Opinion of the Economic and Social Committee on: - the '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)', and - the '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)'
Date: 2000-04-27
Institutions: European Economic and Social Committee
Subjects: EU programme, audiovisual industry, audiovisual production, cultural policy, programmes industry, vocational training

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Opinion of the Economic and Social Committee on:

— the ‘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)’, and

— the ‘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)’

(2000/C 168/03)

On 6 March 2000 the Council decided to consult the Economic and Social Committee, under Article 262
of the Treaty establishing the European Community, on the above-mentioned proposals.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for
preparing the Committee’s work on the subject, adopted its opinion on 6 April 2000. The rapporteur
was Mr Herna´ndez Bataller.

At its 372nd plenary session of 27 April 2000 the Economic and Social Committee adopted the following
opinion with 111 votes in favour and one abstention.

1.

Introduction

1.1.
The industries connected with the information society,
particularly the audiovisual industry, are one of the sectors in
the European Union with the greatest potential for growth.
Studies estimate that revenues in this market will increase by
70 % by 2005, an increase which could give rise to the creation
of more than 300 000 highly skilled jobs over this period
alone (1).

1.2.
Digitalisation, interactivity and technological conver-
gence are profoundly changing the traditional audiovisual
industry as a result of the emergence of new forms of design,
production and distribution using new agents, new content
and services and new, direct and derived modes of exploiting
works.

these changes are complementary to,
1.2.1. Moreover,
rather than a substitute for, more traditional forms. In addition
to the accelerating growth of digital
television and new
applications like on-line services, interactive television, video-
on-demand (VOD) and electronic dissemination in cinemas,
growth is also occurring in more traditional segments of
supply like the sale of videos and the production and showing
of cinematic works.

1.2.2.
Against this background, the production of audiovis-
ual content can be seen as a major added-value sector for the
21st century, potentially capable of promoting the develop-
ment of a competitive European industry and, ultimately,
economic growth in the European Union.

(1) Study carried out for the Commission by Norcontel Ltd, Economic
Implications of New Communications Technologies on the
Audiovisual Markets, final report, 15 April 1997.

1.3.
But if the audiovisual content industry is going to be
able to fulfil its role of economic and entrepreneurial engine,
it will be necessary to tackle appropriately certain basic
challenges of a structural nature. These are in some cases
challenges facing the whole of the industry, such as diminishing
revenue from each showing (with greater fragmentation of the
audience) and the effective internationalisation of means of
exploitation;
in other cases, however, they are specifically
European weaknesses:

— The fragmentation of national and regional markets, which
impedes the transnational movement of programmes in
Europe.

— The low level of investment in the planning and execution
of audiovisual projects, which in turn diminishes the
profitability of works and reduces the capacity for future
investment.

— The insufficient capitalisation of companies which weakens

their international development strategy.

1.4.
The European audiovisual content industry is weak. It
is not yet able to withstand growing international competition;
this makes it necessary to draw up financing strategies
concentrating on boosting international development, inte-
gration, distribution and marketing capacity. It is essential that
governments support these initiatives by means of specific and
complementary financial measures aimed at increasing the
product range, particularly in the most innovative segments of
the market. The quality of European production — thanks to
more effective training — and the capacity to establish a
position in a global market, thus increasing market share, can
increase European audiovisual content producers’ share of the
industry’s revenues.

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the current and future implications of

1.5.
Since 1997 the Commission has been engaged in a
detailed study of its audiovisual policy in order to take account
the advent of
of
the digital age. These activities have included the Media II
programme (1), the remarks and contributions received in
response to the report from the High-Level Group on Audiovis-
ual Policy (2) and the consultation of professional circles carried
out by the Commission at the conferences held in Birmingham
(April 1998) and Helsinki (September 1999), as well as the
Green Paper on the convergence of the telecommunications,
media and information technology sectors (3).

2. Commission proposal

2.1.
The aim of the Commission proposal for the Media
Plus programme is to establish optimum conditions based on
a coherent strategy and with clear objectives so as to continue
to help alleviate the problems identified by the European
audiovisual industry, enabling players to occupy an optimum
position in the new markets.

The approach adopted to supporting European
2.1.1.
players must be pragmatic and must be adapted to the
needs of the audiovisual market, with particular attention for
structural measures. It also has to boost the added value
associated with the common European area and the cultural
and national diversity of the Member States.

2.1.2.

In the light of the above, the following are needed:

— An information and monitoring system for the new needs
and developments of the audiovisual market, together with
the exchange of experience between the Member States in
order to establish effective synergies.

— Emphasis on transnational dissemination of European
audiovisual works, both within and outside the European
Union.

— Complementarity and coherence with other Community
measures following a common strategy, such as the
education and training programmes, the support pro-
grammes for SMEs and information society technologies,
the e-Europe initiative (4), the User-friendly information
society programme of the 5th Framework Programme for

(1) ESC Opinion on the proposal for a Council Decision on the
implementation of a training programme for professionals in the
European audiovisual programme industry (Media II — Training)
OJ C 256, 2.10.1995.

(2) The Digital Age: European Audiovisual Policy, report of the High-

Level Group on Audiovisual Policy, Luxembourg, 1998.

(3) COM(97) 623 final and COM(1999) 108 final; ESC Opinion, OJ
C 214, 10.7.1998; the conclusions of
the Birmingham and
Helsinki conferences are available at the following web sites:
http://europa.eu.int/eac and http://presidency.finland.fi.

(4) e-Europe — an information society for all, COM(1999) 687 final.

Research and Technological Development (5), the INFO
2000 and MLIS programmes, other training programmes
like Socrates and Leonardo, collaboration with institutions
like Eureka (6) etc.

— The desired complementarity with policies implemented
at national and regional level, with greater consideration
for the specific needs of the industries in countries with
lower audiovisual capacities and/or restricted geographic
and linguistic area.

— The application of aid at those stages of the audiovisual
chain where intervention can bring greater added value
(mainly at
the beginning and end of the production
process).

— The appropriate and systematic evaluation of aid, together
with suitable adjustments and greater use of automatic
support mechanisms based on market performance.

— The carrying out of pilot projects which, having achieved
convincing results, will make it possible to adapt the
programme’s main aid mechanisms immediately (7).

— The extension of cooperation with third countries which
share the European Union’s objectives in terms of audiovis-
ual content policy.

Like the Media II programme, the activities provided
2.2.
for under the MEDIA Plus programme concentrate aid on two
different areas of activity: education and vocational training
(Article 150 of the Treaty) and industry (Article 157 of the
Treaty) (8), which includes project development, production,
distribution, marketing and promotion.

2.2.1.
To this end two proposals for Council decisions have
been drawn up, the aim of which is the application of a
policy geared to market characteristics and to optimising the
advantages which the European audiovisual content industry
can derive from technological progress.

2.2.2.
The financial aid arrangements will be periodically
reviewed and adjusted. On the basis of these reviews, the
Commission may propose complementary activities for both
instruments.

(5) ESC Opinion on the fifth framework programme for research and
technological development (1998-2002), OJ C 407, 28.12.1998.
(6) Audiovisual Eureka is a pan-European intergovernmental organis-
ation established in 1989 with the aim of promoting the European
audiovisual industry. It has 35 members (the Member States, the
European Commission and the Council of Europe with associated
member status).

(7) OJ C 343, 11.11.1998, pp. 10 to 16.
(8) 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.

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In the field of training (Media Training), the measures

2.3.
proposed are mainly aimed at:

3. General comments

— 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 management at European and international
level, including the legal aspects, financing of production,
marketing and distribution;

— writing techniques, in particular for interactive programs
intended for the new means of electronic dissemination.

The development and production of high-quality
2.4.
audiovisual programmes capable of generating substantial
income on a growing number of media calls for considerable
investment. Media Plus support must start at the stage of
to
preparing the projects through adequate development
determine the feasibility of the project, the expected profita-
bility 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 often leads to the production of projects
of limited economic viability.

2.5.
The support for distribution and marketing is the most
important chapter of the action in the framework of the
proposed Media Plus programme, as it directly concerns the
amortisation and profitability of the investment which is
essential to ensure that European audiovisual content occupies
a solid position in the market. This requires the creation, and
above all, exploitation of catalogues of works, such as cinema
films, drama, documentaries and cartoons which can be used
and reused through different channels and in different formats.

The specific aims of aid to promotion are in general
2.6.
similar to those for aid to distribution. However, the mechan-
isms complementary to those established for distribution aim
at improving access to European and international markets for
European works and programmes.

2.7.
The measures implemented under the development,
distribution and promotion chapter must comply with the
competition provisions of the Treaty, especially the rules on
state aid.

The Committee supports the Commission proposal
3.1.
which contains complementary measures to promote the
dissemination of the common cultural heritage, although it
feels that:

— the financial resources earmarked for the Media Plus
programme are insufficient
to achieve the ambitious
objectives set. The Committee therefore suggests that
funding be increased. Market mechanisms in the sector are
inadequate in some areas, given that the European financial
sector generally does not participate in investment by the
audiovisual sector, being unwilling to run risks in these
sectors;

— this fact should be highlighted in the proposal, given that

the promotion of our cultural identity is involved;

— it would be helpful if the sector were to have access to
more data on the evaluation of previous programmes, as
the existing data is inadequate;

— priority should in particular be assigned to technological
development and innovation, as well as to improved
distribution of funds;

— The Commission should set up a European information
society agency which would help coordinate the various
multimedia convergence initiatives.

3.2.
Thus there exists a real need for the adoption of this
proposal, first because of the added value its adoption will
bring, and also because it will encourage the free movement
across national frontiers of audiovisual works, strengthening
and improving the competitiveness of the European audiovis-
ual production industry as well as knowledge of the European
cultural identity, all of which fully justifies Community inter-
vention in this field.

3.3.
However, the Committee regrets that the proposal has
not taken account of the fact that the importance of the
European audiovisual
industry does not derive exclusively
from its entrepreneurial dimension, but also from its role as a
vehicle for the promotion of our culture and democratic
values.

3.3.1.
The recognition of the cultural dimension of the
audiovisual industry, which has a unique product, explains the
approach to the audiovisual media traditionally followed in
Europe of aiming to strike a balance between:

— on the one hand, the right to freedom of expression and
information, which is inseparable from any democratic
society, and

— on the other hand, the defence of the general interest, the
principle underlying the protection of minors, the fight
against racism and xenophobia, the safeguarding of the
right to privacy, the development of social cohesion and
the guaranteeing of pluralism, among other objectives.

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3.4.
The proposal should evaluate the jobs which could be
generated by its application. The audiovisual sector has
strong growth potential in this area, and the Commission, in
formulating and applying Community policies and measures,
should always take account of the objective of achieving a
high level of employment.

As for aid for training, this should be an instrument
3.5.
for promoting coordination between vocational
training
centres and universities, thus avoiding the danger of excessive
dispersal of aid. The ESC hopes that operational criteria will be
established ensuring that maximum use is made of
the
programmes and the corresponding financial resources, with
greater emphasis being placed on education of young people.

3.5.1.
At all events, it is considered important that there be
an effective and lasting interconnection at European level
in order to
between training centres and interested firms,
ensure a balance between basic and specialised training,
thus underpinning the development of on-going training of
audiovisual professionals, and exploiting opportunities for:

— distance learning using new technologies and applying

these to the production of audiovisual works;

— innovative approaches to education offered by the new

technologies, especially digital technology.

the European audiovisual
industry, promote the work of
European audiovisual-sector firms and especially improve
access to the market for independent firms. It also considers
essential all measures which improve public access to the
European audiovisual heritage by means of digitalisation and
interconnection at European level, particularly educational
measures. In principle, the ESC considers that emphasis should
be placed more on the development of audiovisual works than
on distribution and promotion.

3.6.1.
The proposed cooperation measures between broad-
casters should be developed, particularly activities involving
specialised bodies, such as audiovisual Eureka, in order to
implement joint measures that meet the programme objectives
in the field of promotion.

3.6.2.
Pilot projects should be developed in the framework
of e-Europe in order to harmonise and coordinate all invest-
ment support measures in the audiovisual sector and exploit
existing synergies between different aid mechanisms. The
Committee reiterates the need for reports which are sufficiently
detailed to enable the results so far achieved with the various
instruments for promoting the audiovisual
industry to be
evaluated; the reports should be submitted for consideration
by the other Community institutions and bodies.

3.5.2.
Suitable vocational training measures can improve
the capacity for vocational integration and retraining, encour-
age the entrepreneurial spirit, especially by means of measures
to stimulate technological innovation in favour of SMEs, and
promote equality of opportunity between operators, at the
same time as exploiting European cultural and linguistic
diversity via the adoption of this kind of complementary
measure.

3.6.3.
The Committee welcomes the plans to provide for
effective coordination with measures undertaken in the field
of new technologies,
in particular those provided for in
the Fifth Framework Programme, as it is essential that the
Community product be of high quality in order to justify
the confidence to undertake research under the Framework
Programme.

At all events, every effort must be made to ensure that training
is geared to actual realities, with the main stress being placed
on education of young people.

3.6.4.
Effective incentive mechanisms need to be estab-
lished for the financing of enterprises presenting groups of
projects, with preference for automatic aid systems ensuring
maximum transparency.

3.5.3.
The ESC proposes that the Commission include
measures for the active promotion of greater participation by
women in the implementation of the training programme,
ensuring that women are in future better represented in the
sector as this will encourage the sector’s development.

As for measures to stimulate the development, distri-
3.6.
bution and promotion of audiovisual works, the Committee
considers it necessary to create more favourable conditions for

3.6.5.
The ESC considers that priority should be given to
products which can be marketed commercially over an
extended period in various markets. With regard to the
distribution of programmes, the Committee favours the pro-
motion of subtitling, thus seeking a balance between respect
for the integrity of the work, cultural variety, cost optimisation
and audience preferences; subtitling and dubbing should be
used in a complementary way, as technology is making the
striking of such a balance increasingly practicable.

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4.
Finally, the Committee regrets that the Commission has
not been more ambitious, from the financial and added value
points of view,
in the objectives set for the programme,
specifically:

— the Committee reiterates that, in order to act in a more
tangible way in the cultural field and promote the European
cultural
identity, giving it a political dimension, user
awareness and information will be required as well as
services to industry and the Member States. To this end,
the Commission should set up a European Information
Society Agency which would help coordinate the various
initiatives in the field of multimedia convergence.

— This agency, proposed by the ESC on the basis of the Oulu
Declaration, could be an effective and non-bureaucratic
channel for financing, cooperation and coordination in the
various areas, spanning the whole production-distribution
chain, providing a distinctive European ‘label’ and making
combined use of the financing instruments provided.

— other promotion instruments should be established in the
audiovisual sector, such as the Guarantee Fund,
the
establishment of which has been proposed by the Com-
mission but which is currently blocked.

Brussels, 27 April 2000.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI