Report from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Report on the implementation and results of the MEDIA II programme (1996-2000)
Date: 2003-12-18
Institutions: European Commission
Subjects: EU programme, European audiovisual area, audiovisual communications policy, audiovisual industry, audiovisual production, vocational training

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 18.12.2003
COM(2003) 802 final

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

Report on the implementation and results of the MEDIA II programme (1996-2000)

EN

  EN

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

Report on the implementation and results of the MEDIA II programme (1996-2000)

INTRODUCTION

The  MEDIA  II  programme  began  on  1  January  1996  and  ended  on  31  December
2000. It was based on two Council Decisions :

– 

– 

Decision  95/563/EC  of  10/07/95  on  the  implementation  of  a  programme
encouraging the development and distribution of European audiovisual works,
with an indicative budget of EUR 265 million,

Decision  95/564/EC  of  22/12/1995  on  the  implementation  of  a  training
programme for professionals in the European audiovisual programme industry,
with an indicative budget of EUR 45 million.

The  MEDIA  II programme succeeded  MEDIA  I  (1991-1995) and  was  followed  by
MEDIA Plus (2001-2005). These three generations of the MEDIA programme have
a  common  objective:  to  improve  the  competitiveness  of  the  European  audiovisual
programme industry.

With  a  budget  of  EUR 200 million,  MEDIA  I  enabled  audiovisual  professionals  in
the Member States to  strengthen  their  position  on  their  national  markets  and  at  the
same time to gain access to new forms of transnational cooperation (co-productions,
cross-border cooperation, partnerships, consortia, etc.).

MEDIA II had a bigger budget (EUR 310 million) and its activities were focused on
three priority areas: vocational training, development of projects and enterprises, and
transnational distribution of films and audiovisual programmes.

MEDIA  Plus  had  an  even  bigger  budget  of  EUR 400 million  and  focused  on  the
same three priority  areas  –  training,  development,  distribution  –  plus  a  fourth  area,
promoting audiovisual works in Europe and worldwide.

The  purpose  of  this  report  is  specifically  to  evaluate  the  results  of  the  MEDIA  II
programme, in accordance  with  Articles 7(5)  and 6(5) of Decisions 95/563/EC and
95/564/EC establishing, respectively, the programmes MEDIA II - Development and
Distribution and MEDIA II - Training. These Articles provide that the Commission
"shall submit to the European Parliament, the Council, the European Economic and
Social Committee and the Committee of the Regions a report on the implementation
and results of the programme."

It  is  based  on  the  conclusions  of  the  ex-post  evaluation  of  MEDIA  II,  carried  out
pursuant  to  Articles  7(1)  and  6(1)  of  Decisions  95/563/EC  and  95/564/EC  and

2

 
assigned  by  the  Commission  to  an  independent  consultant1  following  an  open
invitation to tender.

1.

MEDIA  II :  A  JUSTIFIED  COMMUNITY  ACTION,  GEARED  TO  THE  NEEDS  OF  THE
EUROPEAN AUDIOVISUAL PROGRAMME INDUSTRY

1.1.

Economic context

The European audiovisual industry showed a continuous significant trade deficit with
the  United  States  throughout  the  period  1996-2000  (more  than  6  billion  dollars,
equivalent  to  approximately  250 000  jobs  in  19972).  However,  the  deficit  was  not
confined to this particular period. It has been there for the last few decades and is still
there today.

Examination  of  the  European  audiovisual  programme  market  reveals  that  the  main
cause is the  inadequate  circulation  of  non-national  European  works.  In  the  cinema,
for example, the bulk of the market is taken up by American films (66% in 2000)3,
followed  by  national  films.  Non-national  European  films  lag  far  behind  in  third
place.  They  tend  not  to  travel  far  and  rarely  sell  more  than  50  000  tickets  outside
their country of origin.

The  poor  circulation  of  non-national  European  works  in  Europe  weakens  the
profitability of the European programmes industry and hampers its development, as
well  as  causing  development  and  production  to  be  concentrated  in  just  a  small
handful of countries.  For example, in  1998, France, the  United  Kingdom,  Italy  and
Germany accounted for 70% of all the films produced in the countries participating
in the MEDIA programme.

This  is  a  complex  phenomenon  and  there  is  a  whole  raft  of  related  explanations.
Upstream, i.e. pre-production, compared with America the European industry invests
too  little  in  project  development  (writing,  financial  packaging,  establishment  of  a
marketing  plan).  In  Europe,  development  costs  represent  2  to  3%  of  production
budgets,  compared  with  10  to  12%  in  the  case  of  the  American  majors.  Still
upstream,  the  poor  training  of  European  audiovisual  professionals  results  in  an
absence of corporate strategy, especially at the European level.

As  for  the  distribution  sector,  it  lacks  the  structure  required  to  cope  with  the
American competition. American film distributors have 50% of the market share in
Europe  as  a  whole,  extending  as  high  as  80%  in  the  United  Kingdom  and  70%  in
Germany.  These  powerful  distribution  networks  provide  easy  access  for  American
films to European cinema screens, whereas "non-commercial" national films have a
problem finding screens, and non-national European films even more so.

1

2

3

The company BIPE
Source : Commission services document SEC(1998) 837 of 14.5.1998.
Source : IMCA study

3

 
                                                
1.2.

Community  assistance  justified  and  geared  to  the  needs  of  the  European
industry

Ex-post evaluation of MEDIA II  confirmed that  a Community programme to assist
the European audiovisual industry was fully justified by the economic situation in the
audiovisual  sector.  The  focusing  of  resources  on  development,  distribution  and
training  was  appropriate  for  tackling  the  weaknesses  of  the  European  industry,  the
fragility  and  lack  of  competitiveness  of  European  audiovisual  products  arising  to  a
large  extent  from  chronic  under-investment  both  upstream  (training,  development)
and downstream (distribution) of the production process.

(cid:1)  Thus, in the area of training, MEDIA II's aim was to support initiatives to enable
professionals to acquire the know-how and skills needed in order to take account
of 
international  markets  (economic  and  commercial
management,  integration  of  new  technologies,  screenplay  techniques)  and  to
enhance the creative and commercial potential of their projects.

the  European  and 

(cid:1)  In  the  area  of  development,  MEDIA  II's  aim  was  to  promote,  by  providing
financial and technical assistance, the development of production projects  aimed
at  the  European  and  international  markets  and  to  contribute  towards  the
development  and  strengthening  of  companies.  The  aims  were  to  bring  onto  the
European  market  programmes  that  were  better  adapted  to  the  standards  of  the
international market and to make companies structurally stronger.

(cid:1)  In the area of distribution, MEDIA II's aim was to improve the circulation of non-
national European films and programmes. The main focus was on the distribution
and screening of  cinema films in cinemas  outside  their  territory  of  origin.  Other
mechanisms were also put in place to promote the widest possible circulation of
European  programmes  through  television  and  other  media  (video,  multimedia).
Finally,  the  programme  supported  a  series  of  initiatives  aimed  at  facilitating  the
promotion  and  access  to  the  international  market  of  European  independent
productions.

The  ex-post  evaluation  also  underlined  the  complementarity  between  national
measures  and  the  MEDIA  programme.  During  the  period  1996-2000,  the  bulk  of
national  aid  (84%)  was  for  production,  while  MEDIA  II  focused  on  training,
development and distribution. The few instances of national aid for distribution were
chiefly  in  support  of  national  films,  while  MEDIA  II  exclusively  encouraged  the
distribution of non-national European films. In the area of cinema operation, national
aid was chiefly for structures, while MEDIA II aid was chiefly for cinemas to show
European films. In the area of development, national aid was insignificant except in
Germany, Finland and France.

Finally, MEDIA II assistance has also proved to be well suited to the specific needs
of the European audiovisual sector, which comprises mainly small and medium-sized
enterprises and is marked by an economic imbalance between countries with strong
production potential and countries with a low production capacity and/or a restricted
linguistic and geographical area4.

4

The  following  were  considered  as  countries  with  a  low  audiovisual  production  capacity  and/or  a
restricted  linguistic  and  geographical  area  during  the  MEDIA  II  programme:  Austria,  Belgium,

4

 
                                                
2.

2.1.

On the one hand, new mechanisms were set up in the course of MEDIA  II to meet
the  specific  needs  of  medium-sized  companies  (automatic  distribution  support  and
slate  funding)5,  while  existing  mechanisms  (selective  distribution  support  and
support  for  the  development  of  individual  projects)  remained  open  to  smaller
companies.

On  the  other  hand,  the  introduction  of  flexible  positive  discrimination  in  favour  of
countries  with  a  low  production  capacity  and/or  a  restricted  linguistic  and
geographical  area  made  it  possible  to  begin  to  restore  balance  to  the  European
market6.

EVALUATION OF THE IMPACT OF THE MEDIA II PROGRAMME

Overall  impact  of  the  MEDIA  II  programme  on  the  European  audiovisual
sector

The total budget for the MEDIA II programme was EUR 358 million (including the
initial  budget  allocation,  reimbursements  and  appropriations  made  available  again),
of  which  89%  (EUR 320 million)  was  allocated  to  project  support  and  11%  to
horizontal  operations.  The  ex-post  evaluation  confirmed  the  smooth  administrative
functioning  of  the  programme,  sound  management  by  the  Commission  having
reduced the operating costs by half compared with MEDIA I.

MEDIA II aid represented only 0.51% of the European audiovisual sector's economic
weight overall, although this proportion was higher (average 0.80%) in the countries
with  low  production  output  and  exceeded  1%  in  Greece,  Iceland,  Belgium  and
Luxembourg.

The MEDIA II aid had a substantial knock-on effect, even though this is difficult to
quantify  precisely.  An  estimation  of  this  knock-on  effect  was  provided  in  the  mid-
term evaluation of MEDIA II7, which concluded that each Community euro invested
had  generated  EUR 5.75  of  investment  in  the  industry.  This  multiplier  coefficient
was  of  course  much  lower  in  the  training  sector  (2.38)  but  was  higher  in  the
distribution sector (7.2) and, to a lesser degree, in the development sector (4.19).

This  estimate  of  the  leverage  effect  produced  by  the  Community  funds  ought  no
doubt  to  be  revised  upwards  in  order  to  measure  the  full  impact  of  the  MEDIA  II
programme, since it takes no account of the introduction of the automatic distribution
support and slate funding mechanisms, mechanisms which, by virtue of their design
and the reinvestment obligation that they contained, had a strong knock-on potential.

MEDIA II also made it possible to begin to restore balance to the European industrial
market, a feature of which is the dichotomy between countries with a low production

5

6

7

Denmark,  Finland,  Greece,  Ireland,  Iceland,  Liechtenstein,  Luxembourg,  Norway,  Netherlands,
Portugal and Sweden.
See paragraphs 2.2.1, 2.3.1. and 3.1.
See paragraph 2.1.
Commission report on the results obtained in the context of the MEDIA II programme during the period
1.1.1996 - 30.6.1998, COM(1999) 91 final.

5

 
                                                                                                                                                        
capacity  and/or  restricted  linguistic  and  geographical  area8,  whose  volume  of
production is naturally limited, and countries with a higher production capacity (i.e.
volume of production in relation to the population).

In  order  to  offset  the  structural  handicaps  of  the  countries  and  regions  with  a  low
production capacity and restricted linguistic areas, a flexible positive discrimination
policy  with  no  pre-set  quantified  objectives  was  introduced.  This  system  enabled
these countries to receive approximately 30% of the aid distributed under MEDIA II,
even though they represented only 19% of the European audiovisual market. MEDIA
II has therefore helped lay the foundations for a long-term convergence of production
structures within the Union.

2.2.

Impact of the Distribution strand

2.2.1.

Support for cinema distribution

(cid:1)  Selective support for cinema distribution

The aim of this support was to improve the transnational circulation of non-national
European  films  and  encourage  European  distributors  to  create  and  consolidate
cooperation  networks.  Support  was  provided  for  the  creation  and  production  of
marketing  material  to  launch  cinema  distribution  campaigns  and  for  dubbing  and
subtitling. Projects had to involve at  least three distributors joining together for the
distribution of a film. With effect from 1999 the mechanism was also opened up to
international sales agents.

Over  the  lifetime  of  the  MEDIA  II  programme,  2 712  project  applications  were
submitted.  In  all,  1 930  distribution  campaigns  for  305  films  were  supported.  The
total amount of MEDIA II funding awarded was EUR 62 million, i.e. an average of
EUR 32 000 per film, representing 25% of the total average distribution budget. On
average,  there  were  6  national  distribution  campaigns  per  film  supported.  The
average production cost of the films supported was EUR 4.3 million. The number of
project  applications  submitted  each  year  rose  by  60%  between  1996  and  2000,
evidence that the support mechanism was found extremely attractive, both in design
and in the amounts allocated.

(cid:1)  Automatic support for cinema distribution

This  mechanism  was  created  part-way  through  the  programme  (in  1997)  and
consisted of an automatic support procedure for  European distributors,  awarded  for
the release  of  a  non-national  European  film  in  any  of  the  countries  participating  in
the  programme.  The  MEDIA  II  aid  was  calculated  on  the  basis  of  the  number  of
spectators paying to see the film, multiplied by a weighting coefficient based on the
nationality  of  the  film  and  the  distribution  area.  The  distributor  was  obliged  to
reinvest the aid in the distribution of another non-national European film.

8

The  following  were  considered  as  countries  with  a  low  audiovisual  production  capacity  and/or  a
restricted  linguistic  and  geographical  area  during  the  MEDIA  II  programme:  Austria,  Belgium,
Denmark,  Finland,  Greece,  Ireland,  Iceland,  Liechtenstein,  Luxembourg,  Norway,  Netherlands,
Portugal and Sweden.

6

 
                                                
Over  the  lifetime  of  the  programme,  1 462  films,  with  an  average  budget  of
EUR 6 million, attracted a total paying audience of 145 million, of which 106 million
were eligible. The aid thus generated totalled EUR 44.7 million. Almost 80% of this
aid  was  re-invested  in  419  new  European  films.  The  mechanism  took  off  very
rapidly, the number of projects aided annually multiplying by 15 between 1997 and
2000. This demonstrates how successful the mechanism was with professionals, and
how well-suited it was to their needs.

(cid:1)  Impact of MEDIA II on the circulation of European films

The  number  of  European  films  distributed  outside  their  national  territory  doubled
over the lifetime of the programme, from 246 in 1996 to 499 in 2000. In 1999, 62%
of these films had been supported by MEDIA II, compared with 64% in 2000. These
films accounted for 90% of the ticket sales generated by non-national European films
in Europe.

Because of the selection and award procedures adopted by distributors in allocating
support for film distribution, the MEDIA  II aid in fact went to films which already
had  a  strong  international  circulation  potential.  However,  it  undeniably  helped  to
consolidate that potential.

On the other hand, MEDIA II did not lead to the creation of stable networks between
European  distributors.  Experience  has  taught  us  that  the  creation  of  such  networks
will  have  to  be  a  medium  to  long-term  structural  objective,  impossible  to  achieve
over the period 1996-2000. This difficulty can be attributed to a strong reluctance on
the part of independent distributors to group together. However, there are signs that
they are gradually becoming more aware of the need to change the way they operate
and of the benefits this could bring. One sign was the improvement, over the lifetime
of MEDIA II, of functional collaboration between distributors during the preparation
and dispatch of dossiers. This growing awareness can also be seen in MEDIA Plus,
with the gradual emergence of groupings.

2.2.2.

Support for networks of cinemas

The aim was to support, through subsidies, networks of cinemas pledging to screen a
significant proportion of European films on new release and for a minimum period.
The  networks  were  selected  on  the  basis  of  the  number  of  cinemas  they  contained
and the number of countries they involved.

Over  the  period  1996-2000,  MEDIA  II  awarded  funding  to  two  networks,  Europa
Cinemas  and  Média  Salles,  for  a  total  of  EUR 17.2 million.  These  networks
numbered 413 screens at the start of the programme and 754 by the end of 2000 (i.e.
3.4%  of the  cinemas  in  Europe).  These  cinemas scheduled 36%  of  their  screenings
for  non-national  European  films  (compared  with  a  market  average  of  20%).  At  the
end  of  the  programme,  the  geographical  distribution  of  the  cinemas  was  evenly
balanced  and  included  countries  with  a  low  production  capacity  and/or  restricted
linguistic area.

7

 
(cid:1)  Impact of MEDIA II on the scheduling of non-national European films

MEDIA  II  was  particularly  helpful  to  small  independent  cinemas.  Of  the
356 affiliated  cinemas,  130  were  single-screen,  91  were  two-screen  and  only  five
were  multiplexes.  The  funding  had  a  positive  impact  on  their  financial  situation.
Thanks to the leverage effect, their takings rose by between 5 and 10%.

The  percentage  of  non-national  European  films  screened  in  the  networks  awarded
funding rose from 30% at the start of the programme to 36% by the end. MEDIA II
support enabled the cinema operators to take more risks in  scheduling  films of  this
type.

2.2.3.

Support for television broadcasting

The aim was to promote the television broadcasting of non-national European works
by  encouraging  the  creation  of  European  co-productions.  To  qualify  for  support,
producers had to satisfy an independence criterion, in terms of the maximum period
of  ownership  of  rights  by  broadcasters  (7  years).  The  purpose  of  introducing  this
criterion  was  to  change  current  practice  on  the  television  markets  by  encouraging
shorter ownership of rights by the television channels. Such a change would benefit
the  independent  production  sector  by  allowing  companies  to  have  catalogues  of
works  –  veritable  assets  –  and  thus  some  self-financing  capability  and/or  sufficient
guarantees to present to financial partners.

Over the lifetime of MEDIA II, 362 projects received funding, for a total amount of
EUR 39 million. 65% of the projects supported were documentaries, 27% fiction and
8% animations.

The  overall  investment  in  production  was  EUR 572 million,  or  2.3%  of  European
television  production.  The  MEDIA  funding  therefore  had  an  important  leverage
effect,  in  enabling  independent  producers  to  complete  the  financial  package  for
international co-productions for which they had already assembled 75% of the funds.

The  producers  allocated  support  for 
television  broadcasting  were  mainly
concentrated in a small number of countries (France, Belgium, Germany, Italy, Spain
and  the  United  Kingdom).  This  was  due  to  the  independence  criterion  imposed,
because  practices  in  terms  of  ownership  of  rights  by  broadcasters  turned  out  to  be
very different from one country to another. Experience from MEDIA II has taught us
that funding alone will not bring about the changes anticipated in market practices:
legislation  too  is  required,  both  at  Community  level  (the  "Television  without
Frontiers" Directive)9 and at Member State level.

2.2.4.

Support for video and multimedia publishing and distribution

The purpose of this support was to encourage European publishers and distributors to
publish  and  distribute  catalogues  of  films  and  of  recent  European  audiovisual
programmes on all video media for home use (VHS, DVD, CD-ROM).

9

Directive  89/552/EEC  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 Directive 97/36/EC of the European Parliament and of the Council; OJ L 202 of 30.7.1997,
p. 60.

8

 
                                                
Support  for  video  and  multimedia  publishing  and  distribution  covered  2 476  titles
(including  188  multimedia  titles),  presented  by  108  companies.  MEDIA  II  funding
amounted to EUR 10.4 million. Over the reference period, the DVD format grew in
popularity (40% of the titles supported in 2000).

The  ex-post  evaluation  indicated  that  funding  had  only  a  limited  impact  on  this
sector. The number of beneficiaries was small, and mainly confined to the three main
video markets, France, the United Kingdom and Germany. Numerous medium-sized
distributors never even applied for MEDIA II funding.

Support was minimal (EUR 10.4 million over 5 years) compared with the size of the
end market (EUR 7 billion in 2000).

As a result, the support mechanisms for this sector were revised for MEDIA Plus.10

2.2.5.

Support for promotion

The  aim  was  to  improve  the  promotion  of  European  films  and  programmes  and
facilitate  access  by  European  independent  producers  and  distributors  to  the
professional markets. Two types of promotion were supported by MEDIA II:

-  presence  at  the  industry's  major  markets  (the  Berlin  and  Cannes  film  festivals,
MIPCOM, MIP-TV and MILIA), where independent professionals could participate
together  at  an  "umbrella  stand",  providing  them  with  maximum  visibility  and
services;

-  presence  at  the  thematic  markets  (Cartoon  Forum,  Sunny  side  of  the  Doc  etc.),
where effective "pitching" sessions for projects could be organised.

Over the lifetime of MEDIA II, funding was awarded for 64 festivals, at which 7 500
European works were screened to over 2 million persons, and for 50 trade events and
markets.  The  total  amount  of  support  awarded  over  the  period  1996-2000  was
EUR 19.1 million.

Concerning  support  for  presence  at  the  industry's  major  markets,  400  European
independent companies benefited during the programme from the MEDIA umbrella
stands. There was  a high  rate of  satisfaction from  these  users  (for  example  85%  in
the case of the MIP-TV market).

Concerning support for presence at thematic markets, 1 164 European projects were
presented to broadcasters (for advance sales) or to producers (for co-productions) at
the  Cartoon  Forum  alone.  This  type  of  action  has  undeniably  helped  to  make
independent producers more professional and paved the way for the establishment of
landmark promotional thematic events.

10

See paragraph 3.2.

9

 
                                                
2.2.6.

Support for catalogues

The aim was to provide financial support to companies engaged in the international
distribution  of  television  programmes,  to  help  them  produce  promotional  material
(publishing/printing  of  paper  catalogues  or  online  catalogues),  to  dub  and  subtitle
programmes, and to participate at international markets (stand hire, etc).

Over the  lifetime of  the  MEDIA  II  programme, 62  companies  received  support  for
catalogues, for a total amount of EUR 3.6 million.

2.3.

Impact of the Development strand

2.3.1.

Support for project development

(cid:1)  Support for the development of individual projects

This support was awarded for the development of fiction, documentary, animation or
multimedia  projects  intended  for  the  cinema  or  television  and  presented  by
independent European production companies.

In  all,  1 178  different  companies  were  awarded  development  support,  covering  a
total  of  1 714  projects.  The  total  amount  of  MEDIA  II  aid  awarded  was
EUR 50.9 million,  averaging  EUR 30 000  per  project.  Works  of  fiction  headed  the
list, followed by documentaries.

(cid:1)  Support for the development of project packages (slate funding)

This  radically  new  funding  mechanism  was  introduced  in  1999  and  allowed
European  independent  production  companies  to  be  allocated  a  budget  for  the
development  of  project  packages.  It  was  aimed  at  medium-sized  production
companies that had already ventured into the international market.

Over the period 1999-2000, 99 catalogues were selected, for a total amount of almost
EUR 12 million  and  an  average  amount  of  EUR 125 000.  The  total  number  of
projects supported was 400. Works of fiction represented three-quarters of this total,
followed by documentaries. A shift in the nature of the funding applications received
was very soon observed, from individual-project funding to slate funding, indicating
how well this new instrument met the needs of medium-sized companies.

2.3.2.

Support for the development of production structures

(cid:1)  Support for the development of production companies

The purpose of this support was to help companies become more competitive. It took
the  form  of  support  for  the  drawing-up  of  five-year  business  plans  and  support  for
the implementation of business plans.

Between 1996 and 2000, 186 companies received support under this mechanism, for
a  total  amount  of  EUR 8.4 million.  The  average  loan  awarded  was  approximately
EUR 100 000. The introduction of slate funding in 1999 saw the gradual withdrawal
of  applications  and  resources  for  this  type  of  support.  Slate  funding  was  seen  as  a
more flexible instrument for supporting companies' medium-term strategies.

10

 
(cid:1)  Support for industrial platforms

This  mechanism  was  intended  to  encourage  European  independent  production
companies  working  on  animation  projects,  productions  based  on  new  technologies
and productions promoting Europe's film and audiovisual heritage to join together in
networks. The support was awarded to the platform responsible for redistribution and
for providing advice to the producers in the network.

Two  platforms  were  selected  during  the  lifetime  of  the  MEDIA  II  programme:
Multimedia Investissement (Multimedia Investments) and Cartoon.

2.3.3.

Impact of the Development strand

Aid for development has helped to make professionals more aware of the importance
of  the  industrial  stage  of  development,  while  giving  them  access  to  financial
resources  for  developing  their  products.  It  has  enabled  producers  to  test  their
concepts  and  not  produce  projects  of  dubious  potential  as  regards  feasibility  or
profitability.

The  economic  impact  of  this  aid  on  investment  levels  is,  however,  difficult  to
quantify. But the mechanism seems to have been particularly interesting to medium-
sized  producers,  in  enabling  them  to  increase  their  volume  of  investment  and
improve  their  companies'  financial  situations.  For  small  producers,  it  offered  an
alternative to costly bank finance. The aid represented a greater or lesser proportion
of  total  development  investment  depending  on  the  size  of  the  recipient  company
(small  or  medium)  and  the  country  of  origin  (country  with  high  or  low  production
capacity).  The amounts of development aid awarded per  project (from EUR 23 000
to  EUR 35 000  depending  on  the  product  category)  were  sufficiently  high  to  be
attractive and to have a real impact on the financing of the development.

2.4.

Impact of the Training strand

MEDIA II pursued the following objectives with regard to training:

- providing professionals with initial and continuing training, especially in relation to
the European dimension of markets and the use of new technologies;

-  promoting  cooperation  and  exchanges  of  know-how  through  the  networking  of
professionals and the development of teacher training and distance training.

The  training  initiatives  covered  three  main  fields:  economic  and  commercial
management, utilisation and development of new technologies for the production of
audiovisual programmes, and screenplay techniques.

Over  the  period  1996-2000,  186  training  initiatives  were  co-financed,  involving
8 691  participants.  MEDIA 
total  cost  of
II's  contribution 
EUR 94.9 million was EUR 39.7 million. Training in the new technologies attracted
the most participants, followed  by  training  in  management,  followed  by  training  in
screenplay  techniques.  A  wide  range  of  training  institutions  (from  universities  to
associations) benefited from the MEDIA II Training strand.

towards 

the 

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In  the  course  of  the  programme  the  training  provision  offered  by  these  institutions
was  gradually  tailored  to  the  predetermined  priorities  (the  three  main  fields
mentioned  above)  and  the  professionals'  requirements.  There  was  a  significant
improvement  in  the  educational  content.  Efforts  were  also  made  in  terms  of
information and clarification of objectives, so as to reach out more effectively to the
target  audience.  An  increase  in  training  provision  in  countries  with  low  production
capacity and a restricted linguistic area was also observed.

The impact of the Training strand can only be measured in the medium or long term.
However, it already appears that the MEDIA II training initiatives have helped shake
up  the  attitudes  and  practices  of  independent  European  professionals,  in  that  they
now take more account of the European dimension, the development stage, the end
markets, transnational cooperation and spontaneous networks.

Workshops based on participants' individual projects have enabled the participants to
target, calibrate, develop, produce and sell these projects more effectively. They have
also  fostered  networks  of  contacts  between  independent  producers  of  various
countries, giving them easier access to certain resource people for the development,
financial set-up, packaging, marketing, selling and distribution of their projects. The
links created during these training courses have ranged from selective co-production
to the sale of programmes and have led to some solid partnerships.

Investment  in  initial  training  initiatives  has  turned  out  to  be  far  less  profitable  in
terms of collective impact, since the participants have no previous experience and no
anchor point in professional practice.

3.

ADJUSTMENTS  TO  THE  COMMUNITY  ACTION  FOLLOWING  IMPLEMENTATION  OF
THE MEDIA II PROGRAMME

3.1.

Adjustments during the programme

Several adjustments were made to the MEDIA II programme based on analysis of the
evolution  of  the  audiovisual  programme  market.  The  purpose  of  these  adjustments
was  to  adapt  the  programme  as  well  as  possible  to  the  needs  of  the  European
audiovisual industry and maximise its structuring effects.

Thus, two mechanisms directed at medium-sized companies already possessing some
financial  capacity  and  experience  at  international  level  were  set  up  during  the
programme, namely the system of automatic support for cinema distribution and the
development of project packages (slate funding).

The  first  mechanism  (automatic  support  for  cinema  distribution)  was  introduced
experimentally  in  1997  and  was  subsequently  extended  until  the  end  of  the
programme,  with  a  bigger  budget,  on  the  basis  of  positive  conclusions  in  the  mid-
term  evaluation11  of  MEDIA  II.  The  second  mechanism  (slate  funding)  was
introduced  in  1999,  on  the  basis  of  recommendations  made  in  the  mid-term
evaluation.

11

Commission report on the results obtained in the context of the MEDIA II programme during the period
1.1.1996 - 30.6.1998, COM(1999) 91 final.

12

 
                                                
The  complementarity  between  these  two  new  mechanisms  and  the  existing
mechanisms  (selective  support  for  distribution  and  support  for  the  development  of
individual projects) has been strengthened. In the case of support for distribution, the
selective  aid  was  targeted  on  films  with  low  initial  commercial  potential  and
therefore representing a bigger risk for the distributor. The support provided enabled
these  films  to  be  released  and  made  more  attractive  (dubbing,  printing  of  copies,
promotion  campaigns).  The  automatic  distribution  aid,  in  contrast,  went  to  more
commercial, bigger-budget films. As regards support for development, slate funding
offered  medium-sized  companies  flexible  support  and  better  financial  visibility.
Maintenance  of  the  system  of  support  for  individual  projects  ensured  that  smaller
companies were not excluded from MEDIA II aid.

3.2.

Design of the MEDIA Plus programme (2001-2005)

When  the  discussions  on  MEDIA  Plus  were  launched,  the  need  to  provide
Community support for the audiovisual sector was not challenged. This was because
of the sector's economic situation, reflecting how much needed to be done in terms of
training,  development  and  distribution  (see  part  1  of  this  report).  In  fact,  the
economic assessment of the audiovisual sector justified a substantial increase in the
MEDIA  budget.  While  MEDIA  II  had  had  a  budget  of  EUR 310 million,  MEDIA
Plus was allocated EUR 400 million.

Experience  acquired  from  MEDIA  II  influenced  the  design  of  MEDIA  Plus  in  the
following  ways.  The  focusing  of  resources  on  the  three  strands  of  training,
development and distribution was maintained. However, the instruments set up under
MEDIA II were adapted to take account of the results recorded over the period 1996-
2000 and to take account of the sector's changing needs.

In the training field, the main adaptation was to introduce an incentive for the setting
up of European networks of centres of excellence, to coordinate the activities of the
training institutions.

In the development field, the support mechanisms for the development of production
structures  were  scrapped,  in  favour  of  support  mechanisms  for  the  development  of
projects. Slate funding was seen to be a suitable mechanism for short and medium-
term financing and structuring of companies and was maintained for MEDIA Plus.

In the distribution field:

– 

– 

– 

– 

support  for  catalogues  was  replaced  by  support  for  digitisation  of  works  and
the creation of promotional and advertising material on digital media;

the system of automatic support for cinema distribution was maintained, with a
bigger budget;

aid for sales agents was maintained under the selective support mechanism;

the MEDIA II system of support for video and multimedia was replaced by a
system of automatic support for publishers and distributors of European works
on media for private use (video, DVD and CD-Rom).

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