Source: EURLEX
Language: en
Format: md

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| 21.1.2015 | EN | Official Journal of the European Union | C 19/70 |

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Opinion of the Committee of the Regions — European film in the digital era

(2015/C 019/15)

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| |  |  | | --- | --- | | Rapporteur | Jean-François ISTASSE (BE/PES), Verviers Municipal Councillor | | Reference document | Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — European film in the digital era — Bridging cultural diversity and competitiveness  COM(2014) 272 final | |

THE COMMITTEE OF THE REGIONS

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|  | 1. | endorses the European Commission’s analysis that to establish a stimulating environment to enable the European film industry to reach its full cultural and economic potential, players must be mobilised at all levels: in the sector, in the Member States, from local to national level, and also often in a cross-border context; |

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|  | 2. | highlights the major role that local and regional authorities play in promoting and raising the profile of culture, by preserving cultural heritage and fostering artistic innovation[(1)](#ntr1-C_2015019EN.01007001-E0001), and in defining cultural strategies, developing sectoral initiatives or providing the appropriate infrastructure; |

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|  | 3. | considers that the cultural industries make a robust contribution to local and regional development as they make Europe’s regions more attractive, generate sustainable tourism and develop new opportunities for lasting jobs[(2)](#ntr2-C_2015019EN.01007001-E0002); |

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|  | 4. | notes that the shift to digital opens up new prospects for creating interconnections between the various European regions and that the transition might provide an opportunity to attract new audiences, take advantage of unconventional content, provide new services, give a higher profile to content from other regions and support interregional cultural cooperation. The Committee would also stress that due consideration will have to be given to the fact that the costs entailed by this shift can pose a major challenge for regional and local authorities; |

I.   POLICY RECOMMENDATIONS

General comments

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|  | 5. | is committed to contributing to the development of and follow-up to the new strategy for the European film industry launched by the Commission in its communication on ‘Promoting cultural and creative sectors for growth and jobs in the EU’[(3)](#ntr3-C_2015019EN.01007001-E0003), which is aimed at reinforcing competitiveness in these high-growth sectors and redistributing the profit they generate to other sectors such as innovation or information technology; |

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|  | 6. | would like to play an active part in the work of the European Film Forum in order to spark a European debate on the increasingly rapid growth of the audiovisual sector and engage in a dialogue with all film industry policy stakeholders. Exchanges of best practice should serve in particular to sharpen Europe’s competitive edge, get common projects off the ground and show respect for the cultural diversity of the public/consumers by reflecting demand. They should also promote effective EU-wide protection of minors, as well as the inclusion in the film world of people with visual impairments and hearing loss; |

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|  | 7. | underlines the importance of dovetailing the current debate with the Commission’s Digital Strategy for Europe[(4)](#ntr4-C_2015019EN.01007001-E0004) initiative; |

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|  | 8. | welcomes the timing chosen by the Commission in publishing this initiative, given that the new Creative Europe programme and, more specifically, its MEDIA sub-programme were launched this year. One of the main objectives of this sub-programme is to boost demand for films, encourage cross-border distribution and reach potential audiences in the European Union and worldwide; |

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|  | 9. | would stress the need to take a coordinated approach in order to respond to the new challenges associated with the rapid growth of the European film-making sector: first to respond effectively to the growing disconnect that has been observed between the European public and what is on offer in terms of culture in general[(5)](#ntr5-C_2015019EN.01007001-E0005), and second, to adapt to the public’s new digital consumption behaviour[(6)](#ntr6-C_2015019EN.01007001-E0006). It is now essential that the sector succeed in harnessing and exploiting the various types of connected platform (streaming, video on demand (VOD), etc.) and the new consumer devices (smartphones, tablets and smart TV), in order to increase the number of potential opportunities for broadcasting European films and hence reach new audiences; |

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|  | 10. | considers it necessary, given the abstract principle of cultural diversity on the one hand and the implications for competitiveness on the other, to develop an approach whereby the input of local, regional, national, interregional and European operators is coordinated to respond to the structural difficulties experienced by the European film industry in reaching potential audiences in the European Union and the wider world, as identified by the Commission, namely:   |  |  | | --- | --- | | — | the fragmentation of production and financing, |  |  |  | | --- | --- | | — | limited opportunities and incentives to internationalise projects, |  |  |  | | --- | --- | | — | the focus on production and limited attention to distribution and promotion, and |  |  |  | | --- | --- | | — | shortcomings in entrepreneurial skills and cross-sectoral partnerships; | |

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|  | 11. | considers that, as they stand, the measures proposed in the communication do not appear to raise any issues regarding compliance with the principles of either subsidiarity or proportionality. Nevertheless, with respect to multi-level governance, it would be worthwhile ensuring that regional and local authorities are involved as a matter of course when it comes to planning, implementing and managing measures designed to promote growth in the European film-making sector; |

Reviewing the financial framework — public financing schemes

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|  | 12. | notes that with over 600 national, regional and local support schemes[(7)](#ntr7-C_2015019EN.01007001-E0007), the Member States have put a wide range of measures in place to support the production of films, television programmes and other audiovisual products, on the basis of considerations that are as much cultural as industrial, with the prime cultural objective being to ensure that regional and national cultures and their creative potential are expressed through audiovisual media; |

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|  | 13. | agrees with the Commission on the need to boost the overall complementarity and consistency of public funding in order to make it more effective in general, by encompassing regional, national, interregional and supranational levels of financing and covering the various activities financed; |

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|  | 14. | would stress how important it is that local and regional authorities retain the opportunity to make demands as regards the territorialisation of expenditure, as this is essential in order to generate the critical mass of activity necessary to kickstart a trend that will secure the development and consolidation of the film industry; |

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|  | 15. | would draw attention to the way in which economic investment funds aimed at supporting the audiovisual sector at regional level can provide structure, not least by setting up mechanisms to finance audiovisual productions and co-productions; |

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|  | 16. | recalls that according to the study on the economic and cultural repercussions of territorialisation conditions in film support schemes, Member States allocate an estimated one billion euros of additional aid each year in the form of tax incentives for film making[(8)](#ntr8-C_2015019EN.01007001-E0008); |

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|  | 17. | calls on public authorities to study the development of tax incentives designed to boost the production of audiovisual works and films, for instance by means of mechanisms that enable private partners to benefit from exemptions on taxable income; |

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|  | 18. | reaffirms the Commission’s observation on the need to strike a new balance between the production, distribution and promotion of films in terms of expenditure; |

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|  | 19. | considers nevertheless that although, when it comes to redistributing budgets between production and distribution/promotion, the latter appear to have more limited resources, the budgets made available on a market like that of the US cannot be used as the basis for arguing in favour of this redistribution; it is commonly accepted that aid is important to support European audiovisual production and that it is difficult for producers to secure sufficient initial commercial support to gather the financial resources necessary to carry projects through, the direct consequence being that certain films are under-funded with their quality suffering as a result. Increasing promotion and release costs would not be enough to resolve the problems linked to under-funding of film production or to enable a wider public to be reached; although an increase in distribution and promotion budgets would be welcome in absolute terms, it must not in any way be carried out at the expense of budgets earmarked for the production of European films; |

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|  | 20. | notes that the difficulty European films often have in finding an audience is sometimes the result of a failure to think about the target audience at the film project design stage. Films that target a niche audience at the scriptwriting stage generally find it easier to attract an audience than those aimed at the public at large. As the Commission points out, this can also sometimes be because promotion budgets are too small to allow for the widespread and high-profile dissemination of the film; |

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|  | 21. | would note that the film industry produces prototypes and that it is impossible to predict with certainty whether a film will be successful or not; |

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|  | 22. | would argue that a number of films would benefit if they were further developed before going into production; for this reason it is absolutely essential to make development support available, in conjunction with the grants provided under the Creative Europe programme and MEDIA sub-programme; |

Reviewing the funding framework — involving new players in the value chain

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|  | 23. | takes the view that the funding of audiovisual production is being affected by gradual convergence, changes in consumer behaviour and the advent of new economic models. The tendency of VOD platforms to invest in original content is proof that these new players are potential investors in audiovisual content; |

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|  | 24. | would highlight the need for new players (VOD platforms, telecommunications operators, over-the-top (OTT) operators) benefiting from European content to contribute to funding and be subject to the same constraints as national operators, so as to guarantee healthy competition between national operators and operators from outside the EU that have set up business in Europe and to boost financing for alternative content that guarantees cultural diversity; |

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|  | 25. | intends in this respect to engage in a debate with the players concerned with the aim of reviewing the country of origin principle as provided for in the Audiovisual Media Services (AMS) Directive[(9)](#ntr9-C_2015019EN.01007001-E0009), and assessing the way it operates in the context of the current transformation of the audiovisual landscape; |

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|  | 26. | reaffirms the principles enshrined in the 2005 Unesco Convention on the Promotion and Protection of the Diversity of Cultural Expressions, including the right of states and authorities to conserve, adopt and implement appropriate policies for the protection and promotion of cultural diversity, in particular by promoting the publication, production and dissemination of content, whatever the medium (conventional, on-demand or internet television); |

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|  | 27. | is of the opinion that the information gathered by art house cinemas (as part of the MEDIA programme) and also the statistics collected by the major internet operators, the main aggregators and the VOD sector, and public broadcasters (private, too, if they benefit from public aid or are in competition) should be shared and made available for the film industry at regional and national levels. What is needed is to dispel the current lack of transparency, as this tends to stop public authorities from legislating or regulating new operators or imposing on them the general policy requirements that currently apply to public broadcasters in the form of management contracts or other measures; |

Establishing an innovative commercial environment

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|  | 28. | awaits the results of the public consultation launched under the Commission’s green paper Preparing for a Fully Converged Audiovisual World: Growth, Creation and Values [(10)](#ntr10-C_2015019EN.01007001-E0010), in order to assess the degree to which the AMS Directive[(11)](#ntr11-C_2015019EN.01007001-E0011) is still responding to its objectives of promoting the creation, distribution, availability and commercial appeal of audiovisual works within the digital single market; |

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|  | 29. | would nevertheless highlight the difference in treatment by the AMS Directive of linear audiovisual services on the one hand, for which the directive sets percentages of European and independent works that EU broadcasters are obliged to schedule, and non-linear audiovisual services on the other, for which these obligations are worded in a more flexible manner. The take-off of non-linear services (VOD) and the experience that has been gained could be helpful in identifying and implementing more effective means of promoting European works in such services; |

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|  | 30. | would argue that the rapid development of the sector should encourage the European Commission to run pilot initiatives with regard to media chronology (e.g. day and date release) in order to assess the possible need to relax the rules in terms of film availability windows. The CoR would underline that local players and rights-holders must be protected through a suitable business model, while also making the most of the new opportunities presented by digital technology and improving access to content for the general public. Account should also be taken of new behaviours and expectations on the part of consumers, who desire immediate access to new content when and where they want it, whilst enabling the development and consolidation of new business models for financing and distributing this content; |

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|  | 31. | would note the need to work on the following aspects: establishing a modern framework regarding copyright to make it easier to deposit and access films on line in the EU so as to secure recognition and effective remuneration for rights holders; providing sustainable incentives for creativity, cultural diversity and innovation; broadening final users’ access to legal content; nurturing the emergence of new economic models; and combating illegal content and piracy even more effectively[(12)](#ntr12-C_2015019EN.01007001-E0012); |

Strengthening the creative environment

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|  | 32. | agrees with the Commission on the need to foster talent and develop professional skills in the European industry and would encourage creative partnerships between film schools and the professional world; with respect to this objective would underline the importance of the support provided under the Creative Europe and Erasmus+ programmes; |

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|  | 33. | would also point out the need to adopt a more proactive approach that will help to generate synergies between the cultural and creative sectors and also with economic and social players in other spheres in order to support new and innovative areas of activity, such as cross-media, social media, digital publishing and creative tourism, etc.[(13)](#ntr13-C_2015019EN.01007001-E0013); |

Accessibility and audience development

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|  | 34. | would underline the importance of finding and building up a new audience for European films and endorses the Commission’s analysis regarding the need to design tools that widen access to and demand for European films, non-national films in particular; |

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|  | 35. | acknowledges the usefulness of being able to target factors that might contribute to the success of a film, by collecting information on audience preferences; however, would also like to point out that while it may be true that films benefiting from national and regional public support have a tendency to target a local audience, it is not by erasing the local aspect of films that they will have more of a chance of accessing the markets of other European States and finding an audience. The CoR is of the opinion that it is by succeeding in its own domestic market that a film is likely to interest a foreign distributor and be shown elsewhere. It would be counterproductive to think that films should be designed on the basis of a European lowest common denominator. Indeed, cultural diversity requires that local and regional characteristics be brought to the fore as these are the special ingredients making up our European identity; |

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|  | 36. | takes the view that the digital revolution could offer greater flexibility for film distribution by allowing for alternatives to the traditional distribution system that can respond to public demand for faster access to content in more formats; |

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|  | 37. | considers it indispensable that public authorities encourage national VOD platforms to promote European films in their catalogues actively, by means for instance of advertising strategies or promotion campaigns, as part of either national and regional policies; |

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|  | 38. | would also stress that co-productions, which are often financially and artistically essential in order to be able to make European films, also encourage the distribution of films; they could be improved by co-producers themselves doing more to anticipate conditions for release in the various co-producing countries; |

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|  | 39. | welcomes the constructive ‘Licences for Europe’ dialogue, with particular regard to the need to digitalise, restore and make European film heritage accessible and the procedures for doing this, including the use of connected platforms, thus allowing the institutions in possession of this heritage to release works stored in their archives, while also ensuring that rights-holders receive their fair share of the income generated; |

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|  | 40. | would highlight in this context the need to use these connected platforms to improve and develop the availability of a greater number of dubbed and subtitled versions of films in individual countries[(14)](#ntr14-C_2015019EN.01007001-E0014), always with the aim of making Europe’s film heritage accessible to as many people as possible; |

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|  | 41. | would emphasise the need to modernise the film industry by means of digitalisation projects and training initiatives, deploying the EU’s Structural Funds in order to involve the industry in local and regional development strategies aimed at the public, while also giving due consideration to cultural and linguistic diversity and the rich variety of national audiovisual landscapes; |

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|  | 42. | notes that education in the area of film remains under-funded and that European financing should be made available; this is a key sector that can raise young people’s awareness of the existence of alternatives to US films and of the way that film can act as a cultural vector for the many different facets of European identity; |

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|  | 43. | considers that it is important that the Commission use its film industry policy to acknowledge the importance of the regional and local dimension and of public funding for the audiovisual sector at local, regional and interregional levels, not least to protect cultural diversity. This is where the European treaties and the Unesco Convention on the Promotion and Protection of the Diversity of Cultural Expressions can come into their own. |

Brussels, 4 December 2014.

The President of the Committee of the Regions

Michel LEBRUN

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