Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on certain legal aspects relating to cinematographic and other audiovisual works
Date: 2001-09-26
Institutions: European Commission
Subjects: European audiovisual area, audiovisual production, film production, free movement of programmes, legal deposit

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Communication from the Commission to the Council, the European Parliament, the Economic and
Social Committee and the Committee of the Regions on certain legal aspects relating to cinema-
tographic and other audiovisual works

(2002/C 43/04)

(COM(2001) 534 final)

1. INTRODUCTION

Audiovisual works, and cinema in particular, play an important
role in shaping European identities, both in common aspects
shared across Europe and in the cultural diversity that char-
acterises our different traditions and histories. They are an
essential element for the good functioning of our democracies
because of their widespread influence on society. They are also
at the heart of the transformations resulting from the devel-
opment of the information society: new technological devel-
opments offer new opportunities for promoting culture and
heritage conservation, and to increase mutual understanding
across Europe. But the multiplication of distribution channels
available for distribution of audiovisual goods does not auto-
matically lead to an increase in the creation of quality content.

the necessary balance must be kept

The principles of the Community audiovisual policy have been
expressed in the Commission’s communication of December
1999 (1) and remain fully valid today. The primary purpose
of regulation in the audiovisual sector is to safeguard certain
public interest objectives
such as pluralism, cultural and
linguistic diversity and the protection of minors. At a
European level,
to
guarantee subsidiarity in an area where major competences
level, while ensuring that
are at
the national or regional
from the European
European companies can fully benefit
dimension.
specifically
European
key
developed in this area, the Television without frontier Directive,
for regulatory aspects, and the MEDIA Plus programme for
support mechanisms, have as their main objective to allow
European companies in this sector to benefit fully from the
European single market.

instruments

The

rather

advent of new technologies has not

affected the
The
renaissance of the cinema in Europe; such new technologies
have been shown to offer additional
income for media
operators
than substituting existing media. Total
cinema admissions in Europe rose from 662 million in 1995
to 844 million in 2000 (+ 27 %) (3). This increase would appear
to be due at least in part to the growth in the number of
cinema screens in Europe,
in particular multiplexes (+ 22 %
in 1999 v 1995) (3) as well as improved facilities at cinemas.
Recent
show that TV viewing in Europe has
increased in most Member States in the past year.

figures (4)

Amongst audiovisual works, cinematographic works have a
their cost of production
particular prominence, because of
the productions of
for
importance: budgets
and cultural
cinema films are substantially higher than for other audiovisual
content, they are more frequently the subject of international
co-productions, and the duration of their exploitation life is
to use all distribution channels,
longer, with the potential
cinemas, DVDs and videocassettes (both selling and rental),
(pay-per-view,
Internet
and
pay-per-channel,
face
strong competition from outside Europe (5). There is little
circulation of European works outside their country of
origin, although there appears
to be an upward trend:
according to certain estimations, European non-national films
reached over 10 % (6) of total attendance in 1999 from less
than 8 % in 1996.

free-to-air). Cinematographic works

downloading,

television

Audiovisual works have unique characteristics because of their
double nature: they are economic goods, offering important
opportunities for the creation of wealth and employment. In
1999, the European audiovisual market (2) was estimated at
EUR 58,3 billion (+ 8,7 % v 1998). They are also cultural
goods which at the same time mirror and shape our societies.
This is the reason why the development of this sector has never
been left solely to market forces.

Because of the particularity of cinema, the Commission had
indicated in its communication on audiovisual policy in
1999, that there was a need to examine in more detail a
the
to clarify the legal
number of
cinema sector, including the application of State aid policy in
that area. The objective of this review was to determine which
measures could be taken in order to improve the circulation of
these works in Europe.

framework of

issues

(3) European Audiovisual Observatory.
(4) European Audiovisual Observatory:

television
viewing in Europe varies between 144 minutes per day in Austria
and 239 minutes per day in Italy. The trend is positive in almost all
Member States.

the average for

(1) Principles and guidelines for the Community’s audiovisual policy in

(5) European Audiovisual Observatory: the market share of American

the digital age, COM(1999) 657 final of 14 December 1999.

cinema films in Europe in 2000 was above 73 %.

(2) European Audiovisual Observatory.

Includes

television, cinema,

(6) European Audiovisual Observatory; LumiŁre database; data are

video (cassettes and DVD), but not games.

inclusive of international EU/extra EU co-productions.

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the White Paper on
In accordance with the principles of
Governance (7), the Commission services organised a public
consultation on the basis of a staff working document (8) in
order to give all
interested parties the opportunity to make
their views known before the adoption of this communication
by the Commission. A hearing attended by around 250
interested parties was held on 15 June. This not only
provided an opportunity for the Commission to identify the
central issues in respect of the issues raised in the staff working
document, but also allowed the interested parties to hear and
respond to each other’s views.

49 written comments (9) were received from Member States,
regulatory and self-regulatory authorities, authors,
national
film and television producers and directors, cinema
artists,
operators, video and DVD publishers/distributors,
television
industry associations, consumer representatives
broadcasters,
and trade unions.

This communication sets out the Commission’s policy orien-
tations and proposals building upon the consultation exercise.
It sets out the principles to be applied for the application of
State aid rules to the cinema sector, and identifies the next
steps to be taken and the areas where further reflection is
needed in order to create a favourable environment for the
production and distribution of audiovisual works.

included in Article 87(3)(d) EC a new specific possibility of
exception to the general
incompatibility principle of Article
87(1) EC for aid granted by the Member States to promote
culture.

Member States implement a wide range of support measures
for the audiovisual production of films and TV programmes.
This support focuses on the creation and production phases of
film-making and generally takes the form of subsidies or
repayable advances. The rationale behind these measures is
based on both cultural and industrial considerations. They
have the primary cultural aim of ensuring that the national
and regional cultures and creative potential are expressed in
the audiovisual media of film and television. On the other
hand, they aim to generate the critical mass of activity that
is required to create the dynamic for the development and
creation of
consolidation of
soundly-based production undertakings and the development
of a permanent pool of human skills and experience.

industry through the

the

This communication does not cover the application of Articles
81 and 82 of
the EC Treaty (anti-competitive practices by
companies) to the audiovisual sector (10).

2. THE GENERAL ORIENTATION OF THE COMMISSION WITH

REGARD TO STATE AID TO THE CINEMA SECTOR

2.1. Compatibility with the EC Treaty of schemes of aid to

cinema and TV production

the

and

special

characteristics
it

Cinema and TV programmes are two of the most universal
impact on a great
media of entertainment, with a powerful
number of people internationally. The current stage of devel-
audiovisual
opment
production within the EC, mean that
for
producers to obtain a sufficient level of upfront commercial
backing to put together a financial package so that production
projects can proceed. In these circumstances, the fostering of
audiovisual production by the Member States plays a key role
to ensure that their indigenous culture and creative capacity
can be expressed, thereby reflecting the diversity and richness
of European culture.

of
is difficult

The basic rules on State aid under the EC Treaty are as follows:
Article 88(3) of the EC Treaty provides that Member States are
obliged to inform the Commission of any plans to grant or
alter aid before putting it into effect. Article 87(1) EC prohibits
aid granted by the State or through State resources, which
distorts or threatens to distort competition and trade between
Member States. However, the Commission may exempt certain
State aid from this prohibition. In particular, Article 87(3) EC
the
lists certain aid types
Commission may authorise. One of
is
Article 87(3)(d) EC for aid to promote culture, where such
aid does not affect competition and trading conditions to an
extent contrary to the common interest.

their effects,
these exemptions

in view of

that,

The Maastricht Treaty gave Community-level recognition to the
utmost
importance of promoting culture for the European
Union and its Member States by incorporating culture
amongst the Community’s policies specifically referred to in
it
the EC Treaty (see Article 151 EC) At

the same time,

(7) COM(2001) 428 of 25 July 2001.
(8) SEC(2001) 619 of 11 April 2001.
(9) Representing more than 95 % of

the production industry,

film
directors, cinema exhibitors, rights holders, broadcasters, unions
representing workers in the audiovisual sectors, video and DVD
associations,
list of
comments and full
those sent electronically without a
text of
request for confidentiality at:
http://europa.eu.int/comm/avpolicy/regul/cine1_en.htm

film institutes and Member States. See

2.2. Enforcement of the EC Treaty rules on State aid to

cinema and TV production

complaint

the Commission received a

about
In 1997,
exclusionary effects created by the French cinema production
aid scheme. This was
confirmed by the Commission’s
assessment. The anti-competitive effects were the result of
provisions making the aid conditional on the realisation of
certain film-making activities in the Member State (so-called
(cid:145)territorialisation(cid:146)).

(10) For example, practices such as block bookings or the bundling of

rights, which could be incompatible with the EC Treaty.

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The French authorities, at the Commission’s request, modified a
series of incompatible provisions of their cinema production
aid scheme and on 3 June 1998 the Commission authorised
their scheme. In its decision (N 3/98), the Commission set out
to
specific compatibility criteria (see 2(3)(b) below)
four
authorise aid to cinema and TV production in accordance
with the (cid:145)culture derogation(cid:146) contained in Article 87(3)(d) of
the EC Treaty. The Commission also undertook to review the
schemes in other Member States under the criteria adopted in
the French decision.

The Commission launched an inquiry requesting information
from all Member Sates about their aid schemes for the audio-
visual sector. The inquiry showed that the majority of
the
schemes had not been notified to the Commission for prior
authorisation.

2.3. Assessment of aid schemes

to cinema and TV

production

When it assesses aid schemes to cinema and TV production,
the Commission must verify:

(cid:151) first, whether the aid scheme respects the (cid:145)general legality’
principle, i.e. the Commission must verify that the scheme
does not contain clauses
that would be contrary to
provisions of the EC Treaty in fields other than State aid
(including its fiscal provisions),(cid:146)

(cid:151) secondly, whether the scheme fulfils the specific compati-
bility criteria for aid, set out by the Commission in its 1998
decision on the French automatic aid scheme (11).

The second condition is specific to cinema and TV production
aid schemes, whereas the other is a routine test applied to all
aid schemes irrespective of the sector.

(a) Respect of the general legality criterion

than State

in fields other

The Commission must verify that the eligibility conditions of
the State aid schemes do not contain clauses contrary to the EC
aid. The
Treaty provisions
Commission must ensure, inter alia, that the EC Treaty prin-
ciples prohibiting discrimination on the grounds of nationality,
freedom of establishment,
free movement of goods and
freedom to provide services have been respected (Articles 12,
28, 30, 39, 43, 48 and 49 EC). The Commission enforces these
principles in conjunction with the application of competition
rules when the provisions in breach of these principles are not
detachable from the operation of the scheme.

(11) The question whether fiscal relief to producers can be qualified as
aid is assessed under
the principles contained in the 1998
Commission communication on the application of State aid rules
to measures
taxation (OJ C 384,
12.12.1998).

relating to direct business

In compliance with the above principles, aid schemes must not:
e.g. reserve the aid for nationals exclusively; require bene-
ficiaries to have the status of national undertaking established
under national commercial
law (undertakings established in
one Member State and operating in another by means of a
for aid;
permanent branch or agency must be
eligible
furthermore,
be
only
the
should
enforceable upon payment of
the aid); require workers of
foreign companies providing film-making services to comply
with national labour standards.

requirement

agency

Certain schemes of aid to cinema and TV production are
financed by parafiscal charges. According to the Commission’s
decision making policy and the Court of Justice’s jurisprudence,
when such schemes benefit solely national producers or do so
to a higher extent than to competitors in other Member States,
in order to be compatible with the Treaty, imported products
may not be levied and national production may not enjoy a
lower rate of taxation when exported.

When the Commission applies the State aid rules to assess the
compatibility of aid schemes under the review, it addresses at
the same time the problems identified by the Code of conduct
group on direct business taxation (the so-called Primarolo
Group) set up by the Council (12).

(b) The specific compatibility criteria for State aid to cinema and TV

programme production

The specific criteria on which basis the Commission currently
assesses State aid to cinema and TV programme production
under the culture derogation of Article 87(3)(d) EC were estab-
lished in its decision of June 1998 on the French automatic aid
scheme to film production. These specific criteria are as
follows:

1. The aid is directed to a cultural product. Each Member State
must ensure that the content of the aided production is
criteria
cultural
(in
compliance with the
subsidiarity
principle).

to verifiable national
the
application of

according

in other Member States without

2. The producer must be free to spend at least 20 % of the film
suffering any
budget
In
reduction in the aid provided for under the scheme.
other words,
the Commission accepted as an eligibility
criteria territorialisation in terms of expenditure of up to
80 % of the production budget of an aided film or TV work.

(12) This group compiled an inventory of harmful measures that
includes a certain number of State aid schemes for cinema and
TV production.

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3. Aid intensity must in principle be limited to 50 % of the
production budget with a view to stimulating normal
commercial
initiatives inherent in a market economy and
avoiding a bidding contest between Member States. Difficult
and low budget films are excluded from this limit. The
Commission considers that, under the subsidiarity principle,
it is up to each Member State to establish a definition of
difficult
film according to national
parameters.

and low budget

4. Aid supplements for specific film-making activities (e.g.
post-production) are not allowed in order to ensure that
incentive effect and consequently
the aid has a neutral
that
those specific activities
in/to the Member State granting the aid is avoided.

the protection/attraction of

Several considerations arise in respect of the abovementioned
criteria:

The Commission considers that aid should be towards the
overall budget of a specific film-making project and the
producer should be free to choose the items of the budget
in other Member States. Aid schemes
that will be spent
shaped on this basis are deemed to support the creation of
an audiovisual product and not to assist the development of an
industrial activity. Consequently, this aid is to be assessed under
the culture derogation of Article 87(3)(d) EC rather than the
industrial derogation of Article 87(3)(c). Undertakings in the
film and TV programme production sector may also benefit
from other aid types granted under national horizontal aid
schemes authorised by the Commission under
the Article
87(3)(a) and (c) EC exemptions (e.g. regional aid, aid for
SMEs, R & D aid, training aid, employment aid).

The Commission accepted that Member States may require a
certain part of the film production budget to be spent on their
territory as an eligibility criterion for aid. This is based on the
reasoning that a certain degree of
the
continued
expenditure may be necessary to ensure
presence of the human skills and technical expertise required
for cultural creation (13). This
should be limited to the
minimum degree required to promote cultural objectives.

territorialisation of
the

characteristics of

Furthermore, given the particular
film
production, the Commission considers that the overall budget
of an audiovisual production is the disbursement at
risk
necessary for its creation and, consequently, admits that the
reference for aid calculation is that overall budget, regardless
of the nature of the individual expenditure items of which it is
formed. The earmarking of aid to specific individual items of a
film budget could turn such aid into a national preference to
the sectors providing the specific aided items, which might be
incompatible.

Funds provided directly from EC programmes like MEDIA Plus
are not State resources. Therefore, their assistance does not
for the purposes of respecting the 50 % aid ceiling.
count
the distribution of
Furthermore,
its effects do not
national
add up to those of national schemes focusing on national
production and distribution.

films abroad and, consequently,

this assistance promotes

Legal obligations imposed by Member States upon TV broad-
casters to invest in audiovisual production do not constitute
State aid, where these investments provide a reasonable
compensation to broadcasters. The extent
to which these
legal obligations may be considered State aid as such has to
be considered in view of the development of the EC Court of
Justice jurisprudence after its judgement of 13.3.2001 in Case
C-379/98 (PreussenElektra).

In the Commission’s view, the above criteria strike a
balance between the aims of cultural creation, the devel-
opment of the EC audiovisual production and the respect
of the EC rules on State aid.

2.4. Review of schemes

Following its 1998 decision on the French scheme of automatic
aid to film production,
the Commission has reviewed the
schemes in place in other Member States under the abovemen-
tioned assessment
criteria. The Commission has already
reviewed and approved the schemes of a series of Member
States (14). The Commission,
completing
discussions with the remaining Member States to bring their
schemes in line with EC law. The Commission intends to
complete the review by the end of 2001. The completion of
the review will provide legal certainty to the sector.

at present,

is

The review has revealed the following key features of national
State aid schemes:

(cid:151) there is a great diversity of aid schemes within EC both in

terms of aid type and scope,

(cid:151) many of the schemes contained provisions contrary to the

general legality principle,

(cid:151) very few Member States impose territoriality requirements

in order to qualify for aid,

(cid:151) only exceptionally, Member States grant State aid levels

higher than 50 % of the film costs,

(cid:151) the exceptions to this latter finding normally fall under the

(cid:145)difficult and low budget film(cid:146) category.

(13) See reply to Written Question 3173-00 of Mr Veltroni (OJ C 163 E,

6.6.2001, p. 50).

(14) France,

the Netherlands, Germany (and certain German L(cid:228)nder,
Ireland, and Sweden: see http://europa.eu.int/comm/competition/
state_aid/decisions/

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2.5. Future developments

The specific compatibility criteria for aid to cinema and TV
programme production, set out above, will remain valid until
June 2004, the time limit set in the decisions adopted so far.
Under the review, the other Member States’ schemes will be
authorised until the same deadline.

other possible forms and use of databases with a commercial
aim. These issues could have important consequences for the
circulation of audiovisual works within Europe, and for the
preservation of Europe’s audiovisual heritage.

3.1. The legal deposit of audiovisual works

fragment

The Commission does not intend to alter these criteria unless
they prove unable to prevent undue distortion of competition
within the EC. The Commission will examine further in the
light of the review the maximum level of admissible territori-
alisation. Territoriality requirements
the internal
market for the provision of goods and services for audiovisual
production and hinder their development. Possible distortion of
competition created by aid to cinema and TV programme
from territorialisation
production would originate more
requirements rather than from the level of aid itself. Terri-
toriality
judged
acceptable under the necessity and proportionality criteria go
beyond the strict limits of cultural promotion and aim basically
in its
at
decision on the French aid scheme considered that
the
Member States should be encouraged to reduce national pref-
erences for an important part of the costs as to the place of
expenditure.

industrial objectives. Therefore,

exceeding what may

the Commission,

requirements

be

a

on

adopted

Different work has been done in various fora on this issue. The
Council
and
resolution
enhancement of European cinema heritage in May 2000 (16),
in which it called on the Commission to take account of the
specific needs of this particular form of cultural legacy, and to
support and encourage a transnational study to be carried out
by the Member States on the situation facing European cinema
archives.

conservation

the public hearing and in
From the contributions both at
it is clear that there is consensus on the need to
writing,
preserve and to safeguard Europe’s audiovisual heritage.
Opinions diverged as to the best way of achieving this aim,
and as to whether regulatory intervention at a European level
was required or in fact desirable.

In view of the comparatively limited geographic extension of
certain languages and cultures, and given the limited circu-
lation of
those cultural products within the EC and world
markets, the Commission could accept aid intensities higher
than 50 % where proven to be necessary in cases other than
for difficult and low budget films for these Member States.

At pan-European level
initiatives have been taken by
professional organisations (17), and by the Council of Europe,
whose draft European Convention for the protection of the
audiovisual heritage should be adopted shortly. This convention
will provide for a compulsory legal deposit of (cid:145)moving image
material forming part of its audiovisual heritage and having
been produced or co-produced in the territory of the party
concerned(cid:146).

The Commission intends to continue the multilateral
dialogue with the Member States to discuss relevant
issues connected with State support to cinema and TV
production. This dialogue started in the conference
organised by the French National Cinema Centre in Paris
in October 2000 that brought together expert officials of
the Commission and representatives from the relevant
Ministries and film institutes in the EU. The dialogue
was pursued in a second conference organised by the
Swedish Film Institute in Stockholm in June 2001.

3. PROTECTION OF HERITAGE AND EXPLOITATION OF

AUDIOVISUAL WORKS

A number of issues relating to protection of heritage, trans-
parency,
rights have been
raised (15): the legal deposit of audiovisual works, the creation
of a European register (or the linking of national registers) and

exploitation of

and effective

(15) In particular

in the Commission staff working document,

SEC(2001) 428 of 11.4.2001.

the

convention

to do so. A number of
offered

Opinions were divided as to whether the European Union
instrument and/or encourage the
should adhere to this
commentators
Member States
reasonable
a
that
considered
compromise for action is
this area, making Community
action unnecessary, or alternatively felt that it constituted a
for a Community initiative. Others
good starting point
favoured a Community initiative, stating that
this was still
necessary despite the convention and could provide an added
value in terms of the protection of heritage and the promotion
of cultural diversity.
It was suggested that any Community
approach should focus on best practice, although certain
that self-regulation or co-regulation did
commentators felt
not
function adequately and could lead to disparities as
regards the preservation of audiovisual works.

(16) 2261 Council meeting (16 May 2000) Press 154 (cid:151) No 8394/2000.
(17) There are proposals
from the European Federation of Film
Directors (FERA) and the International Federation of Cinema
Producers Associations (FIAPF) (which has proposed a (cid:145)voluntary(cid:146)
deposit for cinematographic works based on a model contract that
they have drawn up (cid:145)General regulations concerning trust deposit
of motion picture prints with film archives(cid:146) (1971)).

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or

be

compulsory

legal deposit

supported obligatory

voluntary. A number

There were conflicting views as to whether such a system
of
should
commentators
a
minimum measure. Others considered that such a requirement
should not entail any additional costs for the producer and
should therefore be publicly financed. The
requirement
should only apply to new works (older works should be the
subject of voluntary deposit). Many commentators favoured a
voluntary scheme with details established at Member State level
and limited to national works, which could be linked to
incentives.

as

Commentators drew a distinction between cinematographic
and other works. Broadcasters considered that it would be
inappropriate to make television productions part of any
mandatory deposit scheme. They added that if regulatory inter-
vention for the preservation of television productions was to be
regarded as necessary, it should be on a voluntary basis, and
linked to significant
financial support mechanisms. Others
favoured the inclusion of all audiovisual works, whilst a third
group favoured focusing initially on cinematographic works,
which could later be extended to other categories.

In terms of conservation, the cinemathŁques stressed the need
for the works deposited to be of high quality (either the
original copy or one of similar quality), as well as the need
to create a database of
the different material supports for
audiovisual works.

The Commission notes that there is widespread support
of the need to preserve audiovisual works in view of the
objectives of protection of heritage and the promotion of
cultural diversity. The results of the consultation show
that there is a need for action to preserve our audiovisual
heritage. This appears to be particularly important in
respect of cinematographic works. However, there was a
lack of consensus as to the type of measures that would
be appropriate.

Thus, before putting forward a possible proposal the
Commission intends to carry out a stocktaking exercise
in respect of the current situation within the Member
States. This will be carried out by means of an inquiry
addressed to the national authorities later on this year.
This exercise will evaluate the role played by legislative
and other measures and to further analyse the conditions
that should apply. Furthermore, the Commission intends
to encourage cooperation between the interested parties
in this area together with the spread of (cid:145)best practice(cid:146). It
notes the consensus between the parties concerned that
there should not be a single European archive. Deposit
should rather be organised at the national or regional
level, with appropriate transparency as to the location
of works. It also intends to examine further the issue of
creating a database of the different material supports for
audiovisual works as suggested during the consultation.

3.2. The creation of a registration scheme

Differing opinions exist as to the value of a registration scheme
for films and other audiovisual works. At the moment, only a
minority of Member States has put in place such a register. An
initiative to create an international register in the context of
the World Intellectual Property Organisation (WIPO) only met
with limited success.

A European initiative in this domain might encourage trans-
parency and thereby help protect right-holders and facilitate
the circulation of European productions. This could be
particularly important
the
in view of
impact on questions
industry. Such a scheme should not
relating to different rules on authorship or on the use of
rights in line with copyright rules, but could aim to provide
certain information relating to the audiovisual works registered.

the complexity of

the commentators considered the
Although a number of
scheme unnecessary and costly,
the majority supported it.
There was support for creation of a national public register
of films in every Member State, if certain criteria were estab-
lished. This was seen by some as being an essential element of
any policy to promote circulation of audiovisual works. Some
went
further and saw the absence of such a register (or
registers) as a hindrance to exploitation of works.

registers

recognition based on individual

There were differing opinions on the most appropriate type of
action. Some were in favour of the creation of a system of
mutual
in each
Member State. Others felt there was a need to assess market
needs before deciding on appropriate action. A number of
commentators were in favour of networking national registers
at a European level. This was seen as having the advantage of
others
identification,
transparency
considered that
a
as
could be quite
mechanism and that it would be difficult to set up such a
scheme.

although
cumbersome

facilitating
this

There was widespread agreement as to the advantages of clear
identification and the importance of metadata (18). Public
service broadcasters stated that Europe would benefit if there
were well-known and well-designed systems for metadata with
respect to production, delivery, classification, protection and
archiving of media works.
In respect of the standards they
considered it important to encourage the development of a
more widely distributed media registration number network,
in order to ensure interoperability between media registration
numbers and to reduce registration fees for the European
programme maker. Certain operators supported the use of
the ISAN (19) standard or another standard established by
industry, whereas others were against the use of this particular
standard, whilst nonetheless in favour of standardised metadata
systems.

(18) Digital information about an audiovisual work intended to help the
production and distribution process (also referred to as digital asset
management (DAM)).

(19) Developed by the International Standards Organisation (ISO). The
current version is known as IVID (international version identifier)
or V-ISAN.

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16.2.2002

Some commentators suggested that it should hold details of all
the contracts relating to the production and exploitation of
films produced in the country,
in particular the identity of
the various parties, ownership and exercise of copyright, the
exploitation terms in the contract, the duration of the licence
and its exclusive or non-exclusive character. Commentators
considered that financing should be provided at a European
level or alternatively by a combination of private and public
funding. Other commentators expressed concern either about
the costs of such a scheme, or the possible disadvantages if the
information was not accurate or up to date.

The Commission notes that there is considerable support
for the creation of public registers of films in Member
States based on the argument that such a registration
scheme would improve the circulation of
films by
assuring that the information needed is readily available,
although a number of issues remain to be clarified. The
Commission therefore intends to carry out a stocktaking
exercise in respect of the current situation within the
Member States. This will be carried out by means of an
inquiry addressed to the national authorities later on this
year. It will aim to evaluate the role played by legislative
and other measures and to further analyse the conditions
that should apply.

3.3. Right-holders database

The possibility of creating a new database enabling the identi-
fication of (cid:145)rights(cid:146) or (cid:145)licensing(cid:146) agreements across the European
Union was put forward. There was disagreement as to whether
information on rights and licensing agreements was difficult to
this information could have a
obtain. The availability of
positive effect on the circulation of films. It should be noted
that the Commission is analysing the issue of management of
rights, as a follow-up to its 1995 Green Paper on copyright and
related rights in the information society (20).

sufficient

Opinions were divided as to whether there was a lack of
transparency regarding this information. The majority stated
that
transparency is ensured by producers and
collecting societies. It was suggested that there was work to
be done in the standardised codification of rights in order that
rights may
relevant
information exchanged in a legally reliable way. A potential
benefit of such a database could be to help producers and
distributors to find partners in other European countries.

consistently

represented

and

be

A large number of commentators asserted that such a database
would not seem necessary to improve the circulation of audio-
visual works: the view was expressed that such a database
might be very slow, costly, cumbersome and unable to keep
pace with constant, very rapid changes in property. This would
not correspond to the flexibility needed for the efficient exploi-

(20) COM(95) 382 final.

tation of audiovisual works. Consequences of any mistaken or
obsolete information could be considerable. The formalities
might be unmanageable and the delays in registering valid
rights and the related contracts could be a hindrance to
freedom of movement in a very brisk market. There might
even be a danger that defrauders could obtain validation for
misappropriated rights to the detriment of the entitled parties.
Concern was also expressed that
the creation of such a
database could interfere with the internationally well estab-
the
lished rule (see Article 5(2) Berne Convention)
enjoyment and the exercise of copyright and neighbouring
rights must not be subject to any formalities. Others main-
tained that major differences in the relevant contract law for
copyright seriously affect the competitiveness of audiovisual
producers of one country as compared to such producers in
another country and that such a database could play an
important role in the circulation of audiovisual works by
ensuring that
it was possible to obtain information about
audiovisual works in other countries. The database could
facilitate
right-holders but negotiations
should still take place on a contractual basis.

identification of

that

The Commission has taken note of the views expressed in
the consultation and in particular the lack of support for
the creation of a right-holders database. It will continue to
examine the issue of management of rights, which it is
analysing as a follow-up to its 1995 Green Paper on
copyright and related rights in the information society,
with a view to evaluating the possible impact of the
existing differences in national law on the internal market.

3.4. The exploitation of rights

Copyright and neighbouring legislation vest rights in authors,
performers, phonogram producers, broadcasters and other
rightsholders to authorise or prohibit certain acts of exploi-
tation of
In general,
their works or other subject matter.
individual contracts with the
users acquire rights by direct
rightsholders concerned or their representatives.

the exploitation of rights has been raised by
The issue of
they have problems in exploiting
broadcasters who assert
some of
their productions stored in their archives, which
they would like to show again especially in the new online
to be virtually impossible to
environment. They claim it
identify and to trace and negotiate with all
individual
programme contributors or their heirs, particularly in the
these difficulties
case of old productions. They assert
prevent
them from exploiting their archives today. Public
service broadcasters therefore asked for legislative action to
facilitate their situation. The cinemathŁques also stated that
they were unable to use a number of works and that the
public therefore lost access to its own audiovisual heritage.

that

16.2.2002

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Producers and certain private broadcasters on the other hand,
felt that the matter had been settled in the context of the new
Copyright Directive (21) and should not be reopened in this
context.

A number of commentators considered that the creation of the
databases and registers referred to above could facilitate identi-
the matter should be
fication.
considered in the review of the Television Without Frontiers
(TVWF) Directive. However,
this
directive does not cover copyright and related rights issues.

It was also suggested that

it should be noted that

The Commission supports cooperation between all parties
in order to solve specific difficulties, which may exist in
certain situations. This cooperation should in the first
place aim to set up an inventory of works for which
problems relating to the identification of rightsholders
could exist.

4. E-CINEMA

The issue of e-cinema has been raised because of the new
pan-European distribution possibilities that are being created
by digital
technologies. These technologies can also enable
the development of local multipurpose centres in less densely
populated areas (22). The term e-cinema is used to signify elec-
tronic delivery to a cinema screen. The term d-cinema has also
been used by the industry, signifying that the final image is
either the result of an end-to-end digital chain or the digital
projection of material originated on film and transferred to
digital medium. The impact on the cost/benefit analysis for
film distributors and cinema owners was also raised.

There was widespread support
from commentators for an
industry-led approach to the standardisation of e-cinema. Inter-
vention by national authorities or the European Union was not
felt to be necessary. A number of contributions referred to the
European Digital
in
Stockholm, at the initiative of the Swedish Presidency, as the
appropriate body to take forward actions, and called for
support of its objectives and projects.

Film Forum,

established

recently

There were calls for the Commission to support the devel-
opment of e-cinema through the MEDIA Plus programme
programme
and
open
to
2002-2006 for
and
demonstration activities aimed at contributing towards the

framework
technological development

its
research,

(cid:145)multiannual

(21) Directive 2001/29/EC of

the
Council of 22 May 2001 on the harmonisation of certain
aspects of copyright and related rights in the information society
(OJ L 167, 22.6.2001).

the European Parliament and of

(22) For example, the Swedish Folket Hus.

creation of the European research area’ (the sixth framework
programme)
to
developing a high standard for electronic cinema distribution.(cid:146)

European industries

committed

to the

The pilot projects under the MEDIA programme are the way in
which Council Decisions 2000/821/EC and 2001/163/EC
ensure that the MEDIA Plus (23) and the MEDIA Training (24)
respond to rapid technological change. This
programmes
reflects an expectation that
technologies
will make European audiovisual works more readily accessible
as a result of new ways of transporting audiovisual content and
thus more widely available outside their country of origin.
Competitiveness in a globalisation context will
increasingly
depend on the use of new technologies in the development,
production and distribution stages.

the use of digital

However, the MEDIA programmes address themselves to the
audiovisual industry and not to the research community. The
Commission will ensure suitable and effective coordination
with the measures undertaken in the field of new technologies
and in particular,
sixth framework
inter alia, with the
programme,
focusing on the needs and potential of SMEs
operating on the audiovisual market.

continuous vocational

The Commission’s overall objective is to strengthen, through
the development and use of new technologies, the European
content industry, by improving the chances of such content
entering into production, by encouraging its transnational
distribution and by improving the potential of professionals
through appropriate
training. The
target should be to develop globally recognised, open stan-
dardised e-cinema systems, through an industry-led process.
This could include the following elements: to develop suitable
algorithms for the compression of film quality digital content
to be exhibited; to develop technologies capable of projecting
such content; to develop methods of protecting the use of
content through encryption; to develop methods which will
allow the billing of content consumed over a network;
to
develop methods for the digitisation, enhancement, restoration
and conservation of content.

It

for

that

The Commission considers that e-cinema offers important
increasing the circulation of
new opportunities
the
European audiovisual works.
considers
priority in this respect is the delivery to cinema,
i.e.
business to business, although there may possibly be a
later date. The Commission
consumer phase
welcomes the establishment of
the European Digital
Cinema Forum. It supports the objectives of this forum
to establish European user requirements for all parts of
the digital/electronic chain, and to facilitate the devel-
opment of worldwide standards for e-cinema in a timely
manner.

at

a

(23) OJ L 13, 17.1.2001.
(24) OJ L 26, 27.1.2001.

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5. TAX ISSUES

Certain questions arise concerning the differences that exist
between various types of cultural (cid:145)goods(cid:146) within the Member
States and the effect of fiscal measures in force in the Member
States on the production and circulation of audiovisual works.
It was considered that national fiscal incentives could be an
important factor in the development of co-productions, as well
as the harmonisation of tax practices to avoid double liability.
Producers and directors felt that the Commission should ask all
Member States to facilitate the creation of specialised, national
or European, banks or venture capital
funds with private
finances, and to encourage Member States that don’t have
them to introduce fiscal measures to encourage audiovisual
investment. A number of commentators referred to fiscal
measures (in particular (cid:145)tax shelters(cid:146)) that were being used to
finance
exhibitors
considered that
the Commission should encourage Member
States to lower indirect taxes on cinema seats to the same
level as those imposed for other cultural products.

non-European

production.

Cinema

to

audiovisual

a number of

products
commentators

There was widespread agreement from the different players
concerned that reduced rates of VAT or a zero rate should
and
apply
services.
cultural
suggested that
Accordingly,
Annex H of the Sixth VAT Directive (25) should be expanded
to cover either certain parts of the sector (video and online
services) or
the entire sector. Certain national authorities,
however, questioned the need for European action although
this subject should be discussed at
others considered that
European level.

The procedure laid down by the Directive is for the review to
be carried out on the basis of a report from the Commission.
On the basis of this report, the Council shall review the scope
the reduced rates every two years. The Council, acting
of
unanimously on a proposal
from the Commission, may
decide to alter the list of goods and services in Annex H.
The Commission laid down its policy for VAT in the communi-
cation of 7 June 2000 (26).
the
Commission stated that it would look at the harmonisation
of rates and assess the impact of their structure on the func-
tioning of the single market. Guidelines will be established on
the basis of this analysis once the evaluation of the current
for labour-intensive services (27)
(for which a
pilot project
reduced rate may be applied until December 2002) has been
completed. Particular attention will be paid to the use of
reduced VAT rates in the context of the Community’s priorities
in this sector.

In this communication,

(25) Sixth Council Directive 77/388/EEC of 17 May 1977, as last
amended by Directive 2001/41/EC of 19 January 2001. Annex H
includes a number of items of cultural interest such as books and
newspapers (including their loan), and entrance fees for cultural
and other events (cinema, theatre, fairs, museums etc.) and the
reception of broadcasting services.

(26) A strategy to improve the operation of the VAT system within the

context of the internal market, COM(2000) 348 final.
(27) Introduced by Directive 1999/85/EC of 22 October 1999.

the views expressed about
The Commission notes
taxation for cultural goods and services, and in particular
the request to enable those Member States who wish to
do so to apply a reduced rate of VAT to all cultural goods
and services without discriminating between different
forms of distribution. The Commission will consider
whether to respond to this request in the context of the
review of Annex H of the Sixth VAT Directive, which will
take place after 2002. The Commission would draw
attention to the existing possibility for Member States
to apply a reduced rate to cinema admissions.

6. RATING

There are two interlinked issues concerning the differences in
ratings given to audiovisual works within Member States for
different means of distribution and between Member States for
the same means of distribution. Audiovisual works are
indicating for
their content,
generally subject
which age ranges they are considered suitable.

to rating of

the

result of

On the issue of differences between the Member States, a
certain number of commentators (notably national authorities)
cultural
considered that differences were
differences and did not affect circulation significantly and
therefore should be dealt with at a national
level. Others
were in favour of action to address this issue, even though
they acknowledged that harmonising rating systems for audio-
visual works across Europe could be difficult because of
varying
and sensitivities. There was
support
increased cooperation between the competent
authorities and the rating bodies to reduce the disparities
from one Member State to another and from one medium to
another,
recognition. Certain
commentators considered that
the role of national and
European public authorities could be to support cooperation
between relevant authorities possibly with the development at
the European level of common descriptive criteria.

develop mutual

cultural
for

traditions

and

to

that

thought

commentators

the differences between different means of
In respect of
distributions many
content
should be treated in the same way through the different
for harmonised
distribution outlets. There were requests
standards, as this would facilitate the circulation of European
works. It was argued that judgements about the suitability of
material should be made on a more consistent and coherent
statutory
basis across
objectives and principles for content regulation. The solution
could be to set up a uniform European rating standard across
audiovisual media, which would benefit
and
suppliers and therefore positively affect production and circu-
lation of European audiovisual works.

the media, according to a set of

consumers

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In its report on the recommendation on the protection of
minors and human dignity (28), the Commission has stressed
the need to have a coherent approach across all media. The
Commission intends to continue this work and to evaluate
which systems could be put in place, which would address
this problem, whilst taking account of the cultural differences
States. The Commission
existing between the Member
recognises the important cultural aspects of ratings,
to be
decided in accordance with the principles of subsidiarity and
in its recent White Paper (29), but
governance as set out
considers that further analysis should be carried out of the
role played by self-regulatory schemes such as NICAM in the
Netherlands.

films,

The Commission will encourage exchanges of experience
in respect of ratings (to include self-regulation) with a
view to increasing cooperation on this issue.
In this
respect, the Commission intends to launch a Study on
television, DVD and
for cinema,
the rating of
videocassette in the EEA. The study will evaluate the
reasons for, and the impact of differences between the
different national
laws or self-regulatory measures for
rating of films on their subsequent marketing. It also
will analyse whether such differences in rating create
potential confusion amongst the persons responsible for
minors.

7. OTHER MEASURES TO IMPROVE THE CIRCULATION OF

FILMS

A number of different ideas to increase the production and
circulation of European audiovisual works were put forward,
notably a number of commentators considered that
the
Commission should encourage the funding of the production
sector and/or encourage Member States or other institutions to
do so. It should be noted that the Commission, together with
the European Investment Bank (EIB) and the European
Investment Fund (EIF) launched the (cid:145)i2i-audiovisual initiative(cid:146),
which
for
2001-2005 and focuses on both industrial goals of competi-
tiveness together with the promotion of cultural diversity
inherent in the promotion of the development of European
audiovisual
to
content. The Commission will
examine all appropriate financial measures to improve the
production and circulation of European audiovisual works.

the MEDIA Plus

supplements

programme

continue

respect,

the Commission highlights

In this
the positive
approach taken in the recent communication adopted on
State aid and risk capital (30), which it will apply for the next
five years. This text is in line with the commitment to risk
capital set out as a wider Community objective at the Lisbon
European Council, and with the Commission’s general policy of
promoting risk capital in the Community (31). The Commission

(28) Evaluation report

from the Commission to the European
Parliament and the Council on the application of
the Council
Recommendation of 24 September 1998 concerning the protection
of minors and human dignity, COM(2001) 106 of 27 February
2001,
http://europa.eu.int/comm/avpolicy/regul/new_srv/pmhd_en.htm

(29) See note 7.
(30) OJ C 235, 21.8.2001.
(31) Risk capital, a key to job creation in the European Union,

SEC(1998) 552 final of 31 March 1998.

to create

has approved a number of schemes launched by the Member
States
such funds. Encouraging exchanges of
information and (cid:145)best practice(cid:146) between the Member States
and the Commission to identify the best means by which the
various Member States could help the cinema sector, and to
consider opportunities to develop them in every Member State.
to create transnational
In this
regard it could be useful
networks of European professionals
in the film industry.
Others identified a need for the Commission to define broad
principles for the Member States and to address key issues such
as the need for national approaches to avoid inhibiting trans-
frontier production or circulation.

It was suggested that the European Commission should use its
e-Learning initiative that seeks to mobilise the educational and
in order to speed up changes in the
cultural communities,
to introduce the knowledge of classic
education systems
European films to Europe’s young citizens.

Finally, there was support for the creation of a European Union
TV channel to broadcast (cid:145)European films(cid:146).

the

that

sector. The

and market

exchange of
The Commission considers
information and best practice is extremely important in
the
audiovisual production industry is
extremely complex, and faces a number of both tech-
challenges. The Commission
nological
intends to create a group of experts to discuss these
issues and provide an input for the Commission for the
elaboration of policy in this area. This group should gather
together multidisciplinary expertise. Its objective should
be to provide information and ideas on the technological
and market developments in the audiovisual production
sector. It should not represent Member States as such
but gather the experience and knowledge in all Member
States.

The Commission will examine which action could be
its e-Learning initiative to
taken in the context of
develop
of
education
image
European films to Europe’s young citizens.

knowledge

and

the

The Commission also intends to launch a study on the
identification and evaluation of
financial flows within
the European cinema industry, based on the analysis of
the financial records of a selected number of
films
study will
marketed between 1996 and 2000. This
identify and evaluate the key factors determining the
economic characteristics of
In
particular, it will analyse the different project phases of
post-
development,
pre-production,
production, promotion, distribution and import
and
export. A description of
that possible
relations between specific investors and amount of
revenues may have had on the film performances will
also be carried out.

the cinema industry.

the impact

production,

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16.2.2002

8. QUESTIONS TO BE CONSIDERED IN THE 2002 REVIEW (32)
OF THE TELEVISION WITHOUT FRONTIERS DIRECTIVE

beneficiaries of national State aid schemes. The issues of the
meaning of (cid:145)independence(cid:146) and the criteria to establish whether
a producer is independent were raised.

8.1. Definitions

The definition of a European work: Different definitions of a
European work exist at international, Community and national
levels. The main issues identified were whether there is a need
for an agreed definition at European level, what the level of
detail of that definition should be, and whether it should be
binding for the various uses envisaged. At Member State level a
number of different definitions exist for (cid:145)European works(cid:146). It
has been argued that the differences could create barriers to the
circulation of European productions. These definitions have
been adopted at Member State level both to implement the
provisions of the TVWF Directive and for the application of
national support schemes for audiovisual works.

There was widespread recognition that the issue of (cid:145)definitions(cid:146)
was important for all types of production. Many commentators
stressed the need for such definitions to take account of the
relevant context, notably support schemes, co-productions etc.
and highlighted the links with the review of
the TVWF
Directive in 2002. Some felt that certain political objectives
would benefit from a harmonised definition or, as an alter-
native, from coordination or mutual recognition of Member
State definitions; this could simplify the creation of European
co-productions and the combination of different (national or
European) support schemes.

felt

(including broadcasters and
A number of commentators
national authorities)
in definition
the differences
that
identified did not create difficulties for transfrontier production.
Others (notably, film and television producers) considered that
the existence of different definitions, as well as the different
these definitions, hampers any
national
attempt to clearly assess the economic development of
the
European production industry as a whole. Opinions were
also divided as to whether a more detailed definition should
be provided in Community law, with some asserting that this
was not necessary whilst others called for harmonisation.

interpretation of

In respect of the criteria that should be adopted a number of
different views were expressed. Views were divided between the
merits of the widest possible definition or a stricter approach,
and of cultural or economic criteria. Certain criteria such as
the control of rights were the subject of disagreement. Other
commentators put
forward criteria such as the use of a
labour-based definition, or (cid:145)cultural(cid:146) elements.

The definition of an independent producer: A number of
different definitions of an (cid:145)independent producer(cid:146) and (cid:145)inde-
exist across Europe. Many Member
pendent production(cid:146)
States use the notion of independent producer to delimit the

(32) Review provided by Article 26 of the directive;

see http://europa.eu.int/comm/avpolicy/regul/regul_en.htm

There was broad agreement that it was necessary to clarify the
underlying policy objectives, in particular in the light of new
industry structures. Certain commentators noted a potential
tension between the objectives of increasing European competi-
tiveness and that of promoting cultural diversity within Europe.
The latter goal would appear to be in line with the original
aims of the TVWF Directive to stimulate the creation of new
sources of TV production, notably by favouring the creation of
SMEs, which will compete with the existing established
producers. It would imply focusing the protection offered by
the current system on SMEs, rather than extending it to larger
groups linked to broadcasters. In this respect, it was also noted
that the distinction between producers and broadcasters is not
as clear as it used to be, as they frequently form part of
vertically integrated groups and the relationship is therefore
increasingly complex. Any definition should therefore include
links with interests in different parts of the audiovisual value
chain. There was a certain amount of support for a European
definition, which could ensure that Member States used the
same interpretation. The general opinion was that the issue
should be considered in the review of the TVWF Directive.

The

important

The distinction between the notions of independent producer
and independent production was highlighted by producers and
directors.
independent
producers was stressed by a large number of commentators,
in particular in view of the need to promote cultural diversity.
In respect of possible criteria that could be used a number of
commentators considered that the starting point should be the
relevant recital in the TVWF Directive (Recital 31).

contribution

of

There was disagreement notably between broadcasters and
producers as to whether the criteria should include a limitation
on the duration of the transfer of rights from producers to
broadcasters. Broadcasters considered that any intervention at
the European level to introduce a time or other limit on rights
ownership by broadcasters would be unjustified and contrary
to the objectives of European audiovisual policy, as well as
having an adverse effect on competition. Producers considered
that the re-transfer of traditional rights back to the producer
and the fair negotiation of new media rights can only benefit
the circulation of audiovisual works, and increase the quantity
and quality of European content available to new delivery
platforms.

Key criteria put forward included the free choice of facilities,
free choice of international distribution, majority participation
link, company ownership and shareholdings. Others suggested
that any definition should focus on the notion of
(cid:145)inde-
pendence(cid:146) to retain the distinction between broadcasters and
(public service and
producers. A number of broadcasters
commercial) considered that the current definition of
(cid:145)inde-
pendence from a broadcaster(cid:146) should be altered to reflect devel-
opments in the sector, notably the increasing concentration and
creation of media conglomerates and the presence of other
platforms linked back to broadcasters.

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Official Journal of the European Communities

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that intervention would curtail commercial freedom for both
parties.

The Commission considers that
the consultation has
confirmed that the current position under Community
law remains the best solution, permitting a flexible
approach to the use of
for different media
windows. It notes the concerns expressed by producers
in terms of bundling of rights and intends to consider this
question insofar as it is linked to the definition of an
independent producer in the context of the review of
the TVWF Directive in 2002.

rights

9. NEXT STEPS

the heart of

the
The fundamental principles, which are at
remain fully valid. The
Community’s audiovisual policy,
Community will develop this policy on the basis of existing
regulatory instruments and support mechanisms, but also
explore the possibility of using new instruments or initiatives
to achieve these objectives. Technological and market devel-
opments must be seen in the light of the need to reinforce
Europe’s cultural and linguistic diversity and preserve our
audiovisual heritage.
the Commission has
In this respect,
identified a certain number of initiatives that could be taken
to promote the circulation of works and will therefore launch
the following actions:

Timetable for action

Subject

Action

Completion date

Ratings

Other issues

Other issues

of
exploitation

Protection
and
audiovisual works

heritage
of

Independent
study on
the evaluation of rating
practices

2002

Creation of a cinema
experts group

2002

study on
Independent
flows within
financial
the European cinema
industry

2002

Stocktaking,
launch of initiative

before

Mid-2002

Definitions
a
European work and an
independent producer

of

Review of the Television
Without
Frontiers
Directive

End of 2002

Tax issues

e-Cinema

Review of Sixth VAT
Directive

After 2002

in MEDIA
Inclusion
Plus
sixth
and
framework programme

2002-2006

it was

competition

In respect of the use of this definition for the application of
Community
that
rules
consideration should be given to the question of independent
production when looking at mergers and joint ventures to
ensure that the sector (composed mainly of SMEs) would not
be adversely affected. This should include, in particular, control
of production, access
to distribution channels, and the
retention of rights for independents in respect of catalogues.

suggested

The Commission considers that the debate launched in
this context will provide useful input to the studies that
have been launched in preparation of the review of the
TVWF Directive in 2002, and intends to take this issue
forward in that context. It notes that the review should
pay particular attention to the objectives to be achieved,
notably in respect of
the need to promote cultural
diversity and the role played by the definition in that
respect as well as to the wide range of possible criteria
to be evaluated.

8.2. Questions on media chronology and online rights

the chronology of windows

for
in Member States of

the
issue concerns
This
economic exploitation of
the
films
European Union, which is based on agreements between the
actors (33). An
in
relevant
Community law for Member States to ensure that broadcasters
under
jurisdiction do not broadcast cinematographic
works outside periods agreed with the right-holders (34).

obligation

economic

exists

their

There was widespread agreement from commentators that this
was sufficient and that provided that the principle of media
chronology was guaranteed at the European level, deadlines for
film exploitation should be left to contractual arrangements
between the parties involved. Certain commentators felt that
to harmonise practices would be counterproductive. Others
spoke up in favour of self-regulation.

The new issues in terms of defining on-line and new media
rights created by the distribution of European production
on-line were highlighted and comments on the implications
for different actors in the value chain (bundling of rights etc)
were requested. Broadcasters and producers disagreed as to the
need to categorise rights, with producers considering that there
was a need to categorise and to define the different groups of
rights.

In general, producers considered that broadcasters already
acquired new media rights at no additional cost, since these
rights were not clearly defined in the contract and negotiated
separately. Broadcasters agreed that negotiations for rights must
recognise the range of platforms over which there is potential
for exploitation, and make clear arrangements either to include
or exclude those additional rights in any agreement, subject to
In addition, they considered
fair payment (current practice).

(33) Supplemented by legislation in Germany, France and Portugal.
(34) Article 7 of the amended TVWF Directive.