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  - Summary of the impact assessment {COM(2008) 892 final} {SEC(2008) 3098} {SEC(2008) 3102}
Date: 2009-01-09
Institutions: European Commission
Subjects: audiovisual industry, competitiveness, economic development, employment policy, innovation, third country, vocational training

EN 

EN 

   EN 

 
 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 9.1.2009 
SEC(2008) 3097 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 

SUMMARY OF THE IMPACT ASSESSMENT 

{COM(2008) 892 final} 
{SEC(2008) 3098} 
{SEC(2008) 3102} 

EN 

   EN 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
1. 

INTRODUCTION 

The  audiovisual  sector  is  an  essential  vector  for  creating  highly  skilled  future-oriented  jobs 
and  for  conveying  and  developing  cultural  values.  In  the  frame  of  the  Lisbon  strategy  the 
audiovisual  sector  is  particularly  relevant  and  contributes  to  the  Lisbon  agenda,  namely  to 
boost training, prosperity, growth and jobs in a knowledge-based economy. The audiovisual 
sector  plays  a  major  role  in  the  i2010  initiative  —  the  policy  umbrella  for  the  European 
Union’s information society and media policies — as part of the Lisbon agenda.  

Furthermore the audiovisual sector is important in the context 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. 

The major problem faced by the European audiovisual industry on international markets is the 
poor  circulation  of  audiovisual  works.  Foreign  films  —  other  than  those  from  Hollywood 
studios — face a similar problem of limited circulation on European markets, although there 
is a demand for more diverse audiovisual content. 

The international audiovisual landscape has changed significantly over the last two decades, 
notably from the impact of technological developments like multi-channel digital television, 
digital  cinema  projection  and  video  on  demand.  In  some  foreign  markets  this  has  created 
strong financial growth and promising investments and consequently, a growing demand for 
more audiovisual content. Structural weaknesses affecting the circulation of European works 
on foreign markets and inadequate financing of European audiovisual companies prevent the 
industry from benefiting fully from this new expansion of international opportunities. 

Against  this  background  the  Impact  Assessment  identified  two  overall  policy  goals  and 
general objectives for international cooperation: 

•  To increase the competitiveness of the EU audiovisual industry on global markets. 
•  To  increase  consumer  choice  and  cultural  diversity  on  the  European  and  international 

markets.  

Consultations with the main stakeholders and professionals, such as participants in the current 
MEDIA  2007  programme,  professionals  from  third  countries,  and  MEDIA  committee 
members have been extensive; an open public online consultation was launched in April 2008 
and  in  the  context  of  a  public  hearing,  several  conferences  and  meetings,  stakeholders 
provided  extensive  input.  Furthermore  several  services  of  the  Commission  have  been 
consulted  and  DG  INFSO,  the  author  DG,  concluded  a  service  contract  with  Technopolis  / 
Media Consulting Group to acquire external expertise on and input for the impact assessment 
integrating ex-ante evaluation requirements. 

2. 

BACKGROUND OF THE INITIATIVE 

Considering the problems and challenges for the European audiovisual sector arising from the 
internationalisation of markets the European Parliament adopted, on 13 December 2007, for 
the  2008  budget,  a  Preparatory  Action  MEDIA  International  focusing  on  developing 
European  Union  relations  with  third-country  audiovisual  markets.  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 

EN 

2 

   EN 

 
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”.  The  results  of  the  call  for  proposals  for  the  Preparatory  Action  showed  a 
rapid  and  strong  response  from  professionals  with  training,  promotion  and  cinema  network 
projects already covering the major Latin American and Asian markets. 

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

3. 

PROBLEM DEFINITION AND RATIONALE FOR THE INTERVENTION 

The  major  problem  identified  by  the  Impact  Assessment  for  the  European  audiovisual 
industry on international markets is the poor circulation of audiovisual works. This problem 
affects not only European professionals who cannot fully benefit from the internationalisation 
of audiovisual markets but also the consumers that are faced with a limited choice and limited 
cultural  diversity.  The  European  Union  itself,  a  major  player  in  the  negotiation  of  the 
UNESCO  Convention  on  Cultural  Diversity,  is  therefore  confronted  with  high  expectations 
regarding its implementation, and could risk losing its credibility in this regard. 

The  reasons  underlying  the  poor  circulation  of  audiovisual  works  are  the  following:  the 
different  European  markets  are  fragmented  not  only  on  the  basis  of  language  but  also  of 
market structure. The problem lies with the market size; the original market size determines 
the strength of the industry on the international stage. Individually all the Member States (and 
most of their foreign counterparts) have relatively small markets compared to that of the USA. 
The  distribution  structure  in  Europe  is  made  up  of  small  individual  companies,  unlike  their 
large  multinational  vertically-integrated  counterparts  in  the  USA;  hence  the  lack  of 
competitiveness  of  the  European  audiovisual  industry.  In  addition  European  companies 
struggle with the problem of under-funding. Audiovisual works are essentially financed with 
national  public  resources,  limiting  the  need  for  foreign  investment  and  export.  Moreover 
demand  and  viewing  habits  of  audiences  dominated  by  US  and/or  domestic  blockbusters 
represent  a  significant  obstacle  to  showing  a  real  diversity.  Audiences  (in  particular  young 
audiences) are not aware of the wide choice of culturally diverse films, although there is well 
documented demand for greater diversity. 

impact  on 

the  audiovisual 

Existing EU programmes in the area of audiovisual support such as MEDIA 2007 have had a 
successful 
the  circulation  of  European 
cinematographic works inside Europe. It cannot, however, address the challenges of the rapid 
internationalisation of the audiovisual sector. Programmes like EUROMED Audiovisual II or 
the  EU-ACP  support  programme  for  cinema  and  the  audiovisual  industry  are  regional 
development  programmes  and  as  such  have  a  different  focus  and  objectives.  A  new 
programme could create considerable synergies with these programmes.  

industry  and 

Other  international  activities  such  as  existing  international  film  funds  mostly  have  limited 
budgetary  allocations.  Co-production  treaties  are  rarely  endowed  with  budgetary  means  and 
therefore inefficient in addressing the problems described above. 

EN 

3 

   EN 

 
4. 

OBJECTIVES 

The  general  objectives  are  to  strengthen  international  cooperation  in  order  to  increase  the 
competitiveness  of  the  European  audiovisual  sector,  and  to  increase  consumer  choice  and 
cultural diversity on the European and international markets. 

Four specific objectives have been identified: 

(1) 

(2) 

(3) 

Increase information exchange and market intelligence, 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. 

Contribute  towards  the  facilitation  of  international  co-productions  in  the 
audiovisual markets.  

Improve  transnational  distribution  of  audiovisual  works  and  enhance  the 
visibility of European audiovisual works in third countries and vice versa as 
well  as  increasing  consumer  choice  for  European  and  third-country 
audiences.  

(4) 

Reach new audiences and promote film literacy. 

5. 

POLICY OPTIONS 

Three different policy options (including two different scenarios to implement these specific 
objectives) have been assessed regarding their economical, social, cultural and environmental 
impact and their cost-effectiveness.  

(1) 

(2) 

(3) 

Business as usual (in the sense of continuing the existing European activities 
in the audiovisual sector). 

Extension of existing instruments. 

Creation of a new instrument MEDIA Mundus. 

As to the business as usual option, in view of the situation evolving on world markets and the 
technological challenges, the situation for European audiovisual companies would deteriorate 
significantly  over  time.  Business  as  usual  would  not  entail  new  costs,  but  would  have  a 
negative  cost:  if  the  opportunities  of  internationalisation  are  not  seized  by  European 
companies in the new fast-growing markets. 

An  extension  of  existing  instruments  by  opening  the  MEDIA  2007  programme  to  further 
participation and cooperation would entail various difficulties related to WTO rules as well as 
resource-intensive  negotiations  at  governmental  level  and  was  therefore  considered  to  be 
inefficient.  Also,  an  opening  of  MEDIA  2007,  not  in  the  sense  of  full  membership  or 
cooperation, but in the sense that strands for international cooperation could be introduced in 
the  current  programme,  was  considered.  In  terms  of  costs  and  procedure  the  options  are 
similar.  However  this  policy  option,  although  being  an  alternative  to  the  creation  of  a  new 
instrument, was discarded because one programme focusing on internal and external policies 
at the same time would become very complex, lead to brand confusion and be less effective in 
meeting the policy objectives defined. 

Under the option creation of a new instrument the four specific objectives were broken down 
to more detailed operational objectives / action lines that refer to the actual deliverables: 

(1) 

Increase information exchange and market intelligence, in particular through training 
activities,  facilitate  networking  between  European  and  third  country  audiovisual 

EN 

4 

   EN 

 
professionals in order to improve access to foreign markets and to build trust and long-
term commercial relationships. 

•  Building  up  websites  and  databases  (aims  at  collecting  and  disseminating  information 

about European and third countries’ audiovisual markets) 

•  Network of contact points (in various regions of the world in order to monitor the regional 

audiovisual industry) 

•  Training activities (aims at supporting various training measures such as the certification of 

training institutions, provide scholarships or continuous and initial training projects) 

•  Market access mechanisms and events (aims at supporting access to film market and other 

key events) 

(2) 

Facilitation of international co-productions in the audiovisual markets.  

•  Supporting 

the  development  stage  of  co-production  (aims  at  supporting  script 
development,  partner  searching  or  other  activities  in  the  development  phase  such  as 
financing or casting) 

•  Supporting  the  funding  of  co-productions  (aims  at  a  direct  funding  to  co-productions  or 

measures that could facilitate the access to commercial financing of co-productions) 

(3) 

Improve  transnational  distribution  of  audiovisual  works.  Enhance  the  visibility  of 
European audiovisual works in the world and vice versa and increase consumer choice 
for European / third-country audiences. 

•  Distribution  support  (aims  at  supporting  the  costs  of  acquisition,  printing,  advertising, 

dubbing and subtitling etc.) 

•  Cinema  networks  (aims  at  supporting  cinema  networks  in  Europe  and  in  third  countries 
that  commit  themselves  to  programming  of  a  significant  number/percentage  of  European 
audiovisual works and vice versa) 

•  Support  to  broadcasters  and  digital  platforms  (aims  at  encouraging  the  showing  of 
European works on TV and platforms like VOD, mobile TV etc. in third countries and vice 
versa) 

(4) 

Reach new audiences and promote film literacy 

•  Festivals and special events (aims at supporting festivals that programme third countries’ 

and European audiovisual works or awareness-raising events) 
•  Networks to target young audiences including education activities 
•  Support for TV programmes dedicated to young audiences 

The definition of the specific and operational objectives was largely inspired by stakeholders’ 
consultation  and  is  based  on  cost-benefit  analyses  carried  out  by  the  various  ex-post 
evaluations of MEDIA programmes and the ex-ante evaluation of MEDIA 2007. 

Two  different  scenarios  have  been  examined  within  the  specific  objective  ‘facilitation  of 
international  co-productions’  and  ‘supporting  distribution’.  Regarding  the  facilitation  of  co-
productions  the  alternative  scenarios  related  either  to  the  setting  up  of  funds  by  the 
Commission  (development  fund  for  co-productions,  co-production  funds  for  feature  films, 
documentary and animation films, gap financing fund), or alternatively the financing of script 
development  training,  market  access  mechanisms  and  existing  co-production  funds.  In  view 
of the heavy administrative burden, the creation of co-production funding instruments by the 
Commission  was  not  pursued  further.  With  regard  to  distribution  support,  one  scenario  was 
more  oriented  towards  the  classical  MEDIA  approach.  It  was  however  found  that  the 
requirements for international cooperation regarding distribution were different on the internal 

EN 

5 

   EN 

 
and the external markets. Therefore an option focusing the support on partnerships between 
rights-holders and distributors was assessed to be more effective and appropriate.  

The calculation of the cost implications that was used to compare the different scenarios was 
in  particular  based  on  the  evaluations  of  previous  MEDIA  programmes,  the  experiences  of 
MEDIA 2007, the public consultations and the Preparatory Action MEDIA International. 

In summary the Impact Assessment reached the conclusion that the following scenario should 
be further pursued in order to achieve the objectives identified: 

 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 

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 rights 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 to target young audiences including education activities 

4) Support for TV programmes dedicated to young audiences 

In order to take into account the current economic crisis, a third scenario has been built on the basis of 
a  smaller  budget  than  that  of  scenarios  1  and  2.  This  "crisis"  scenario  intends  to  maximise  the 
effectiveness  of  the  intervention  given  the  budgetary  constraint.  Hence,  only  the  most  effective 
operational  objectives  and  actions  analysed  under  scenarios  1  and  2  have  been  selected.  They  have 
been gathered into a narrower framework limited to three specific objectives. Such an option would 
ensure  continuity  following  the  preparatory  action  and  could  pave  the  way  for  a  larger  programme 
under new financial perspectives.   

Specific Objective 1: Information exchange and market intelligence 

1) Continuous training  

Specific Objective 2: Competitiveness and distribution 

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

EN 

6 

   EN 

 
 
 
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 

6. 

CONCLUSION 

The Impact Assessment on the establishment of an audiovisual cooperation programme with 
third countries reached the following conclusions: There is a lack of circulation of European 
audiovisual works in third countries and vice versa. This has an impact on the competitiveness 
of the European audiovisual sector and, as a consequence, European companies cannot fully 
benefit from the opportunities of internationalisation. Furthermore, consumers cannot benefit 
from a wide choice of films and therefore there is limited cultural diversity. A new instrument 
should  therefore  pursue  those  two  global  objectives:  to  increase  the  competitiveness  of  the 
European audiovisual sector and to increase consumer choice and cultural diversity. 

EN 

7 

   EN