support designed to encourage exhibitors to
include in their screening schedules a significant showing of non-domestic European films in
commercial first-appearance cinemas for a minimum period of screening. The support granted
to each cinema may be determined, in particular, by the attendances achieved by the cinemas
for non-domestic European films over a fixed reference period. Support may also be granted
to encourage the creation and consolidation of European operator networks to devise joint
measures in favour of such scheduling. Finally, particular attention will be paid to cinemas
which engage in awareness-raising and educational activities aimed at young audiences.

(b)

Off-line distribution:

This term designates the distribution of European works on media intended for private use.

Automatic support: a system of automatic support for European publishers and distributors
according to their market performance over a given period. Distributors can use this support
solely for the purpose of investing in:

• the publication, distribution and promotion of non-domestic European works using new

technologies (such as DVD), particularly at European level;

• the advertising and promotion of new non-domestic European works published by them;

(c)

Television broadcasting:

the aim is to encourage independent producers to produce works

Here,
(dramas,
documentaries and animation productions) involving at least three broadcasters from several
Member States belonging to different language areas. The criteria applied in selecting the
beneficiaries may include provisions to distinguish between projects according to budget
category. Particular attention will be paid to audiovisual works which are likely to raise the
profile of European heritage and cultural diversity.

40

(d)

On-line distribution:

This term designates the distribution of European works on-line using advanced distribution
services and new media (Internet, video-on-demand, pay-per-view). The aim is to facilitate
consumer access to Europe's audiovisual heritage by means of new technologies and
advanced distribution services.

Support for catalogues: by providing incentives for the marketing of rights to works and for
is designed to encourage European
the dubbing/sub-titling of productions,
publishing and distribution companies to create and exploit catalogues of European works in
digital formal for commercial exploitation using new methods of dissemination.

this support

3.4

Promotion and market access sector

The specific objectives of promotional aid generally intermesh with those of aid for
distribution. However, there is a need for mechanisms which supplement those in place on the
distribution side by granting subsidies tointermediate service providers (organisers of
markets, festivals, etc.) so as to enable them to improve access for European works and
programmes to the European and international markets.

The mechanisms must be geared to encouraging:

• the presence of European audiovisual professionals and programmes on the traditional

markets, as well as on emerging European and international markets;

• the participation of European audiovisual professionals and programmes in all activities
aimed at promoting the movement, exchange and sale of European programmes inside and
outside Europe;

• the inclusion of European audiovisual works in European and international events and/or

festivals;

• the networking of professionals and national associations at European level in order to

optimise resources.

In parallel with promotion and market access measures, a specific measure is planned in
favour of film festivals. Where they are open to the general public,
these events give
European films a "showcase" to attract cinema-goers, as well as providing a forum at which to
promote productions vis-à-vis potential distributors in the country concerned. European
support must also be aimed at networking, exchanging information and experience, and
implementing measures common to these festivals.

Priority actions:

1.

Improving the conditions for access by professionals to European and international
markets by means of specific technical and financial assistance measures in the
context of events such as:

• the main European and international markets for films and audiovisual programmes;

• the thematic markets, especially those for animated films, documentary films, multimedia

the new technologies.

41

2.

3.

Promoting the use of databases and any other tools suitable for exchanging
information and experience relating to the exploitation of catalogues of European
programmes.

In the field of festivals:

• supporting audiovisual festivals which are carried out

in partnership and feature a

significant proportion of European works;

• encouraging projects for cooperation with a European dimension between audiovisual
events involving at least eight Member States with a joint plan of action to promote
European audiovisual works and their movement;

• promoting the setting-up by professionals, in close cooperation with Member States, of a

major event to spotlight European cinematographic and audiovisual creativity.

3.5

Pilot projects

Current and expected developments in the field of the digital technologies mean that a flexible
policy needs to be drawn up which is in step with a changing marketplace and takes due
account of the growing content requirements of television channels broadcast as part of digital
bouquets.

In order to ensure that the needs of industry dovetail with technological developments and
programme mechanisms, pilot projects will be organised throughout the programme so as to
promote conditions in which companies in the audiovisual content sector can seize the best
opportunities offered by new production and dissemination services.

Priority actions

• Pilot projects, aimed in particular at exploiting the cinematographic heritage, digitising
European audiovisual programme archives, and networking holders of rights to catalogues
of European audiovisual works.

• Pilot project aimed at promoting the dissemination of European works by thematic digital
audiovisual channels and services. In the first year of the programme, this project will be
the subject of a feasibility study to determine possible arrangements for this support
mechanism, with a view to establishing the conditions for its operational application
starting from the second year of the programme.

42

1999/0276 (CNS)

Proposal for a

COUNCIL DECISION

on the implementation of a programme to encourage the development, distribution and
promotion of European audiovisual works
(MEDIA Plus - Development, Distribution and Promotion) (2001-2005)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular
Article 157(3) thereof,

Having regard to the proposal from the Commission1,

Having regard to the opinion of the European Parliament2,

Having regard to the opinion of the Economic and Social Committee3,

Whereas:

(1)

(2)

(3)

From 6 to 8 April 1998, the Commission, in collaboration with the United Kingdom
presidency, held a European audiovisual conference on "Challenges and opportunities
of the digital age", in Birmingham. This consultation process revealed the need for an
enhanced programme of support for the European audiovisual industry, in particular in
the area of the development, distribution and promotion of European audiovisual
works. In the digital age, activities in the audiovisual field contribute towards the
creation of new jobs, particularly in the production and dissemination of audiovisual
content;

The Culture/Audiovisual Council of 28 May 1998, in approving the outcome of the
European Audiovisual Conference in Birmingham, highlighted the desirability of
encouraging the development a strong and competitive European audiovisual
programme industry, taking particular account of Europe's cultural diversity and the
specific conditions obtaining in restricted linguistic areas.

The Report of the High-Level Group on Audiovisual Policy of 26 October 1998,
entitled "The Digital Age: European Audiovisual Policy", recognises the need to
strengthen support measures for the cinematographic and audiovisual industry, in
particular by endowing the MEDIA programme with resources that are commensurate
with the size and strategic importance of the industry.

1

2

3

OJ C
OJ C
OJ C

43

(4)

(5)

(6)

(7)

(8)

(9)

The Communication from the Commission to the European Parliament and the
Council of Ministers entitled "Audiovisual Policy: Next Steps"4 recognises the need
for increased public support, particularly at Community level, for strengthening the
competitiveness of the European audiovisual industry.

The Green Paper on the "Convergence of the telecommunications, Media and
Information Technology Sectors, and the Implications for Regulation"5 underlines the
risk of a shortage of good quality content on the digital and analogue television
market.

The public consultation on the Green Paper, conducted by the Commission6,
highlighted the need to establish a framework to underpin the distribution and
promotion of European audiovisual content for the traditional and new media in a
digital environment.

In its Conclusions of 27 September 1999 regarding the results of the public
consultation on the Convergence Green Paper7, the Council invited the Commission to
take account of the outcome of the consultation when drawing up proposals for
measures to strengthen the European audiovisual industry, including the multimedia
sector.

the European audiovisual

The Commission implemented an "Action programme to promote the development
of
adopted by
Council Decision 90/685/EEC8, including in particular measures designed to support
the development and distribution of European audiovisual works.

industry (MEDIA)

(1991-1995)",

The Community strategy for developing and strengthening the European audiovisual
industry was confirmed in the framework of the MEDIA II Programme (1996-2000),
adopted by Council Decision 95/563/EC9, and by Council Decision 95/564/EC10. It is
appropriate, on the basis of the experience acquired from the Programme, to ensure its
extension, taking into account the results obtained.

(10)

The Commission report on the results obtained under the MEDIA II programme
(1996-2000) from 1 January 1996 to 30 June 1998 states that the Programme responds
to the necessary subsidiarity of Community funds compared with national funds, since
MEDIA areas of involvement complement the traditional emphasis of the national
mechanisms11.

(11)

It is necessary to take into account the cultural aspects of the audiovisual sector, in
accordance with Article 151 of the Treaty.

4

5

6

7

8

9

10

11

COM(1998) 446 final, 14.07.1998.
COM(97) 623 final, 3.12.1997
SEC(1998) 1284 final, 29.7.1998.
OJ C 283, 6.10.1999, p. 1.
OJ L 380, 31.12.1990, p. 37.
OJ L 321, 30.12.1995, p. 25.
OJ L 321, 30.12.1995, p. 33.
COM(1999) 91 final, 16.03.1999

44

(12)

(13)

(14)

(15)

(16)

(17)

(18)

The advent of a European audiovisual market necessitates the development and
production of European works, namely works originating from Member States as well
as works originating from European third countries participating in the MEDIA Plus
programme or having a cooperation framework satisfying the conditions set out in
Article 6 of Council Directive 89/552/EEC of 3 October 1989 on the coordination of
certain provisions
regulation or administrative action in
Member States concerning the pursuit of television broadcasting activities12, as
amended by European Parliament and Council Directive 97/36/EC13.

laid down by law,

The competitiveness of the audiovisual programme industry depends on the use of
new technologies at the programme development, production and distribution stages.
is therefore appropriate to ensure suitable and effective coordination with
It
the measures undertaken in the field of new technologies,
the
Fifth Framework Programme
research,
technological development and demonstration activities (1998-2002), as adopted by
Decision No 182/1999/EC of the European Parliament and of the Council14.

the European Community

in particular

for

of

In its Report to the European Council, entitled Job opportunities in the information
society15, the Commission referred to the major job-creation potential provided by the
new audiovisual services.

In its Communication on Community policies in support of employment16,
the
Commission recognised the MEDIA II Programme's positive impact on employment
in the audiovisual sector.

There is a need to improve the conditions for distributing European cinematographic
works on the European and international markets. Cooperation between international
and national distributors, cinema owners and producers should be encouraged and
support should be given to concerted action to promote common scheduling measures
at European level.

There is a need for improvement in the television broadcasting prospects of European
works on the European and international markets. Cooperation between broadcasters,
(as defined in Article 2 of Directive 89/552/EEC,
international distributors and
producers should be encouraged.

There is a need to facilitate market access for independent European production and
distribution companies, and to promote both European works and European companies
in the audiovisual sector.

(19)

Public access to the European audiovisual heritage should be improved, in particular
through its digitisation and networking at European level.

12

13

14

15

16

OJ L 298, 17.10.1989, p. 23.
OJ L 202, 30.07.1997 p. 60.
OJ L 26, 1.2.1999, p. 1.
COM(1998) 590 final.
COM (1999) 167 final.

45

(20)

(21)

The associated countries of Central and Eastern Europe, as well as Cyprus, Malta,
Turkey and those EFTA countries which are parties to the EEA Agreement are
recognised as potential participants in Community programmes on the basis of
supplementary appropriations and in accordance with the procedures to be agreed with
those countries.

The other countries of Europe which are parties to the European Convention on
Transfrontier Television are an integral part of the European audiovisual area and
should therefore be enabled to participate in this Programme on the basis of
supplementary appropriations, in accordance with the procedures to be established in
the agreement between the interested parties. Those countries should be able, if they
wish, and regard being had to budgetary considerations or the priorities of their
audiovisual industries, to participate in the programme and to benefit under a more
limited cooperation formula, on the basis of supplementary appropriations and specific
arrangements to be agreed between the interested parties.

(22) Cooperation with non-European third countries, developed on the basis of mutual and
balanced interests, may enable the European audiovisual industry to derive an added
value in terms of the promotion, market access, distribution, dissemination and
exploitation of European works in those countries. Such cooperation should be
developed on the basis of supplementary appropriations and specific arrangements to
be established in the agreement between the interested parties.

(23) A financial reference amount, within the meaning of point 2 of the Declaration by the
European Parliament, the Council and the Commission of 6 March 199517, is included
in this Decision for the entire duration of the programme, without prejudice to the
powers of the budgetary authority as defined by the Treaty,

(24)

In accordance with Article 2 of Council Decision 1999/468/EC of 28 June 1999,
laying down the procedures for the exercise of implementing powers conferred on the
Commission18, measures for the implementation of this Decision should be adopted by
use of the advisory procedure provided for in Article 3 of that Decision.

HAS DECIDED AS FOLLOWS:

Article 1

1.

A programme (hereinafter referred to as "the Programme"), is hereby established to
encourage the development, distribution and promotion of European audiovisual
works within and outside the Community,
to run from 1 January 2001 to
31 December 2005, for the purpose of strengthening the European audiovisual
industry.

17

18

OJ C 102, 4.4.1996, p. 4.
OJ L 184, 17.7.1999, p. 23

46

2.

The objectives of the Programme are as follows:

(a)

an improvement in the competitiveness of the European audiovisual industry
on the European and international markets, by supporting the development,
distribution and promotion of European audiovisual works, taking due account
of the development of new technologies;

(b)

respect for European linguistic and cultural diversity;

(c)

(d)

(e)

exploitation of the European audiovisual heritage, and in particular
digitisation and networking;

its

the development of the audiovisual sector in countries or regions with a low
capacity for audiovisual production and/or a restricted geographical and
linguistic area;

building up a production and distribution sector, especially comprising small
and medium-sized enterprises.

Those objectives shall be realised in accordance with the detailed arrangements set
out in the Annex.

Article 2

In the development sector, the specific objectives of the Programme are as follows:

(a)

(b)

to promote, by providing financial support, the development of production projects
(dramas for cinema or television, creative documentaries, animated films for
television or cinema, works exploiting the audiovisual and cinematographic heritage)
submitted by companies and aimed at the European and international markets;

to promote, by providing financial support, the development of production projects
that make use of new creation, production and dissemination technologies.

Article 3

In the distribution sector, the specific objectives of the Programme are as follows:

(a)

(b)

(c)

to strengthen the European distribution sector in the field of cinema by encouraging
distributors to invest in the acquisition and promotion of non-domestic European
cinema films;

to foster the wider transnational dissemination of non-domestic European films on
the European and international markets through measures to stimulate their
distribution and their screening in cinemas;

to strengthen the distribution sector for European works on media intended for
private use, by encouraging distributors to invest in digital technology and in the
promotion of non-domestic European works;

47

(d)

(e)

(f)

to promote the movement, in the Community and outside it, of European television
programmes intended for a European and world audience, by encouraging
independent European broadcasters and independent distributors and producers to
cooperate right from the production stage;

to encourage the creation of catalogues of Europe works in digital format intended
for exploitation on new media;

to support the linguistic diversity of European audiovisual and cinematographic
works.

In the field of promotion and market access, the Programme aims to:

Article 4

(a)

(b)

1.

2.

3.

facilitate and encourage the promotion and movement of European audiovisual and
cinematographic works at trade fairs in Europe and around the globe, as well as at
European audiovisual festivals;

encourage the networking of operators at European level, particularly by supporting
joint activities between national promotion organisations.

Article 5

Beneficiaries of Community support shall provide a significant proportion of the
funding. Community funding shall not exceed 50% of the cost of operations. In the
cases expressly provided for in the Annex, this percentage may nonetheless reach
60% of the cost of operations.

The financial reference amount for implementation of the Programme for the period
referred to in Article 1(1) shall be EUR 350 million. The annual appropriations shall
be authorised by the budgetary authority within the limits of
the financial
perspectives.

Without prejudice to the agreements and conventions to which the Community is a
contracting party, the undertakings benefiting from the programme shall be owned
and shall continue to be owned, whether directly or by majority participation, by
Member States and/or by nationals of Member States.

Article 6

Financial support under the Programme may be granted in the form of conditionally repayable
advances or subsidies, as defined in the Annex. The repayments under the Programme,
together with the repayments from operations under the MEDIA programme (1991-95)
and MEDIA II programme (1996-2000), shall be allocated to the requirements of the
MEDIA Plus Programme.

48

Article 7

The Commission shall be responsible for
in
accordance with the procedure referred to in Article 8(2) and with the rules laid down in the
Annex.

the implementation of the Programme,

Article 8

1.

2.

The Commission shall be assisted by the committee (the "MEDIA Committee")
established by Article 6 of Decision xx/xxx/EC19 of the European Parliament and of
the Council.

Where reference is made to this paragraph, the advisory procedure laid down in
Article 3 of Decision 1999/468/EC shall apply, in compliance with Article 7(3)
thereof.

Article 9

To ensure that the Programme can be flexibly adapted to technological developments, pilot
projects shall be implemented in the fields defined in the Annex.

In this task the Commission may consult Technical Consultation Groups. These shall be
composed of professionals from the various sectors of the audiovisual industry, appointed by
the Member States and chaired by a representative of the Commission. The Technical
Consultation Groups shall submit their reports to the Commission, which shall take the utmost
account of them.

Article 10

1.

2.

3.

The Programme shall be open to the participation of the associated countries of
Eastern and Central Europe in accordance with the conditions laid down in the
association agreements or their additional protocols relating to participation in
Community programmes concluded or to be concluded with those countries.

This Programme shall be open to the participation of Cyprus, Malta, Turkey and
those EFTA countries which are parties to the EEA Agreement on the basis of
supplementary appropriations, in accordance with the procedures to be agreed with
those countries.

This Programme shall be open to the participation of the countries which are parties
to the Council of Europe Convention on Transfrontier Television other than those
referred to in paragraphs 1 and 2, on the basis of supplementary appropriations, in
accordance with conditions to be established in the agreements between the
interested parties.

19

See page ... of this Official Journal.

49

4.

5.

1.

2.

3.

4.

The opening-up of the programme to the European third countries referred to in
paragraphs 1, 2 and 3 may be subject to a prior examination as to the compatibility of
their national
including the second
subparagraph of Article 6(1) of Directive 89/552/EEC.

legislation with the Community acquis,

The Programme shall also be open to cooperation with other third countries on the
basis of supplementary appropriations and the specific arrangements to be
established in agreements between the interested parties. The European third
countries referred to in paragraph 3 which do not wish to benefit from full
participation in the Programme may be eligible for cooperation with the Programme
under the conditions set out in this paragraph.

Article 11

The Commission shall ensure that measures taken under this Decision are subject to
prior appraisal, and to subsequent monitoring and evaluation.

After completion of the projects, the Commission shall evaluate the manner in which
they have been carried out and the impact of their implementation, in order to assess
whether the original objectives have been achieved.

After two years of implementation of the Programme, the Commission shall present
to the European Parliament, the Council and the Economic and Social Committee an
evaluation report on the impact and effectiveness of the Programme based on the
results obtained. This report shall be accompanied, if need be, by any adjustment to
the Programme, including budgetary adjustments.

On completion of
to the
European Parliament, the Council and the Economic and Social Committee a report
on the implementation and results of the Programme.

the Commission shall

the Programme

submit

Article 12

This Decision shall take effect on 1 January 2001.

Done at Brussels,

For the Council
The President

50

ANNEX

1.

1.1

MEASURES TO BE IMPLEMENTED

In the "development of audiovisual works" sector

The object of the programme measures is to provide financial assistance for enterprises in the
audiovisual sector submitting:

• proposals supporting the development of audiovisual works presented project by project;

• proposals supporting the development of project catalogues (project packages) as part of a

medium-term business strategy.

Selection criteria will chiefly take account of the European and international nature of the
projects, and in particular:

• the interest shown by co-producers in the project;

• the project's transnational exploitation potential (as demonstrated by the expression of
interest by distributors, the project's production potential, previous productions by the
tendering enterprise or its constituent individuals) ;

• the quality and originality of the concept, script or narrative;

• the potential for using new technologies (special effects, computer images, interactivity,

etc.).

As a general rule, financial support for development will take the form of conditionally
reimbursable loans for individual projects, and non-reimbursable subsidies for project
catalogues. The contribution will generally be limited to 50% of project costs, but may be
raised to 60% for projects that exploit European cultural diversity.

1.2

In the distribution and dissemination sector

1.2.1

Cinema distribution:

The following lines of action will be implemented in order to achieve the objectives outlined
in Article 3:

(a)

a support scheme in the form of a conditionally reimbursable advance for distributors
of European cinematographic works outside their production territory. The aim of
this scheme is:

• to encourage the networking of European distributors in conjunction with
international producers and distributors, in order to promote joint strategies for the
European market,

• to encourage distributors in particular to invest

in adequate promotion and

distribution costs for European films, whatever their production budget,

• to assist with the multilingual aspects of European film-making (dubbing,

subtitling and multilingual production).

51

The criteria for selecting beneficiaries may include provisions to distinguish between projects
according to their budget category. Special support will be granted for films that exploit
European cultural diversity.

(b)

a system of “automatic” support for European distributors proportional to the number
of seats sold for non-domestic European films in countries participating in the
programme, up to a limit per film and adjusted for each country. This type of support
may be used by distributors only for investment in the following:

• the acquisition of non-domestic European films;

• editing costs (copying, dubbing and subtitling), promotion costs and publicity

costs for non-domestic European films.

Reinvestment arrangements will provide for a Community contribution of over 50% (but not
more than 60 %) of project costs, particularly for investment in the production stage and in
films exploiting European cultural diversity.

(c)

(d)

a system to assist European companies specialising in the international distribution of
cinema films (sales agents) according to their performance on the market over a
given period. This type of assistance may be used by international distributors only
for investment in costs arising from the promotion of new European works on the
European and international markets.

appropriate assistance to encourage operators to screen a significant proportion of
non-domestic European films in premiere cinemas for a minimum screening period.
The support granted to each cinema will be determined according to the number of
cinema seats sold for non-domestic European films during a reference period.
Support should, in particular, contribute to measures to educate and raise awareness
amongst young cinema-goers. Support will also be granted for the creation and
consolidation of networks of European operators running joint schemes to encourage
such scheduling.

(e)

a support scheme for the production of international soundtracks (music and effects)
for European cinematographic works. The support granted will be determined
according to the production budget.

1.2.2

Distribution of off-line European works.

This is understood to mean the distribution of European works on media intended for private
use.

for editors and distributors of
Automatic support: a system of automatic support
European cinematographic works on media intended for private use (e.g. videocassettes,
DVD, DVD-Rom) according to market performance over a given period. The support granted
may be used by distributors only for investment in the following:

• the costs of editing and distributing new non-domestic European works in digital form; or

• the costs of promoting new non-domestic European works in non-digital format.

52

This system is designed to:

• encourage the use of new technologies in the production of European works intended for

private use (production of a digital master for use by all European distributors);

• encourage distributors in particular to make adequate investment in the costs of promoting

and distributing non-domestic European films and audiovisual works;

• assist with multilingual European productions (dubbing, subtitling and multilingual

production).

1.2.3

Television broadcasting:

Encourage independent producers to produce works (feature films, documentaries and
animated films) involving at least three broadcasters in several Member States belonging to
different language zones.

The criteria for selecting beneficiaries may include provisions that distinguish between
projects by budget category. Special support will be granted for audiovisual works that exploit
European heritage and cultural diversity.

1.2.4

Distribution of European works on-line:

This is taken to mean the distribution of European works on-line via advanced distribution
services and new media (Internet, video-on-demand, pay-per-view). The aim is to encourage
the European audiovisual industry to adapt to developments in digital technology, particularly
as regards advanced on-line distribution services.

Introduction of incentives to digitise works and create promotional and publicity material in
digital form, so encouraging European companies (suppliers of on-line access, special-interest
channels, etc.) to create catalogues of European works in digital format for exploitation via
new media.

1.3

Promotion

1.3.1

In the field of promotion and market access:

The programme measures aim to:

(a)

improve the conditions governing access by professionals to the European and
international markets via specific technical and financial support schemes as part of
events such as:

• the main European and international cinema markets;

• the main European and international television markets;

• special-interest markets, particularly for

animated films, documentaries,

multimedia and new technologies.

(b)

encourage the creation of a database on catalogues of European programmes.

53

To this end, the Commission is encouraging the networking of operators at European level,
essentially by supporting joint initiatives involving national promotional bodies.

Criteria for selecting projects will principally take account of the following:

• the European dimension,

• the quality of professional services (producers, distributors, broadcasters, sales agents),

• the expertise of service providers and operators in the field of promotion.

Support will generally be limited to 50% of project costs.

1.3.2

In the festivals field:

The programme measures aim to:

• support joint audiovisual festivals that screen a significant proportion of European works;

• encourage joint projects with a European dimension involving audiovisual events from at
least eight Member States, with a common action plan to promote European audiovisual
works and their movement.

Particular attention will be paid to festivals which help to promote works from Member States
or regions with a low audiovisual production capacity and works by young European
producers, and which establish a policy for monitoring the distribution of the European works
featured at the festivals.

Priority will be given to projects from networks which encourage lasting cooperation between
events.

Support will generally be limited to 50% of project costs.

1.3.3

Activities to promote European productions:

to organise
To encourage professionals,
activities to promote European audiovisual and cinema productions intended for the general
public.

in close association with the Member States,

1.4

Pilot projects

The Commission will implement pilot projects in the following areas:

– conservation and exploitation of the cinematographic heritage, by encouraging partnerships

between operators in the cinematographic sector and public or private bodies;

– digitisation of European audiovisual programme archives;

– networking the owners of rights to catalogues of European audiovisual works;

– scheduling of European audiovisual works on special-interest channels in digital format;

– creation of a suitable environment for developing and disseminating new advanced on-line

distribution services.

54

Where appropriate, the Commission may approach the technical consultation groups for
assistance.

2.

2.1

IMPLEMENTATION PROCEDURE

Approach

In implementing the programme, the Commission will work closely with the Member States.
It will also consult the partners concerned and ensure that the participation of professionals in
the programme reflects European cultural diversity.

2.2

Funding

2.2.1

Community contribution

Community funding will not exceed 50 % of the cost of the planned measures (other than in
the cases expressly provided for in the Annex, where a higher ceiling applies) and will be
granted in the form of advances or conditionally reimbursable loans. For multilingual support,
the Community contribution will be in the form of subsidies.

2.2.2

Prior appraisal, monitoring and subsequent evaluation

Prior to approving a request for Community support, the Commission will carefully evaluate
it to check that it complies with this Decision and with the conditions set out in points 2 and 3
of this Annex.

Requests for Community support must include the following:

• a financial plan setting out all the project funding components, including the financial

support requested from the Commission;

• a provisional work timetable;

• any other relevant information required by the Commission.

2.2.3

Financial provisions and control

The Commission shall set out the rules on commitments and payments for the measures
undertaken pursuant to this Decision, in compliance with the appropriate provisions of the
financial regulations.

2.3

Implementation

2.3.1 The Commission shall implement the programme. It may,
to this end, call upon
consultants and technical assistance offices to be selected, after a call for tenders, on the basis
of their expertise in the sector. The Technical assistance shall be financed by the programme’s
budget. The Commission may also conclude, in accordance with the procedure referred to in
Article 8(2), partnerships for ad hoc operations with specialist bodies such as Audiovisual
Eureka, in order to implement joint measures that meet the programme objectives in the field
of promotion.

The Commission will make the final selection of the beneficiaries of the programme and
decide on the financial support to be granted, in accordance with Article 7.

55

In order to execute this programme and, in particular, evaluate the projects benefiting from
the Commission shall draw on the
the programme funding and networking activities,
know-how of recognised audiovisual experts in the fields of development, production,
distribution and promotion.

2.3.2 The Commission shall
opportunities offered by the Programme, and shall ensure its promotion.

take the necessary steps to provide information on the

The Commission and the Member States shall take the necessary steps, by continuing with the
activities of the network of MEDIA Desks and Antennae and ensuring that their professional
skills are enhanced, in order to:

• publicise and promote the programme;

• encourage maximum participation in the programme's activities by professionals;

• assist professionals with the presentation of projects in response to calls for proposals;

• foster transborder cooperation between professionals;

• liaise between the various support bodies in the Member States with a view to ensuring

that programme activities complement national support measures.

56

FINANCIAL STATEMENT

1.

TITLE OF OPERATION

Programme to encourage the development, distribution and promotion of European
audiovisual works

2.

BUDGET HEADING INVOLVED

B 3 2010.

3.

LEGAL BASIS

Article 157 of the Treaty establishing the European Community

4.

4.1

DESCRIPTION OF THE OPERATION

Overall objective

The aim of the programme is to remedy the shortcomings of the European
i.e. the inadequate movement of
audiovisual and multimedia content
non-domestic European works and the chronic shortage of investment, both upstream
(project development
and downstream
(distribution and promotion) in terms of production volume and competition from the
United States.

and continuous vocational

industries,

training)

The overall objectives are as follows:

– to enhance the competitiveness of the European audiovisual industry, particularly
on the European market, by supporting the development of projects with genuine
distribution and/or dissemination potential,

– to

help

independent European

production

and

distribution

companies

(mostly small and medium-sized enterprises) by encouraging their networking,

– to help European content industries consolidate their market position in the new

audiovisual media sector,

– to encourage the movement of audiovisual works within the European market and

their promotion outside the Union,

– to enhance the potential of countries or regions with a low audiovisual production

capacity and/or with a limited geographic and linguistic area,

– to ensure that European linguistic and cultural diversity is respected,

– to exploit the European audiovisual heritage.

57

4.2

Period covered by the operation and arrangements for renewal

The Media Plus Training programme covers the period from 1 January 2001 to
31 December 2005. Its possible renewal will be the subject of a new decision-making
process based on the provisions of the Treaty.

5.

5.1

5.2

5.3

CLASSIFICATION OF EXPENDITURE OR REVENUE

Non-compulsory expenditure

Differentiated appropriations

N/A

6.

TYPE OF EXPENDITURE OR REVENUE

The financial support allocated under the development heading will generally take
the form of conditionally reimbursable
and
non-reimbursable subsidies for catalogues of projects. The contribution will
generally be limited to 50% of the cost of projects, but may be raised to 60% for
projects that exploit European cultural diversity.

individual projects

loans

for

Financial support allocated under the distribution heading will generally take the
form of conditionally reimbursable loans for selected systems (cinema and
television) and non-reimbursable subsidies for automatic systems (cinema and
video). Non-reimbursable subsidies will also be granted to assist sales agents and
cinemas, to help with the production of international soundtracks and for catalogues
of works in digital format. The contribution will generally be limited to 50 % of the
cost of projects, but may be raised to 60% for projects that exploit European cultural
diversity.

Financial support allocated to promotion and pilot projects will generally take the
form of non-reimbursable subsidies.

7.

7.1

FINANCIAL IMPACT

Method of calculating the total cost of the operation

Amounts were arrived at using two sources of information:

– The data available from the implementation of the MEDIA II Programme
(databases by sector of activity and action line). These figures are based on actual
dossiers submitted by tenderers (representing at least half of the professionals in
the sector).

58

– Data contained in the following documents: proceedings of conferences on the
audiovisual sector
(Birmingham Conference on the European Audiovisual
Industry, the Helsinki Forum on Audiovisual Policy), report by the High-level
Group on Audiovisual Policy (Oreja Group), the mid-term assessment of the
MEDIA II Programme (BIPE), Commission documents (Green paper on
convergence, Communication on the next steps in audiovisual policy), etc. These
documents – containing macro-economic analyses – include figures on the
sectoral requirements of the European audiovisual industry.

Reimbursements of the loans granted under the programme, and of those for
measures implemented under the MEDIA programme (1991-95) and the MEDIA II
(1996-2000) programme, are allocated to the requirements of the MEDIA Plus
programme.

Development

Breakdown and quantified forecast for the development sector (EUR million)

DEVELOPMENT

2001

2002

2003

2004

2005

TOT

Project development

Development of individual projects
No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

Development of project packages
No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

Total development support

No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

2
1 000
170

2
1 000
170

2
1 000
170

2
1 000
170

2
1 000
170

10
5 000
850

6.4

6.4

6.4

6.4

6.4

32.0

1
150
51

1
150
51

1
150
52

1
150
51

1
150
51

5
750
256

6.375

6.375

6.5

6.375

6.375

32.0

3
1150
221

3
1150
221

3
1150
222

3
1150
221

3
1150
221

15
5750
1106

12.775

12.775

12.9

12.775

12.775

64.0

selection
%
-
Contrib.
per
contract

17%
-
37.647

34%
-
125.000

19%
-
57.866

59

Distribution

Breakdown and quantified forecast for the distribution sector (EUR million)

DISTRIBUTION

2001

2002

2003

2004

2005

TOT

Cinema distribution support

Selective cinema support
No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

Automatic cinema support
No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

Support for cinemas
No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

Support for sales agents
No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

Soundtrack production support
No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

Television broadcasting support

for

TV

support

Selective
broadcasting
No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

3
500
230

9

1

150
130

11

1
500
150

3.5

2
40
20

1

2
130
20

0.4

3
170
80

9

3
500
220

8

1

150
130

11

1
500
150

3.5

2
40
20

1

2
130
20

0.4

3
170
80

9

3
500
220

9

1

150
130

11

1
500
150

3.5

2
40
20

1

2
130
20

0.4

3
170
80

9

15
2500
1.240

45.0

5

750
650

55.0

5
2500
720

17.5

10
200
100

5.0

9
650
100

2.0

15
850
400

45

3
500
300

10

1

150
130

11

1
500
120

3.5

2
40
20

1

1
130
20

0.4

3
170
80

9

3
500
270

10

1

150
130

11

1
500
150

3.5

2
40
20

1

2
130
20

0.4

3
170
80

9

60

selection
%
-
Contrib.
per
contract

50%
-
36.290

87%
-
84.615

29%
-
24.306

50%
-
50.000

15%
-
20.000

47%
-
112.500

Off-line distribution support

Automatic editing support (DVD)

No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

On-line distribution support

Support for catalogues
No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

Total distribution support

No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

Promotion

1
130
50

3

1
60
30

2

1
130
70

3

1
60
30

2

1
130
100

3

1
60
30

2

1
130
100

3

1
60
30

2

1
130
100

5
650
420

3

15.0

1
60
30

2

5
300
150

10.0

13
1680
750

14
1680
770

14
1680
760

14
1680
750

14
1680
750

69
8400
3780

39.4

39.4

38.4

37.4

37.4

192.0

Breakdown and quantified forecast for the promotion sector (EUR million)

PROMOTION

2001

2002

2003

2004

2005

TOT

Promotion and market access

Support for audiovisual markets
No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

Support for festivals/major events
No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

Total support for promotion

No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

3
100
40

4.0

2
200
55

2.0

5
300
95

6

3
100
40

4.0

3
200
55

2.0

6
300
95

6

3
100
40

4.0

3
200
55

2.0

6
300
95

6

3
100
40

4.0

3
2100
55

15
500
200

20.0

14
1000
275

2.0

10

6
300
95

29
1500
475

6

30.0

3
100
40

4.0

3
200
55

2.0

6
300
95

6

61

65%
-
35.714

50%
-
66.667

45%
-
51.455

selection
%
-
Contrib.
per
contract

40%
-
100.000

28%
-
36.364

32%
-
63.158

Pilot projects

Breakdown and quantified forecast for the pilot projects sector (EUR million)

PILOT PROJECTS

2001

2002

2003

2004

2005

TOT

Pilot projects
No of calls for proposals anticipated
No of requests for support anticipated
No of requests for support accepted
(forecast)
Total (EUR million)

2
30
3

2.0

2
30
6

4.0

2
30
6

4.0

2
30
6

5.0

2
30
6

10
150
27

5.0

20.0

selection
%
-
Contrib.
per
contract

18%
-
740.741

7.2

Itemised breakdown of cost

Breakdown and quantified forecast for the pilot projects sector (EUR million)

Measure
Development
Support for individual projects
Support in the form of slate funding

Total development support

Distribution and dissemination
Selective support for cinema distribution
Automatic support for cinema distribution
Support for cinemas
Support for sales agents
Support for soundtrack production

Total cinema distribution support

Selective support for television broadcasting

Total television broadcasting support
Automatic support for works intended for
private use

Total support for off-line distribution

Support for catalogues

Total support for on-line distribution
Total support for distribution

Promotion

Support for audiovisual markets
Support for festivals and major events

Total promotion support

Technological developments
Pilot projects

Horizontal costs
GRAND TOTALS

2001

2002

2003

2004

2005

Total

6.4
6.375
12.775

6.4
6.375
12.775

10.0
11.0
3.0
1.0
0.4
25.9
9.0
9.0
3.0

3.0
2.0
2.0
39.4

4.0
2.0

6.0

10.0
11.0
3.0
1.0
0.4
25.9
9.0
9.0
3.0

3.0
2.0
2.0
39.4

4.0
2.0

6.0

6.4
6.5
12.9

9.0
11.0
3.0
1.0
0.4
24.9
9.0
9.0
3.0

3.0
2.0
2.0
38.4

4.0
2.0

6.0

6.4
6.375
12.775

6.4
6.375
12.775

8.0
11.0
3.0
1.0
0.4
23.9
9.0
9.0
3.0

3.0
2.0
2.0
37.4

4.0
2.0

6.0

8.0
11.0
3.0
1.0
0.4
23.9
9.0
9.0
3.0

3.0
2.0
2.0
37.4

4.0
2.0

6.0

2.0
8.3
68.98

4.0
8.3
70.98

4.0
8.3
70.10

5.0
8.3
69.98

5.0
8.3
69.98

32.0
32.0
64.0

45.0
55.0
15.0
05.0
02.0
125.0
45.0
45.0
15.0

15.0
10.0
10.0
192.0

20.0
10.0

30.0

20.0
41.5
350.0

62

Actions vis-à-vis the sector

Commitment appropriations (EUR million) (current prices)

2001

2002

2003

2004

2005

– MEDIA Desks

– Studies and meetings

of experts1

– Information and
publications

2.4

0.4

1.0

2.4

0.4

2.4

0.4

2.4

0.4

2.4

0.4

1.0

1.0

1.0

1.0

Total

12.0

2.0

5.0

Total

3.80

3.80

3.80

3.80

3.80

19.00

7.3

Operating costs included in Part B of the budget

Horizontal costs

Commitment appropriations (EUR million) (current prices)

– TAO2

Total

2001

2002

2003

2004

2005

4.5

4.5

4.5

4.5

4.5

4.5

4.5

4.5

4.5

4.5

Total

22.5

22.5

In order to conduct a selection among the proposals and to assist in the follow-up, the
Commission envisages calling upon external technical and/or administrative assistance. In the
framework of the MEDIA II and MEDIA I programmes, the Commission was assisted by
TAOs (Technical Assistance Offices) with expertise in the areas covered by the programme.
The type of external technical and/or administrative assistance used for the implementation of
the present programme will be determined in accordance with the guidelines established by
the Commission.
If TAOs were to be used for the establishment of the present programme,
the College will be duly informed in accordance with the Vademecum concerning Technical
Assistance Offices.

1

2

Expenses meeting the criteria set out
in the Commission Communication dated 22 April 1992
(SEC(1992) 769). The expert meetings will be organised by the Commission to assist it in the selection
of projects for each call for proposals.
The TAO will provide the Commission with technical and administrative assistance for the assessment
of the projects presented and the monitoring of the implementation of the selected projects. Calling on
the TAO does not imply any delegation of public power from the Commission who maintains the
entirety of its decision-making powers.

63

7.4

Indicative schedule commitment/payment appropriations

Commitment appropriations (EUR million)

Commitment
appropriations

Payment appropriations

2001
2002
2003
2004
2005
2006
2007

Total

2001

2002

2003

2004

2005

68.98

70.98

70.10

69.98

69.98

34.49
24.14
10.35
-
-
-
-

68.98

-
35.49
24.84
10.65
-
-
-

70.98

-
-
35.05
24.54
10.52
-
-

-
-
-
34.99
24.49
10.50
-

-
-
-
-
34.99
24.49
10.50

70.10

69.98

69.98

Total

350.0

34.49
59.63
70.24
70.17
69.99
34.99
10.50

350.0

8.

FRAUD PREVENTION MEASURES

Programme beneficiaries are selected according to a call for proposals procedure
published several times a year in the Official Journal of the European Communities.
Before approving a request for Community support, the Commission carefully
evaluates it to check that it complies with the Council Decisions and the terms of the
call for proposals.

Requests for Community support must include the following:

– a financial plan detailing all the components of project funding, including the

financial support requested from the Commission;

– a provisional work timetable;

– any other relevant information required by the Commission as set out in the

technical specifications of the call for proposals.

For proposal selection, the Commission is assisted by a technical assistance office
with expertise in the fields covered by the Programme. Projects that are deemed
eligible are then submitted to independent experts and to the MEDIA Committee,
which consists of
the Member States participating in the
programme, before the final decision is taken by the European Commission.

representatives of

The payment of financial contributions is contingent upon the production of detailed
supporting documents, prior to payment, and of activity reports. It
is likewise
contingent upon on-site checks (audits) and central monitoring.

Furthermore, various bodies (Court of Auditors, Financial Control and authorising
officer) run checks on the bodies managing the measures and on the beneficiaries.

64

9.

9.1

ELEMENTS OF COST-EFFECTIVENESS ANALYSIS

Specific and quantified objectives, target population

The objective in the development sector is to remedy chronic under-investment in the
European industry, particularly in the development phase of projects with
commercial potential on the European market. The objective is also to help
independent companies consolidate their presence and set up networks.

The objectives of development aid must be:

– in the short/medium term, to inject additional funding into enterprises running

fiction, animation or documentary projects using new technologies;

– in the longer term (and in conjunction with training), to bring about a change in
professional practices in terms of greater concentration on project development.

Development aid must also encourage

the most dynamic independent producers to implement genuine commercial
development strategies, and

encourage entrepreneurs to acquire the critical mass that will allow them to
increase investment
in the development of European projects as a result of
increased turnover, catalogue receipts and operating results.

The objectives of distribution aid must be:

In the short term:

– to improve the access of European works to the exploitation modes already
available within Europe and encourage the movement of European works within
the Single Market;

– to improve public access to non-domestic European works (cultural diversity),

particularly by providing assistance for multilingual productions;

– to enhance the prominence, visibility and profitability of these works in various

formats (cinema, video and DVD, television);

– to encourage national and international distributors (sales agents) to increase

investment in individual European works (publicity, promotion);

– to encourage the distribution sector (national and international) to increase

investment in production, particularly the production of non-domestic works.

In the medium term:

– to improve the mobility and profitability of European works on the European and

world markets, on all consumer-accessible media;

65

-
-
– to enhance the competitiveness of distribution companies (cinema, video, TV) and

the compilation and exploitation of European copyright catalogues;

– to develop networking and joint strategies at European level by strengthening the

links between distribution and production;

– to increase the production of works intended for

the European market

(distribution-led production) whilst respecting linguistic and cultural diversity;

– in cultural terms: to develop the European public's knowledge and appreciation of
thus strengthening European cultural

works from other European countries,
identity in all its diversity.

The objectives of promotional assistance must be:

– to encourage the presence of European professionals and audiovisual programmes
on both traditional markets and the emerging European and international markets;

– to encourage the participation by professionals and European audiovisual
programmes in all measures to promote the movement, exchange or sale of
European programmes inside and outside Europe;

– to encourage the scheduling of European audiovisual works at European and

international events and/or festivals;

– to encourage the networking of professionals and of national associations at

European level in order to optimise resources.

Sector

Target population

Development

Distribution

Promotion

-

-
-
-
-
-
-
-
-

-

-
-

documentaries

European independent production companies (SMEs)
- Fiction
-
- Animation
- Multimedia
European film distributors (cinema, video, DVD, etc.)
Independent European cinema and television producers
European sales agents
Owners of copyright on works (catalogues): distributors etc.
Special-interest channels
Independent European operators
European and international audiovisual markets
International audiovisual
proportion of European works
European associations of
featuring a significant proportion of European works
European audiovisual operators
International audiovisual events to promote European works and
talent

international audiovisual

featuring a significant

festivals

festivals

9.2

Grounds for the operation

Need for a contribution from the Community budget, particularly in view of the
principle of subsidiarity.

66

The support programme in question is in line with the European Union's audiovisual
policy.

It operates on the basis of the principle of subsidiarity, complementing initiatives at
national level. It underpins and complements measures taken at national level. It
meets the objectives set out in the Treaty, particularly Article 157 thereof, i.e.:

– speeding up the adjustment of industry to structural changes;

– encouraging an environment favourable to initiative and to the development of
undertakings throughout the Community, particularly small and medium-sized
undertakings;

– encouraging an environment favourable to cooperation between undertakings;

– fostering better exploitation of the industrial potential of policies on innovation,

research and technological development.

Choice of operational arrangements

The incentive here is financial, the aim being to mobilise additional investment from
industry and bring about a significant
increase in the volume of activity. This
market-based approach will stimulate activity.

National state aid is very much geared towards production, whilst MEDIA aid is
deployed for the development of projects and the distribution of works. National aid
in the production sector accounts for 59% of total national aid, compared with 5% for
distribution and 6% for exploitation.

By mobilising capital (under the MEDIA II programme), Community financial
intervention will have an average multiplier effect of 4.19 in development and 7.2 in
distribution.

– Main unknowns that may affect the specific results of this action: this is a

pioneering, high-risk industry.

9.3

Monitoring and evaluation of the operation

Performance indicators:

Development

Individual projects

Project packages

-
-
-

-

-
-
-
-

investment by production companies in the

Number of projects developed
Number of projects in production
Level of
development phase (in EUR)
Number of works produced with MEDIA assistance and
distributed outside the country of production
Number of enterprises benefiting from the programme
Number of projects developed per year per enterprise
Number of projects in production
Number of enterprises that have collaborated in project
development

67

Selective support for
cinema

Automatic support for
cinema

Support for sales
agents

Distribution

Support for cinemas

Support for soundtrack
production

Selective support for
television

Automatic support for
works intended for
private use
(video - DVD)

Support for catalogues

-

-
-

-
-
-

-

-
-
-
-
-
-

-

-
-
-
-
-
-
-
-

-
-
-
-
-
-
-
-
-
-

-

-

-

-

-
-

-
-

European

distributors

(programme

Number of non-domestic films distributed (by company,
country, year, etc.)
Number of distributors per film distributed (networks)
Number
of
participation)
Number of seats sold per film
Number of copies per country
Ratio of expenditure on promotion (per film and country)
to production budget and the guaranteed minimum paid
Number of non-domestic European films distributed from
countries with limited audiovisual production capacity
Reimbursement rate (film's performance on the market)
Number of non-domestic films distributed
Number of European distributors
Number of seats sold per film
Number of copies per country
Ratio of expenditure on promotion (per film and country)
to production budget and the guaranteed minimum paid
Rates of investment in P&A (prints and advertising), GM
(guaranteed minimums) and co-production.
Number of enterprises benefiting from programme
Number of films supported
Number of countries sold to per film
Revenue from films sold
Number of cinemas in networks
Ratio of scheduling for non-domestic European films
Number of seats sold for non-domestic European films
Volume of receipts from non-domestic European films in
relation to investment in promotion
Number of projects supported
Number of beneficiary enterprises
Number of countries in which film distributed
Revenue from films supported
Number of projects supported
Number of partner countries involved in project
Return rate (in relation to the number of countries sold to)
Number of countries sold to
Revenue generated
Number of titles distributed (non-domestic European) by
medium
Number
programme
Volume of revenue from the marketing of these works (by
medium)
Proportion of works from countries with low audiovisual
production capacity
Rate of reinvestment of support in distribution of works in
DVD format
Number of enterprises supported
Scheduling volume (by genre/origin of production) of
supported catalogues
Countries sold to and revenue generated
Ratio of financial assistance from the Commission to
overall investment (in relation to catalogue volume)

editors benefiting from the

of European

68

Promotion

Support for promotion

Support for festivals
and major events

-
-

-
-
-
-
-
-
-
-

-

Number of audiovisual markets and umbrellas supported
Number of enterprises and participants in markets and
umbrellas
Number of programmes on the markets
Volume of trade in programmes
Volume of receipts generated
Number of audiovisual festivals supported
Scheduling rate, European films
Scheduling rate, non-domestic European films
Number of viewers
Number of films commercially distributed after screening
at festivals
Number of works screened by young producers

the
pertinent
The Commission monitors
implementation of
the contracts established with the
Commission, the beneficiaries of financial support will have to provide the relevant
information so as to allow the continuous, half term and ex-post evaluation.

the programme. For

throughout

the most

indicators

Details and frequency of planned evaluation:

The Commission will draw up two Programme evaluation reports.

Mid-term report: the first report will be drawn up two years after the start of the
programme. The object of this report is to provide an initial assessment of the results
obtained at the half-way stage so that any changes or adjustments that are deemed
necessary may be made for the second half of the programme. To this end, the
Commission may draw on the assistance of outside experts, who will be selected on
the basis of their expertise following a call for tenders. The Commission report will
the Council and the Economic and
be submitted to the European Parliament,
Social Committee.

Final Report: the second report will be drawn up at
the end of the five-year
programme. The object of this report is to assess the comparative results of support
systems in the light of the programme objectives. As with the mid-term report, the
Commission may call on outside consultants for assistance. The final report will be
submitted to the European Parliament, the Council and the Economic and Social
Committee.

in the light of

Furthermore,
the MEDIA II
Programme, the Commission plans to continue its practice of auditing beneficiaries
(around 30 per year) in order to check that Community funds are being used
properly. The results of audits will form the subject of a written report.

the experience acquired under

Evaluation of the results obtained:

Information providing a measure of the performance, results and impact of the
Programme will be taken from the following sources:

– statistical data compiled on the basis of the information from application dossiers

and the monitoring of beneficiaries' contracts;

– audit reports on a sample of Programme beneficiaries (30 per year);

69

– consultations with MEDIA Desks and Antennae and on national markets;

– consultations with experts and institutional bodies (national and international

professional associations);

– consultations with audiovisual professionals and with specialist training bodies.

10.

ADMINISTRATIVE EXPENDITURE (PART A OF SECTION III OF THE
GENERAL BUDGET)

This section must be sent simultaneously to DG BUDG and DG ADMIN; the latter will then
forward it to DG BUDG with its opinion.

Actual mobilisation of the necessary administrative resources will depend on the annual
decision by the Commission on the allocation of resources, particular account being taken of
the additional staff and amounts authorised by the budgetary authority.

10.1

Impact on the number of posts

Type of post

Posts to be allocated to
management of the operation

permanent
posts

temporary
posts

Officials or
temporary staff

Other resources

9A;
6B;
8C;

A
B
C

of which

Duration

from existing
resources
within the DG
or department
concerned

5A;
3B;
3C

from additional
resources

4A;
3B;
5C;

2001-2005

Total

23

11

12

5 years

The administrative resources required may actually be mobilised in the framework of the
annual Commission decision on the allocation of resources, taking into account in particular
additional resources authorised by the budgetary authority.

Accordingly, DG EAC should take into account the risk that the budget authority, after the
Council having adopted the legislative proposal in question, does not grant the Commission
the necessary additional human resources. In that case,
if no redeployment from other
Commission services were possible, DG EAC would have to meet the related needs in term of
human resources by internal redeployment exclusively.

70

10.2

Overall financial impact of the additional human resources

(EUR)

Amounts

Calculation method

12.420.000

23 person/year x EUR 108.000 (unit cost) x 5 years – Titles A1, A2,
A4, A5 and A7.

-

Officials

Temporary staff

Other resources
(Heading A 0 7002)

Total

12.420.000

Amounts show the total cost of additional posts for the entire duration of the operation if it is
of a specific duration, or for a period of 12 months if it is of unspecified duration.

10.3

Increase in other management expenditures resulting from the action, notably
expenditures for meetings and expert panels (EUR)

Budget Line

Amounts

Method of calculation

(No and heading)

1-7031 Obligatory
Committees

A-7030 Meeting costs

949.000 MEDIA Committee: 30 national experts (2 experts per delegation
EUR 650 per expert) + 2 experts for Iceland (EUR 900 per expert –
calculation based on 1998 Commission missions) + 2 experts for
Norway (EUR 650 per expert – calculation based on 1998
Commission missions). Total per Committee meeting: EUR 22.600.
The Committee meets once a month x 5 years = 1.356.000.
Percentage of contribution for the MEDIA Training decision to the
functioning of the MEDIA Committee: 30%.

1.662.000 TECHNICAL EXPERT GROUPS:

30

non-national

experts
(2 experts per delegation, EUR 800 per expert/transport and
accommodation costs) + 2 experts for Iceland (EUR 900 per expert
for transport – calculation based on 1998 Commission missions –
and EUR 149.63 for accommodation) + 2 experts for Norway
(EUR 650 per expert for transport – calculation based on 1998
Commission mission- and EUR 149.63 for accommodation). Total
per meeting: EUR 27.700. The group meets once a month for five
years.

Total

2.611.000

The expenses relating to heading A-7 appearing in point 10 will be covered by the overall
credits for DG EAC.

71