Commission staff working document - Accompanying document to the proposal for a Decision of the European Parliament and of the Council establishing an audiovisual cooperation programme with third countries MEDIA Mundus - Impact assessment Report {COM(2008) 892} {SEC(2008) 3097} {SEC(2008) 3102}
Date: 2009-01-09
Institutions: European Commission
Subjects: audiovisual industry, competitiveness, economic development, employment policy, innovation, third country, vocational training

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 9.1.2009 
SEC(2008) 3098 final 

COMMISSION STAFF WORKING DOCUMENT 

Accompanying document to the 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing an audiovisual cooperation programme with third countries MEDIA 
Mundus 

IMPACT ASSESSMENT REPORT 

{COM(2008) 892} 
{SEC(2008) 3097} 
{SEC(2008) 3102} 

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COMMISSION STAFF WORKING DOCUMENT 

Accompanying document to the 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing an audiovisual cooperation programme with third countries MEDIA 
Mundus 

IMPACT ASSESSMENT REPORT 

Integrating ex ante evaluation requirements 

This  Impact  Assessment  Report  is  prepared  as  a  basis  for  comments.  It  only  commits  the 
Commission’s services involved in its preparation and does not prejudge the final form of any decision 
to be taken by the Commission. 

The  draft  of  this  Impact  Assessment  Report  was  discussed  in  oral  procedure  with  the  Impact 
Assessment  Board  on  27  August  2008;  on  01  September  2008  and  on  13  October  2009  the  Impact 
Assessment Board issued its opinion / recommendations, which are all integrated into this Report. 

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TABLE OF CONTENTS 

Introduction .........................................................................................................................................- 9 - 

1. 

1.1. 

1.2. 

1.3. 

1.4. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

2.5. 

Section 1: Procedural issues and consultation of interested parties ...................................- 10 - 

Organisation and timing.....................................................................................................- 10 - 

Consultation and expertise .................................................................................................- 10 - 

Main results and follow-up to the consultations ................................................................- 12 - 

The opinion of the Impact Assessment Board ...................................................................- 12 - 

Section 2: Problem definition and rationale for intervention.............................................- 13 - 

Context: Introduction - value chain of the audiovisual industry........................................- 13 - 

What are the nature and the scope of the problem? ...........................................................- 14 - 

What are the underlying causes behind these problems?...................................................- 16 - 

Who is affected, in what ways and to what extent? ...........................................................- 18 - 

How would the problem evolve, all things being equal? ...................................................- 18 - 

2.5.1.  Missed potential for opportunities on third country markets .............................................- 19 - 

2.5.2. 

Insufficiency of existing internationalisation efforts .........................................................- 19 - 

2.6. 

2.7. 

2.8. 

3. 

3.1. 

3.2. 

4. 

4.1. 

4.2. 

4.3. 

Events triggering the initiative - the Preparatory Action MEDIA International................- 21 - 

Does the EU have the right to act?.....................................................................................- 22 - 

Summary of problems........................................................................................................- 23 - 

Section 3: Objectives .........................................................................................................- 24 - 

General policy objectives (global objectives) and specific objectives...............................- 24 - 

Consistency with other European Union policies and other objectives .............................- 25 - 

Section 4: Policy options and Impacts ...............................................................................- 25 - 

Option 1: Business as usual ...............................................................................................- 25 - 

Impact of option 1 – "Business as usual"...........................................................................- 25 - 

Option 2: Extension of existing instruments......................................................................- 26 - 

4.3.1. 

Extension of Euromed Audiovisual II and the EU – ACP Support Programme for Cinema 
and the Audiovisual Industry .............................................................................................- 26 - 

4.3.2.  Amendment of the MEDIA 2007 programme ...................................................................- 26 - 

4.4. 

Impact of option 2 - Extension of existing instruments .....................................................- 26 - 

4.4.1. 

Impact of amending Euromed Audiovisual II and the EU – ACP support programme for 
Cinema and the Audiovisual Industry................................................................................- 26 - 

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4.4.2. 

Impact of amending the MEDIA 2007 Programme...........................................................- 27 - 

4.4.3. 

Conclusion .........................................................................................................................- 28 - 

4.5. 

Option 3: Creation of a new instrument.............................................................................- 29 - 

4.5.1. 

Specific Objective 1 – information exchange and market intelligence..............................- 30 - 

4.5.2. 

Specific Objective 2 - Facilitation of international co-productions ........................................33 

4.5.3. 

Specific Objective 3 - Distribution and circulation of audiovisual works ..............................37 

4.5.4. 

Specific Objective 4 - Reach new audiences and promote film literacy.................................40 

5. 

Section 5: Comparison of Operational objectives / action lines/ options ...............................41 

5.1. 

Cost implications of the programme over 3 years ..................................................................41 

5.1.1. 

Scenario 1................................................................................................................................41 

5.1.2. 

Scenario 2................................................................................................................................42 

5.1.3. 

Scenario 3................................................................................................................................42 

5.2. 

Assumptions on the cost effectiveness and the European added value regarding the different 
operational objectives; Scenarios 1 and 2 ...............................................................................44 

5.2.1. 

Specific objective 1: Information exchange and market intelligence – Scenarios 1 and 2 .....44 

5.2.2. 

Specific objective 2: Facilitate international co-production activities - Scenario 1................46 

5.2.3. 

Specific Objective 2: Facilitate international co-production activities - Scenario 2...............47 

5.2.4. 

Specific objective 3: Distribution and circulation support - Scenario 1 .................................49 

5.2.5. 

Specific objective 3: Distribution and circulation support - Scenario 2 .................................51 

5.2.6. 

Specific objective 4: Reach new audiences and promote film literacy...................................52 

5.3. 

Assumptions on the cost effectiveness and the European added value regarding the different 
operational objectives; Scenario 3 ..........................................................................................54 

5.3.1. 

Specific objective 1: Information exchange and market intelligence – Scenario 3 ................54 

5.3.2. 

Specific objective 2: Competitiveness and distribution - Scenario 3......................................54 

5.3.3. 

Specific objective 3: Circulation - Scenario 3.........................................................................55 

5.4. 

5.5. 

Comparison of alternative specific objectives / action lines ...................................................56 

Conclusion regarding the preferred operational objectives ....................................................58 

5.5.1. 

Scenarios 1 and 2 ....................................................................................................................58 

5.5.2. 

Scenario 3................................................................................................................................59 

5.6. 

5.7. 

5.8. 

5.9. 

Extension of MEDIA 2007 versus creation of a new programme MEDIA Mundus ..............60 

Risks and counter measures ....................................................................................................61 

Lessons from the past..............................................................................................................63 

Comparison of policy options .................................................................................................64 

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6. 

6.1. 

6.2. 

Section 6: Monitoring and evaluation.....................................................................................64 

Nature and frequency of the evaluation process .....................................................................64 

Monitoring - Choice of indicators...........................................................................................65 

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EXHIBITS 

Exhibit 1 

Exhibit 2 

Exhibit 3  

Exhibit 4  

Exhibit 5  

Exhibit 6 

Exhibit 7  

Exhibit 8  

Exhibit 9 

Exhibit 10 

Exhibit 11 

Exhibit 12 

Exhibit 13 

Exhibit 14 

Exhibit 15 

Exhibit 16 

Chronology of Impact Assessment 

Distribution of interviews according to region and actors in value chain 

Life cycle of a film - Value chain 

European film market, 2004 to 2006 

Market share of European and US films in third countries – 2006 

Breakdown of admissions in the European Union - Admissions by origin of films  

Top 10 third country films (excluding the US) in the EU- 2002 to 2006 

Comparison of TV advertising spend in the EU versus USA in 2006  

MEDIA International Preparatory Action 2008: Proposals 

Problem tree 

Potential impact of Operational Objective/Action Line 1 

Alternative instruments for delivering operational objective 2 

Potential impact of Operational Objective/Action Line 2.1 

Potential impact of Operational Objective/Action Line 2.2  

Alternative instruments for delivering operational objective 3 

Potential impact of Operational Objective/Action Line 3  

Exhibit 17  

Potential impact of Operational Objective/Action Line 4 

Exhibit 18 

Exhibit 19 

Exhibit 20 

Exhibit 21 

Exhibit 22 

Exhibit 23 

Exhibit 24 

Exhibit 25 

Exhibit 26 

Exhibit 27 

Exhibit 28 

Exhibit 29 

Exhibit 30 

Exhibit 31 

Exhibit 32 

Cost implications of a new programme - 2011 to 2013 for scenario 1 

Cost implications of a new programme - 2011 to 2013 for scenario 2 

Cost implications of a new programme - 2011 to 2013 for scenario 3 

Output and unit costs per proposed action line for specific objective 1, Scenarios 1 
and 2 

Output and unit costs per proposed action line for specific objective 2, Scenario 1 

Output and unit costs per proposed action line for specific objective 2, Scenario 2 

Output and unit costs per proposed action line for specific objective 3, Scenario 1 

Output and unit costs per proposed action line for specific objective 3, Scenario 2 

Output and unit costs per proposed action line for specific objective 4, Scenarios 1 
and 2 

Output and unit costs per proposed action line for specific objective 1, Scenario 3 

Output and unit costs per proposed action line for specific objective 2, Scenario 3 

Output and unit costs per proposed action line for specific objective 3, Scenario 3 

Likely effectiveness of the different objectives, Scenarios 1 and 2 

Likely effectiveness of the different objectives, Scenario 3 

Table of preferred operational objectives between the scenario 1 and the scenario 
2 

Exhibit 33 

Table of preferred operational objectives, Scenario 3 

Exhibit 34 

Comparison  of  policy  option  2  (extension  of  MEDIA  2007)  and policy option  3 
(creation of a new instrument) 

Exhibit 35 

Comparison of policy options 

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ANNEXES 

Annex 1 

Annex 2 

Annex 3 

Annex 4 

Annex 5 

Annex 6 

Annex 7 

Annex 8 

Annex 9 

Assessment of the impacts by Technopolis / Media Consulting Group; Final 
Report  

Summary of public online consultation  

The film industry value chain 

Structure of audiovisual markets 

Market share (EU) according to origin of feature films - 2006  

Market size – the effect on exports 

Missed potential for opportunities on third countries markets 

Comparison of International Film Funds 

Preparatory Action MEDIA International selected projects 

Annex 10 A 

Financial Annex Scenario 2 

Annex 10 B 

Financial Annex Scenario 1 

Annex 11 

Annex 12 

Annex 13 

Annex 14 

Annex 15 

Annex 16 

Actions to be implemented 

Implementation and programme delivery 

Intervention Tree for Policy Options 1,2 & 3 

Intervention Tree for Policy Option 3 

Specific objectives and indicators  

Operational objectives and indicators  

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INTRODUCTION 

The  audiovisual  sector  is  an  essential  vector  for  creating  highly  skilled  future-oriented  jobs  and  for 
conveying and developing cultural values. It plays a major role in the context of the i2010 initiative –
the  policy  umbrella  for  the  European  information  society  and  media  policies  –  in  the  context  of  the 
Lisbon agenda.  

Since  1991,  Community  support  in  the  context  of  consecutive  MEDIA  programmes1  is  intended  to 
enhance  competitiveness  and,  in  particular,  to  increase  the  circulation  in  Europe  of  non-national 
European audiovisual works2.  

MEDIA 2007 is designed to enable the European audiovisual sector to develop its cultural, social and 
economic  potential  on  the  internal  market.  It  does  not  include  support  for  the  production  phase  of 
audiovisual  works  for  which  a  variety  of  national  support  schemes  exist.  Instead,  the  MEDIA 
programmes  have  focused  on  support  upstream  and  downstream  of  production  support  where 
European added value and cost effectiveness are much more pronounced.  

-  The  external  dimension  of  audiovisual  policy  is  taking  on  increasing  importance:    in  2006  the 
European  Community  ratified  together  with  12  Member  States  the  UNESCO  Convention  on  the 
protection and promotion of the diversity of cultural expressions3. 

It is in this context that on 13 December 2007, the European Parliament adopted, in the 2008 budget, a 
Preparatory Action  focusing  on  developing  European Union  relations  with  third-country  audiovisual 
markets.  This  Preparatory  Action  MEDIA  International  provides  the  opportunity  for  structuring  and 
strengthening relations and networks between European Union and third-country professionals in the 
audiovisual  sector,  for  the  mutual  benefit  of  the  European  industry  and  that  of  the  third  countries 
involved. Intensified exchange and cooperation with non-European Union professionals strengthen the 
competitiveness of the European audiovisual industry. At the joint invitation of Viviane Reding and 
Gilles  Jacob,  President  of  the  Cannes  Film  Festival,  and  in  the  presence  of  José  Manuel  Barroso, 
ministers  in  charge  of  audiovisual  matters  in  the  European  Union  and  the  EFTA  countries,  met 
informally  in  Cannes  on  19  May  2008,  and  adopted  a  declaration  welcoming  the  European 
Parliament's  initiative  on  the  MEDIA  International  Preparatory  Action  and  encouraging  the 
Commission  "to  pursue  the  development  of  this  initiative  and  to  examine  the  desirability  and  the 
possibility of presenting, before the end of the year, a proposal for a support programme to promote 
cooperation between European audiovisual industry professionals and industry professionals in third 
countries for the mutual benefit of all participants". 

With a view to proposing a legal basis following the Preparatory Action, DG INFSO has prepared this 
Impact Assessment on a possible future MEDIA Mundus programme.  

1  
2  

3 

MEDIA I 1991-1995, MEDIA II 1996-2000, MEDIA Plus and MEDIA Training 2001-2006. 
Audiovisual  work  for  the  purpose  of  this  Impact  Assessment  Report  and  the  proposed  new  programme  MEDIA 
Mundus  means a set of moving images with or without sound, as defined in Article 1 of the Audiovisual Media 
Services Directive (Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by 
law, regulation or administrative action in Member States concerning the provision of audiovisual media services, 
(OJ  L  298,  17.10.1989,  p.  23),  last  amended  by  the  new  Audiovisual  Media  Services  Directive  2007/65/EC.) 
Examples of audiovisual works include feature films, documentaries, animation films and to a certain extent video 
games. In principle the scope of the initiative would embrace all audiovisual works independent from their cultural 
value and therefore no criteria relating to cultural diversity would need to be introduced. Exceptions might apply 
for video games and other moving content. Here criteria would relate to the “contribution to the cultural heritage” 
and the “artistic value of the project”. 
UNESCO  Convention  on 
http://ec.europa.eu/culture/portal/action/diversity/unesco_en.htm  

the  diversity  of  cultural  expressions. 

the  protection  and  promotion  of 

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A future MEDIA Mundus programme would not overlap in any way with the existing MEDIA 2007 
Programme,  but  would  be  a  complementary  instrument  to  MEDIA  2007.  Whereas  the  objectives  of 
MEDIA 2007 are focused on the internal market, those of a MEDIA Mundus programme would focus 
on the external dimension of the audiovisual industry. A point of convergence for both Programmes 
would be their aim to strengthen the competitiveness of the European audiovisual industry.  

1. 

SECTION 1: PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

•  Lead Directorate-General: Directorate-General for Information Society and Media. 
•  Other  involved  services:  DGs  AIDCO,  BUDG,  DEV,  EAC,  ENTR,  LS,  RELEX,  SG,  TRADE, 

EACEA 

•  Agenda planning / INFSO Work Programme: Reference number 2008/INFSO/046 

1.1. 

Organisation and timing 

Exhibit 1: Chronology of Impact Assessment 

February to July 2008 

March 2008 

April to June 2008 
April to July 2008 
June 2008 
July 2008 
September 2009 

Consultation of stakeholders on the possibility of a future new 
programme at various events, meetings and conferences (see chapter 
1.2.) 
1st Inter- Service Steering Group accompanying the Impact Assessment4. 
DGs AIDCO, BEPA, COMM, DEV, EAC, EACEA, ENTR, 
EUROSTAT, LS, RELEX, SG and DG TRADE showed interest in 
participating in the group5; 
Public on-line consultation of interested parties 
Provision of expertise by external consultants 
Public Hearing  
2nd Inter-Service Steering Group 
3rd Inter-Service Steering Group 

1.2. 

Consultation and expertise 

Consultation  within  the  Commission:  The  following  services  have  been  consulted:  SG,  LS,  BEPA, 
DGs AIDCO, BUDG, COMM, DEV, EAC, ELARG, ENTR, EUROSTAT, RELEX and TRADE. 

External  Expertise:  DG  INFSO  concluded  a  service  contract  with  Technopolis  /  Media  Consulting 
Group to acquire external expertise on and input for the impact assessment and the ex-ante evaluation. 
The assignment included an analysis of the underlying problems, the comparative assessment of policy 
options and an assessment of potential impacts of the policy options (see Annex 1).  

Consultation  of  Stakeholders  –  Stakeholder  meetings:  Consultations  with  the  main  stakeholders, 
such  as  participants  in  the  current  MEDIA  2007  programme,  stakeholders  from  third  countries  and 
MEDIA committee members6 - have been extensive7: 
•  On  6  February  2008  a  meeting  of  the  Cinema  Expert  group8  on  Strengthening  of  the  external 
dimension of Audiovisual Policy took place. National authorities’ and experts' views were heard; 

4 
5 
6 

7  

http://intra.infso.cec.eu.int/A2/what_we_do/media_int/mundus/  
http://intra.infso.cec.eu.int/A2/what_we_do/media_int/mundus/  
According  to  Article  11  of  the  current  MEDIA  2007  programme  Decision,  the  Commission  is  assisted  by  a 
committee (Decision n°1718/2006/CE of 15/11/2006). 
Consumers were not consulted separately. However, the public hearing on 25 June 2008 in Brussels and the online 
questionnaire was given wide publicity (for example on 10 June 2008 a press release was published, IP/08/909) and 
neither were restricted to professionals. Several individuals participated in the public consultation. 

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•  On 11 February and 18 May 2008 the EFADs (European Film Agencies' Directors) were informed; 
•  In February 2008, in the context of the Berlin Film Festival, and in April 2008, in the context of the 

Udine Far East Film Festival, consultations were held with professionals; 
•  On 17 April 2008 the audiovisual experts from the EFTA were informed. 
•  On 25 April, 27 June and 28 July 2008 the MEDIA committee9 was informed. Delegations were 
invited to send their written comments to the Commission and to hold bilateral consultations with 
the Commission, if they so wished; 

•  On  19  May  2008,  Ministers  in  charge  of  audiovisual  met  during  Europe  Day  in  Cannes  on  the 
theme  "Cinema:  building  a  world  of  exchanges"10  and  a  conference  with  approximately  230 
stakeholders  from  all  over  the  world  took  place  to  present  and  discuss  possible  means  of 
international cooperation; 

•  On 19 June 2008 the German Federal Film Board (FFA) invited the Commission to hold a bilateral 

consultation with national stakeholders in Berlin;  

•  On 25 June 2008 a public hearing with approximately 120 professionals took place in Brussels. The 
hearing focused on the key role of international cooperation for the European audiovisual industry, 
provided an outline of a possible future programme MEDIA Mundus and three international expert 
panels  discussed  in  particular  questions  related  to  cooperation  between  professionals  and 
circulation of audiovisual works11; 

•  On  8  July  2008,  the  French  Presidency  of  the  EU  organised  a  colloquium  on  the  topic  Quelle 
politique de coopération cinématographique pour l’Union européenne?12 Four international expert 
panels  discussed  the  challenges  and  opportunities  of  international  cooperation  programmes  for 
training, co-production, distribution and exhibition.  

•  From  9-11  July  2008  the  evaluation  of  projects  submitted  under  the  call  for  proposals  for  the 
Preparatory  Action  MEDIA  International  took  place.  Intensive  discussions  were  held  with  the 
independent  experts  (evaluators)  on  the  projects  submitted  and  on  their  recommendations  for 
modifications to any future actions.  

Consultation of Stakeholders – Online Consultation: A public on-line consultation was launched on 
10 April 2008 using the Commission’s Interactive Policy Making tool (IPM). The consultation lasted 
until 25  June  2008.  Wide publicity  was  given  to  this  public  consultation  by  placing  it on  the  “Your 
Voice in Europe” website. Moreover, the MEDIA Desks13, delegations of the European Commission 
and  diverse  expert  groups  circulated  the  questionnaire  among  professionals  world-wide.  259  replies 
from 51 different countries were received. The opinions expressed were analysed in the context of this 
impact assessment and the results and a detailed analysis of the public consultation were published on 
the Internet (see Annex 2)14.  

Consultation  of  Stakeholders  –  Interviews:  In  the  context  of  the  research  for  their  Report, 
Technopolis / Media Consulting Group conducted 54 interviews with audiovisual professionals from 
around the world, covering all relevant parts of the audiovisual value chain, see exhibit 2.  

8 

9 

10 

11 
12 
13 

14 

for 

the 

The Cinema Expert group was created in 2001 to provide expertise to the Commission when drafting implementing 
measures on audiovisual policy (COM(2001) 534 final) - http://ec.europa.eu/avpolicy/reg/cinema/index_en.htm . 
According  to  Article  11  of  the  current  MEDIA  2007  programme  Decision,  the  Commission  is  assisted  by  a 
committee (Decision n°1718/2006/CE of 15/11/2006). 
For  text  of  Declaration  of  European  Audiovisual  Affairs  Ministers  and  of  the  European  Commission  member 
responsible 
see: 
Media, 
Information 
http://ec.europa.eu/information_society/media/docs/overview/news/cannes2008/cannes_2008_en.pdf  
http://ec.europa.eu/information_society/media/mundus/public_hearing/index_en.htm  
http://www.colloquecinemaeuropemonde.fr/  
The MEDIA Desks & Antennae represent the MEDIA programme in the Member States, as set out in Article 12 of 
the  MEDIA  2007  decision  (Decision  n°1718/2006/CE  of  15/11/2006).  Their  objective  is  to  promote  the 
Programme  in  their  country/  region  and  provide  information  to  professionals  of  the  audiovisual  industry  on  its 
antennas: 
43 
implementation. 
http://ec.europa.eu/information_society/media/overview/who/desks/index_en.htm  
http://ec.europa.eu/information_society/media/mundus/index_en.htm  

Currently, 

comprises 

network 

Society 

desks 

and 

and 

the 

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Exhibit 2: Distribution of interviews according to region and type of actors in the audiovisual 
value chain15 
Region 

Africa Asia  Australia CIS EU Latin 

America 

Near 
East 

North 
America16 

Broadcaster 
Distributor / 
Sales Agent 
Exhibitor 
Producer 
Public support 
body 
Total 

1 
1 

1 
3 
4 

10 

1 
2 

3 

2 

2 

1 
1 

1 

1 

4 

1 
9 

2 
1 
10 

23 

2 

4 

6 

1 

1 

5 

5 

Total

3 
13 

4 
5 
29 

54 

1.3.  Main results and follow-up to the consultations 

The main results of the consultation process can be summarised as follows: 
–  Many professionals strongly support strengthened cooperation between European and third country 

professional in the audiovisual sector. 

–  The  consulted  stakeholders  expressed  a  need  for  action  that  should  mainly  focus  on  training, 
distribution, the facilitation of co-productions and circulation of audiovisual works (including  new 
platforms, such as VOD17 and IPTV18), and film literacy.  

Stakeholders were given ample opportunities to contribute to and comment on different policy options. 
This  Impact  Assessment  report  closely  reflects  their  views.  The  policy  options  described  here  have 
received  feedback  from  a  representative  sample  of  relevant  parties  and  actors  from  the  audiovisual 
sector. 

1.4. 

The opinion of the Impact Assessment Board 

On 27 August 2008 the draft of this Impact Assessment Report was discussed in oral procedure with 
the  Impact  Assessment  Board.  On  01  September  2008  the  Impact  Assessment  Board  delivered  its 
opinion  /  recommendations.  The  following  general  recommendation  was  given:  "The  report  should 
strengthen the rationale for the creation of a new instrument MEDIA Mundus and better explain why 
the extension of the existing initiative MEDIA 2007 would be neither desirable nor feasible. It should 
develop and analyse alternative options for the allocation of funding across the value chain and assess 
their cost-effectiveness as required by the Implementing Rules of the Financial Regulation. The report 
should also discuss the risks (in the sense of the Financial Regulation) which would be connected to 
the implementation of this programme. During its meeting with the board DG INFSO agreed to revise 
the impact assessment on this basis".  

In  response  to  these  recommendations,  a  number  of  modifications  were  made  to  the  Report  and  the 
analysis  of  impacts  of  options  1,  2  and  3  was  further  substantiated  with  the  requested  elements  in 
section 4.1.-4.5., additional elements regarding cost effectiveness, resource intensity and a comparison 
of options (including the rationale for creating a new instrument) were introduced in section 5, and in 
section  6  indicators  were  added.  In  section  5  additional  explanations  have  been  provided  as  regards 
lessons  learned  from  evaluations  of  the  previous  MEDIA  programmes  and  how  they  could  be 
transferred  to  a  MEDIA  Mundus  Programme.  The  definition  of  the  objectives  (global,  specific  and 
operational)  proposed  for  MEDIA  Mundus  in  section  4.3.  (including  an  explanation  of  budget 

15 
16 
17 
18 

Source: Technopolis / Media Consulting Group, 2008. 
All interviews were conducted  solely with Canadian counterparts, no US organisations were interviewed. 
Video on Demand. 
Internet Protocol Television: Broadcasting of audiovisual content through the Internet.  This covers several types of 
video content, such as live television broadcast, video on demand, catch-up TV, etc. 

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allocation  and  deliverables  per  specific  and  operational  objective)  now  follows  the  standard 
terminology of the ex-ante evaluation requirements. Annex 11, actions to be implemented, was added. 
The  (additional)  technical  comments  made  by  the  IAB  were  duly  taken  into  account  in  the  revised 
version.  In  September  2008  DG  BUDG  was  consulted  on  methodological  issues  relating  to  ex-ante 
evaluation,  in  particular  sections  5  and  6  and  confirmed  that  this  report  fully  complied  with  DG 
BUDG's ex-ante requirements. The revised report was resubmitted to the IAB on 26 September 2008 
and the IAB issued its final recommendations on 13 October 2008 which state that 

"The  report  should  further  explain  why  it  is  necessary  to  create  a  new  instrument,  rather  than 
integrating  international  activities  in  the  existing  programme  MEDIA  2007.  It  should  also 
demonstrate  with  greater  precision  the  (cost-)  effectiveness  of  different  scenarios  in  achieving  the 
objective  of  7%  market  share  of  EU  audiovisual  works  in  third  countries  and  vice  versa.  Finally,  it 
should  provide  a  clearer  explanation  of  the  added  value  and  justification  for  the  number  of  outputs 
under each action line in terms ff the expected benefits." 

The respective modifications were made to the Report and are to be found in particular in sections 4.3, 
4.4 and 5.6 as regards the clarification why the envisaged international activities cannot be integrated 
into  the  existing  MEDIA  2007  Programme.  Concerning  greater  precision  of  (cost-)  effectiveness  in 
scenarios  1  and  2  in  meeting  the  7%-objective,  sections  4.5  and  5.2  were  modified.  Additional 
clarification  was  provided  as  regards  added  value  and  justification  for  the  number  of  outputs  under 
each action line, i.e. in exhibits 21 to 26. Finally, the text was shortened as requested and the concept 
of cost-effectiveness and administrative costs was more rigorously used in section 5. 

2. 

SECTION 2: PROBLEM DEFINITION AND RATIONALE FOR INTERVENTION 

Context: Introduction - value chain of the audiovisual industry  

2.1. 
The  life  cycle  of  a  film19  is  a  long  and  complex  process  for  which  six  steps  can  be  identified  (see 
exhibit 3). A myriad of actors are involved although certain of them have a more important role, such 
as scriptwriters, producers, distributors, outlets for dissemination (cinema theatres, TV channels, DVD 
and  VOD).  Their  interaction  (see  Annex  3)  determines  the  different  market  structures  for  the 
audiovisual  sector.  Indeed,  there  is  not  a  sole  cinema  or  audiovisual  market  but  many  of  a 
heterogeneous nature (see Annex 4). 

Exhibit 3: Value chain of audiovisual industry - Life cycle of a film20 

P re -p ro d u ctio n
P re -p ro d u ctio n

P ro d u c tio n
P ro d u c tio n

P o st-p ro d u ctio n
P o st-p ro d u ctio n

P r o d u c e r s/
P r o d u c e r s/
D ir e c to r s
D ir e c to r s
• D ire c tio n
• D ire c tio n
• P ro d u c tio n
• P ro d u c tio n
• F ilm in g
• F ilm in g
• C o n tro llin g
• C o n tro llin g

P r o d u c e r s/
P r o d u c e r s/
F ilm  la b o r a to r ie s
F ilm  la b o r a to r ie s
• E d itin g
• E d itin g
• S o u n d tra c k in g
• S o u n d tra c k in g
• E ffe c ts
• E ffe c ts
• T itle
• T itle

P r o d u c e r s
P r o d u c e r s
• F o rm u la tin g id e a s
• F o rm u la tin g id e a s
• A c q u irin g rig h ts
• A c q u irin g rig h ts
• S c rip tw ritin g
• S c rip tw ritin g
• S e e k in g fin a n c in g
• S e e k in g fin a n c in g
• S e e k in g c re a tiv e
• S e e k in g c re a tiv e

ta le n ts
ta le n ts

• P re p a rin g b u d g e t
• P re p a rin g b u d g e t
• P re p a rin g
• P re p a rin g

p ro d u c tio n s c h e d u le
p ro d u c tio n s c h e d u le

R ig h ts 
R ig h ts 
M a n a g e m e n t
M a n a g e m e n t

O w n e r o f r ig h ts
O w n e r o f r ig h ts
• S a le  o f rig h ts
• S a le  o f rig h ts

D is trib u tio n
D is trib u tio n

E x h ib itio n
E x h ib itio n

D istr ib u to r , sa le s
D istr ib u to r , sa le s
a g e n t
a g e n t
• A d v e rtisin g /
• A d v e rtisin g /
p ro m o tio n
p ro m o tio n

• S a le s/d istrib u tio n
• S a le s/d istrib u tio n
• S y n c h ro n isa tio n
• S y n c h ro n isa tio n
• B u n d lin g
• B u n d lin g

V a r io u s e x h ib ito n
V a r io u s e x h ib ito n
p la tfo rm s, su ch  a s:
p la tfo rm s, su ch  a s:
• C in e m a  s c re e n in g
• C in e m a  s c re e n in g
• T V  sc re e n in g
• T V  sc re e n in g
• D V D
• D V D
• V O D
• V O D
• M o b ile  T V
• M o b ile  T V
• IP T V
• IP T V
• W e b  T V
• W e b  T V

19  

20 

This study covers audiovisual works in the meaning of the Audiovisual Media Services Directive" (AVMSD), (see 
footnote  2).  However,  the  main  focus  of  the  study  and  a  future  expenditure  programme  are  cinema;  therefore 
information is on occasion specific to cinema/film. 
Source: INFSO/A2. 

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2.2.  What are the nature and the scope of the problem? 

Europe has a particularly active cinema industry, when measured against classic indicators (see exhibit 
4). In 2006, Europe produced 883 films, in second place behind India (1,016 films) and in front of the 
United  States  (485  films)21.  In  2006,  Europe  was  the  third  largest  cinema  market  in  the  world  (926 
million  cinema  tickets  sold)  and  the  second  in  terms  of  box  office  takings,  just  behind  India  (3,997 
million tickets sold), and the United States (1,448 million tickets)22. 

Exhibit 4: European film market, 2004 to 200623 

Number of feature films produced 
770 
815 
883 

Number of screens 
28,727 
29,020 
29,024 

Number of admissions (million) 
1,006 
894 
926 

2004 
2005 
2006 

Despite this, the European industry struggles with the major problem of poor circulation of European 
films on international markets and of foreign films (other than those produced by Hollywood studios) 
on  European  markets.  European  films,  in  contrast  to  those  produced  by  Hollywood  studios,  are  not 
readily exported. This is evidenced by the low market share of European films on foreign markets (see 
exhibits 5 and 6). These figures represent some important markets; however, the average market share 
of European films in third countries is estimated to amount to 4%24. 

Exhibit 5: Market share European films versus US-American films in major third countries in 200625 

Mexico 
Argentina 
Brazil 
South Korea 
India 
Japan 
USA 

Market share of European films 
3% 
5.5% 
3% 
3% 
2% 
5-9% 
3.3% 

Market share of US films 
81% 
82% 
86% 
47% 
10-12% 
50% 
94.5% 

21 
22 
23 
24  

25 

SCREEN DIGEST. 
SCREEN DIGEST. 
Source: Centre National de la Cinématographie, France (CNC) 2008. 
Source:  UNESCO,  Audiovisual  markets  in  the  developing  world-  Statistical  assessment  of  11  countries,  Paris, 
2006, http://unesdoc.unesco.org/images/0014/001461/146192e.pdf. 
Source:  Instituto  Mexicano  de  Cinematografìa  (IMCINE),  Korean  Film  Council  (KOFIC),  Instituto  Nacional  de 
Cine y Artes Audiovisuales, Argentina (INCAA), Unifrance, Motion Pictures Association of America (MPAA). 

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Exhibit 6: Breakdown of admissions in the European Union admissions by origin of films 200726 

DE 3,9%

ES 1,2%

IT 4,1%

Other Eur 4,5%

Rest of World 2,2%

FR 8,5%

GB 6,7%

US/EUR
 inc 3,5%

US  59,1%

EUR inc/US 6,3%

Total US + US/EUR inc 62,7%

Films from non European countries other than Hollywood productions face similar difficulties on the 
European market, see exhibit 7.  

Exhibit 7: Top 10 third country films (excluding the US) in the EU- 2002 to 200627 

Rank 

Country 

Number of 
feature films 
produced  

Number of 
films released 
in Europe 

Market share 
of admissions 
in Europe28 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

Top 10 total 

Canada 

Australia 

Japan 

India 

China 

Argentina 

Hong Kong 

South Korea 

Russia 

Turkey 

484 

122 

1,663 

4,464 

1,042 

275 

359 

427 

610 

110 

114 

42 

122 

248 

43 

82 

37 

56 

76 

39 

9,556 

859 

0.55% 

0.32% 

0.29% 

0.25% 

0.13% 

0.12% 

0.09% 

0.08% 

0.08% 

0.06% 

1.96% 

26 
27 
28 

Source: European Audiovisual Observatory (FOCUS 2008). 
Source: European Audiovisual Observatory (FOCUS 2008) and SCREEN DIGEST. 
Column 3 is not related to columns 1 and 2 but relates to the overall number of admissions/attendance in Europe. 

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On  the  French  exhibition  market,  which  is  seen  as  the  most  open  to  diversity  within  the  European 
Union,  only  541  films  from  Asia,  Africa  and  Latin  America  had  a  première  showing  between  1992 
and 2003, as opposed to 1,967 from North America, 1,746 French films and 1,201 from Europe. Only 
20 Indian films were shown in France during this period, 4 Thai films, 31 Korean films, 23 Mexican 
films  (this  represents  a  tiny  proportion  of  the  national  production  from  these  countries  during  this 
period).  This  under-showing  is  even  more  noticeable  when  one  considers  the  number  of  screenings 
(i.e.  number  of  times  the  film  was  shown  in  cinemas)  as  a  reference  criterion.  Asian  cinema 
represented 7.26 % of the number of films released during that period, but only 2.05 % of the number 
of  screenings.  This  discrepancy  affects  also  Latin-American  productions  (share  in  the  number  of 
screenings lower by 1.39 points than films released). Conversely, domestic films and American films 
represent a share in screenings higher than their share in the number of films (by nearly 20 points in 
the case of American films). For additional information on market shares in the European Union, see 
Annex 5. 

Regarding  the  circulation  of  films  on  television,  DVD,  VOD,  IPTV  available  data  is  patchy29.  In 
general  the  television  market  is  dominated  by  domestic,  European30  and  US  productions  and  this  is 
even more pronounced for video.  

2.3.  What are the underlying causes behind these problems? 
Market size and fragmentation: As has been demonstrated by the new theory of international trade31, 
in  a  state  of  imperfect  competition,  the  size  of  the  original  market  predominates  in  determining  the 
structure  of  international  exchanges:  Consequently,  the  concentration  of  performance  of  European 
works  on  their  sole  domestic  market,  by  reason  of  the  persistent  fragmentation  of  European 
audiovisual markets, affects their competitiveness in third-country markets, particularly with regard to 
competition from American works. This also applies to non American foreign films in Europe32. These 
imbalances  also  concern  the  market  for  television  resources  (advertising  resources,  public  resources 
and  subscription  resources,  See  exhibit  8).  Thus,  remaining  largely  compartmentalised  within 
domestic markets, whose relative size is modest, European and foreign works are doubly handicapped 
with  respect  to  competition  from  American  works  on  foreign  (and  European)  markets.  A  detailed 
explanation of this phenomenon is given in Annex 6.  

Exhibit 8: Comparison of TV advertising spend in the EU versus USA in 2006(in million Euro) 33 

USA 

49,823 

GB 

5,654 

Italy 

4,599 

Germany 

4,571 

EUR 15 

26,785 

The linguistic diversity of the European audiovisual market reinforces the problem of fragmentation 
and  market  size.  In  general,  language  transfer  (generally  dubbing  or  subtitling)  is  a  necessary 
condition to enable circulation within Europe and on an international level. In  cinema, and even more 
so on television, the general public prefers the traditional “comfort” of National language. The high 
costs of dubbing and subtitling are a major obstacle for distributors, in particular in restricted linguistic 

29 
30           

31 

32  

33 

For further reference: European Audiovisual Observatory (FOCUS 2008) 

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1207&format=HTML&aged=0&language=EN&gu
iLanguage=en  
For any goods, countries whose market size is relatively larger than that of their commercial partners will have a 
relative  advantage  and  will  therefore  have  a  strong  economic  interest  in  specialising  in  the  production  of  those 
goods, see Krugman, (1979), Siwek and Wildman (1987), Lancaster (1991). 
As an example to demonstrate the scope of the problem it is useful to compare the number of screenings / entries, 
which highlights that the US and European markets are of completely different orders of magnitude. In fact, with 
1,400  million  entries  in  2007,  the  market  for  screenings  in  the  USA  is  almost  10  times  the  size  of  any  major 
European market, on the other hand the largest European national market, France, had 177 million entries in 2007; 
i.e. the largest European national market is tiny compared to that of the US. 
Source: European Audiovisual Observatory (OEA), 2007. 

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areas,  to  target  non  national  markets.  The  average  costs  (for  a  90  minutes  film)  in  big  markets  like 
Germany, Spain, France and Italy are 5.300 Euro for subtitling and 34.900 Euro for dubbing whereas 
in small markets like Finland, Sweden and Denmark prices are around 2.600 Euro for subtitling and 
52.000 Euro for dubbing34. 
Distribution structures in Europe are extremely disadvantageous for exporting audiovisual products. 
Contrary to their large vertically integrated multinational US counterparts, distributors in Europe are 
mostly  small.  In  addition,  within  each  national  market  of  the  European  Union,  other  types  of 
organisational  structure  exist  for  distribution  (independent  distributors,  distributors  integrated  within 
TV  channels,  distributors  vertically  integrated  into  a  cinema  group,  exhibitors  with  distribution 
activities  etc.).  Thus,  the  distribution  sector  in  Europe  is  highly  fragmented  without  any  integrated 
pan-European companies. Moreover, European audiovisual works are first released on their national 
markets  and,  if  this  is  a  success,  other  European  non-national  distributors  may  distribute  the  film  in 
another European country. This strategy generates a ‘timing constraint’, i.e. the release of the film over 
several  months/years,  thus  increasing  the  risk  and  cost  of  distribution:  All  the  more  so  as  film 
distribution  requires  heavy  investments  upfront35  without  any  guarantee  on  returns.  Since  the  US 
majors36 have a greater degree of control over distribution37, they are able to organise the release of 
their  films  on  international  markets  in  a  short  period  of  time,  improving  the  efficiency  of  the 
promotion and marketing. In addition, in a large number of countries around the world, the distribution 
segment  is  to  a  large  extent  in  the  hands  of  US  majors,  either  through  distribution  subsidiaries  or 
through a joint venture with a powerful domestic distributor, thereby ensuring privileged distribution 
for the American majors. For example, in Brazil, Argentina and Mexico, the six Hollywood majors are 
the  top  six  distributors,  whilst  in  South  Korea  three  of  the  Hollywood  majors  are  in  the  top  seven 
distributors38. 
Financing Structures of European audiovisual works depend heavily on public resources and national 
distributors.  This  strongly  favours  the  creation  of  works  geared  towards  national  audiences  and 
hampers the export of audiovisual works as well as the participation of non-European capital.  
Under-funding of European audiovisual companies: In the European audiovisual industry, revenues  
from European audiovisual works are limited mainly to television sales and box office receipts from 
domestic  markets.  This  characteristic,  combined  with  the  economic  specificities  of  film  production 
(high-level risk, hazards of demand, importance of fixed and sunk costs), explains the chronic under-
funding  of  European  audiovisual  companies  and  the  central  role  of  national  public  aids  and  legal 
investment  obligations  imposed  on  domestic  TV  Broadcasters  in  the  financing  of  European 
audiovisual works. It also explains in part why there is little impetus for seeking foreign investment or 
developing strategies for export. 
Lack  of  equity:  European  audiovisual  works  suffer  from  a  lack  of  funds  meaning  that  financing 
depends  on  obtaining  pre-financing  (often  from  public  funds).  This  situation  means  that  seeking 
additional  non-domestic  or  non-European  finance  is  rarely  vital  once  the  pre-financing  has  been 
awarded,  and  prevents  the  development  of  effective  export  strategies.  This  also  however  impacts 
negatively on the economic viability of the company and its capacity to attract private investment.  
Lack of information / data: Information on third country audiovisual markets is scarce, awareness is 
low  and  available  data  is  limited.  It  is  also  difficult  for  audiovisual  professionals  to  establish 
networking abroad given distances and legal and linguistic barriers. 

34  

35 
36 

37 

38 

Study  on  dubbing  and  subtitling  needs  and  practices  in  the  European  audiovisual  industry  14.11.2007,  Media 
Consulting Group in partnership with Peacefulfish , published on http://intra.infso.cec.eu.int/  
Minimum guarantee and print & advertising costs. 
Buena  Vista  International,  Columbia  Tristar,  Paramount  Pictures,  Universal,  20th  Century  Fox,  MGM,  Warner 
Bros. 
Competition  policy  is  not  an  instrument  to  remedy  this  problem  and  it  is  not  a  tool  for  industrial  policy.  It  is  a 
response 
to  (European)  market  failure.  See  for  example  UIP  case 
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/99/681&format=HTML&aged=0&language=EN&gui
Language=en  
For further details see impact assessment study (Technopolis) in Annex 1, page 10, exhibit 5. 

to  market  behaviour  and  not 

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Viewing  habits:  Depend  on  personal  impressions  and  emotions  that  are  linked  to  previous  positive 
experiences. Experience is also cumulative and depends on individuals but also generations (acquired 
taste) as well as on (regional) cultural traditions. In a context where viewing is mainly dominated by 
US and partly by domestic production, these characteristics are important for determining the demand 
for  audiovisual  works  and  represent  a  significant  obstacle  to  diversity  of  audiovisual  works.  In  this 
context, it is of paramount importance for the audience (in particular young audiences) to be aware of 
and seek a choice of culturally diverse audiovisual works.  

2.4.  Who is affected, in what ways and to what extent? 

•  European  Professionals:  European  audiovisual  professionals,  in  view  of  the  problems  explained 

above, are caught in a vicious circle:  

–  the  financial  fragility  of  production  and  distribution  structures  combined  with  the  poor 
circulation  of  works  on  foreign  markets  affects  adversely  the  economic  viability  of  all 
segments of the value chain,  

–  the  implementation  of  an  export  strategy  could  increase  the  circulation  of  European 
works and would thereby address the problem of financial fragility, improve profitability 
and therefore increase overall competitiveness, 

–  nevertheless, this is in itself limited by the current structure and financial weakness of the 

European audiovisual industry. 

This  vicious  circle  is  of  great  concern  since  the  potential  of  development  (and  consequently  the 
increase of revenues) on the "old" European markets is limited. In the long term, the future of the 
European audiovisual industry could clearly be compromised. 

•  Consumers:  There  is  limited  international  visibility  for  European  films  and  limited  visibility  of 
foreign  audiovisual  works  in  the  EU.  This  limitation  is  often  perceived  as  the  consequence  of 
economic  dysfunctions  in  the  supply  and  screening  conditions  for  non-domestic  (and  non-
American) works but it should not simply be interpreted as a possible lack of appetite of the public 
for foreign works. In fact, a study conducted by the European Audiovisual Observatory highlights 
the growing importance of films from third countries39. 

•  European Union credibility / position vis-à-vis international policy in the sector: The European 
Union  was  a  major  player  in  the  conception  and  adoption  of  the  UNESCO  Convention  on  the 
Protection and the Promotion of the Diversity of Cultural Expressions40, which entered into force 
on 18 March 2007. Its aim is to "strengthen international cooperation and solidarity so as to favour 
the  cultural  expressions  of  all  countries".  The  poor  circulation  of  third  country  cinema  works  on 
European  markets  does  not  reflect  favourably  the  aims  expressed  by  the  European  Union.  The 
conference  Cultural  Diversity  –  Europe's  Wealth.  Bringing  the  UNESCO  Convention  to  Life, 
organised  in  Essen  during  the  German  Presidency  of  the  EU41,  highlighted  the  expectations  of 
Europe from third country audiovisual professionals. In this context, the success of the first year of 
the  Preparatory  Action  MEDIA  International  illustrates  the  needs  of  European  and  third  country 
professionals.(See section 2.6. and Annex 9 ) 

2.5. 

How would the problem evolve, all things being equal? 

The international audiovisual landscape has changed significantly over the last two decades, notably 
from  the  impact  of  technological  developments.  New  players  have  emerged,  requiring  more  content 
production for emerging markets where financial growth is extremely promising.  

39 

40 
41 

The place of third country film and audiovisual works in European markets; M.Kanzler and A. Lange, EAO 2008; 
http://www.obs.coe.int/online_publication/reports/thirdcountry_av_works.pdf.en  
http://portal.unesco.org/en/ev.php-URL_ID=31038&URL_DO=DO_TOPIC&URL_SECTION=201.html  
April 2007 see http://www.unesco.de/1338.html?&L=0  

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2.5.1.  Missed potential for opportunities on third country markets 

During the last fifteen years, audiovisual markets of many third countries have largely improved their 
economic results. Multi channel TV has developed in numerous Latin American and Asian countries. 
This has been mirrored by the removal of institutional barriers and increased resources. Asia Pacific 
stands out as exceptionally dynamic (India and China). This development of multi channel TV is an 
opportunity for the broadcasting of content.  

In many regions the cinema theatre market has also grown in the last decade42. In fact, many markets 
show remarkable increases often linked to the creation of multiplexes. The revenues needed to finance 
this growth require foreign investment. Positive effects of this growth include increased cinema going, 
and therefore increased revenues; this growth is likely to continue over the next 10 years (see Annex 7 
for further details). 

Structural weaknesses affecting the circulation of European works on foreign markets and inadequate 
financing of European firms prevent the European audiovisual industry from benefiting fully from this 
new international expansion of opportunities. This situation is regrettable since: 
–  The majority of the European audiovisual markets (with the exception of the new Member States) 

are "mature" markets with little prospect of growth in revenues.  

–  The  recent  construction  of  cinema  theatres  launched  on  a  massive  scale  in  many  third  countries 
means that these countries, unlike Europe or the United States, will benefit from advances in digital 
projection  since  they  have  not  invested  (as  have  European  cinema  theatres)  in  an  upgrade  to 
multiplexes but will switch directly to digital multiplexes. Indeed, digital rollout can be expected to 
happen  rapidly  and  on  a  wide  scale  in  these  countries;  this  will  in  turn  reduce  the  costs  for  film 
distribution.  

2.5.2. 

Insufficiency of existing internationalisation efforts 

There  are  three  types  of  internationalisation  activities,  namely  (1)  international  film  funds,  (2)  co-
production  treaties  and  (3)  existing  European  Union  programmes  in  the  area  of  audiovisual  support 
(MEDIA  2007,  Euromed  Audiovisual  and  EU  –  ACP  support  programme  for  cinema  and  the 
audiovisual industry) 

International  film  funds:  There  are  several  funding  bodies  supporting  internationalisation  activities 
(see Annex 843). These funds44 cover all geographic zones of the world and all parts of the value chain. 
However, budgetary allocations are very limited. Altogether these funds had less than 10 million Euro 
at their disposal in 2007. In comparison, financial support for the film industry in Austria amounted to 
more than 12 million Euro in 2007 – exceeding the budget of the international funds. 

Co-production treaties: An international co-production is a film made by production companies from 
different  countries.  Official  co-productions  are  made  possible  by  co-production  treaties  between 
national governments and stipulate the legal framework in which producers may work together. They 
open  national  sources  of  film  funding  to  foreign  producers.  International  co-productions  also  occur 
outside the framework of co-production treaties45. 

Existing European Union programmes in the area of audiovisual support: MEDIA 2007:  

42 
43 
44 

45 

This does not apply to Africa. For further reference see impact assessment study (Technopolis) page 11. 
For further reference: Appendix D of the impact assessment study (Technopolis). 
Ibermedia, Balkan Fund, Produire au Sud, Fonds du Sud, Hubert Bals Fund, World Cinema Fund, Göteborg Film 
Fund, Southern Vision, Visions Sud-Est. 
http://merlin.obs.coe.int/ ; http://www.cnc.fr 49 bilateral co-production treaties between EU Member States and 109 
co-production  treaties  between  EU  Member  States  and  third  countries  can  be  identified.  For  further  reference, 
Apendix C of the impact assessment study (Technopolis). 

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The MEDIA 2007 programme (2007-2013)46 is the fourth multi-annual programme for support to the 
European audiovisual industry since 1991. Its general objectives are to: 
– 

(a) preserve and enhance European cultural and linguistic diversity and its cinematographic and 
audiovisual heritage, guarantee its accessibility to the public and promote intercultural dialogue; 
(b) increase the circulation and viewership of European audiovisual works inside and outside the 
European Union, including through greater cooperation between players; 
(c)  strengthen  the  competitiveness  of  the  European  audiovisual  sector  in  the  framework  of  an 
open and competitive European market favourable to employment, including by promoting links 
between audiovisual professionals. 

– 

– 

Article 8 of the MEDIA 2007 Decision sets out the conditions for, on the one hand, participation of 
European  third  countries  in  the  programme  and,  on  the  other  hand,  cooperation  with  non-European 
third countries: 

–  Full  participation  in  MEDIA  2007  is  limited  to  certain  European  third  countries.  Currently 
Norway, Iceland, Liechtenstein, Switzerland and Croatia participate in MEDIA 2007. They have 
to pay an annual financial contribution for their membership ("entry ticket"). 

–  Limited participation in the field of training is also possible.  
–  Cooperation is possible with Western Balkan countries and with other third countries which have 
concluded  Association  and  Cooperation  Agreements  with  the  European  Union  incorporating 
clauses  on  the  audiovisual  sector.  Only  one  request  for  cooperation  under  Article  8  of  the 
MEDIA programme has been received to date and is currently pending.  

All  forms  of  participation  and  cooperation  require  supplementary  appropriations  and  specific 
arrangements  to  be  agreed  upon,  necessitating  lengthy  negotiations  and  legislative  procedures. 
Although  MEDIA  2007  creates  synergies  on  a  pan-European  level  and  foresees  the  possibility  for 
cooperation,  it  is  mainly  an  intra-European  programme  aiming  at  increasing  co-operation  and 
circulation among Member States47. Its main focus is thus not on the international, but on the internal 
market dimension.  

Existing European Union programmes in the area of audiovisual support: EUROMED Audiovisual 

In  the  1995  Barcelona  Conference  Foreign  Affairs  Ministers  from  the  European  Union  and  12 
Mediterranean Partners agreed to form the Euro-Mediterranean Partnership to nurture closer economic 
and cultural ties between the southern Mediterranean and Europe. In 2000, the European Commission 
launched  the  regional  Euromed  Audiovisual  I  Programme  and  in  2006,  the  current  Euromed 
Audiovisual II Programme48. The current programme budget is 15 million Euro for the period 2006 to 
2008.  The  programme  ends  in  2008  and  its  relaunch  is  currently  foreseen  for  2009.  Euromed 
Audiovisual  II  is  geared  towards  professionals,  institutions  and  national  organizations  in  the 
audiovisual field from the following countries and territories: Algeria, Egypt, Jordan, Israel, Lebanon, 
Morocco,  Syria,  the  Palestinian  Authority,  Tunisia  and  Turkey49.  The  15  Euromed  Audiovisual 
projects  concern  training,  development,  promotion,  distribution  and  exhibition,  backed  up  by  a 
technical assistance structure50. 

Existing European Union programmes in the area of audiovisual support: EU – ACP  

46 
47  

48 
49 

50 

See http://eur-lex.europa.eu/LexUriServ/site/en/oj/2006/l_327/l_32720061124en00120029.pdf  
Countries  that  are  eligible  for  participation  in  the MEDIA  2007  programme  are  an  integral  part  of  the  European 
audiovisual  area  and  are  therefore  enabled,  if  they  wish  and  taking  into  account  budgetary  considerations  or 
priorities of their audiovisual industries, to participate in the programme. 
http://www.euromedaudiovisuel.net/general.aspx?treeID=4&lang=en  
All those activities have the aim of exchanging know-how, networking the South Mediterranean professionals and 
institutions and reinforcing their contacts with Europe. 
To reinforce the capacity of the South-Mediterranean region's public authorities, to improve the organization of the 
audiovisual sector and to adopt measures to deal with new developments and new threats. 

EN 

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The  EU-ACP  support  programme  for  cinema  and  the  audiovisual  industry51  aims  to  promote  the 
development  and  structuring  of  the  audiovisual  industries  in  the  79  ACP  (Africa,  Caribbean  and 
Pacific)  countries.  The  Programme  started  in  October  2007  for 3 years  with  a  budget  of 6.5  million 
Euro. The programme is managed and implemented by the ACP Group of States Secretariat with the 
assistance of a Programme Management Unit. It is funded under the 9th European Development Fund 
(EDF). It supports training, film production, film distribution and film promotion.  

2.6. 

Events triggering the initiative - the Preparatory Action MEDIA International  

On  13  December  2007  the  European  Parliament  adopted,  in  the  2008  budget,  a  Preparatory  Action 
MEDIA International with a 2 million Euro budget to focus on European Union relations with third 
countries'  audiovisual  markets.  Unlike  existing  programmes,  the  Preparatory  Action  is  based  on  the 
principle of mutual benefit for professionals from European Union Member States and from third 
countries; the coordinator of the project needs to be a resident of an European Union Member State, 
but  projects  have  to  be  jointly  implemented  by  professionals  from  third  countries  and  the  European 
Union. 

On 4 April 2008 the Commission launched a call for proposals52, which closed on 13 June 2008. This 
call  contained  three  action  lines:  (1)  Continuous  Training,  (2)  Promotion  of  cinematographic  works 
and (3) Support of Cinema Networks. Of the 33 proposals received, 26 were found to be eligible; 19 in 
the field of training, 6 for promotion/distribution and 1 cinema network. In total, Community support 
required by the 33 submitted projects amounted to 4.62 million Euro, Community support required by 
the 26 eligible projects amounted to 3.13 million Euro, compared to 1.98 million Euro available (see 
exhibit 9). It can be seen that this call, in spite of the short period for finding partners and submitting 
proposals, was significantly oversubscribed.  

Exhibit 9: MEDIA International Preparatory Action 2008: proposals received and supported53 

Proposals 

Support  
(million Euro) 

Eligible Proposals 

Continuous training 

Distribution/Promotion 

Cinema Networks 

Total 

24 

8 

1 

33 

2,49 

1,43 

0,70 

4,62 

19 

6 

1 

26 

Support 
(million 
Euro) 
1,75 

0,68 

0,70 

3,13 

The  evaluation  process  for  the  MEDIA  International  Preparatory  Action  was  concluded  on  24  July 
2008 and the list of selected projects can be found in Annex 9. 

•  In  the  field  of  continuous  training54,  19  eligible  projects  were  submitted  by  coordinators  from 
Belgium,  France,  Germany,  Hungary,  Ireland,  Italy,  Luxemburg,  Rumania,  Spain  and  the  United 
Kingdom.  Partner  institutions  in  third  countries  originate  inter  alia  from  Argentina,  Brazil, 
Uruguay, India, Indonesia, Jamaica, Israel, Lebanon, Tunisia, Iraq, Canada, US, Armenia, Georgia, 
Azerbaijan, Moldova and Turkey. The majority of the proposals were for new training projects, 5 
of  them  extended  existing  training  programmes  (supported  under  MEDIA  2007)  to  participants 

51 
52 
53 
54 

http://www.acpfilms.eu/index.php?id=23&L=1  
http://ec.europa.eu/information_society/media/prep_action/call/index_en.htm  
Source: INFSO/A2, 2008. 
Training  under  MEDIA  supports  the  creation  of  pan-European  training  networks  to  help  professionals  in  the 
audiovisual  industry  enhance  their  competence  in  the  international  market.  Separate  action  lines  support  initial 
training  initiatives  for  students  with  no  experience  in  the  sector,  and  continuous  training  for  experienced 
professionals of the audiovisual industry. 

EN 

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   EN 

 
 
                                                 
from  third  countries.  The  vast  majority  of  training  projects  was  open  to  professionals  from  all 
European Union Member States. 

•  In the field of distribution and promotion, 6 eligible projects were submitted by coordinators from 
Bulgaria, France and by pan-European associations like Europa Cinemas, Europa Distribution and 
Club  des  Producteurs  européens.  Partners  originate  from  China,  Japan,  South  Korea,  India, 
Morocco, Mexico, Chile, Bosnia and Herzegovina. 

•  One  cinema  network  submitted  a  proposal,  comprising  146  cinemas  from  19  third  countries  and 

230 cinemas from the Europa Cinemas network.  

2.7. 

Does the EU have the right to act?  

Treaty Base: Several Treaty provisions give the European Union the right to act:  
•  Article 157 EC: "The Community and the Member States shall ensure that the conditions necessary 
for the competitiveness of the Community's industry exist. For that purpose, their action shall be 
aimed  at:  speeding  up  the  adjustment  of  industry  to  structural  changes…".  Under  the  AETR55 
doctrine the European Community  has the competence to establish contractual links with third 
countries  over  the  whole  field  of  objectives  defined  by  the  treaty.  Therefore  Article  157  is 
also the legal basis for activities going beyond the Community borders. 

•  According to Article 150 (2) EC, Community action in the field of vocational training shall aim to: 
"facilitate  adaptation  to  industrial  changes,  in  particular  through  vocational  training  and 
retraining, and improve initial and continuing vocational training in order to facilitate vocational 
integration and reintegration into the labour market". Under Article 150 (3), "the Community and 
the Member States shall foster cooperation with third countries ". 

•  Under Article 149 the Community can support a policy "encouraging mobility of students" and the 

Community …"shall foster cooperation with third countries…". 

•  Article 151 (4) should be taken into account but would not serve as a legal base. It stipulates that 
the Community "shall take cultural aspects into account in its action under other provisions of this 
Treaty, in particular in order to respect and to promote the diversity of its cultures". 

Subsidiarity  and  added  value:  Since  certain  actions  to  be  proposed  concern  domains  where  the 
Commission does not have exclusive competence the principle of subsidiarity applies. 
•  It is preferable for an international audiovisual initiative to take place at an European level where it 
can generate European added value. An European initiative would be complementary to initiatives 
by individual Member States. Although these initiatives are highly beneficial in themselves, they 
often remain at a bilateral level and cannot have the same pan European effect as a Europe-wide 
cooperation  instrument.  The  European  added  value  generated  would  be  that  the  visibility  of 
European films in the world would not be reduced to a small number of films from mostly large 
Member  States  but  create  opportunities  to  increase  market  share  for  European  films  on  third 
country markets. 

•  The nature of the challenge that Europe faces means that coordinated action at European level is 
likely to create an European added value to regional or local initiatives because it enables a pooling 
of  resources  and  greater  geographical  coverage,  encompassing  more  than  one  or  indeed  several 
European  country(ies).  Many  of  the  barriers  to  internationalisation  can  be  better  addressed  at 
European level, in particular as regards the size, under-funding and fragmentation of markets, but 
also barriers specifically related to third countries such as lack of information etc. It would be more 
efficient,  proportional  and  effective  if  these  problems  were  addressed  on  a  European  level  rather 
than by individual Member States. A joint approach including a critical mass of professionals from 
the European Union and from third countries, could lead to a greater positive impact, sustainable 
global  networking  and  thus  the  gradual  change  of  global  market  structures.  This  would  be 
particularly  beneficial  for  smaller  Member  States.  The  European  Union  is  best  placed  to  help 

55 

Case 22/70 Commission v Council (AETR) [1971] ECR 263. 

EN 

- 22 - 

   EN 

 
                                                 
develop  an  international  dimension  for  the  European  audiovisual  industry,  thus  creating  a 
framework for cooperation and for improved circulation of audiovisual works. 

•  Action taken at the level of individual institutions or Member States and a Community programme 
in the field are not mutually exclusive – quite on the contrary – they often meet the same objectives 
and are complementary. Community action would aim at reinforcing any national action taken in 
this  field.  It  would  be  proportionate  and  would  not  go  beyond  what  is  necessary  to  achieve  the 
objectives. 

•  The generated added value would not detract from other Community programmes, in particular the 
MEDIA  2007  programme.  MEDIA  2007  is  clearly  focused  on  the  internal  market  and  a  new 
MEDIA  Mundus  Programme  would  be  targeted  towards  the  mutual  exchange  between  European 
and  third  country  professionals.  Nor  is  there  any  overlap  with  the  development  programmes 
EUROMED  audiovisual  and  the  audiovisual  programme  EU-ACP.  All  these  initiatives  are 
complementary.  The  enhancement  of  the  circulation  of  European  audiovisual  works  worldwide 
would entail a specific European added value that transcends national policies. 

2.8. 

Summary of problems 

The  major  problem  faced  by  the  European  audiovisual  industry on  international  markets  is  the  poor 
circulation of audiovisual works.  

The  reasons  underlying  this  problem  are  the  following:  There  is  fragmentation  of  the  different 
European  markets  on  the  basis  of  language  but  also  market  structure.  There  is  a  problem  with  the 
market size: since the original market size determines the strength of the industry on the international 
stage  and  individually  all  the  Member  States  (and  their  foreign  counterparts)  have  relatively  small 
markets  (notably  when  compared  to  the  USA  market).  The  distribution  structure  in  Europe  is 
composed  of  individual  small  companies  unlike  their  large  multinational  vertically  integrated  US 
counterparts, hence the European audiovisual industry is internationally not competitive. In addition, 
under-funding  is  one  of  the  major  causes  of  the  problems  of  European  audiovisual  companies;  the 
financing  of  European  audiovisual  works  depends  heavily  on  public  resources  and  national 
broadcasters/distributors.  Films  are  essentially  financed  on  national  markets,  limiting  the  need  for 
foreign  investment,  but  the  funding  of  films  solely  from  their  national  market  also  limits  export 
strategies and possibilities.  

This  has  to  be  seen  in  the  context  of  an  international  audiovisual  landscape  that  has  changed 
significantly  over  the  last  two  decades,  notably  from  the  impact  of  technological  developments  like 
digital cinema, VOD or multi-channel digital television. For certain foreign markets, this has created 
strong financial growth and promising investments in the audiovisual industry and a consequent strong 
and  growing  demand  for  more  audiovisual  content.  However,  structural  weaknesses  affecting  the 
circulation of European audiovisual works on foreign markets and inadequate financing of European 
audiovisual companies prevent the European audiovisual industry from benefiting fully from this new 
expansion of international opportunities.  

There is a similar problem for foreign audiovisual works - other than those from Hollywood studios - 
on European markets. There is a demand on European markets for more diverse audiovisual content. 
These aspects also need to be evaluated in the light of the commitment of the European Union as  a 
major  player  in  the  conception  and  adoption  to  the  UNESCO  Convention  on  the  Protection  and 
Promotion of the Diversity of Cultural Expressions, ratified by the European Community together with 
12 Member States on 18 December 2006. 

The  problem  can  be  broken  down  into  two  concrete  elements;  a  lack  of  competitiveness  for  the 
different European players on international markets and a clear lack of consumer choice and cultural 
diversity on European and international markets. 

EN 

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   EN 

 
Exhibit 10: Problem tree 

3. 

SECTION 3: OBJECTIVES 

3.1. 

General policy objectives (global objectives) and specific objectives 

Based  on  the  problem  definition  in  section  2,  the  policy  objectives  of  an  activity  related  to 
international cooperation in the audiovisual field should be twofold, as defined in the general policy 
objectives (global objectives) and detailed in the specific objectives below.  

General Policy Objectives (global objectives) 

Two general policy objectives are defined for international cooperation: 

•  Objective 1: to increase the competitiveness of the EU audiovisual industry on global markets. 

•  Objective 2: to increase consumer choice and cultural diversity. 

Specific objectives 

Four specific objectives are detailed below. They are reflected in the proposed operational objectives / 
action lines described in section 4: 
•  to  increase  information  exchange  and  market  intelligence  and,  in  particular  through  training 
activities,  facilitate  networking  between  European  and  third  country  audiovisual  professionals  in 
order  to  improve  access  to  foreign  markets  and  to  build  trust  and  long-term  commercial 
relationships. 

•  to contribute towards the facilitation of international co-productions in the audiovisual markets. 
•  to improve transnational distribution of audiovisual works and enhance the visibility of European 
audiovisual works in the world and vice versa and to increase consumer choice for European and 
third country audiences. 

•  to reach new audiences and promote film literacy. 

The  specific  objectives  can  be  broken  down  to  the  following  more  detailed  operational  objectives  / 
actions lines that refer to the actual deliverables (actions) of the new initiative (see Annex 11). The 

EN 

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   EN 

 
 
 
 
 
 
definition of the specific and operational objectives are largely based on the results of costs-benefits 
analyses carried out by the various ex-post evaluations of MEDIA programmes56 

3.2. 

Consistency with other European Union policies and other objectives 

The policy objectives are consistent and complementary with the objectives of other European Union 
policies  such  as  industrial  policy,  external  cooperation  policy  (including  development  policy),  the 
common commercial policy and the completion of the internal market. 

In  the  context  of  the  Lisbon  strategy  the  audiovisual  sector  is  highly  relevant  and  contributes  to  the 
Lisbon Agenda, namely to boost training, prosperity, growth and jobs in a knowledge-based economy. 
In  its  conclusions,  the  European  Council  of  23  and  24  March  2000  stated  that  "content  industries 
create  added  value  by  exploiting  and  networking  European  cultural  diversity".  This  approach  was 
confirmed  in  the  conclusions  of  the  Brussels  European  Council  of  20  and  21  March  2003  and  by 
conclusions from the Austrian presidency in 2006. The initiative is coherent with and further develops 
the audiovisual strand of the i2010 initiative –the policy umbrella for the EU's information society and 
media policies – in the context of the Lisbon agenda. 

Furthermore, the general policy and the operational objectives play an important role in the context of 
the implementation of the UNESCO Convention on the Protection and Promotion of the Diversity of 
Cultural  Expressions.  This  convention  emphasises  the  specific  and  dual  (cultural  and  economic) 
nature of cultural goods and services. 

Community action is consistent with the obligation placed on the Community by Article 151(4) of the 
EC Treaty to take cultural aspects into account in its action under other provisions of the Treaty, in 
particular in order to respect and to promote the diversity of its cultures.  

The  general  policy  objectives  and  the  specific  and  operational  objectives  of  the  action  are  also 
consistent  with  the  Charter  of  Fundamental  Rights,  especially  the  principle  of  promoting  cultural 
diversity (Article 22). 

4. 

SECTION 4: POLICY OPTIONS AND IMPACTS 

4.1. 

Option 1: Business as usual 

The  option  would  cover  the  continuation  of  MEDIA  2007,  the  regional  development  programmes 
EUROMED  Audiovisual  II,  and  EU-ACP  Support  programme  for  Cinema  and  the  Audiovisual 
Industry57. 

4.2. 

Impact of option 1 – "Business as usual" 

The evolution of the problem,  all things being equal, was discussed in section 2.5.1.. In conclusion, 
existing internationalisation efforts in the European audiovisual sector are insufficient and in view of 
the situation evolving on world markets and the technological challenges, the situation for European 
audiovisual companies would deteriorate significantly over time. All existing programmes have either 
an  internal  market  or  a  regional  (MEDA  region  or ACP)  and  not  a  global  focus.  'Business  as  usual' 
would  not  entail  new  costs,  but  would  definitely  have  a  negative  cost:  if  the  opportunities  of 
internationalisation are not seized by European companies in the new fast-growing markets (in Asia 

56 

57 

Except  for  (1)  development  support  where  evaluations  concluded  that  action  lines  such  as  script  development 
seminars and pitching events, which are less resource intensive, could lead to equally good results and have similar 
impacts and for (2) video distribution, which had been heavily criticized by the evaluation report of MEDIA Plus 
but has been retained in MEDIA MUNDUS, because of its major impact in third countries. 
See section 2.5.2 above for detailed description. 

EN 

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for  example),  their  revenues  will  be  restricted  mainly  to  the  Internal  Market,  with  the  limitations 
already described. Therefore this option should not be pursued further. 

4.3. 

Option 2: Extension of existing instruments 

Under  this  option,  MEDIA  2007,  the  regional  programme  EUROMED  Audiovisual  II,  and  the  EU 
ACP  support  programme  for  Cinema  and  Audiovisual  could  be  amended  in  order  to  attain  the 
objectives as described above under section 3.1. 

4.3.1.  Extension  of  Euromed  Audiovisual  II  and  the  EU  –  ACP  Support  Programme  for 

Cinema and the Audiovisual Industry 

Euromed Audiovisual II expires at the end of 2008; the EU-ACP Support Programme for Cinema and 
the Audiovisual Industry is scheduled until 2011. Both programmes could be extended and the budgets 
could be increased. For the detailed description of the programmes, see section 2.5.2 above. 

4.3.2.  Amendment of the MEDIA 2007 programme 

The  following  two  sub-options  could  be  envisaged  to  amend  the  MEDIA  2007  Programme.  For  a 
detailed description of MEDIA 2007, see section 2.5.2 above: 

(1)  Extending  participation  and  cooperation  under  Article  8:  On  the  basis  of  Article  8  additional 
countries  could  be  integrated  in  the  MEDIA  2007  programme,  either  as  full  members  or  through 
cooperation agreements (see section 2.5. above). The programme could be opened to the participation 
of  professionals  from  other  regions  in  the  world  and  a  specific  fund  for  cooperation  under  Article 
8(4)58  could  be  set  up.  This  fund  could  contain  action  lines  specifically  devoted  to  international 
cooperation  between  European  Union  professionals  and  professionals  from  third  countries  having 
concluded  a  cooperation  agreement.  Such  a  fund  could  for  example  promote  the  exchange  of 
information (conferences, websites), support joint training initiatives, the use of new technologies and 
the distribution of audiovisual works. 

(2)  Opening  of  MEDIA  2007  to  the  participation  of  third  countries'  professionals,  by  opening 
strands to professionals from third countries or adding specific strands for global cooperation between 
professionals. Accordingly the above defined objectives (see section 3.1) and the actions (see section 
4.5 below) would be integrated into the existing MEDIA 2007 programme. 

4.4. 

Impact of option 2 - Extension of existing instruments 

4.4.1. 

Impact of amending Euromed Audiovisual II and the EU – ACP support programme 
for Cinema and the Audiovisual Industry 

The  programmes,  EUROMED  Audiovisual  II  and  the  EU-ACP  programme  for  Cinema  and  the 
Audiovisual Industry, have been successfully operating for some time. 

However, it should be noted that both programmes are by their very nature development programmes 
with  a  specific  regional  focus  (MEDA  for  Euromed  Audiovisual  and  ACP-countries  for  ACP 
Audiovisual).  Thus,  the  objective  of  both  programmes  is  to  assist  partner  countries  in  specific 
geographical zones creating a sustainable future for their cultural heritage through assistance in terms 
of training, development and distribution, and to provide help for the restructuring of these countries’ 
audiovisual markets. Accordingly benefits are concentrated on the respective regions. The objectives 
of  the  initiative  currently  being  discussed  focus  on  international  exchange  aiming  at  the 
competitiveness  of  the  European  audiovisual  sector  and  a  global  increase  of  consumer  choice  and 

58 

See http://eur-lex.europa.eu/LexUriServ/site/en/oj/2006/l_327/l_32720061124en00120029.pdf . 

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cultural  diversity.  In  that  respect  the  objectives  of  the  current  initiative  would  not  fit  into  a 
development programme. 

It should be underlined that an extension (in their current form) of EUROMED Audiovisual II and the 
EU-ACP  programme  for  Cinema  and  the  Audiovisual  Industry  would  be  complementary  to  the 
objectives  of  the  current  initiative,  in  that  these  programmes  create  the  structures  enabling  the 
professionals  from  these  regions  to  participate  as  partners  in  any  future  initiative  at  an  international 
level.  

One of the key recommendations of the working document “Towards a Strategy for the Development 
of  Euro-Mediterranean  Audiovisual  Cooperation59”  is  the  creation  of  a  simple-to-operate  co-
production  support  fund.  The  Fund  would  finance  the  development  (including  translation  costs), 
production  (including  post-production)  and  promotion  (including  assistance  for  distribution  and 
marketing) of works from Mediterranean countries, including digital products. Professionals from the 
Mediterranean  region  could  subsequently  be  enabled  to  participate  in  global,  multilateral  projects. 
Thus, a new international initiative MEDIA Mundus would be complementary60. 

4.4.2. 

Impact of amending the MEDIA 2007 Programme 

Sub-option (1): Participation and cooperation under Art. 8 

Opening the MEDIA 2007 programme to further participation of and cooperation with third countries 
as described above would have the following implications: 

"Participation in MEDIA 2007" means (full) involvement of the third countries' professionals on the 
same footing as EU professionals, as well as involvement in the decision making process (comitology) 
through joint committees61 (Article 8 paragraphs 1-3). 

Participation or cooperation with third countries under Article 8 would be on State level and require 
supplementary  appropriations  and  specific  arrangements  to  be  agreed  upon  and  would  necessitate  a 
framework  agreement  or  an  international  agreement  based  on  Article  113(5),  a  Memorandum  of 
Understanding,  and  in  the  case  of  participation  an  agreement  on  the  financial  contribution  of  each 
country  ("entry  ticket").  This  is  an  extremely  lengthy  procedure  (the  timeframe  for  completing  this 
procedure could take up to two years for each additional country). 

MEDIA 2007 is listed as GATS 62exempted from the general MFN63. It would therefore be necessary 
to  check  that  each  potential  partner  country  has  no  commitments  on  audiovisual  services  in  the 
framework of the GATS and that it has scheduled the necessary exemptions to the MFN rules. This 
would  greatly  -restrict  the  scope  of  the  initiative  and  leave  out  important  countries  with  emerging 
audiovisual  markets.  The  current  MEDIA  International  preparatory  action  has  underlined  the 

59  
60 

61 

62 

63 

http://www.euromedaudiovisuel.net/general.aspx?treeID=9243&lang=en  
There  has  been  some  interest  from  the  MEDA  region  in  the  Preparatory  Action  MEDIA  International.  The 
projects  selected include one project focusing on distribution and certain MEDA cinemas are included under the 
cinema networks project).  The financing of these projects does not overlap with or duplicate MEDA financing. 
As regards management and implementation of MEDIA 2007, it should be noted that MEDIA 2007  functions on 
the basis of comitology. "Participation in MEDIA 2007" means involvement of the third countries' professionals on 
the same footing as EU professionals, as well as involvement in the decision making process (comitology) through 
joint  committees  (Article  8  paragraphs  1-3).  Even  if  third  countries'  participation  was  solely  on  the  basis  of 
cooperation they should be allowed to participate as observers when decisions concerning them are on the agenda. 
The  MEDIA  2007  committee  meets  between  5  and  6  times  a  year.  The  participation  and  cooperation  of  further 
countries would increase the number of participants/observers and meetings. 
GATS 
in 
http://www.wto.org/english/tratop_e/serv_e/serv_e.htm . 
MFN  =  Most  favoured  nation  is  a  status  awarded  by  one  nation  to  another  in  international  trade:  the  receiving 
nation will be granted all trade advantages (such as low tariffs) that any other nation also receives and a nation with 
MFN 
status: 
not 
http://www.wto.org/english/tratop_e/serv_e/serv_e.htm . 

nation  with  MFN 

treated  worse 

status  will 

Agreement 

(GATS), 

Services 

General 

Trade 

other 

than 

any 

see 

on 

be 

= 

EN 

- 27 - 

   EN 

 
                                                 
importance  of  wide  participation  (the  cinema  network  action  covers  13  countries  by  itself)  and  the 
constraints therefore of this option. 

On this basis it is extremely unlikely that a sufficient number of professionals from third countries to 
create  the  necessary  critical  mass  in  order  to  achieve  the  objectives  could  be  reached,  since 
professional  participation  would  be  limited  to  those  professionals  from  the  third  countries  that  had 
become members of MEDIA 2007.  

The option is therefore unlikely to contribute to any of the objectives. For these reasons, this option 
should not be pursued further. 

Sub-option (2): Opening  of MEDIA 2007 to the participation of third countries' professionals by 
adding  the  above  defined  operational  objectives  and  the  respective  strands  to  the  legal  basis  of  the 
existing  MEDIA  2007  programme.  This  option  is  not  based  on  membership  by  a  country,  but  third 
country  professionals  would  benefit  directly  from  the  MEDIA  2007  programme.  Therefore,  neither 
time consuming and arduous negotiations with other governments would be required nor would this 
policy  option  entail  difficulties  with  GATS  regulations.  As  long  as  the  programme  were  open  to  all 
third  countries'  professionals  in  a  non  discriminatory  way  the  MFN  rule  would  not  be  infringed. 
However, the MEDIA programme has been operating for 17 years on an internal market basis and has 
high  brand  equity  a  high  degree  of  EU-identification.  Adding  international  cooperation  to  its  action 
lines would lead to some confusion.  

The present MEDIA 2007 programme includes EU-wide funding for: 
–  Training (scriptwriting techniques; economic, financial management; digital technologies); 
–  Development (single projects, catalogues, European talent, co-productions, i2i, other financing); 
–  Distribution (distributors, sales agents, broadcasters, cinema exhibitors, VOD, digital); 
–  Promotion (market access, festivals, common events, heritage); 
–  Horizontal actions making it easier for small and medium sized enterprises to access funding, and 
to encourage the presence of European audiovisual works on digital platforms, and pilot projects 
embracing new technologies like digital technologies in production and distribution. 

Whilst  the  option  of  opening  different  strands  for  professionals  from  third  countries,  has  been 
considered  there  are  few  if  any  activities  under  the  MEDIA  2007  programme  where  this  could  be 
successfully achieved in particular in the light of meeting both the existing objectives under MEDIA 
2007  and  the  new  needs  that  have  been  established.  Many,  like  automatic  distribution,  could  not  be 
opened  on  a  global  scale  (for  example  automatic  distribution  support,  where  necessary  data  is  not 
available, see exhibit 24) and in any event the opening up of the strands to non-European professionals 
would  change  the  nature  of  MEDIA  2007  and  impact  negatively  on  the  achievement  of  the  internal 
market  objectives,  notably  in  respect  of  fragmentation  within  Europe  and  the  horizontal  priority  of 
addressing  imbalances  between  European  markets.  This  means  that  the  option  would  entail  the 
addition  of  new  strands  under  the  existing  programme  alongside  the  current  activities,  but  with  an 
international focus. 
The actions to be implemented under the current initiative are evaluated below under sections 4 and 5. 
In  section  4.4.  and  5.6.  an  analysis  is  carried  out  as  to  whether  it  is  more  cost  effective  to  integrate 
them into the MEDIA 2007 programme or whether to create a new programme.  

4.4.3.  Conclusion 

It  can  be  concluded  that  neither  an  extension  of  the  EUROMED  Audiovisual  II  and  the  EU-ACP 
programme for Cinema and the Audiovisual Industry nor an opening of the MEDIA 2007 programme 
to further countries can reach the objectives defined in section 3. The possibility of opening MEDIA 
2007 (in the form of additional action lines) to cooperation with professionals from third countries is 
discussed further in section 5. 

EN 

- 28 - 

   EN 

 
4.5. 

Option 3: Creation of a new instrument  

The key problem for the sector is the limited circulation of audiovisual works. Community financing is 
designed  to  provide  a  leverage  effect,  which  could  not  be  achieved  by  legislative  measures  for  the 
audiovisual sector64. Legislative instruments were not retained in this Impact Assessment because they 
were  considered  inappropriate  in  relation  to  the  objective  of  reinforcing  the  competitiveness  of  the 
audiovisual  sector..  The  action  lines  would  be  available  for  all  professionals  from  Europe  and  third 
countries  independent  from  the  origin  of  the  project  and  would  not  discriminate  against  any  region. 
Therefore subsidies would be in line with the principle of the Most Favoured Nation rule and WTO 
compatible. 

In  order  to  respond  to  the  problems  set  out  in  section  2,  two  general  policy  objectives  (global 
objectives)  were  defined  in  section  3  for  which  in  turn  four  major  specific  objectives  have  been 
identified.  

For each of these four specific objectives, a series of cumulative operational objectives /actions were 
developed based on (1) contributions of stakeholders, (2) evaluations of previous MEDIA programmes 
and (3) experience gained from implementing the current MEDIA 2007 programme. 

Following  the  principle  of  mutual  benefit  professionals  from  the  European  Union  and  from  third 
countries would have to jointly propose and implement projects under the proposed actions. Therefore 
potential  applicants  for  all  proposed  actions  are  relevant  professionals  from  Europe  and  third 
countries.  Funding  would  be  available  for  consortia  only,  and  under  two  basic  premises:  (1)  any 
group/consortium which submits a project needs to be headed by a company with head office in the 
EU/a  Member  of  the  programme;  (2)  any  group/consortium  should  include  at  least  one  audiovisual 
company/organisation which has its head office in a third country.  

This section on policy option 3 is thus sub-divided into sub-sections for each specific objective. For 
each  specific  objective,  the  operational  objectives/actions  are  first  described,  then  their  impact  is 
assessed  against  a  set  of  economic  and  social/cultural  criteria  as  well  as  a  (stable)  environmental 
criterion,  in  addition  to  a  qualitative  verbal  assessment  of  each  specific  objective,  the  result  of  this 
assessment is also summed up in a table (exhibits 11 to 17). Moreover, two alternative scenarios were 
developed  for  the  specific  objectives  2  and  3;  for  each  of  these  respective  scenarios  the  operational 
objectives/actions are first described, then they are assessed/compared (text and exhibits). 

Values attributed to the various operational objectives/actions for each of the economic, social/cultural 
and  environmental  criteria  in  exhibits  11,  13,  14,16  and  17  range  from  "---"  to  "+++"  and  were 
established  on  the  basis  of  experience  and  expertise  from  the  implementation  of  the  MEDIA 
programme in the MEDIA unit. 

--- 
-- 
- 
0 
+ 
++ 
+++ 

Extremely negative impact 
Very negative impact 
Negative impact  
No impact at all, neither negative nor positive 
Positive impact and positive contribution to achieving the specific objective 
Very positive impact and clear positive contribution to achieving the specific objective 
Extremely  positive  and  decisive  impact  and  extremely  clear  positive  contribution  to  achieving  the 
specific objective  

64 

Therefore,  no  legislative  measures  are  planned.  However,  the  recently  adopted  Audiovisual  Media  Services 
Directive includes a new definition of European audiovisual works, complementary to the aims of this initiative. 

EN 

- 29 - 

   EN 

 
 
                                                 
4.5.1. 

Specific Objective 1 – information exchange and market intelligence 

These  operational  objectives/action  lines  would  implement  the  first  specific  objective.  Market 
knowledge and networks are crucial to create awareness about market opportunities in order to access 
foreign markets, to remedy the under-financing of the audiovisual industry and to improve circulation 
of audiovisual works. 

•  Operational Objective / Action Line 1.1. - Building up of Websites and Databases: Action would 
aim  at  collecting  and  disseminating  structured  information  about  European  and  third  country 
audiovisual  markets.  This  information  could  be  disseminated  in  the  form  of  an  Internet  platform 
using a common structure and predefined guidelines (similar to the concept (but not the content) of 
EraWatch65  or  Cineeuropa66  ).  Furthermore,  it  could  be  useful  to  build  a  database  of  interested 
professionals and training institutions in Europe and third countries available on the Internet. There 
is no intention to duplicate any existing structures; on the contrary, the necessary structures do not 
generally exist.  

•  Operational Objective / Action Line 1.2. - Network of audiovisual contact points: Action would 
aim  at  installing  a  network  of  contact  points  in  various  regions  of  the  world  in  order  to  monitor 
audiovisual  markets  in  terms  of  market  opportunities,  distribution  venues  and  possible  barriers. 
Members  of  the  network  would  act  as  primary  information  points  for  European  audiovisual 
professionals  seeking  to  access  third  country  markets,  and  vice  versa  and  they  could  help 
audiovisual companies to look for partners in the respective regions (e.g. with a view to future co-
production or distribution activities).  

•  Operational Objective / Action Line 1.3. - Certification of training establishments67: Action could 
aim  at  inviting  European  and  third  country  professional  training  establishments  to  apply  for 
certification from the European Commission, based on a set of well defined criteria. 

•  Operational  Objective  /  Action  Line  1.4.  -  Initial  training68:  Action  would  aim  at  supporting 
activities  such  as  mutual  exchange  between  initial  training  establishments.  For  example  film 
schools could arrange for joint courses or scholarships could be given to students to study abroad. 

•  Operational Objective / Action Line 1.5. - Continuous training: Action would support continuous 
training projects for European and third country professionals. Potential topics should relate to the 
problems  identified  under  section  2  and  could  include:  Improving  economic  and  financial 
management  related  to  cross-border  activities;  launching  marketing  campaigns  on  international 
markets;  organising  distribution  in  other  territories;  pitching  programmes69  with  third  country 
broadcasters;  promoting  European  best  practices  in  third  countries;  reaching  audiences  with 
Internet technologies70; using new technologies in order to improve production and post-production 
workflows; dealing with new distribution platforms, such as VOD, IPTV, Web TV. Projects could 

65 
66 

67  

68 

69 

70 

http://cordis.europa.eu/erawatch/  
http://cineuropa.org/ , Cineuropa is given as an example for a certain type of webpage, it however does not relate to 
international cooperation, where no such website exists.  
The  idea  of  certification  of  training  establishments  was  raised  in  interviews  conducted  by  the  consultants  (see 
points 6.2.1 and 6.2.2 of the Technopolis Impact assessment study, "accreditation").As it can be seen in exhibit 10 
on  page 18 of the draft extended impact assessment, the author DG does not believe that there is an added value in 
such certification. The process would be resource intensive and since the market is relatively limited, stakeholders 
can easily informally obtain information about the quality of training measures 
Training  under  MEDIA  supports  the  creation  of  pan-European  training  networks  to  help  professionals  in  the 
audiovisual  industry  enhance  their  competences  in  the  international  market.  Separate  action  lines  support  initial 
training  initiatives  for  students  with  no  experience  in  the  sector,  and  continuous  training  for  experienced 
professionals of the audiovisual industry. 
Pitching sessions offer producers the opportunity to "pitch", i.e. present / sell their projects to a panel of potential 
buyers such as TV channels.  
eMarketing strategies, Web 2.0 or new and innovative delivery mechanisms such as IPTV, Web TV or VOD. 

EN 

- 30 - 

   EN 

 
                                                 
relate  to  an  opening  of  existing  (MEDIA  2007  supported)  training  projects  to  professionals  from 
third countries or they could consist in setting up new training activities. 

•  Operational Objective / Action Line 1.6. –Market access and Events: Under this action line access 
instruments  such  as  an  umbrella  stand  for  key  European  Union/international  film  markets, 
reimbursement of travel costs and fees could be included.  

Impact of Specific Objective 1: 

Information about third countries’ audiovisual industries in Europe is scarce, as is information about 
European  audiovisual  industries  in  third  countries.  However,  provision  of  information  is  crucial  to 
create awareness about market opportunities, facilitate market access and foster intercultural dialogue. 
In  addition,  the  market  is  changing  rapidly  with  the  advent  of  new  technologies  and  stakeholders, 
making  it  crucial  to  collect  relevant,  updated  information.  The  impact  of  information  dissemination 
and  exchange  tend  to  be  of  a  long-term  and  sustainable  nature  and  is  likely  to  continue  even  if  the 
public  intervention  ceases.  Once  a  basic  threshold  of  awareness  and  know-how  has  been  reached,  a 
long-term change in behaviour of audiovisual professionals is likely to take place over time. 
Training  is  an  effective  tool  for  communication,  contributes  to  networking  and  leads  to  an 
improvement  of  skills  needed  to  access  international  markets.  Evaluations  of  the  previous  MEDIA 
programmes71 show that the skills acquired by participants in training are long lasting. The proportion 
of  firms  hiring  MEDIA  trained  persons  also  reveals  that  these  skills  are  being  appreciated  and 
disseminated  throughout  the  sector.  The  effects  of  schemes  that,  in  particular  through  scholarships, 
help  encourage  meetings  and  exchanges  of  professionals  are  lasting,  even  though  results  may  occur 
several years after the intervention.  

Regarding  a  possible  impact  on  the  first  general  policy  objective  (global  objective),  namely 
competitiveness, information provision would lead to increased knowledge about audiovisual markets, 
and would reduce the cost for companies of obtaining that information on their own. This is important 
since the European audiovisual industry consists mainly of small and medium sized enterprises, with 
limited  strategic  and  financial  resources  at  their  disposal.  Information  exchange  facilitates  market 
access by increasing opportunities and reducing cost. Access to foreign markets would open additional 
financial  sources  and  would  help  to  remedy  the  under-financing  of  the  audiovisual  industry.  The 
creation of sustainable networks lowers transaction costs between different markets. Since the sector is 
dominated  by  small  and  medium  sized  enterprises  without  significant  financial  capacity,  there  is  an 
additional added value and a specific need to support their participation in the major industry events. 

Regarding  a  possible  impact  on  the  second  general  policy  objective  (global  objective),  namely 
consumer choice and cultural diversity, effective dissemination of information as well as mechanisms 
to  ensure  continuous  market  intelligence  can  lead  to  greater  networking  between  professionals  and 
therefore contribute to intercultural dialogue and enhance intercultural learning. 

It was however found that certification of training institution would not significantly contribute to any 
of the objectives. Costs (established on the basis of other audit systems, for example EMAS72 figure of 
approximately 50 000 Euro) are high and institutions need to be regularly monitored. It is difficult to 
see an added value, in particular in view of the high costs and the fact that there are possibilities to 
obtain information via other, less costly, means. Therefore this option was not pursued further. 

71 
72  

http://ec.europa.eu/information_society/media/overview/past_programmes/index_en.htm . 
http://ec.europa.eu/environment/emas/index_en.htm  

EN 

- 31 - 

   EN 

 
 
                                                 
Exhibit 11: Potential impact of Operational Objective / Action Line 1 

Impact 

Description of impact 

Websites and 
Databases  

Contact 
points 

Certification of 
training 
establishment 

Initial training 

Continuous training 

Market access 

Economic 

Increased availability of information on structure 
and functioning of markets 

Enhanced know-how on international markets  

Increased  awareness  of  market  opportunities  for 
European  audiovisual  professionals 
third 
countries and vice versa 

in 

+++ 

++ 

+++ 

+++ 

++ 

+++ 

Reduced 
ascertaining of relevant information 

transaction  cost 

related 

to 

the 

+++ 

+++ 

Increased  networking  between  European  and 
third country professionals 

Enhanced dialogue about audiovisual cultures 

No  impact  on  CO  2-Emissions  from  increased 
volume of travel 

Social/ 

Cultural 

Environ-
mental 

term 

term 

Short 
effect 

Long 
effect 

++ 

0 

0 

++ 

++ 

EN 

++ 

+ 

+ 

++ 

++ 

- 32 - 

0 

0 

0 

0 

0 

0 

0 

0 

+ 

++ 

++ 

+ 

+ 

++ 

+ 

+ 

+ 

++ 

+++ 

+++ 

+++ 

++ 

+++ 

+ 

+ 

++ 

+++ 

+ 

++ 

+++ 

+ 

+++ 

+ 

++ 

+++ 

++ 

EN 

 
  
 
 
4.5.2. 

Specific Objective 2 - Facilitation of international co-productions 

These  operational  objectives  are  intended  to  implement  the  second  specific  objective.  A  generally 
positive role is played by co-productions with regard to market access as shown by recently published 
data by the European Audiovisual Observatory73: 54% of Latin American films and 42% of African 
films  released  on  the  European  market  were  majority  co-productions74  with  Europe.  If  minority  co-
productions are also taken into account, the proportions rise to 64% and 74% respectively. In addition, 
an  analysis  of  the  findings  in  terms  of  the  number  of  admissions  clearly  suggests  that  films  co-
produced between third countries and European Union countries are more successful than those that 
have not been co-produced75. This action line therefore contributes to the circulation of films. It also 
addresses the problem of under-financing, in that official co-productions have access to the financing 
systems of all "participating countries”, see section 2.5.2. 

There are two phases when it comes to setting up co-productions: The development (action line 2.1.) 
and the production phases (action line 2.2.). 

Operational Objective / Action Line 2.1. - Supporting the development stage of co-productions:  

Two  different,  alternative  scenarios  can  be  considered  in  respect  of  the  development  of  co-
productions.  

Scenario 1: 

An  important  number  of  consulted  stakeholders  opted  strongly  in  favour  of  a  specific  development 
fund for co-productions.  

•  A specific fund for the development of projects could be set up: Support would aim at supporting 
the development phase of audiovisual projects, i.e. to prepare for financing, casting and finalising 
the script etc. Such support should only be possible if at this stage two producers (one European, 
one from a third country) are already involved. 

•  Furthermore,  support  would  be  awarded  for  the  organisation  of  co-production  markets,  partner 
search  events  (pitching):  Support  would  aim  at  bringing  together  possible  partners  at  co-
production events and markets (for script writers, directors and producers).  

Scenario 2: 

•  Instead  of  setting  up  a  development  fund,  support  could  be  awarded  for  Script  development 
training: Support would aim at script development training and at the development of high quality 
scripts for co-productions. 

•   Support under this scenario would also be granted for the organisation of co-production markets, 

partner search events (pitching) 

Operational Objective / Action Line 2.2. - Supporting the funding of co-productions: 

For  the  funding  of  co-productions  two  alternative  scenarios  could  also  be  envisaged.  Under  one 
scenario the Commission would finance co-productions whilst under the second scenario existing co-

73 

74 
75 

The  place  of  third  country  film  and  audiovisual  works  in  European  markets,  Report  updated  for  the  conference 
‘Cinema, Europe, the World’, organized by the CNC during the French Presidency of the Council of the European 
Union, Paris 7-8 July 2008 http://www.obs.coe.int/online_publication/reports/thirdcountry_av_works.pdf.en . 
Majority co-productions are productions where European partners have the lead (in general above 50%).  
Co-productions  take  place  in  different  contexts:  Story  driven/artistic  co-productions”  are  motivated  by  the 
content/story line (for example a character is from a country different from the others, some scenes have to be shot 
in  a  particular  part  of  the  world  etc.).  "Financial  co-production”  activities  are  driven  by  the  necessity  to  access 
funds  from  different  sources  in  order  to  be  able  to  finance  the  film.  Frequently,  this  leads  to  using  facilities  or 
actors from different countries whether or not there is a requirement in terms of the content of the film.  

EN 

33 

   EN 

 
                                                 
production  funds  would  be  supplemented  and  financial  institutions  would  be  supported  for  this 
activity. 

Scenario 1: 

•  Setting-up  co-production  fund  for  feature  films:  Such  a  fund  could  support  co-productions 

between European Union professionals and professionals from third countries. 

•  Setting  up  a  co-production  fund  for  animation  films:  Several  stakeholders  pointed  out  the 

particular necessity of such a fund for co-financing animation films. 

•  Setting  up  a  co-production  fund  for  documentary  films:  Several  stakeholders  pointed  out  the 

particular necessity of such a fund for co-financing documentary films. 

•  Gap  financing  of  co-production  budget76:  Gap  financing  refers  to  supporting  financing  the 
difference between the production budget for the film and the amount of presales or other funding 
that a bank would traditionally use as collateral for "production loans" by using an estimate of the 
value of the unsold rights to the film77. 

Scenario 2: 

•  Alternatively,  the  Commission  could  Supplement  existing  co-production  funds:  Under  section 
2.5.2 and in Annex 8 reference is made to several co-production funds. These existing funds could 
be supplemented. 

•  Facilitate access to commercial financing: Support could be provided to financial institutions in 
order to facilitate access to financing from banks and other financial institutions by subsidizing for 
example part of the cost of guarantees, insurance, completion  bonds or financing costs. 

Exhibit 12: Alternative instruments for delivering operational objective 2 

Impact of Specific Objective 2 

As regards the first general policy objective (global objective), namely increased competitiveness, co-
productions  have  access  to  additional  financing  instruments  (see  section  2.5.2),  they  circulate  better 
and  can  therefore  reach  a  broader  audience78.  Co-productions  can  play  a  very  important  role  in 
boosting  film  production  in  countries  with  no  or  very  weak  national  financial  support  measures.  A 

76 
77 

78  

For details regarding film finance, see Appendix B of the impact assessment study (Technopolis). 
For example, if the production budget is 2.5 million Euro and 2 million Euro of the budget is already covered by 
presales, investor funds, public funds or other collateral, the remaining 0.5 million Euro that is not covered by any 
collateral, other than the future potential sales on the film, is considered the "gap." 
http://www.obs.coe.int/online_publication/expert/krakow_report.pdf.en  

EN 

34 

   EN 

 
 
 
 
                                                 
good example is co-productions supported under the Ibermedia79 fund which have contributed to the 
emergence of production talent on the Latin American market. 

The main contribution of co-productions to cultural diversity, i.e. the second general policy objective 
(global objective) defined, is the impact on the art and language of film. Professionals from different 
regions  of  the  world  cooperate  on  co-productions,  often  with  different  methods  (for  example 
photography), visions of the world and working habits. 

Thus,  facilitating  co-productions  addresses  the  problems  listed  under  section  2  and  contributes  to 
increasing the competitiveness of the audiovisual sector and cultural diversity. 

Under the first scenario there would be very high additional administrative costs (17 extra staff needed 
for the agency to run the development and co-production funds, see Annex 10b and extra costs of 3.11 
million Euro). 

Impact of Operational Objective / Action Line 2.1. - Supporting the development stage of 
co-productions: Scenario 1 and 2 

An important number of stakeholders opted strongly in favour of support for the development 
stage of co-productions. However, experience from previous MEDIA programmes show that 
support  to  development  of  projects  in  terms  of  administrative  overhead  costs  is  particularly 
resource  intensive  (see  Annexes  10a  and  10b).  Script  development  seminars  and  pitching 
events, which are less resource intensive, can lead to equally good results and have a similar 
impact80.(For details, see section 5.4 ). 

Exhibit 13: Potential impact of Operational Objective / Action Line 2.1 

Area of impact 

Description of impact 

Economic 

Social/cultural 

Environmental 

Short term effect 
Long term effect 

of 

additional 

circulation 

knowledge 

Enhanced know-how  
Better 
international markets 
Accessing 
production funds 
Increasing 
distribution 
Reaching a wider audience 
More consumer choice 
Increased  networking  between 
European  and  third  country 
professionals 
Better films 

and 

Enhanced 
audiovisual cultures 

dialogue 

about 

Culturally  more  diverse  offer 
of films 
No  impact  on  CO2-Emissions 
from 
increased  volume  of 
travel 

a) Script 
development 
+++ 
+ 

Indirect + 

Indirect+ 

Indirect+ 
Indirect+ 
++ 

+++ 

0 

b) Pitching 

++ 
++ 

+ 

+ 

+ 
+ 
++ 

+ 

0 

Indirect+ 

Indirect+ 

- 

+ 
++ 

-- 

++ 
++ 

c) Development 
Fund 
0 
0 

++ 

+ 

+ 
+ 
+ 

0 

+ 

+ 

- 

++ 
Indirect 

79 
80 

http://www.programaibermedia.com/  
See action lines 2.1.a and 2.1.b above. 

EN 

35 

   EN 

 
 
 
                                                 
Impacts  of  Operational  Objective  /  Action  Line  2.2.  -  Supporting  the  funding  of  co-
productions Scenario 1 and 2 

Extensive  discussions  were  held  with  professionals  and  representatives  from  Member  States  on 
whether to finance co-productions. The outcome was not clear cut and controversial. Stakeholders had 
strong  opinions  in  favour  of  co-production  funding,  stating  that  there  was  a  considerable  necessity 
because existing funds were insufficient and co-productions contribute greatly to the artistic value of a 
film and cultural diversity. On the other hand, national authorities invoked the principle of subsidiarity 
and some stakeholders raised the difficulties surrounding the administration of co-production funds. 

•  Setting-up a fully fledged co-production fund: Reservations regarding the principle of subsidiarity 
relate in particular to the setting up of a fully fledged co-production fund. As described above co-
productions  in  certain  cases  can  benefit  from  the  participating  states’  support  systems.  However, 
most  professionals  considered  state  funding  and  international  funds  that  are  available  largely 
insufficient. Administration costs are comparatively high.  

•  Setting  up  a  co-production  fund  for  animation  films:  Several  professionals  expressed  strong 
support for such funding because Europe could benefit from third countries’ advanced experiences, 
e.g. Asia. Administration costs are comparatively high. 

•  Setting  up  a  co-production  fund  for  documentary  films:  Several  professionals  expressed 
strong support for such funding because such co-productions were very important in terms of story-
telling and contribute to cultural diversity. Administration costs are comparatively high. 

•  Gap financing of co-production budget: Because of “market failure”, there would definitely be a 

need for such funding. Administration costs are comparatively high. 

•  Supplement existing co-production funds: In line with the subsidiarity principle and to avoid the 
cumbersome administration of a fund, existing co-production funds could be supplemented in view 
of the positive impact of co-productions. 

•  Facilitate access to commercial financing: In view of the ongoing problems of small and medium 
sized enterprises to access commercial financing, this option would have a positive impact on the 
competitiveness of the sector and encourage financing institutions to expand their activities81.  

Exhibit 14: Potential impact of Operational Objective / Action Line 2.2  

Impact 

Description of impact 

Economic 

Enhanced know-how  

Better knowledge of 
international markets 

Accessing additional 
production funds 

Increasing circulation and 
distribution 

Reaching a wider audience 

More consumer choice 

Increased networking 
between European and third 
country professionals 

Better films 

Social 
/cultural 

Co-
production 
fund features 

Co-
production 
fund 
animation  

Co-
production 
fund 
documentary 

Gap 
financing 

Supplement 
existing 
funds 

Access 
to 
finance 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

+++ 

+++ 

+++ 

+++ 

+++ 

+++ 

+ 

++ 

++ 

+ 

0 

+ 

++ 

++ 

+ 

0 

+ 

++ 

++ 

+ 

0 

+ 

++ 

++ 

+ 

0 

+ 

++ 

++ 

+ 

0 

++ 

++ 

++ 

+ 

0 

81 

Under MEDIA 2007 “i2i” is a similar small scale support mechanism in favour of producers. 

EN 

36 

   EN 

 
 
                                                 
Impact 

Description of impact 

Co-
production 
fund features 

Co-
production 
fund 
animation  

Co-
production 
fund 
documentary 

Gap 
financing 

Supplement 
existing 
funds 

Access 
to 
finance 

Enhanced dialogue about 
audiovisual cultures 

Culturally more diverse 
offer of films 

No impact on CO 2-
Emissions from increased 
volume of travel 

Environ-
mental 

Short 
effect 

Long 
effect 

term 

term 

+ 

++ 

- 

++ 

+ 

+ 

++ 

- 

++ 

++ 

+ 

++ 

- 

++ 

++ 

+ 

++ 

- 

++ 

+ 

+ 

++ 

- 

++ 

+ 

+ 

++ 

- 

++ 

+ 

4.5.3. 

Specific Objective 3 - Distribution and circulation of audiovisual works 

These  operational  objectives  would  implement  the  third  specific  objective  and  primarily  address  the 
circulation of audiovisual works (with an impact on revenues and financing of the audiovisual sector). 
The aim would be to attain a market share of 7% for EU works in third countries and vice versa over 
the three years. 

For  the  distribution  of  audiovisual  works,  two  alternative  scenarios  have  been  considered,  first  the 
European  model  of  distinct  activities  (right-holders,  sales  agents,  and  distributors)  and  secondly 
creating realistic partnerships across the value chain. 

Scenario 1: 

•  Operational  Objective  /  Action  Line  3.2.  –  Support  to  sales  agents:    Sales  agents  could  be 
supported  to  prospect  new  markets,  attend  big  festivals/markets  and  increase  their  promotion 
investments for European audiovisual works in third countries and vice versa. 

•  Operational  Objective  /  Action  Line  3.3.  -  Automatic  distribution  support82:  To  give  structural 
support  to  the  distribution  of  European  audiovisual  works  in  third  countries  and  vice  versa, 
automatic  funding  (based  on  prior  distribution  of  similar  audiovisual  works)  could  be  made 
available  to  European  and  third  country  distributors  (in  partnerships)  for  the  acquisition  and  the 
print  and  advertising  costs  (prints,  dubbing  and  subtitling,  promotion  and  public  relations 
activities) of those audiovisual works. Inspired by the automatic scheme developed in MEDIA, the 
amount of potential support should be calculated from the admissions or box office receipts from 
European  audiovisual  works  in  third  countries  and  vice  versa.  (Data  is  not  easily  available; 
therefore a different mechanism would need to be developed). 

•  Operational Objective / Action Line 3.4. - Selective distribution support83: Selective support to 
distributors could be made available to partnerships of European and third country distributors for 
the  print  and  advertising  costs  (prints,  dubbing  and  subtitling,  promotion  and  public  relations 
activities)  of  European  or  third  country  audiovisual  works.  These  partnerships  could  be 
coordinated by sales agents. 

82 

83  

Under MEDIA 2007, "automatic support" is granted on the basis of the number of tickets sold in a territory for a 
non-national  European  film  in  order  to  encourage  circulation  of  European  audiovisual  works  among  different 
countries participating in the programme. Member States nominate an authority to "certify" tickets sold. 
Under  MEDIA  2007,  "selective  support"  covers  specific  promotion  and  distribution  costs  such  as  dubbing  and 
subtitling and is granted to permanent groupings of European companies distributing a film from another European 
country in order to encourage circulation of European audiovisual works among different countries participating in 
the programme.  

EN 

37 

   EN 

 
 
 
 
                                                 
Scenario 2: 

•  Operational  Objective  /  Action  Line  3.1.  -  Support  to  right-holders,  sales  agents  and 
distributors:  As  the  key  players  in  international  distribution,  right-holders,  sales  agents,  and 
distributors could be supported in order to encourage international sales and export of European 
audiovisual  works  (and  vice  versa)  by  stimulating  the  conclusion  of  agreements  between  right-
holders,  sales  agents,  and distributors of  EU  countries  and  those of  third  countries  to  ensure  the 
distribution  (in  cinemas,  on  TV,  VOD,  video…)  of  their  respective  audiovisual  works  on  the 
territory/territories of their partner(s).  

These action lines would be valid for both scenarios: 
•  Operational  Objective  /  Action  Line  3.5.  -  Cinema  networks:  Financial  support  would  be 
provided  to  cinema  networks  with  screens  in  Europe  and  in  third  countries  that  programme  a 
significant number of European audiovisual works and vice versa. 

•  Operational Objective / Action Line 3.6. - Support to broadcasters and digital platforms: In view 
of  the  technological  developments  and  the  wide  audience  reached  by  TV  broadcasting,  support 
should be made available to ensure that European works are shown on TV in third countries and 
vice versa. Similarly niche, thematic, IPTV, Web TV, VOD platforms etc. should be encouraged 
to show European and third countries' programmes according to a set of predefined criteria. 

Exhibit 15: Alternative instruments for delivering operational objective 3 

Impact of Specific Objective 3 

Scenario 1: 
Under  MEDIA  2007  support  is  awarded  to  sales  agents  and  distributors,  through  several  automatic 
and/or  selective  schemes.  Given  the  differences  between  sales  agents'  and  distributors  activities  and 
the specificity of their role in the circulation of European audiovisual works, three action lines devoted 
to  the  distributors/sales  agents'  activities  are  in  place  under  MEDIA  2007:  selective  support  for 
distributors,  automatic  support  for  distributors  and  automatic  support  for  sales  agents.  These 
mechanisms achieve good results in the context of the internal market. However, for an international 
cooperation programme and in view of the objectives, the approach does not appear to be promising. 
Firstly,  the  system  of  automatic  distribution  support  is  not  transferable  to  global  markets,  because 
certain data on which the support under MEDIA 2007 is calculated, is missing or difficult to obtain. 
Secondly,  the  implementation  of  these  three  support  mechanisms  based  on  partnerships  (groupings) 
does not really reflect the realities of the sector. (A European distributor never gets into contact with a 
foreign  distributor  and  has  no  interest  in  having  a  commercial  relationship  with  him.  This  situation 
also  characterises  the  relationships  between  European  and  foreign  sales  agents.  ).  For  these  two 
reasons  it  is  not  likely,  that  the  actions  (support  to  sales  agents,  automatic  and  selective  distribution 
support) presented under this scenario would contribute sufficiently to achieving the objective of 7% 
market share for EU works in third countries and vice versa over the three years. 
To alternatively award support to individual applicants would mean that financing would be granted 
directly  for  professionals  in  third  countries.  This  however  is  not  in  line  with  the  logic  of  the 
programme (mutual benefit) and would lead to additional risks (see section 5.5.1. below).  

EN 

38 

   EN 

 
 
 
 
Scenario 2: 
Distribution  is  key  to  bringing  productions  to  the  market.  Given  the  characteristics  of  international 
distribution/circulation  of  audiovisual  works  around  the  world  and  the  respect  of  the  mutual  benefit 
principle,  the  fostering  of  agreements  gathering  distributors,  sales  agents  and  rights  holders  of  the 
European  Union  and  third  countries  is  the  only  way  to  increase  distribution  and  thus  to  achieve  the 
objective  of  7%  market  share  for  EU  works  in  third  countries  and  vice  versa  over  the  three  years 
Given  the  growing  importance  of  new  technologies  as  well  as  the  number  of  screens  in  many  third 
countries, it is also crucial to define distribution not only in the traditional venue of cinema exhibition, 
festivals or TV broadcasting, but also to include new delivery mechanisms such as DVD, VOD, IPTV, 
Web TV84, mobile TV etc. this approach takes account of the different roles played by professionals 
inside  and  outside  Europe.  Regarding  the  circulation  strand  in  both  scenarios,  in  general,  improved 
distribution  significantly  contributes  to  increased  circulation.  The  impact  can  be  expected  to  be 
twofold, responding to both general policy objectives, firstly increased competitiveness and secondly, 
cultural diversity and consumer choice85. 
•  Any  increase  in  circulation  obviously  depends  on  the  financial  resources  of  the  programme 

invested in distribution activities. 

•  The  actions  proposed  will  help  to  reduce  the  risks  and  costs  of  distribution.  The  fragmented 
structure  of  the  European  distribution  system  as  well  as  the  reduced  financial  capabilities  of 
distributors hamper film distribution, leading to time constraints and increasing both risk and cost 
of distribution. 

Exhibit 16: Potential impact of Specific Objective / Action Line 3 

Impact 

Description of 
impact 

consumer 

Increase 
distribution 
Increase circulation 
Reaching  a  wider 
audience 
More 
choice 
Culturally 
more 
diverse  offer  of 
films 
Enhanced  dialogue 
on 
audiovisual 
cultures 
No impact on CO2-
from 
Emissions 
increased  volume 
of travel 

Economic 

Social 
/cultural 

Environ-
ment 

Short term 
effect 
Long term 
effect 

Sales 
agents 

Automatic 
distribution 
support 

Selective 
distributi
on 
support 

Cinema 
networks 

Broadcas
ters/IPTV
/VOD 

Partnerships 
between sales 
agents 
distributors 
and right-
holders  
+++ 

+ 

++ 

++ 

Indirect++ 
Indirect++ 

Indirect++ 
Indirect+ 

Indirect++ 
Indirect+ 

Indirect++ 
Indirect+ 

+++ 

+++ 
+++ 

Indirect++ 

Indirect++ 

Indirect++ 

Indirect+ 

+++ 

+++ 

++ 

+++ 

+++ 

+++ 

++ 

+++ 
+++ 

+++ 

+++ 

0 

- 

+++ 

+++ 

0 

- 

+ 

+ 

0 

- 

++ 

+ 

0 

- 

++ 

+ 

++ 

++ 

- 

0 

++ 

++ 

++ 

++ 

84 
85 

EN 

Web TV is a computerized system that enables viewing TV on the Internet. 
Experience with MEDIA Plus has shown that coverage has been extensive: During the period of the programme, 
one in three European films circulating outside of its national borders received direct support from MEDIA Plus. 
That 
see 
http://ec.europa.eu/information_society/media/overview/evaluation/reports/index_en.htm . 

programme, 

increased 

towards 

ratio 

end 

the 

the 

of 

39 

   EN 

 
 
 
                                                 
4.5.4. 

Specific Objective 4 - Reach new audiences and promote film literacy 

These  operational  objectives  would  implement  the  fourth  specific  objective,  i.e.  reaching  new 
audiences and promoting film literacy. It is closely linked to the issues raised about viewing habits and 
the need to raise awareness and visibility for European and foreign audiovisual works. It is important 
in terms of the (long term) development of the circulation of audiovisual works. 

•  Operational Objective / Action Line 4.1. - Support to festivals: Support would cover programming 

of European and third country audiovisual works and film education activities.  

•  Operational Objective / Action Line 4.2. - Support to special events: Support would cover events 
like  ex-Cinedays86,  and  Picture  Europe87,  to  raise  awareness  and  create  "market  space"  for  the 
promotion of European audiovisual works and vice versa. Support could also be awarded in favour 
of "European film screenings" organised in third countries (for example in delegations).  

•  Operational  Objective  /  Action  Line  4.3.  -  Networks  for  targeting  young  audiences  including 
education activities: A focus on young audiences, including film education activities in cinemas, 
could have a lasting impact on viewing habits. This point was frequently raised by stakeholders. 
•  Operational  Objective  /  Action  Line  4.3.  -  Support  for  TV  programmes  dedicated  to  young 
audiences:  Special  support  to  children's  programmes.  A  focus  on  young  audiences  could  have  a 
sustainable  impact  on  the  viewing  habits.  Children's  films  were  highlighted  as  an  area  where 
consumer choice was extremely limited.  

Impact of Specific Objective 4 

This specific objective is of particular importance in order to support and to give a sustainable, long-
term  effect  to  Community  action.  It  was  demonstrated  above  (see  section  2.3),  that  a  change  in 
viewing habits would be important in terms of a long term effect for the intervention. There would in 
addition be an impact on competitiveness in the long run resulting from behavioural change, whereas 
the impact on cultural diversity and consumer choice would be immediately visible. Also, having films 
selected in festivals is a good starting point for later sales and marketing.  

Exhibit 17: Potential impact of Specific Objective/ Action Line 4 

Area of impact 

Description of impact 

Festivals 

Special events 

Economic 

Social/cultural 

Environmental 

Short term effect 
Long term effect 

Increasing circulation 
Reaching 
audience 
More consumer choice 

a  wider 

dialogue 
audiovisual 

Educating  audiences  in 
terms 
cultural 
of 
diversity 
Enhanced 
about 
cultures 
Culturally  more  diverse 
offer of films 
impact  on  CO2-
No 
Emissions 
from 
increased  volume  of 
travel 

++ 
++ 

+ 

++ 

++ 

++ 

- 

+ 
++ 

++ 
++ 

+ 

++ 

++ 

++ 

- 

+ 
++ 

Young 
Network 
++ 
++ 

Young TV 
programmes 
++ 
+++ 

++ 

+++ 

++ 

+++ 

0 

+ 
+++ 

+++ 

+++ 

++ 

+++ 

0 

+ 
+++ 

86 

87 

Cinedays  =  Organised  for  the  first  time  in  2002,  CINEDAYS  consisted  of  a  Europe  wide  programme  of  major 
European films in cinemas, TV and film libraries, with special showings organised, particularly for schools. 
http://www.pictureurope.eu/2008/en/flashintro_PE.php . 

EN 

40 

   EN 

 
 
 
                                                 
5. 

SECTION 5: COMPARISON OF OPERATIONAL OBJECTIVES / ACTION LINES/ OPTIONS 

A comparison of scenarios/ options is carried out in two steps. First, the above described operational 
objectives/action lines will be assessed regarding their cost-effectiveness, i.e. expenditure (costs) and 
expected  outcomes  (effects).  A  budget  allocation  is  presented  first,  taking  into  account  the  different 
scenarios.  On  the  basis  of  the  scenarios,  the  assumptions  regarding  the  cost  effectiveness  of  the 
different  operational  objectives/action  lines  is  compared  in  section  5.2.,  taking  into  account  the 
impacts (section 4). Subsequently, after identifying which action lines are most effective and should be 
pursued (sections 5.4 and 5.5), the two possible policy options "extending MEDIA 2007" or "creating 
a new programme MEDIA Mundus" will be assessed to establish which would be most effective for 
implementation (section 5.6). 

5.1. 

 Cost implications of the programme over 3 years 

5.1.1. 

Scenario 1 

Exhibit 18 does not include the administrative costs which are laid out in full in Annex 10 b. 

Exhibit 18: Cost implications of a new programme, 2011 to 2013 in million Euro for Scenario 1 
MEDIA Mundus (commitment appropriations) 

2011 

2012 

2013 

TOTAL 

Specific Objective 1: Information exchange and market 
intelligence
1) Building up Websites and Databases 

2) Network of contact points 

4) Initial training 

5) Continuous training  

6) Market access mechanisms 
Specific Objective 2: Facilitating international co-
production activities
1) Development 

Development fund for co-productions  

Co-production markets 

 2) Co-production 

a) Co-production fund for feature films 

b) Co-production fund for animation films 

c) Co-production fund for documentary films 

c) Gap financing 

Specific Objective 3: Distribution and circulation support 

1) Support to sales agents 

2) Automatic distribution support 

3) Selective distribution support 

4) Cinema network 

5) Support to broadcasters and digital platforms 
Specific Objective 4 : Reach new audiences and promote 
film literacy
1) Festivals 

2) Special events 
3) Networks for targeting young audiences including 
education activities
4) Support for TV programmes dedicated to young audiences 

2 

1,5 

2 

6 

8 

4 

2 

2 

0,5 

0,5 

0,5 

3 

9 

13 

7 

8 

4 

4 

2 

2 

1,2 

1,5 

3 

8 

8 

4 

3 

2,5 

0,7 

0,7 

1 

4 

10 

14 

7,5 

8 

5 

3 

2 

2,5 

0,8 

1,5 

3,5 

10 

8 

4 

3 

2,5 

0,8 

0,8 

1,5 

5 

12 

15 

7,5 

8,5 

5 

2 

2,5 

3 

4 

4,5 

8,5 

24 

24 

12 

8 

7 

2 

2 

3 

12 

31 

42 

22 

24,5 

14 

9 

6,5 

7,5 

EN 

41 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total (in million Euro) 

5.1.2. 

Scenario 2 

81 

89,6 

96,9 

267,5 

Exhibit  19  shows  the  cost  implications  of  the  specific  and  operational  objectives  for  the  second 
scenario, reallocating the budget of the scenario 1. Exhibit 19 does not include the administrative costs 
which are laid out in full in Annex 10 a. 

Exhibit 19: Cost implications of a new programme, 2011 to 2013 in million Euro for Scenario 2 

MEDIA Mundus (commitment appropriations) 

2011 

2012 

2013  TOTAL 

Specific Objective 1: Information exchange and market 
i
1) Building up Websites and Databases 

i

2) Network of contact points 

4) Initial training 

5) Continuous training  

6) Market access mechanisms 

Specific  Objective  2:  Facilitating 

international  co-

i
 1) Development 

i i i

a) Script development 

b) Co-production markets/partner search (pitching) 

 2) Co-production 

a) Supplement existing co-production funds 

b) Access to finance  

Specific  Objective  3:  Distribution  and  circulation 

1) Support to partnerships of right holders, sales agents and 
di
2) Cinema network 

ib

3) Support to broadcasters and digital platforms 

Specific Objective 4 : Reach new audiences and promote 
fi
i
1) Festivals 

2) Special events 

3)  Networks  for  targeting  young  audiences  including 
d
4)  Support  for  TV  programmes  dedicated  to  young 

i i i

i

di

Total (in million Euro) 

5.1.3. 

Scenario 3 

2

1,5

1,2

1,5

2

6

8

3

3

3

0

27 

7 

8 

4

4

2

3

8

8

3

4

4

1

29 

7,5 

8 

5

3

2

2
82,5 

2,5
90,7 

0,8 

1,5 

3.5 

10 

8 

3 

4 

5 

1 

29 

7,5 

8,5 

5 

2 

2,5 

3 
94,3 

4

4,5

8.5

24

24

9

11

12

2

85 

22 

24,5 

14

9

6,5

7,5
267,5 

In order to take current economic crisis into account , scenario 3 is based on a smaller budget than that 
of scenarios 1 and 2. Such an option aims at ensuring continuity following the preparatory action and 
at paving the way for a larger programme under the new financial perspectives. Exhibit 20 shows the 
cost implications of the specific and operational objectives for scenario 3. Exhibit 20 does not include 
the administrative costs, which are laid out in full in Annex 10 a.  

Exhibit 20: Cost implications of a new programme, 2011 to 2013 in million Euro for Scenario 3 

MEDIA Mundus (commitment appropriations) 

2011 

2012 

2013  TOTAL 

Specific Objective 1: Information exchange and market 
i

i

EN 

42 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1) Continuous training  

Specific Objective 2: Competitiveness and distribution 

 1) Co-production markets / partner search 

2) Support to partnerships of right holders, sales agents and 
di
Specific Objective 3 : Circulation 

ib

1) Cinema network 

2) Support to broadcasters and digital platforms 

3) Audience support 

Total (in million Euro) 

0,9

0,6
1,1 

0,9

0,7

0,3
4,5 

0,9

0,6
1,1 

0,9

0,7

0,3
4,5 

0,9 

2,7

0,6 
1,1 

0,9 

0,7 

0,3 
4,5 

1,8
3,3 

2,7

2,1

0,9
13,5 

EN 

43 

   EN 

 
 
 
 
 
 
 
 
 
 
5.2. 

Assumptions on the cost effectiveness and the European added value regarding 
the different operational objectives; Scenarios 1 and 2  

The following exhibits present the assumptions regarding unit costs and outputs and assess the added 
value of each proposed activity in relation to the proposed budget. 

5.2.1. 

Specific  objective  1:  Information  exchange  and  market  intelligence  –  Scenarios  1 
and 2 

Exhibit 21: Outputs and unit costs for specific objective 1, Scenarios 1 and 2, 2011 to 2013 

Assumption 

Assessment 

1) Building up 
Websites and 
Databases 
Based on discussions 
with stakeholders and 
global market 
analyses, the needs in 
the context of MEDIA 
Mundus would consist 
in ca. 6 websites and 
databases covering 
geographic zones, and 
in these zones certain 
film genres and topics 
related to right holders 
and market structures. 
The average cost per 
unit over three years 
amounts to 200 000 
Euro. 
2) Network of 
contact points In this 
context  payments to 
the MEDIA Desks & 
Antennae 
 (co financed with 
10.000 Euro per unit) 
for providing 
information to 
stakeholders are taken 
into account. In 
parallel 6 contact 
points (unit costs of 
183 333 Euro) would 
be established in third 
countries. 

The  unit  costs  have  been  determined  on  the  basis  of  previous  experiences  with  the 
establishment  of  different  databases  and  websites,  for  example  under  the  MEDIA 
2007 programme: The cost range from 85.000 Euro for a database aimed at European 
professionals (Cinando) to 375.000 Euro for a website dedicated to information on the 
European  industry  (Cineuropa)  and  235  000  Euro  for  the  integration  of  databases 
(such  as  the  Pro2Film).    An  average  of  200.000  Euro  per  unit  can  be  considered  as 
low. 
The  costs  will  be  co-financed  at  80%;  such  a  high  intervention  guarantees  an 
impartial,  for  the  user  cost-free  service  at  high  level.  The  envisaged  output  of  6 
websites/databases  is  a  minimum  for  global  geographical  (Latin  America,  Asia, 
MEDA,  North  America,  India,  ACP  and  "Neighbourhood  policy  area")  and  content 
coverage.  The  costs  for  the  establishment  of  websites  and  databases  are  decreasing 
over time. Once the websites and databases have been established only the costs for 
updating will be necessary.  
There  is  an  added  value,  in  that  no  such  comprehensive  websites  for  international 
markets  exist. In  the public  consultation  professionals  stressed  the  necessity  of  such 
an information tool. Synergies could be expected for professionals on a European as 
well as on a global level. The websites will partly be supplemented with information 
collected under other actions of MEDIA Mundus. 

The network of 43 MEDIA Desks & Antennae in the EU and 6 contact points in third 
countries (for example Latin America, Asia, India, MEDA, ACP and "Neighbourhood 
policy  area)  would  provide  stakeholders  with  all  relevant  information  regarding  the 
respective markets and the trustworthiness of potential partners. The costs are based 
on  the  experience  with  the  MEDIA  Desks.  Community  support  would  amount  to 
annually  10.000  Euro  per  desk/antenna  and  should  cover  the  additional  costs  for 
providing  the  stakeholders  with  information.  The  MEDIA  Desks  and  antennas  are 
established bodies already co-financed at 50% by Member States; they already form a 
network  and  have  a  sector  knowledge  from  which  the  professionals  can  benefit. 
Therefore similar results could not be obtained at a lower price.  
In parallel 6 contact points would be established in third countries, the costs per unit 
were calculated at 183 333 Euro, including costs for personnel and infrastructure. , in 
regions  with  emerging  or  strong  audiovisual  markets.  The  envisaged  output  of  6 
contact points is a minimum for global geographical coverage (Latin America, Asia, 
MEDA, North America, India, ACP and "Neighbourhood policy area"). 
This would be complementary to actions by the Member States and actions under the 
MEDIA 2007 programme (i.e. the network of MEDIA Desks). It should be noted that 
MEDIA  Desks  &  Antennae  are  attached  to  national  structures;  therefore  there  is 
complementarity with national support schemes as well as with European audiovisual 
support.  It  would  be  more  difficult,  and  much  more  expensive  to  establish  such  a 
network  at  the  level  of  Member  States,  in  particular  for  smaller  Member  States. 
Hence, there is an European added value. 

EN 

44 

   EN 

 
 
Assumption 

Assessment 

3) Support for initial 
training 
150 individual 
scholarships (12 000 
Euro 24 000 Euro for 
postgraduates) and 50 
other initial training 
measures like 
exchange and 
cooperation between 
film schools on more 
specific topics (with 
costs of 106.000 Euro 
per unit). On this 
basis, the average unit 
costs amount to 
40.000 Euro. 

4) Support for 
continuous training 
140 trainings over 3 
years, with an average 
unit cost of 170.000 
Euro (including 
scholarships). Some 
(between 20% and 30 
%) of the supported 
measures will consist 
in an extension of 
training measures 
supported under 
MEDIA 2007. 

In order to attract the most talented students, the programme has to offer competitive 
scholarships. A comparison with similar international scholarship programmes in the 
field confirms these figures88. Although the programme could benefit from having a 
system  to  pick  students  according  to  their  educational  background  and  study 
destination, the administrative costs of such a system (and the risk of fraud) would be 
likely  to  out-weigh  its  benefits  and  would  not  be  cost-effective.  The  output  of  150 
scholarships  over  a  three  year  period,  covering  Europe  and  third  countries,  is  a 
minimum output for the creation of global networks and a sustainable effect.  
For  the  initial  training  measures,  unit  costs  are  based  on  experience  with  MEDIA 
2007 and the ex post evaluation of MEDIA Training (2001-2006). The EU financial 
contribution would be between 40% and 80% of the eligible costs, depending on the 
geographical origin of the applicants. The output of 50 other initial training measures 
is necessary in order to reach the critical mass of participants and to create sustainable 
networks  and  the  necessary  transfer  of  know  how  for  future  cooperation  between 
professionals and projects.  
There is European added value in the creation of global networks, which can generate 
important  synergies  between  professionals.  This  is  particularly  important  for 
professionals from smaller Member States.   

Unit costs are based on experience with MEDIA 2007 (Euro 267.000 per unit) and the 
first  year  of  the  Preparatory  Action  MEDIA  International  (out  of  the  11  supported 
projects, two were extensions of continuous training projects supported under MEDIA 
2007. The average costs of these extensions were 35.000 Euro, the costs of the non-
extension projects amounting on average to 123.000 Euro.) 
A minimum  investment is required to set up the training, rent the premises, pay the 
trainers  etc.  Support  would  amount  to  50%  80%  depending  on  the  locations  for  the 
training  and  the  geographic  origin  of  the  partners  and  participants.  This  rule  was 
already  successfully  applied  in  the  first  year  of  the  Preparatory  Action  MEDIA 
International.  
The number of trainings would be increasing over time; in order to give the sector the 
time necessary to develop the relevant training measures and to address the relevant 
partners and professionals. The total output of 140 trainings over 3 years  is necessary 
in  order  to  create  a  critical  mass  of  potential  partners  and  to  attract  professionals 
specialising  in  the  various  international  aspects  of  production,  distribution  and 
circulation. The number of 140 outputs was calculated on the basis of the feedback in 
the  context  of  the  public  consultation  and  the  first  year  of  the  Preparatory  action 
MEDIA  International.  Further  to  that  experience  from  MEDIA  2007  regarding  the 
diversity of efficient training modules was taken into account. 
A  comparable  global  approach  does  not  exist  in  national  support  systems,  However 
awareness and knowledge of global markets is a precondition for players to make the 
most of their potential and to improve global circulation of works. In order to achieve 
these objectives only a pan –European approach can ensure  added value.  

5) Facilitation of 
market access 
Under the market 
access mechanisms, 
support is awarded for 
the participation in 
festivals and markets. 
Eligible costs cover 
(umbrella) stands and 
travel costs. The costs 
per unit amount to 

Unit  costs  were  determined  on  the  basis  of  MEDIA  2007  experience  and  experts' 
opinions  (e.g.  evaluation  committee  of  Lot  2  of  the  Preparatory  Action  MEDIA 
International).   
Under  MEDIA  2007  the  costs  for  a  (average)  stand  vary  between  300.000  and 
600.000  Euro;  the  price  for  market  access  mechanisms  varies  between  50.000  and 
450.000  Euro.  The  costs  calculated  here  are  below  the  average  MEDIA  2007-costs 
because in some of the most important markets (like Cannes and Berlin) MEDIA is 
already supporting stands. A MEDIA Mundus contribution would cover between 50% 
and  80%,  depending  on  the  relevance  of  the  festival/market  and  the  geographical 
origin of the respective partners.  
The number of supported projects (output of 85 actions) would enable the programme 

88  

See also Impact assessment  ERASMUS Mundus, page 43 
 http://ec.europa.eu/governance/impact/docs/ia_2007/sec_2007_0949_en.pdf 

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45 

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Assumption 

Assessment 

280.000 Euro. Total 
output of 85 actions 

to  cover  the  most  important  international  film  festivals  and  markets.  Similar  results 
could not be achieved at lower costs or with fewer outputs. 
Umbrella  stands  would  enable  European  professionals  to  participate  in  (very 
expensive) international markets. This is in particular relevant for professionals from 
small  Member  States,  who  cannot  afford  an  individual  presence  on  all  big 
international markets. The complementarity and European added value is high since 
these actions would give European professionals the opportunity to join forces and to 
be more visible at major events. 

5.2.2. 

Specific objective 2: Facilitate international co-production activities - Scenario 1 

Exhibit 22: Outputs and unit costs for specific objective 2, Scenario 1;  2011 to 2013 

Assumption 

Assessment 

 1) Development 

a) Development fund 
for co-productions 
300 outputs 
(supported film-
projects), 40.000 Euro 
each 

b) Organisation of 
co-production 
markets and partner 
search events 
(pitching) 
110.000 Euro per 
event. Total output of 
73 events 

Unit  costs  under  the  MEDIA  2007  programme  amount  to  80.000  Euro  maximum. 
Under MEDIA Mundus costs would be 50% lower because the costs of international 
co-productions are on average lower than the costs for European films89.  
The  development  of  approximately  100  co-production  projects  per  year  would  be 
supported. Not all films financed under development enter into production, but in any 
case  this  will  result  in  a  selection  of  "quality"  films  and  the  learning  effect  for 
producers of films not going into production is also considerable.  
Development  of  international  co-productions  is  only  to  a  very  limited  extent 
supported  by  some  Member  States  (some  of  the  international  co-production  funds 
integrate  development  support,  see  Annex  8),  and  if  so  with  a  national  focus. 
Therefore  there  is  a  European  added  value.  However,  the  administration  of  such  a 
fund  is  very  resource  intensive,  because  a  lot  of  documents  need  to  be  read  and 
evaluated by different experts in various languages. It can therefore not be considered 
to be sufficiently cost-effective. 

Under the Preparatory Action MEDIA International costs for similar actions were on 
average 110.000 Euro.  
Financing  would  amount  to  50-80%,  depending  on  the  nature  of  the  event,  for 
example  whether  it  is  taking  place  in  the  context  of  a  festival  (50%  only),  and  also 
depending on the geographical origin of the partners and the country where the event 
would take place. 
The number of events would increase in the second and third year of the programme. 
73  events  over  a  three  year  period  is  a  minimum  number  in  order  to  ensure    the 
selection  of  high  quality  projects  (i.e.  not  a  quantitative  approach)  and  to  cover  all 
geographical zones of interest. 
The  action  is  complementary  to  actions  in  Member  States,  which  mostly  have  a 
national  focus.  Here,  Europe  will  be  presented  at  pitching  events  in  all  its  cultural 
diversity and can offer access to a large market, and this will guarantee the interest of 
strategically important international investors. The added value for the participants is 
the possibility to meet various investors from strategic markets, willing to invest.  

89  

For example, the average cost of French co-productions involving (a) partner(s) from (a) third country (ies) amount 
to 1,98 million Euro, against 5,4 million Euro for other French films.   

EN 

46 

   EN 

 
 
 
 
 
                                                 
Assumption 

Assessment 

 2) Co-production 

a) Co-production 
fund for feature films 
Unit costs: 50.000 
Euro, outputs over 
three years: 140 films 

b) Co-production 
fund for animation 
films 
Unit costs: 60.000 
Euro, output over 
three years: 33 films 

c) Co-production 
fund for 
documentary films: 
40.000 Euro unit costs 
with 50 outputs (films) 
over three years 

d) Gap financing of 
production costs 
30 000 Euro per unit, 
100 outputs (films) 

Unit costs were calculated on the basis of funds awarded by existing international co- 
production  funds  (see  Annex  8),  and  are  comparatively  low.  The  output  number  of 
140  films  over  the  three  year  period  of  the  programme  was  established  following 
discussions with and needs assessment of existing international co-production funds. 
Support would amount to a maximum of 20% of the production costs.  
Several  Member  States  consider  production  as  funding  falling  into  their  exclusive 
competence  and  being  subject  to  the  principle  of  subsidiarity.  Furthermore,  the 
administration of such a fund would be very resource intensive and complicated, i.e. 
with  regard  to  the  contracts  to  be  concluded  with  the  different  financiers,  the  script 
which  would  need  to  be  read  entirely  and  evaluated  in  any  language,  control  of 
receipts/costs  afterwards  from  different  territories  around  the  world  and  finally 
exchange rate fluctuations. Therefore, there are doubts as to the cost-effectiveness of a 
co-production fund for feature films. 

Unit costs were calculated on the basis of reports from the animation industry. They 
very low compared to the average budget of animation films.   
The  output  of  33  films  over  a  three  year  period  was  established  following  market 
investigations.  Financial  support  would  amount  to  a  maximum  of  25%  of  the 
production costs.  
Member  States  do  not  run  such  international  funds  focused  on  animation  films. 
Animation  films  have  an  important potential  for  export  and  circulate  well.  They  are 
costly and therefore produced mainly by few countries. The existence of such a fund 
could  increase  the  production  of  animation  films  and  improve  competitiveness. 
However,  several  Member  States  consider  that  production  funding  falls  into  their 
exclusive competence and is subject to the principle of subsidiarity (see above).  

Unit costs were calculated on the basis of expert opinions. They are low compared to 
the average budget of documentary films (for example around 0,6 million Euro for a 
French documentary film).  
The output of 50 films over a three year period is low as regards the current level of 
production  and  the  strong  interest  in  documentary  films  (thematic  channels  for 
example) and their educational and cultural impact. It reflects the choice to focus on 
high quality and ambitious projects. Support would amount to a maximum of 30% of 
the production costs.  
Member  States  do  not  run  such  international  funds  focused  on  documentary  films. 
Documentary  films  have  an  important  potential  for  export,  in  particular  on  TV,  and 
circulate well. However, several Member States consider that production funding falls 
into  their  exclusive  competence  and  is  subject  to  the  principle  of  subsidiarity  (see 
above).  

In  order  to  incite  banks  to  provide  gap  financing  to  co-productions,  the  EU  would 
cover part of the loans and interest costs. The average costs would amount to 30.000 
Euro. Over the three years of the programme, 100 international co-productions could 
benefit from this tool.  
However,  the  Commission,  not  being  a  financial  institution  itself,  could  not 
administer such a fund. It could only award part of the financing costs (see i2i under 
MEDIA 2007) to banks. Experience from MEDIA 2007 shows that the administration 
of such funding would be particularly resource intensive. In the case of international 
cooperation it would be further complicated, in particular regarding the evaluation of 
proposals (scripts to be read in all languages), contracts with different banks and ex-
post  control.  This  would  significantly  counterbalance  the  leverage  effect.  It  can  be 
concluded that gap financing of production costs is not sufficiently cost-effective. 

5.2.3. 

 Specific Objective 2: Facilitate international co-production activities - Scenario 2 

Exhibit 23: Outputs and unit costs for specific objective 2, Scenario 2; 2011 to 2013 

EN 

47 

   EN 

 
 
Assumption 

 1) Development 

a) Script 
development training 
amounts to 113.000 
Euro per unit. Total 
output of 70. 

b) Organisation of 
co-production 
markets and partner 
search events 
(pitching) is financed 
up to 110.000 Euro 
per event. Total output 
of 100 events 

 2) Co-production 

a) For supplementing 
existing co-
production funds  
Unit costs of 500.000 
Euro. 24 outputs 
would go over the 
three years period of 
the programme to ca.8 
funds 

Assessment 

Unit  costs  are  based  on  experience  with  MEDIA  2007  and  the  Preparatory  Action 
MEDIA  International.  Script  development  trainings  already  supported  by  MEDIA 
receive contributions ranging from 50.000 to 300.000 Euro, the proposed cost per unit 
of  113.000  Euro  is  therefore  reasonable.  Script  development  training  can  to  a  large 
part take place interactively via the Internet. These unit costs are therefore lower than 
the costs calculated for continuous training (see exhibit 18). 
An average output of 23 trainings per year is appropriate to develop co-productions, 
considering the failure rate of film projects at the development stage. 
Co-financing  would  amount  to  50  -  80%  of  the  eligible  costs,  depending  on  the 
geographical origin of the partners and the country where the event is going to take 
place. 
Most  script  development  trainings  offered  by  Member  States  require  that  the  plot 
takes  place  on  their  respective  territory.  Such  restrictions  are  a  constraint  for  the 
development of artistic international co-production and the subsequent circulation of 
films.  Under  this  action,  the  training  would  have  a  focus  on  "international  script 
development",  i.e.  international  co-productions  and  how  to  reach  international 
audiences by adapting the script; a field which is not covered by Member States. The 
training would be complementary to actions pursued by Member States and would in 
the follow-up enable professionals to obtain financing for their projects from diverse 
national and international sources. Thus, there is a clear European added value. 

Under the Preparatory Action MEDIA International costs for similar actions were on 
average 110.000 Euro.  
Financing  would  amount  to  50-80%,  depending  on  the  nature  of  the  event,  for 
example  whether  it  is  taking  place  in  the  context  of  a  festival  (50%  only),  and  also 
depending on the geographical origin of the partners and the country where the event 
would take place. 
The number of events would increase in the second and third year of the programme. 
The output of 100 events over a three year period is a minimum number in order to 
ensure the selection of high quality projects (i.e. not a quantitative approach) and to 
cover all geographical zones and genres (feature, animation and documentary films) . 
(Under  the  first  scenario  a  smaller  number  of  outputs  was  proposed,  because  the 
setting-up of a development fund is considered to have a similar effect in part). 
The  action  is  complementary  to  actions  in  Member  States,  which  mostly  have  a 
national  focus.  Here,  Europe  will  be  presented  at  pitching  events  in  all  its  cultural 
diversity and can offer access to a large market, and this will guarantee the interest of 
strategically important international investors. The added value for the participants is 
the possibility to meet various investors from strategic markets, willing to invest. 

The  unit  costs  were  calculated  on  the  basis  of  the  budget  of  the  existing  public 
international film funds (see Annex 8). By supporting approximately eight funds (with 
24 outputs over the three years period) the action would obtain global coverage, both 
in  terms  of  European  and  non-European  professionals.  500.000  Euro  is  a  small 
amount,  and  is  based  on  the  average  budget  and  intervention  level  of  these  funds, 
investing in productions with a low budget (on average less than 1 million Euro per 
film).Thus, even small contributions (for instance 50 000 Euro per film) can make an 
important  difference.    The  funds  would  be  administered  by  existing  funds  in  the 
Member  States.  In  comparison  to  the  first  scenario,  under  which  the  Commission 
would run the fund, the supplementing of existing co-production funds is much more 
cost effective. The budget for this action would increase over the three year period. 
Most  of  the  funds  are  fighting  for  their  budget  and  their  existence,  for  instance 
because they do not have an important economic effect in the Member States, but are 
significantly  contributing  to  global  cultural  diversity.  Therefore  Community  action 

EN 

48 

   EN 

 
 
 
Assumption 

Assessment 

b) Access to finance: 
Unit costs: 500.000 
Euro, 4 outputs 

would be complementary to  action by Member States and there would be important 
European added value in terms of the implementation of the UNESCO convention on 
cultural diversity and international exchange. 

This  action  would  for  administrative  reasons  start  in  the  second  year  of  the 
programme. The costs of 500.000 Euro per unit, (4 outputs over 2 years) are very low 
for  the  start  of  this  action.  Financial  institutions  would  be  encouraged  to  facilitate 
access  to  finance;  for  example  award  guarantees  to  banks  for  international  co-
productions; guarantee funds would have a very important leverage effect90.  
The selected bodies will have an obligation to reinvest the funding. 
The  majority  of  Member  States  do  not  have  national  or  international  funds, 
facilitating access to finance. Among European professionals there is a strong demand 
and need for more commercial finance and therefore there is an important European 
added value when encouraging banks to invest in international film production. 

5.2.4. 

Specific objective 3: Distribution and circulation support - Scenario 1 

Exhibit 24: Outputs and unit costs for specific objective 3, Scenario 1;  2011 to 2013 

Assumption 

Assessment 

1) Support to sales 
agents average of 50 
000 Euro per project. 
Support would be 
awarded for MG, P&P 
and P&A costs. 240 
outputs over the three 
years period 

2) Automatic 
distribution support  
unit cost of 70.000 
Euro per film and 442 
films supported over 
the three year period 

Support  would  be  awarded  for  groupings  of  sales  agents  assembling  rights  for 
different  territories  and  films.  Unit  costs  comprise  a  maximum  of  10.000  Euro  per 
film and territory and up to a maximum of 250.000 Euro per grouping, consisting of 
at least 2 sales agents covering at least 10 territories and at least 2 films. Unit costs 
were  calculated  on  the  basis  of  MEDIA  2007  projects.  Support  could  finance  up  to 
50%  of  the  eligible  costs,  depending  on  the  territory  (Costs  would  cover:  MG  = 
minimum guarantee; P&P= prints and production; P&A = promotion and advertising). 
Given the complexity of releasing films in various regions of the world, these are low 
costs.  Over  the  three  year  period  240  consortia  (minimum  480  films)  would  be 
supported. Fewer outputs would not lead to a sustainable effect on the market to reach 
the critical mass for distribution.  
The logic of this approach was inspired by the MEDIA 2007 programme and achieves 
good  results  in  the  context  of  the  internal  market.  However,  for  an  international 
cooperation  programme  the  implementation  based  on  partnerships  (groupings)  does 
not reflect the realities of the sector, and is therefore unlikely to sufficiently contribute 
to  increasing  the  market  share  to  7%  and  thus  any  European  value  added  is 
questionable. 

Support would be awarded to a grouping of distributors from at least two territories 
and  with  at  least  2  films.  The  exact  amount  of  potential  support  is  based  on  the 
receipts  from  the  films,  origin  and  the  countries  of  distribution.  Unit  costs  per  film 
would  not  exceed  70.000  Euro  (a  figure  much  lower  than  the  funding  potentially 
awarded under MEDIA 2007- ca. 300 000 Euro per film- this difference because of 
the lower ticket prices in third countries). The distributor would be obliged to reinvest 
the financial support in co-production or distribution of audiovisual works. The output 
is  very  low,  because  –  to  start  the  generation  system  -  only  films  having  had  a 
minimum  amount  of  admissions  would  be  eligible.  This  barrier  is  particularly  high, 
also compared to the automatic support under MEDIA 2007.  
Support  could  finance  up  to  50%  of  the  eligible  costs  (depending  on  the  territory, 
comprising  MG  =  minimum  guarantee;  P&P=  prints  and  production;  P&A  = 
promotion and advertising). 

90  

 See for example IFCIC: http://www.ifcic.fr/infos/communiques-bilan-de-l-annee-2007.html 

EN 

49 

   EN 

 
 
                                                 
Assumption 

Assessment 

 The  logic  of  this  approach  was  inspired  by  the  MEDIA  2007  programme  and 
achieves  good  results  in  the  context  of  the  internal  market.  However,  for  an 
international cooperation programme it would be difficult to obtain the necessary data 
to  run  an  automatic  support  system.  Furthermore  an  European  distributor  does  not 
usually  have  contact  with  a  foreign  distributor  and  has  no  interest  in  having 
commercial  relationships  with  him.  Thus,  it  is  questionable  whether  such  an  action 
could lead to a significant increase in market share and contribute to  European value 
added . 

Support  would  be  awarded  for  groupings  of  distributors  assembling  rights  for 
different  territories  and  audiovisual  works.  The  unit  costs  comprise  a  maximum  of 
20.000  Euro  per  film  and  territory  and  up  to  a  maximum  of  300.000  Euro  per 
grouping,  consisting  of  at  least  2  distributors  and  at  least  5  films.  Unit  costs  were 
based on MEDIA 2007 experience. Support could finance up to 50% of the eligible 
costs,  depending  on  the  territory  (Costs  would  cover:  MG  =  minimum  guarantee; 
P&P= prints and production; P&A = promotion and advertising).  
Given the complexity of releasing films in various regions of the world, these are low 
costs.  Over  the  three  year  period  300  consortia  (minimum  600  films)  would  be 
supported.  
The logic of this approach was inspired by the MEDIA 2007 programme and achieves 
good results in the context of the internal market. However, in the current context of 
an international programme, this action does not appear to be promising in terms of 
increasing the market share of 7% market share for EU works in third countries and 
vice versa over the three years. 

The unit costs are based on the experience from MEDIA 2007 and in particular from 
Lot  3  (cinema  networks)  from  the  first  year  of  the  Preparatory  Action  MEDIA 
International  (700  000  Euro  for  putting  in  place  one  network).  Discussions  with 
experts confirmed the desirability to support new and additional networks, so that the 
different segments of the exhibition market and different audiences can be reached. 
Considering  the  number  of  cinemas  participating  in  such  networks  and  the  direct 
effect on the value chain, the unit costs are very low. Compared with the only existing 
cinema  network on  an  European  level, which receives  7 million  Euro from  MEDIA 
for 1500 screens, this action will be able to support an average of 300 screens in each 
network.  The  support  would  encourage  cinemas  to  show  a  certain  rate  of  European 
and third countries' films, by subsidising 50% of the exhibition costs.   
Member States are not running such networks on an European or international level. 
Therefore  there  is  an  important  added value  in  that films  are  exhibited beyond  their 
national borders. 

Unit costs are based on the MEDIA 2007 experience with the VOD support scheme 
and on discussions with experts. 
Considering  the  rigidity  of  the  broadcasting  market  (high  competition  between 
programmes,  risk  adversity  in  particular  relating  to  non  national  and  non  US- 
productions),  groupings  of  broadcasters  could  tackle  these  problems  and  obtain  a 
price  lower  than  the  average  market  price.  This  goes  hand  in  hand  with  the  new 
Audiovisual  Media  Service  Directive91,  which  qualifies  co-productions  as  European 
works. 
 For VOD platforms, the average unit cost is lower than the MEDIA-supported VOD 
platforms (average unit cost of 411.000 Euro). 
The  financial  contribution  would  cover  50%  of  the  costs  so  as  to  ensure  the 
commercial viability and visibility of the selected projects, which is a key element in 
a very competitive environment. 
Member  States  are  not  financing  similar  projects  and,  apart  from  national  and  US 

3) Selective 
distribution support 
140.000 Euro with 
300 outputs 

4) Cinema network: 
The unit costs (per 
network) amount to 
1.47 million Euro. 15 
outputs over the three 
years period (5 
networks). 

5) Support to 
broadcasters and 
digital platforms: 
The average unit costs 
amount to 390.000 
Euro for the support of 
63 projects associating 
European and non-
European broadcasters 
and VOD platforms 
over three years. 

91   

See footnote 2  

EN 

50 

   EN 

 
                                                 
Assumption 

Assessment 

productions,  films  are  not  widely  distributed.  Therefore  there  is  an  important  added 
value in terms of consumer choice.  

5.2.5. 

 Specific objective 3: Distribution and circulation support - Scenario 2 

Exhibit 25: Outputs and unit costs for specific objective 3, Scenario 2; 2011 to 2013 

Assumption 

Assessment 

1) Support to 
partnerships of 
right-holders, sales 
agents and 
distributors 160.000 
Euro per project, 540 
outputs 

4) Cinema network: 
The unit costs (per 
network) amount to 
1.47 million Euro. 15 
outputs over the three 
years period (5 
networks). 

Support is awarded to groupings of distributors, sales agents/ right-holders assembling 
rights for audiovisual works in different territories and on different formats/platforms. 
Unit  costs  comprise  a  maximum  of  30.000  Euro  per  film  and  territory  and  up  to  a 
maximum  of  550.000  Euro  per  grouping,  consisting  of  at  least  2  distributors  and  2 
sales  agents/right-holders  covering  at  least  10  territories  (=  country)  and  at  least  5 
audiovisual works. Unit costs were calculated on the basis of MEDIA 2007.  
Support  could  finance  up  to  50%  of  the  eligible  costs  (depending  on  the  territory, 
comprising  MG  =  minimum  guarantee;  P&P=  prints  and  production;  P&A  = 
promotion  and  advertising).  These  are  the  lowest  possible  costs  in  view  of  the 
complexity of releasing audiovisual works in various regions of the world. Over the 
three  year  period  540  consortia  (minimum  2700  audiovisual  works)  should  be 
supported.  As  per  the  MEDIA  evaluations,  fewer  outputs  would  not  lead  to  a 
sustainable effect on the market to reach the critical mass for distribution. This action 
is  complementary  to  MEDIA  2007;  and  export  strategies  exist  only  on  a  unilateral 
level in Member States.  
The  European  added  value  lies  in  the  mutuality  of  the  approach,  to  the  benefit  of 
visibility  and  diversity  of  films  and  consumer  choice:  By  providing  concentrated 
support to groupings of distributors, sales agents/ right-holders, this action is expected 
to considerably contribute to the objective of 7% market share for EU works in third 
countries and vice versa over the three years.  

The unit costs are based on the experience from MEDIA 2007 and in particular from 
Lot  3  (cinema  networks)  from  the  first  year  of  the  Preparatory  Action  MEDIA 
International  (700  000  Euro  for  putting  in  place  one  network).  Discussions  with 
experts confirmed the desirability to support new and additional networks, so that the 
different  segments  of  the  exhibition  market  and  different  audiences  can  be  reached. 
Hence, the envisaged output of 5 networks per year. 
Considering  the  number  of  cinemas  participating  in  such  networks  and  the  direct 
effect on the value chain, the unit costs are very low. Compared with the only existing 
cinema  network on  an  European  level, which receives  7 million  Euro from  MEDIA 
for 1500 screens, this action will be able to support an average of 300 screens in each 
network.  The  support  would  encourage  cinemas  to  show  a  certain  rate  of  European 
and third countries' films, by subsidising 50% of the exhibition costs.   
Member  States  are  not  running  such  networks  on  European  or  international  level. 
Therefore  there  is  an  important  added value  in  that films  are  exhibited beyond  their 
national  borders,  significantly  contributing  to  global  cultural  diversity.  Therefore 
there would be important European added value in terms of the implementation of the 
UNESCO convention on cultural diversity. 

5) Support to 
broadcasters and 
digital platforms: 
The average unit costs 

Unit cost is based on the MEDIA 2007 experience with the VOD support scheme and 
on discussions with experts. 
Considering  the  rigidity  of  the  broadcasting  market  (high  competition  between 
programmes,  risk  adversity  in  particular  relating  to  non  national  and  non  US- 

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Assumption 

Assessment 

amount to 390.000 
Euro for the support of 
63 projects associating 
European and non-
European broadcasters 
and VOD platforms 
over three years. 

productions),  groupings  of  broadcasters  could  tackle  these  problems  and  obtain  a 
price  lower  than  the  average  market  price.  This  goes  hand  in  hand  with  the  new 
Audiovisual  Media  Service  Directive92,  which  qualifies  co-productions  as  European 
works. 
For VOD platforms, the average unit cost is lower than the MEDIA-supported VOD 
platforms (average unit cost of 411.000 Euro). 
The  envisaged  output  of  63  projects  would  be  split  between  broadcasters  and  VOD 
to 
the  new 
platforms  reflecting 
internationally distribute content. 
The  financial  contribution  would  cover  50%  of  the  costs  so  as  to  ensure  the 
commercial viability and visibility of the selected projects, which is a key element in 
a very competitive environment. 
Member  States  are  not  financing  similar  projects  and,  apart  from  national  and  US 
productions,  films  are  not  widely  distributed.  Therefore  there  is  an  important  added 
value in terms of consumer choice.  

technological  challenges  and  opportunities 

Under both these scenarios almost 50% of the budget would be devoted to specific objective 3. Firstly, 
in relation to the problems identified and to the general objectives pursued by the programme MEDIA 
Mundus  (circulation/diversity),  it  is  reasonable  to  concentrate  a  large  part  of  the  intervention  on  the 
activities' segment dedicated to international circulation and distribution of audiovisual works. Such a 
strategy is justified by the results of the ex-post evaluations of the MEDIA programmes and the results 
of the public consultation. The MEDIA evaluations show the excellent cost-effectiveness ratio of the 
interventions on this segment and their short-term impact on the  circulation of non-national European 
works inside the European Union (2/3 of the non national European films circulating in Europe have 
benefited  from  the  distribution  support  of  MEDIA  2007).  In  line  with  the  objectives  of  MEDIA 
Mundus, all actions contributing significantly to their achievement have been included: In addition to 
the distributors, the sales agents, the right-holders and the cinemas, they include schemes for television 
networks and for new distribution supports (VOD platform). In view of the above, the proportion of 
the MEDIA Mundus budget devoted to distribution/circulation is moderate (see also section 5.6 and 
5.8 below). 

5.2.6. 

Specific objective 4: Reach new audiences and promote film literacy 

Exhibit 26: Outputs and unit costs for specific objective 4, Scenarios 1 and 2; 2011 to 2013 

Assumption 

1) Festivals are 
supported with 
average unit costs of 
50.000 Euro. 280 
outputs 

Assessment 

Costs  were  calculated  on  the  basis  of  experience  with  MEDIA  2007,  where  100 
festivals receive an average of 35 000 Euro yearly. To focus the support in the context 
of  MEDIA  Mundus  on  the  most  important  festivals  throughout  the  world,  only  90 
festivals would receive support (280 outputs over three years). An average amount of 
50 000 Euro would be allocated in order to incite festivals to participate. 
Circulation of audiovisual works in the context of festivals is one important condition 
to  give  a  platform  to  audiovisual  works  and  make  them  interesting  for  international 
distribution.  The  costs  calculated  are  the  lowest  costs  possible  in  order  to  give  an 
incentive to present a culturally diverse offer of films. Eligible festivals would have to 
show at least 25% of European films in third countries and vice versa. Support would 
cover up to 50% of the eligible costs, i.e. those related to showing the films (approx. 
8-10% of the festival costs) and support would not exceed 80.000 Euro where several 
festivals introduce a joint request, and 35.000 Euro if the application is  made by an 
European intermediary.  

92   

See footnote 2  

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52 

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Assumption 

Assessment 

2) Special events 
Support is planned for 
30 promotional events 
over a three year 
period with an average 
unit cost of 300.000 
Euro. 

3) Network for 
targeting young 
audiences including 
education activities. 
Over the three year 
period 30 such 
networks and 
partnerships would be 
financed at a unit cost 
of 220.000 Euro. 

4) Support for TV 
programmes 
dedicated to young 
audiences. 
Over the three year 
period this action 
would co-finance the 
dubbing of 260 films 
to be broadcast, with a 
unit cost of 30.000 
Euro. 

The financing of festivals has an important leverage effect. There is a European added 
value,  in  that  festivals  with  a  diverse  programme  in  Europe  contribute  to  cultural 
diversity and consumer choice and outside the Union the visibility of European films 
would be strengthened.   

Support  would  cover  events  like  ex-Cinedays93,  and  Picture  Europe94,  to  raise 
awareness  and  create  "market  space"  for  the  promotion  of  European  films  and  vice 
versa.  Events  would  for  example  include  "European  film  festivals"  organised  by  a 
subcontractor for at least 10 EU delegations (or other public bodies) in third countries. 
The  eligible  costs  would  include  the  buying  of  the  rights  and  the  transport  of  the 
prints.  The  organiser  of  the  festival  would  need  to  provide  the  facilities  and  the 
infrastructure.  
These actions would enable spectators to see a cultural diverse sample of films. The 
costs are the lowest possible and have been calculated on the basis of past experience. 
Such festivals will not generate income, the promotional aspect is at the very fore. 
The  output  of  10  promotional  events  per  year  is  a  minimum  to  allow  a  number  of 
focused events via different media and in different geographic zones. 
Currently  it  is  very  difficult  to  organise  such  screenings,  because  for  each  film 
individually rights and prints need to be obtained. To have a subcontractor organising 
all this is of important added value.   

The  costs  and  the  number  of  outputs  (30  over  the  three  year  period)  are  based  on 
experience  with  cinema  networks,  festivals  and  the  organisation  of  events  in  the 
context  of  various  generations  of  MEDIA  programmes.  Feature  films,  children’s 
documentaries, short films and animations would be presented to young audiences, in 
each case combined with an educational programme. Eligible costs would cover 60% 
of the exhibition costs (including acquisition of rights and dubbing of the films) and 
60-80% of the educational programme and of transport costs for children, depending 
on  the  location.  With  a  lower  co  financing  rate  it  would  be  difficult  to  find  the 
respective partners with a similar international focus and investment capacity.  
In  Europe  children  would  see  films  from  third  countries  and  in  third  countries 
European  films  would  be  screened.  Similar  activities  exist  at  national  level  but  not 
promoting international cinema. The long term impact on viewing habits and the early 
education to cultural diversity, as well as the exhibition of films beyond their national 
borders  are  of  added  value  and  justify  the  intervention.  Therefore  there  would  be 
important  European  added  value  in  terms  of  the  long-term  implementation  of  the 
UNESCO convention on cultural diversity. 

Costs  were  calculated  on  the  basis  of  experience  with  distribution  support  schemes 
and a study on dubbing and subtitling95.  
The ceiling of the MEDIA 2007 contribution for dubbing is fixed at 40 000 Euro, an 
average  of  30  000  Euro  would  encourage  quality  dubbing.  Support  under  MEDIA 
Mundus would amount to 50% of the dubbing costs.  
Broadcasters  need  an  incentive  for  broadcasting  more  international  programmes  for 
children. The envisaged output is 260 films, a lower intervention rate  would not be a 
sufficient incentive and fewer outputs would not provide for sufficient global media 
coverage.  
There is an added value in that European broadcasters would show more third country 
films  and  broadcasters  from  third  countries  more  European  films.  This  cannot  be 
achieved  at  Member  State  level  and  contributes  to  the  implementation  of  the 
UNESCO convention on cultural diversity. 

93 

94 
95  

Cinedays  =  Organised  for  the  first  time  in  2002,  CINEDAYS  consisted  of  a  Europe  wide  programme  of  major 
European films in cinemas, TV and film libraries, with special showings organised, particularly for schools. 
http://www.pictureurope.eu/2008/en/flashintro_PE.php . 
http://ec.europa.eu/information_society/media/overview/evaluation/studies/index_en.htm  

EN 

53 

   EN 

 
                                                 
5.3. 

Assumptions on the cost effectiveness and the European added value regarding 
the different operational objectives; Scenario 3  

The following exhibits present the assumptions regarding unit costs and outputs and assess the added 
value of each proposed activity in relation to the proposed budget. 

5.3.1. 

Specific objective 1: Information exchange and market intelligence – Scenario 3 

Exhibit 27: Outputs and unit costs for specific objective 1, Scenario 3, 2011 to 2013 

Assumption 

Assessment 

1) Support for 
continuous training 
45 trainings over 3 
years, with an average 
unit cost of 60.000 
Euro (including 
scholarships). Some 
(between 20% and 30 
%) of the supported 
measures will consist 
in an extension of 
training measures 
supported under 
MEDIA 2007. 

Unit costs are based on the first year of the Preparatory Action MEDIA International 
(out of the 11 supported projects, two were extensions of continuous training projects 
supported  under  MEDIA  2007.  The  average  costs  of  these  extensions  were  35.000 
Euro, the costs of the non-extension projects amounting on average to 123.000 Euro.) 
A minimum  investment is required to set up the training, rent the premises, pay the 
trainers  etc.  Support  would  amount  to  50%  80%  depending  on  the  locations  for  the 
training  and  the  geographic  origin  of  the  partners  and  participants.  This  rule  was 
already  successfully  applied  in  the  first  year  of  the  Preparatory  Action  MEDIA 
International.  
The total output of 45 trainings over 3 years was calculated on the basis of the first 
year of the Preparatory action MEDIA International (11 continuous training projects 
have been supported with a global community contribution of 0.78 Mio Euro.  
A  comparable  global  approach  does  not  exist  in  national  support  systems,  However 
awareness and knowledge of global markets is a precondition for players to make the 
most of their potential and to improve global circulation of works. In order to achieve 
these objectives only a pan –European approach can ensure  added value.  

5.3.2. 

Specific objective 2: Competitiveness and distribution - Scenario 3 

Exhibit 28: Outputs and unit costs for specific objective 2, Scenario 3;  2011 to 2013 

Assumption 

Assessment 

1) Organisation of 
co-production 
markets and partner 
search events 
(pitching) 
110.000 Euro per 
event. Total output of 
16 events 

Under the Preparatory Action MEDIA International costs for similar actions were on 
average 110.000 Euro.  
Financing  would  amount  to  50-80%,  depending  on  the  nature  of  the  event,  for 
example  whether  it  is  taking  place  in  the  context  of  a  festival  (50%  only),  and  also 
depending on the geographical origin of the partners and the country where the event 
would take place. 
The number of events would decrease in the second and third year of the programme. 
In regard with the first year of the preparatory action MEDIA International, 16 events 
over a three year period is a minimum number in order to ensure  the selection of high 
quality projects (i.e. not a quantitative approach) and to cover all geographical zones 
of interest. 
The  action  is  complementary  to  actions  in  Member  States,  which  mostly  have  a 
national  focus.  Here,  Europe  will  be  presented  at  pitching  events  in  all  its  cultural 
diversity and can offer access to a large market, and this will guarantee the interest of 
strategically important international investors. The added value for the participants is 
the possibility to meet various investors from strategic markets, willing to invest.  

2) Support to 
partnerships of 

Support is awarded to groupings of distributors, sales agents/ right-holders assembling 
rights for audiovisual works in different territories and on different formats/platforms. 

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54 

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Assumption 

Assessment 

right-holders, sales 
agents and 
distributors 160.000 
Euro per project, 21 
outputs 

Unit  costs  comprise  a  maximum  of  30.000  Euro  per  film  and  territory  and  up  to  a 
maximum  of  550.000  Euro  per  grouping,  consisting  of  at  least  2  distributors  and  2 
sales  agents/right-holders  covering  at  least  10  territories  (=  country)  and  at  least  5 
audiovisual works. Unit costs were calculated on the basis of MEDIA 2007.  
Support  could  finance  up  to  50%  of  the  eligible  costs  (depending  on  the  territory, 
comprising  MG  =  minimum  guarantee;  P&P=  prints  and  production;  P&A  = 
promotion  and  advertising).  These  are  the  lowest  possible  costs  in  view  of  the 
complexity of releasing audiovisual works in various regions of the world. Over the 
three year period 21 consortia (minimum 100 audiovisual works) should be supported. 
As per the MEDIA evaluations, fewer outputs would not lead to a sustainable effect 
on the market to reach the critical mass for distribution. This action is complementary 
to  MEDIA  2007;  and  export  strategies  exist  only  on  a  unilateral  level  in  Member 
States.  
The  European  added  value  lies  in  the  mutuality  of  the  approach,  to  the  benefit  of 
visibility  and  diversity  of  films  and  consumer  choice:  By  providing  concentrated 
support to groupings of distributors, sales agents/ right-holders, this action is expected 
to contribute to the objective of 7% market share for EU works in third countries and 
vice versa over the three years.  

5.3.3. 

Specific objective 3: Circulation - Scenario 3 

Exhibit 29: Outputs and unit costs for specific objective 3, Scenario 3; 2011 to 2013 

Assumption 

Assessment 

1) Cinema network: 
The unit costs (per 
network) amount to 
0.54 million Euro. 5 
outputs over the three 
years period (2 
networks). 

2) Support to 
broadcasters and 
digital platforms: The 
average unit costs 
amount to 390.000 
Euro for the support of 

The unit costs are based on the experience from MEDIA 2007 and in particular from 
Lot  3  (cinema  networks)  from  the  first  year  of  the  Preparatory  Action  MEDIA 
International  (700  000  Euro  for  putting  in  place  one  network).  Discussions  with 
experts confirmed the desirability to support new and additional networks, so that the 
different segments of the exhibition market and different audiences can be reached. 
Hence, the envisaged output of 2 networks per year. 
Considering  the  number  of  cinemas  participating  in  such  networks  and  the  direct 
effect  on  the  value  chain,  the  unit  costs  are  very  low.  Compared  with  the  only 
existing cinema network on an European level, which receives 7 million Euro from 
MEDIA  for  1500  screens,  this  action  will  be  able  to  support  an  average  of  300 
screens  in  each  network.  The  support  would  encourage  cinemas  to  show  a  certain 
rate  of  European  and  third  countries'  films,  by  subsidising  50%  of  the  exhibition 
costs.   
Member  States  are  not  running  such  networks  on  European  or  international  level. 
Therefore there is an important added value in that films are exhibited beyond their 
national  borders,  significantly  contributing  to  global  cultural  diversity.  Therefore 
there  would  be  important  European  added  value  in  terms  of  the  implementation  of 
the UNESCO convention on cultural diversity. 

Unit  cost  is  based  on  the  MEDIA  2007  experience  with  the  VOD  support  scheme 
and on discussions with experts. 
Considering  the  rigidity  of  the  broadcasting  market  (high  competition  between 
programmes,  risk  adversity  in  particular  relating  to  non  national  and  non  US- 
productions),  groupings  of  broadcasters  could  tackle  these  problems  and  obtain  a 

EN 

55 

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Assumption 

Assessment 

5 projects associating 
European and non-
European broadcasters 
and VOD platforms 
over three years. 

3) Support for 
networks/partnerships 
dedicated to film 
literacy: Over the three 
year period 18 such 
networks and 
partnerships would be 
financed at a unit cost 
of 50.000 Euro. 

price  lower  than  the  average  market  price.  This  goes  hand  in  hand  with  the  new 
Audiovisual Media Service Directive96, which qualifies co-productions as European 
works. 
For VOD platforms, the average unit cost is lower than the MEDIA-supported VOD 
platforms (average unit cost of 411.000 Euro). 
The  envisaged  output  of  5  projects  would  be  split  between  broadcasters  and  VOD 
platforms  reflecting 
to 
the  new 
internationally distribute content. 
The  financial  contribution  would  cover  50%  of  the  costs  so  as  to  ensure  the 
commercial viability and visibility of the selected projects, which is a key element in 
a very competitive environment. 
Member  States  are  not  financing  similar  projects  and,  apart  from  national  and  US 
productions, films are not widely distributed. Therefore there is an important added 
value in terms of consumer choice.  

technological  challenges  and  opportunities 

The  costs  and  the  number  of  outputs  (18  over  the  three  year  period)  are  based  on 
experience  with  cinema  networks,  festivals  and  the  organisation  of  events  in  the 
context  of  various  generations  of  MEDIA  programmes.  Feature  films,  children’s 
documentaries, short films and animations would be presented to young audiences, 
in each case combined with an educational programme. Eligible costs would cover 
50% of the exhibition costs (including acquisition of rights and dubbing of the films) 
and 50-80% of the educational programme and of transport costs for children. With a 
lower  co  financing  rate  it  would  be  difficult  to  find  the  respective  partners  with  a 
similar international focus and investment capacity.  
In  Europe  children  would  see  films  from  third  countries  and  in  third  countries 
European films would be screened. Similar activities exist at national level but not 
promoting  international  cinema.  The  long  term  impact  on  viewing  habits  and  the 
early education to cultural diversity, as well as the exhibition of films beyond their 
national  borders  are  of  added  value  and  justify  the  intervention.  Therefore  there 
would be important European added value in terms of the long-term implementation 
of the UNESCO convention on cultural diversity. 

Under scenario 3, most of the operational objectives and actions of specific objective 3 of scenarios 1 
and  2  have  been  split  into  the  two  following  objectives:  "Competitiveness  and  distribution"  and 
"Circulation".  Hence, 60% of the budget would be devoted to distribution and circulation actions (vs 
around  50%  in  the  case  of  scenarios  1  and  2).  In  relation  to  the  problems  identified,  to  the  general 
objectives  pursued  by  the  programme  MEDIA  Mundus  (circulation/diversity)  and  to  the  smaller 
budget of scenario 3, it is extremely important to concentrate a larger part of the intervention on these 
activity segments rather than that planned under scenarios 1 and 2.  

5.4. 

Comparison of alternative specific objectives / action lines 

Exhibits 30 and 31 summarises the extent to which the different operational objectives detailed and 
assessed under sections 4.5 and 5.2 are cost effective in relation to the global objectives identified in 
section 3. 

Exhibit 30: Likely effectiveness of the different objectives, Scenarios 1 and 2 

 Specific Objective 1: Information exchange and market intelligence 

RELEVANCE 
TO REACH 
OBJECTIVES 

96   

See footnote 2  

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56 

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1) Building up Websites and Databases 

2) Network of contact points 

3) Certification of training establishments 

4) Initial training 

5) Continuous training  

6) Market access mechanisms 

OPTIONS Specific Objective 2: Facilitating international co-production activities 

Scenario 1 

 1) Development 

a) Development fund for co-productions  

b) Co-production markets/partner search (pitching) 

 2) Co-production 

a) Co-production fund for feature films  

b) Co-production fund for animation films 

c)Co-production fund for documentary films 

c) Gap financing 

Specific Objective 2: Facilitating international co-production activities 

Scenario 2 

 1) Development 

a) Script development 

b) Co-production markets/partner search (pitching) 

 2) Co-production 

a) Supplement existing co-production funds 

b) Access to finance  

Specific Objective 3: Distribution and circulation support 

Scenario 1 

1) Support to sales agents  

2) Automatic distribution support 

3) Selective distribution support 

4) Cinema network 

5) Support to broadcasters and digital platforms 

Specific Objective 3: Distribution and circulation support 

Scenario 2 

1) Support to partnerships of right holders, sales agents and distributors 

2) Cinema network 

3) Support to broadcasters and digital platforms 

Specific Objective 4 : Reach new audiences and promote film literacy 

High 

Moderate to high 

None 

Moderate to high 

High 

High 

RELEVANCE 
TO REACH 
OBJECTIVES 

Moderate 

High 

Moderate 

Moderate 

Moderate 

Moderate 

RELEVANCE 
TO REACH 
OBJECTIVES 

High 

High 

Moderate to high 

Moderate to high 

RELEVANCE 
TO REACH 
OBJECTIVES 

Moderate  

Moderate  

Moderate 

High 

High 

RELEVANCE 
TO REACH 
OBJECTIVES 

High 

High 

High 

RELEVANCE 
TO REACH 
OBJECTIVES 

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1) Festivals 

2) Special events 

3) Networks for targeting young audiences including education activities 

4) Support for TV programmes dedicated to young audiences 

Exhibit 31: Likely effectiveness of the different objectives, Scenario 3 

 Specific Objective 1: Information exchange and market intelligence 

1) Continuous training  

Specific Objective 2: Competitiveness and distribution  

1) Co-production markets/partner search (pitching) 

2) Support to partnerships of right holders, sales agents and distributors 

Specific Objective 3: Circulation 

1) Cinema network 

2) Support to broadcasters and digital platforms 

3) Support for networks/partnerships dedicated to film literacy 

High 

High 

High 

High 

RELEVANCE 
TO REACH 
OBJECTIVES 

High 

High 

High 

High 

RELEVANCE 
TO REACH 
OBJECTIVES 

High 

High 

High 

5.5. 

Conclusion regarding the preferred operational objectives 

5.5.1. 

Scenarios 1 and 2 

In respect of specific objective 1: one action was discarded, the certification of training institution (see 
Section 4.5.1. for details). 

In  respect  of  specific  objective  2:  scenario  2  was  considered  to  be  the  most  cost-effective  and  all 
proposed actions were evaluated favourably. The proposed actions under scenario 1 were less effective 
and in addition had high administration costs. Facilitating international co-production activities, it is 
significantly less costly for the Commission to support existing funds compared to setting up funds for 
the  development  and  the  financing  of  co-productions.  Furthermore,  Member  States  have  questioned 
whether  direct  funding  of  co-productions  would  be  compatible  with  the  subsidiarity  principle.  In 
addition the high administrative costs mean that cost effectiveness is further reduced. 

In respect of specific objective 3: scenario 2 was considered to be the most effective and all proposed 
actions  were  evaluated  favourably.  For  distribution  support,  one  operational  objective  focusing  on 
partnerships between right holders, sales agents and distributors appears to be more realistic to achieve 
the objectives of the initiative of 7% market share for EU works in third countries and vice versa over 
the three years, and would also follow the concept of mutual benefit. This takes account of differences 
in market structures inherent in European and international markets. On this basis exhibit 27 presents 
the preferred operational objectives:  

In  respect  of  specific  objective  4:  all  actions  were  favourably  evaluated  as  contributing  to  the 
achievement of and all proposed actions were evaluated favourably o this objective. 

Exhibit 32: Table of preferred operational objectives between the scenario 1 and the scenario 2 

Specific Objective 1: Information exchange and market intelligence 

EN 

58 

   EN 

 
 
 
 
1) Building up Websites and Databases 

2) Network of contact points 

4) Initial training 

5) Continuous training  

6) Market access mechanisms 

Specific Objective 2: Facilitating international co-production activities 

 1) Development 

a) Script development 

b) Co-production markets/partner search (pitching) 

 2) Co-production 

a) Supplement existing co-production funds 

b) Access to finance  

Specific Objective 3: Distribution and circulation support 

1) Support to partnerships of right holders, sales agents and distributors  

2) Cinema network 

3) Support to broadcasters and digital platforms 

Specific Objective 4 : Reach new audiences and promote film literacy 

1) Festivals 

2) Special events 

3) Networks for targeting young audiences including education activities 

4) Support for TV programmes dedicated to young audiences 

5.5.2. 

Scenario 3 

The "crisis" scenario has been built in a way to maximise the effectiveness of the intervention given 
the budgetary constraint. Hence, only the most effective operational objectives and actions have been 
selected.  They  have  been  gathered  in  a  narrower  framework  limited  to  three  specific  objectives 
(against 4 in the case of scenarios 1 and 2).    

Exhibit 33: Table of preferred operational objectives, Scenario 3 

Specific Objective 1: Information exchange and market intelligence 

1) Continuous training  

Specific Objective 2: Competitiveness and distribution 

1) Co-production markets/partner search (pitching) 

2) Support to partnerships of right holders, sales agents and distributors  

Specific Objective 3: Circulation 

1) Cinema network 

2) Support to broadcasters and digital platforms 

3) Support for networks/partnerships dedicated to film literacy 

EN 

59 

   EN 

 
 
   
5.6. 

Extension  of  MEDIA  2007  versus  creation  of  a  new  programme  MEDIA 
Mundus 

The  question  arises  whether  "extending  MEDIA  2007"  or  "creating  a  new  programme  MEDIA 
Mundus" would be more effective for implementing the above assessed actions.  

From a procedural point of view both options would require a co-Decision procedure so there would 
be little difference between an amendment of the existing legal basis of MEDIA 2007 and the creation 
of a new programme.  

MEDIA 2007 is a support instrument for the internal market and it is not the objective to replace this 
instrument for the internal market, which is now in its fourth generation and has been progressively 
adapted to the needs of the European audiovisual industry. Therefore one could only add the proposed 
actions  to  the  already  existing  actions  under  MEDIA  2007  as  new  strands  alongside  the  existing 
activities  supported  by  the  MEDIA  2007  programme.  One  major  problem  is  that  these  new  strands 
would  not  fit  into  the  concept  of  MEDIA  2007.  Although  several  of  the  proposed  actions  cover 
activities  similar  to  those  in  MEDIA  2007  (Training,  development,  distribution,  festivals…),  the 
objectives pursued, their functioning, the professionals they concern are radically different from those 
of MEDIA 2007. The support amounts and intensities underline these strong differences. Other actions 
have been proposed under MEDIA Mundus but are not part of MEDIA 2007 (for example support to 
broadcasters,  support  to  existing  co-production  funds,  literacy  activities).  Therefore  the  integration 
into MEDIA 2007 would be counterproductive since it would create confusion amongst professionals 
and dilute the impact of the existing programme. Indeed, the separation of the MEDIA International 
preparatory  action  has  shown  how  important  a  separate  programme  would  be  in  terms  of  clearly 
defining objectives and support strands. 

Furthermore, it would not be possible to "extend" in any event the activities under MEDIA 2007 since 
although  some  current  beneficiaries  would  also  submit  international  cooperation  projects,  the  target 
group  would  not  be  the  same  and  the  impact  is  not  achieved  through  the  same  mechanisms.  Since 
wholly  separate  actions  would  be  required  to  implement  the  proposals  there  are  no  advantages  to 
extending  the  current  programme  but  only  drawbacks  evidenced  by  the  differences  between  the 
activities. For example, MEDIA 2007 supports (as a separate mechanism) automatic distribution based 
on entries certified by Member State authorities allocated to individual distributors whereas MEDIA 
Mundus  would  award  funding  to  a  grouping  of  distributors,  sales  agents  and  right  holders  on  a 
selective basis covering a number of territories for different films. In addition certain priorities under 
the existing programme such as reducing the imbalances in the European audiovisual market have no 
relevance  in  an  international  context,  highlighting  the  fundamental  differences  in  the  approach 
required for international cooperation. 

From  the  point  of  view  of  costs,  the  costs  of  integrating  the  strands  into  MEDIA  2007  would  be 
identical with the costs for a new programme. The executive agency EACEA, already dealing with the 
MEDIA 2007 programme would be entrusted with MEDIA Mundus. Therefore the synergies would be 
the same in both cases.  

Exhibit 34: Comparison of policy option 2 (extension of MEDIA 2007) and policy option 3 (creation 
of a new instrument) 

Success criteria 

Policy Option 2.1.  

Policy Option 2.2. 

Policy Option 3 

Extension of MEDIA 
2007 (article 8) (see 
section 4.4 above) 

Extension of MEDIA 
2007 (integrating 
international activities) 

Creation of a New 
Instrument 

Feasibility of option 

Costs for EU budget 

Low 

Low 

Low 

Medium 

High 

Medium 

EN 

60 

   EN 

 
Success criteria 

Policy Option 2.1.  

Policy Option 2.2. 

Policy Option 3 

Extension of MEDIA 
2007 (article 8) (see 
section 4.4 above) 

Extension of MEDIA 
2007 (integrating 
international activities) 

Creation of a New 
Instrument 

Likelihood for achieving 
global and specific 
objectives 

Time needed for 
implementation of 
options 

Risks involved  

Contribution to better and 
transparent legislation 

Low 

High 

High  

Low 

Medium 

Low 

Medium  

Low 

High 

Low 

Low 

High 

Overall assessment 

Not recommended: 

Medium:  

Recommended: 

Unlikely to sufficiently 
contribute to achieving 
the objectives 

Most transparent and 
effective option to 
achieve the objectives 

Same costs and effects as 
option 3 but could be 
counterproductive since 
likely to create confusion 
amongst professionals 
and dilute the impact of 
the existing programme 

5.7. 

Risks and counter measures 

Risk management is fundamental for the further programme design. In the following section the risks 
that are likely to occur are identified and are assessed regarding the potential impact on the programme 
if the risk were to occur: 

1) Risk of dependency on public financing: there might be a risk to increase the dependence of the 
audiovisual  industry  on  public  funding.  However,  the  aim  of  the  instruments  to  be  developed  is  to 
provide  a  leverage  effect  and  to  create  a  favourable  socio-economic  environment  for  European 
companies  to  improve  their  competitiveness  and  therefore  to  enhance  their  financial  sustainability. 
The actions to be implemented would to a large extent consist of incentives for companies to seek for 
“private” funding abroad, mainly upstream and downstream of the production stage For example: joint 
training measures would enable companies to build up networks with partners from third countries in 
order to “enlarge” the market for European companies or when opening new distribution markets, it 
would  be  the  aim  of  the  programme  to  expand  the  potential  market  of  the  works  produced  by 
European independent companies, consequently expanding the potential return on investments in the 
sector.  This  higher  return  on  investment  would  provide  them  with  additional  working  capital  to 
develop new projects and to a certain degree make them less dependent on public interventions. The 
creation of a new fund (as already shown by the various generations of MEDIA programmes) does not 
create  greater  dependency  but  encourages  the  creation  of  networks  and  the  inclusion  of  a 
European/global dimension in projects.  

As  a  counter  measure,  co-financing  will  be  the  rule,  obliging  companies  to  co-finance  with  proper 
funding. 

2) Sectoral risks: With its particular value chain and production cycle the audiovisual sector carries 
very  high  financial  risks  (see  section  2.3).  As  a  counter  measure  MEDIA  Mundus  would  aim  at 
reducing  such  risks  by  improving  access  to  international  finance  for  the  sector’s  small  and  medium 

EN 

61 

   EN 

 
 
 
sized enterprises and by favouring networking in view of international co-productions. The latter can 
contribute  directly  by  increasing  the  production  budget  and  therefore  the  potential  circulation  of  the 
works  and  indirectly  by  diminishing  the  investment  risk  thanks  to  the  increase  of  revenues  from 
exploitation,  which  would  in  turn  attract  private  capital  into  production  financing.  As  it  requires 
massive investments upfront without any guaranteed results distribution is a particularly risky activity. 
That is why a substantial part of the budget would be dedicated to distribution activities.  

3) Risks of running the programme: From a general point of view, flexibility to adapt the programme 
to changing economic and technological circumstances should be guaranteed by instruments for close 
monitoring  of  the  European  and  international  audiovisual  sector:  trend  analysis  studies  and  expert 
advisory  groups  and  by  regular  audits  (ca.  30  per  year)  of  the  beneficiary  companies.  As  a  counter 
measure    a  contact  points  network  in  various  regions  of  the  world  should  help  reduce  risks  (1)  by 
monitoring  foreign  audiovisual  markets  in  terms  of  market  opportunities,  (2)  by  describing  for  each 
country the difficulties and structural risks likely  to affect the effectiveness of MEDIA Mundus and 
(3) by identifying for each country the potential and the conditions, but also the risks for cooperation 
with the European audiovisual industry (i.e. information on reliability of potential partners).  

3) Risks of monitoring the programme: There will be two levels of monitoring, the programme and 
the  individual  projects.  In  respect  of  the  individual  projects  see  "financial  viability  risks"  below.  In 
respect  of  the  implementation  of  the  programme  objectives,  counter  measures  will  include  close 
monitoring  of  the  European  and  international  audiovisual  sector:  trend  analysis  studies  and  expert 
advisory  groups.  This  will  enable  the  guidelines  to  be  modified  as  required  to  ensure  that  the 
programme as implemented closely corresponds to the objectives set out. 

4) Financial viability risks: in a very volatile sector, mainly made up of SMEs, risks of bankruptcies 
and non completion of the projects are real. It is all the more true as some companies might explore 
the  international  market  for  the  first  time  with  MEDIA  Mundus.    As  a  counter  measure  particular 
attention will be paid to financial viability check and, where appropriate, for example bank guarantees 
will  be  requested  from  beneficiaries  or  beneficiaries  will  not  receive  pre-financing  but  will  only 
receive any grant after completion of the project and presentation of the final report. 

5) Risk of lack of response from the professionals: there is always some uncertainty as to the reaction 
of the potential beneficiaries of a new initiative. As a counter measure professionals of the audiovisual 
sector have been extensively consulted (see section 1.2): they have clearly expressed their needs, their 
interest  and  their  willingness  to  participate,  which  was  confirmed  by  their  response  to  the  call  for 
proposals  for  the  Preparatory  Action  MEDIA  International.  As  demonstrated  above  the  instruments 
already  in  place  (Euromed  Audiovisual,  ACP  support  programme,  Ibermedia,  international  film 
funds…)  will  not  prevent  professionals  from  participating  in  MEDIA  Mundus  since  they  have  a 
regional focus and/or a limited scope, a modest budget and no reciprocity dimension.  

6) Risk of overlap with MEDIA 2007 and EUROMED& ACP: As explained above, the Programme 
objectives  differ  significantly  from  those  of  both  MEDIA  2007  (internal  market)  and  the  two 
development  programmes  Euromed  Audiovisual  and  ACP  (see  section  4.3.-4.4.  above).  Where 
beneficiaries  could  receive  funding  from  more  than  one  programme  (as  is  currently  the  case  under 
MEDIA 2007 and Euromed Audiovisual) counter measures will be put in place to ensure there is no 
duplication of costs claimed. 

7)  Risk  of  losing  incentives  for  third  countries  not  to  take  WTO  commitments:  since  MEDIA 
Mundus  would  be  WTO  compatible  third  countries  would  be  able  to  participate  without  taking 
exemptions to the Most Favoured Nation (MFN) rule. They might therefore lose a major incentive to 
do so in the future. While acknowledging the risk it has to be said that it is still necessary to take MFN 
exemptions to participate in the MEDIA 2007 programme, so third countries still have an incentive not 
to take WTO commitments. 

EN 

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5.8. 

Lessons from the past 

The  numerous  evaluations  (ex-ante,  ex-post,  interim)  of  the  different  generations  of  the  MEDIA 
programme  (MEDIA  I,  1991-1995;  MEDIA  II  1996-2000;  MEDIA+  and  MEDIA  Training,  2001-
2006) had an impact on the set-up and design of the objectives and actions.  

Frequent  evaluations  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. It 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  
exhibition, national aid was chiefly for structures, while MEDIA II support was chiefly for cinemas to 
show European films. In the area of development, national aid was insignificant except in Germany, 
Finland  and  France.  MEDIA  II  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 area.  

The interim and final evaluation of MEDIA Plus and MEDIA Training confirmed the relevance and 
effectiveness of the MEDIA programmes, both in terms of strengthening the sector's competitiveness 
and  promoting  European  linguistic  and  cultural  diversity.  The  interim  evaluation  also  reported  "that 
MEDIA  acts  to  consolidate  the  Internal  market  and  to  improve  its  transparency,  to  facilitate  trade. 
Community action enables European industry to break through where American competition is at its 
strongest, i.e. on cinema screens, and provides durable funding for the companies in the audiovisual 
sector.  For  example  in  the  distribution  sector,  98  films  supported  by  the  MEDIA  Plus  Programme 
made more than 50,000 entries outside their country of origin. 11 even exceeded one million entries in 
2001. Overall, 9 films out of 10 distributed outside their country of origin benefited from  the aid of 
MEDIA". Furthermore, the MEDIA programmes supported the creation of Europa Cinemas: a cinema 
network  of  around  670  independent  theatres  with  more  than  1500  screens  in  some  300  cities  within 
Europe.  This  network  plays  a  key  role  in  boosting  the  screening  of  European  films  (and  especially 
non-national  ones)  within  Europe.  The  final  evaluation  also  confirmed  the  added  value  of  the 
Community action and notes concrete and sustainable effects on the industry: each Euro spent within 
the programme thus generates an average some 6 Euro in the European audiovisual industry. It also 
concluded:  "The main mechanisms of MEDIA contribute effectively towards enhancing competencies 
(Training),  developing 
the  pre-production  phase 
(Development),  improving  the  competitiveness  of  the  sector  (Distribution,  mainly,  by  reducing  risks 
and strengthening the beneficiaries' financial capacities) and promoting the cross border circulation 
of works (Distribution et Promotion)". Finally, the evaluation report of the MEDIA Plus programme97 
highlighted  the  importance  of  international  markets  to  overcome  the  problems  of  the  European 
audiovisual industry.  

the  European  dimension  of  works 

from 

The results of these evaluations have influenced the definitions and to a certain extent the assessment 
of the proposed activities. 

97  

http://ec.europa.eu/information_society/media/overview/evaluation/reports/index_fr.htm  

EN 

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5.9. 

Comparison of policy options 

A  comparative  assessment  of  the  three  basic  policy  options  shows  that  "business  as  usual"  does  not 
address  effectively  the  key  problem  of  poor  circulation  of  European  audiovisual  works  on 
international markets or of foreign films on European markets. "Business as usual" does not entail new 
costs,  but  has  a  negative  cost  (which  cannot  be  calculated  in  a  credible  way).  Without  a  further 
initiative  the  revenues  of  European  audiovisual  industries  will  be  limited  to  the  saturating  Internal 
Market and the European Audiovisual industry will lose out on international opportunities. 

The  options  "extending  the  existing  MEDIA  2007  programme"  by  amending  it  and  adding  the 
proposed actions (see exhibit 27 for selected actions after cost effectiveness discussion) would meet 
the  Community's  policy  objectives  and  the  industry's  needs.  Option  2  "extension  of  existing 
instruments" could include the activities proposed under Option 3 "creation of new instruments" if the 
legal  basis  of  MEDIA  2007  were  modified.  This  however  was  shown  to  be  less  effective  than  the 
creation of a new instrument (see sections 4.4 and 5.6 above).  

Therefore  the  recommendation  is  to  set  up  a  new  support  programme,  implementing  the  preferred 
actions  (see  exhibits  32  and  33  and details  in  annexes  11  and  12),  in order  to  meet  the  specific  and 
global objectives. 

Exhibit 35: Comparison of policy options 

Effectiveness 

Costs 

OPTION 1 

0 

negative 

OPTION 2 

Medium 

medium 

Risk 

high 

high 

OPTION 3 

High 

medium 

moderate 

Overall assessment 

Inoperable 

Inadequate 

Winwin 

6. 

SECTION 6: MONITORING AND EVALUATION 

Reliable  data  on  implementation  and  results  of  Community  intervention  has  to  be  the  basis  for  the 
evaluation of the impact of a new programme. Therefore, the definition of monitoring and evaluation 
arrangements  is  essential  for  the  potential  new  programme  The  following  sub-sections  6.1.  and  6.2. 
describe the methodological approach for monitoring and evaluation: 

6.1. 

Nature and frequency of the evaluation process 

Any evaluation of the programme should be done externally and independently, addressing relevance, 
effectiveness, efficiency and utility of the programme. 

In terms of the frequency of evaluations (the proposed programme should run between 2011 and 2013) 
one  final  evaluation  should  be  carried  out.  A  meaningful  assessment  of  impacts  and  results  in  the 
context of the ex-post evaluation report would be submitted to the European Parliament, the Council, 
the Economic and Social Committee and the Committee of the Regions by December 2015. 

Any  extension  of  the  programme  beyond  2013,  would  be  subject  to  an  ex  ante  evaluation  and  an 
external impact assessment study which would form the basis of a Communication on the continuation 
of the programme, to be presented to the European Parliament, the Council, the Economic and Social 
Committee  and  the  Committee  of  the  Regions  by  30  June  2012.  This  ex-ante  evaluation  would  be 
based on the results of the first 12 months of the new (3 year) programme and also of the preparatory 
action. It would, therefore replace a mid-term evaluation of the programme. It would follow standard 
evaluation  benchmarks.  It  would  thus  provide  valuable  input  for  deciding  on  adapting/modifying 
objectives/actions.  Immediate/initial  results  analysed  qualitatively  and  quantitatively  in  the  ex-ante 

EN 

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evaluation  would  feedback  into  both:  the  third  annual  work  programme  of  MEDIA  Mundus  (2011-
2013) and the decision making process for a possible extension of the programme beyond 2013.  

6.2.  Monitoring - Choice of indicators 

For the potential new programme, systematic collection of monitoring data would be based on clearly 
established objectives and indicators. 

Annex  15  illustrates  the  result  indicators  proposed  per  specific  objectives  and  annex  16  shows  the 
most important output indicators per operational objective / action line. 

The Commission would continuously monitor the programme and results of the monitoring would be 
taken into account in the implementation of the programme. 

EN 

65 

   EN