CELEX: 51995PC0523
Language: en
Date: 1995-11-16
Title: Amended proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE relating to cableway installations designed to carry passengers

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                  COM(94)523 final
                                                  Brussels, 08.02.1995
                                                  95/0026 (SYN)
                                                  95/0027 (CNS)
            COMMUNICATION FROM THE COMMISSION
                         AUDIOVISUAL POLICY
                  STIMULATING DYNAMIC GROWTH
            IN THE EUROPEAN PROGRAMME INDUSTRY
                          (MEDIA I I - 1996-2000)
                                Proposal for a
                           COUNCIL DECISION                         95/0026 (SYN)
     on the implementation of a training programme for professionals
             in the European audiovisual programme industry
                           (MEDIA II - Training)
                                 (1996-2000)
                                Proposal for a
                           COUNCIL DECISION                         95/0027 (CNS)
             on a programme to promote the development and
                distribution of European audiovisual works
                (MEDIA II - Development and Distribution)
                                 (1996-2000)
                       (presented by the Commission)
 ---pagebreak---          AUDIOVISUAL POLICY
    STIMULATING DYNAMIC GROWTH
IN THE EUROPEAN PROGRAMME INDUSTRY
          (MEDIA II - 1996-2000)
 ---pagebreak---                                      Contents
CHAPTER I
    New guidelines for Community support mechanisms
    I.     Competitiveness in the programme industry
    II.    The need to rethink support mechanisms
    III.   Action: principles and methods
           III. 1 Training
           111.2 Project development or pre-production
           111.3 Production and distribution
    IV.    From MEDIA (1991-1995) to the new Community mechanisms
           (1996-2000)
           IV. 1 Evaluation of MEDIA and experience gained from it
           IV.2 New terms of action
CHAPTER H
    Training programme for professionals in the audiovisual programme industry
    I.     Introduction
           1.1     Translating growth into jobs
           1.2     Shared responsibilities
           1.3     Grounds for Community action
    II.    Current position
           1.      Training infrastructure
           2.      Levels of training
           3.      Training content
    III.   Guidelines for European action
           1.      Objectives
           2.      Priorities
    Proposal for a Council Decision
    Annex
    Financial Statement
 ---pagebreak--- CHAPTER m
    Programme for encouraging the development and distribution of European
    audiovisual productions
    I.     Introduction
    II.    Current position
           1       Development: a neglected stage
           2       Structural weaknesses in distribution
    III.   Guidelines for European action
           1       Development
           2       Distribution
           3       Financial instruments
    Proposal for a Council Decision
    Annex
    Financial Statement
    Annex: European audiovisual conference, session on support mechanisms
 ---pagebreak---                          STIMULATING DYNAMIC GROWTH
                    IN THE EUROPEAN PROGRAMME INDUSTRY
 CHAPTER I:              New guidelines for Community support mechanisms
Introduction
 The structural shortcomings of the European programme industry are such that without
a policy to safeguard its competitiveness in the medium term, the anticipated cultural and
economic benefits of the information society will not materialize.
The Green Paper adopted by the Commission in April 1994, entitled "Strategy options
to strengthen the European programme industry", identified the following shortcomings:
        the industry is fragmented into national markets, which means that producers are
         too small to compete on European and world markets;
         the partitioning of national markets is compounded by a low rate of cross-border
         programme distribution and circulation;
        the industry is trapped in a spiral of chronic deficit;
        the industry is unable to attract the financial resources needed for its recovery.
Consultations held on the basis of the Commission's Green Paper(1) with the
Member States and people in the industry have revealed that there is widespread
agreement on the seriousness of the state of the programme industry and its possible
consequences. The current situation makes it particularly difficult for the European
audiovisual industry to prepare itself for expected developments in the information society
and the explosion of broadcasting capacity they will bring. There is an obvious risk of
seeing an ever-widening gulf between the supply of European productions and the
growing demands of broadcasters. This would dramatically limit the choice of
programmes, leaving viewers with programmes made, for the most part, by producers
outside Europe and potentially leading to a backlash.
What is at risk, in the long term, is the ability of European producers, in whatever
medium, to gain access to the communications vectors. The stakes are the radiation of
the influence of national cultures, and, more immediately, the very return on infrastructure
investments, given that programme failure would prevent investment paying off as
planned.
(i)
         "Strategy options to strengthen the European programme industry in the context
        of the audiovisual policy of the European Union - Green Paper":
        COM(94) 96 final, 6.4.1994.
 ---pagebreak--- financial resources. In addition to regulations and general measures to attract
investment, support mechanisms for the audiovisual industry must, first and
foremost, encourage the mobilization of the resources necessary for achieving
competitiveness and reestablish dynamic operation of the market.
This will need to include public-sector measures for pre-market activities, such as
research and training, and to take account of the diversity of national cultures and
the need to help them flourish. However, it is obvious that the radiation of the
influence of national cultures is itself dependent to a considerable extent on the
industry's general competitiveness.
This development strategy is intended to ensure that support mechanisms help the
industry develop towards a more efficiently organized set-up. This will be best
achieved by avoiding fragmentation of resources and seeking to concentrate
resources on structural objectives as well as ensuring that the various regional,
national and Community schemes, are clearly demarcated and complement each
other through all stages in the audiovisual chain where action needs to be taken.
The principle of complementary action is to be found in the Treaty on European
Union which lays down new terms for action by the Community. The Treaty
affirms the principle of subsidiarity and Article 3b of the EC Treaty, as inserted
by the Union Treaty, states that "the Community shall take action, .., only if and
in so far as the objectives of the proposed action cannot be sufficiently achieved
by the Member States and can therefore, by reason of the scale or effects of the
proposed action, be better achieved by the Community." Furthermore, the Treaty
gives the Community new responsibilities in the areas of industrial policy (Article
 130), vocational training policy (Article 127) and cultural policy (Article 128),
where Community action is to support and/or supplement the action of the
Member States while fully respecting their own responsibilities.
Pursuant to the new Article 130(2) of the EC Treaty regarding industrial policy,
which reads "The Member States shall consult each other in liaison with the
Commission and, where necessary, shall coordinate their action. The Commission
may take any useful initiative to promote such coordination", the Commission is
proposing to promote coordination by setting up a framework for exchanging
views and discussion with representatives from all the relevant national
authorities. This structure will be operated by the Commission and its principal
aims will be:
        to compile a database on national support systems;
        to exchange experience as regards attracting investment, training and
        supporting production and distribution.
Without anticipating the outcome of this coordination, the focus and thrust of the
new support mechanisms may be summarized under the following headings:
 ---pagebreak--- m.l  Training
     The series of consultations highlighted the indispensability of public-sector
     intervention at the training stage. In accordance with Article 127 of the EC Treaty,
     as introduced by the Union Treaty, the Member States are responsible for
     implementing a vocational training policy that prepares people for jobs and adapts
     them to industrial changes, in this instance in the area of audiovisual programmes.
     The Community's role is to support and supplement action by the Member States,
     stimulate cooperation on training between educational or training establishments
     and firms, and develop exchanges of information and experience.
     This action must take account of "cultural aspects" (Article 128(4)) and respect
     national and regional diversity.
     In this area Community action must therefore aim to take account of the European
     angle in the various training courses in order to enable people who work or will
     be working in the industry to take on board the development opportunities offered
     by the European and world market, whether in management, marketing or new
     technologies. The Community must avoid interfering in Member States' cultural
     policies; training on writing audiovisual works, for example, is most definitely
     outside the Community's remit.
     Community action should also aim to create a network of training facilities. A
     scientific committee on training will be set up with representatives of the main
     public-sector or industry-based audiovisual training bodies to provide the
     Commission with the necessary expertise.
IH.2  Project development or pre-production
     The series of consultations revealed that European works suffer from a lack of
     investment at the pre-production stage. Project development is primarily the
     responsibility of companies in the industry, possibly backed up by regional or
     national support mechanisms.
     Although the creation of audiovisual works is not an exact science, the direction
     in which a work will go is determined right from the design stage. If at that stage
     no thought is given to the European and international dimension, the work in
     question is unlikely to have any appeal outside the area where it was conceived
     and is therefore unlikely to break into additional markets which could help make
     the initial investment pay off.
     The extra investment needed for pre-production must be matched by broader
     distribution of films and transmission of television programmes. The Community
     will encourage this structural development by taking action in accordance with
     Article 130 to develop projects that take account of the European dimension in
     their distribution/transmission strategy. The Commission will invite regional and
     national authorities also to step up action in this direction.
 ---pagebreak--- m«3 Production and distribution
    A key task for the future of the European programme industry will be organizing
    production and distribution structures more effectively so as to make the most of
    the size and cooperation potential of the single market as a way of breaking into
    the world market.
    Moreover, the extra human andfinancialresources needed will not be forthcoming
    unless we do have films and television programmes capable of circulating both
    in Europe and elsewhere and distribution and transmission networks that make
    investments pay off.
    Better organization of structures is primarily the financial responsibility of
    businesses themselves, but is also concerns the public authorities since the vast
    majority of support systems relate to production and distribution. When it comes
    to revising these mechanisms, it is clear that stepping up action to promote
    production would have little effect unless potential outlets were better organized.
    Likewise, stepping up action to promote, for example, trans-European distribution
    networks would be meaningless unless the productions in question had the
    editorial capacity and critical financial mass for them to reach different audiences.
    Without productions of this type, any distribution or transmission circuits set up
    at European level would be left handling predominantly non-European
    productions.
    As stressed by both the Green Paper and the Think Tank report, the aim is to
    have "a market for our products and products for the market".
    Businesses in the industry need to work on producing and distributing on the
    European market audiovisual works with high circulation potential. The design
    and finish of the works must be attractive enough to ensure a better return on
    investments and to enable programme catalogues to be compiled.
    To this end, after a period in which distributors have tended to stand back from
    pre-financing production, the role of the support mechanisms will be to stimulate
    a more dynamic relationship between producers and distributors on a European
     scale. The spin-off of increased cooperation would be further enhanced by the
    production and distribution in Europe of large-budget films, a market segment in
    which Europe is somewhat under-represented. This means that the audiovisual
    industry would no longer have to miss out on investment for this market niche.
    For experience has shown that the higher a film's budget the more likely it is to
    be successful in financial terms, and the European audiovisual conference
     (Brussels, 30 June to 2 July) concluded that 15 to 20 large-scale films a year
     should be produced and distributed throughout Europe.
     In this context, the Member States are responsible for seeing to it that their
     support mechanisms take account pf the accepted objectives and contribute to the
     introduction of structures that are appropriate for their own market and the
    European market. Action they take, with their commitment to cultural identity and
     creativity, should cover the whole range of activities involved in production and
 ---pagebreak---     distribution, including the necessary upgrading of cinemas, which is also a matter
    for regional and local authorities.
    Article 130 of the EC Treaty, as inserted by the Union Treaty requires the
    Community to take steps aimed at "speeding up the adjustment of industry to
    structural changes" by deciding on "specific measures in support of action taken
    in the Member States" in order to ensure the conditions necessary for the
    competitiveness of the Community's industry. For both cinema and television,
    Community action should also encourage cooperation between producers and
    distributors/broadcasters with a view to producing works aimed at both the
    European and world markets and supporting the setting up of Europe-wide
    transmission and distribution networks.
IV. From MEDIA (1991-95) to the new Community mechanisms (1996-2000)
    IV.l    Evaluation of MEDIA and experience gained from it
    Set up by the Council (90/685/EEC) to run for five years (1991-95), the MEDIA
    programme to encourage the development of the European audiovisual industry
    was intended to take action on all aspects of the industry, except financing
    productions. Nineteen structures were set up, ranging from vocational training to
    distribution. From the outset the funding granted to the structures was to enable
    them to become self-financing as they gained financial momentum.
    The series of consultations showed that the results obtained from MEDIA were
    far from negligible, as had already been concluded by a mid-term assessment
    report drawn up by the Commission on the basis of an independent audit report
    and consultations with people in the business. In particular, MEDIA has been an
    important springboard: each ecu invested mobilized on average three ecus from
    other sources on the market. The ratio of MEDIA investment to turnover
    generated was between 1 and 26, if account is taken of receipts from distribution
    via the different media (cinemas, TV, video, etc.). By the end of 1994 support had
    been given to over 5 000 professional initiatives. In addition, MEDIA enabled the
    setting up of European-level networks of businesses and professionals, which are
    a resource for future development
    Despite these results, certain shortcomings were identified: the financial resources
    allocated to the programme proved insufficient for the job they were supposed to
    do. There was a feeling that resources were spread too thinly over the whole
    range of activities and that there was an inability to take any in-depth action on
    the structure of the European programme industry.
    The vast majority of those involved in the consultations (Member States and
    people in the industry) felt that it was essential to concentrate Community support
    on specific European objectives and large-scale activities in order to improve
    performance and make a real structural difference.
                                           10
 ---pagebreak--- IV.2    New terms of action
In the light of the Union Treaty and the outcome of consultations based on the
Commission's Green Paper, Community action for the programme industry must:
        include measures with structural impact on the industry;
        take full advantage of the potential of Community-wide measures;
        encourage Community and national measures that complement each other
        as well as promoting joint financial responsibility on the part of the
        audiovisual industry;
        set upfinancialincentive mechanisms, by making greater use of returnable
        advances and soft loans rather than non-returnable grants;
        make greater use of automatic aid systems rather than selective aid
        systems.
To put this into practice, two instruments are proposed, one for training and one
for development and distribution. In addition, the Commission is planning to
encourage the creation of financial engineering mechanisms to stimulate the
mobilization of financial resources for audiovisual production (cinema and
television).
The Commission may "prepare draft legislation introducing a financial instrument
and specifying how it is to be funded; any Community underwriting will be based
on sound budget management and financial discipline so as to cover the risks
associated with loans and loan guarantees granted by third parties for audiovisual
production
                                     11
 ---pagebreak---  CHAPTER H:             TRAINING PROGRAMME FOR PROFESSIONALS IN THE
                        AUDIO VISUAL PROGRAMME INDUSTRY
I.      INTRODUCTION
 1.     Translating growth into jobs
 The rapid growth in the supply of audiovisual programmes as a result of the proliferation
and diversification of production and transmission channels means that the industry has
great potential for expansion. The European programme market has been among the
fastest growing in the world with a growth rate of 6% a year in real terms.
The rapid expansion of the programme industry and its translation into jobs will need a
backbone of highly qualified professionals. This was the Commission's conclusion in its
White Paper on growth, competitiveness, employment.
2.      Shared responsibilities
Vocational training has nowadays come to be an issue outside its traditional school and
university domain. Rapid changes in the economic and technological environment require
not only high-quality initial training, but also regular continuing training throughout
working life to preserve competitiveness.
This is a matter for all those involved in the industry - firms, training centres,
professional associations, the authorities - whatever their level of involvement. They must
each play their part within an overall strategy.
3.      Grounds for Community action
Support systems for the audiovisual industry, whether national or Community, will not
be effective unless they are backed up by the right skills to meet the new challenges.
This means that it is essential to match any investment in businesses with investment in
the men and women who are responsible for developing them. It is the job of the
authorities to promote and support vocational training as part of a medium and long-term
programme.
The importance of training policy in the European Union is now acknowledged as a
Treaty objective (Article 127).
Responding to calls heard, in particular, at the European Audiovisual Conference
(Brussels, 30 June to 2 July 1994), the Commission feels it essential to include vocational
training in its audiovisual policy m order to provide a future for our audiovisual industry.
                                              12
 ---pagebreak--- In addition to steps taken by Member States, Community action is needed for the
following purposes:
        to round off the vocational skills of those working at European level (basically as
        regards management and new technologies);
        to make existing vocational training centres aware of the European dimension in
        the audiovisual market and encouraging them to incorporate appropriate up-to-date
        teaching in their courses;
        to create a network on existing training in order to facilitate the transfer of
        know-how and cooperation between training centres; this cross-border approach
        is crucial nowadays, especially in the area of new technologies where equipment
        is costly and rapidly goes out of date.
II.     CURRENT POSITION
1.      Training infrastructure
The countries of the European Union have an extremely large and varied training
infrastructure for cinema and the audiovisual industry. There are more than four hundred
establishments, which fall into four main categories:
        vocational colleges which are highly equipped and provide basically technical
        training;
        establishments where teaching is based on theory with very little on the practical
        side;
        establishments, mostly universities, providing general communications courses
        with the audiovisual industry as one component (this is the largest and most
        varied category);
        colleges teaching the techniques of computer graphics (the smallest category).
There is very little crossover between these different types of establishment, since their
courses focus either on theory or on practice.
2.      Levels of training
        Initial training
        For some 40 years Europe has had a network of colleges providing training for
        careers in cinema and television, often alongside technical colleges dealing with
        sound and image. The initial training they provide is generally held to be good,
        although they all suffer from the same shortcoming: lack of training on how the
        audiovisual market works.
                                              13
 ---pagebreak---        Continuing training
       There is very little in the way of continuing training, except within certain
       broadcasting companies and professional associations. Rapid developments in
       technology and within the market itself mean that initiatives need to be set up in
       each Member State to ensure that writers, directors, producers and technicians
       maintain a high level of skill and productivity throughout their career.
3.     Training content
The following shortcomings in existing training have been identified:
       Training for the career of producer (developing a production project, drawing up
       a financing plan and marketing strategy, etc.) is virtually non-existent on
       traditional courses.
       The same applies to distribution, transmission and operation, for which there is
       hardly any specific training in Europe.
       Vocational training on new film and television technologies (digital techniques,
       multimedia, interactive TV, etc.) is rather haphazard, since it is usually provided
       on a one-off basis by industry in the form of on-the-job training, workshops and
       seminars.
IH.    GUIDELINES FOR EUROPEAN ACTION
Objectives
1.1.   The overall aim of action taken by the Union should be to keep pace with
       developments in the industry and bolster its competitiveness by contributing to the
       development of both initial and continuing training of audiovisual professionals,
       particularly in the following fields:
               European-level management of the audiovisual industry in order to provide
               those working in it with the right skills they need to take full advantage
               of the European dimension of the audiovisual programme market and in
               order to encourage them to develop programmes that meet the
               requirements of that market;
               utilization and development of advanced creative technologies for the
               production of programmes with high value added intended for the
               European and world market;
       Both types of training activity must take due account of European aspects;
1.2    Action taken should be designed to step up cooperation between the various
       parties involved in training: training establishments, the industry, businesses.
                                             14
 ---pagebreak--- 1.3  Action should take account of structural objectives such as developing the
     independent production industry, in particular small and medium-sized businesses,
     and developing potential where audiovisual production capacity is low, such as
     in small countries or regions with less widely spoken languages.
1.4  The Commission will see to it that the proposed operations are consistent with
     other Community training schemes, particularly under the Leonardo da Vinci
     programme and in line with the objectives of the European Structural Funds.
2.   Priorities
2.1. Promoting the creation and updating of training modules or supplementary
     refresher courses on how the European and world audiovisual programme markets
     operate and the prospects thev offer.
     Various modulés for both initial and continuing training will be devised in
     conjunction with people involved in training (and in line with experience gained
     from MEDIA) in the course of 1995 so as to be operational by the start of the
     MEDIA II programme.
     The modules will cover:
             management training (European aspects)
             The principal objective will be to make people in the industry aware of the
             European and worldwide dimension of the audiovisual market and develop
             their ability to exploit this aspect to the full. This will involve mainly the
             development of production projects for the European market; means of
             financing; distribution in all its forms, market research and promotion;
             maximizing profit from audiovisual programmes; and legal aspects.
             training on new technologies
             The technologies in question are ones with direct impact on the production
             and distribution of audiovisual programmes that are essential for
             guaranteeing competitiveness. In this connection, it should be noted that
             virtually all audiovisual careers are affected by the advent of digital
             techniques. However, particular emphasis will be given to the new careers
             introduced by these techniques, such as virtual image designers,
             multimedia and interactive programme designers and new technology
             project leaders.
     Given the speed of developments in the audiovisual industry, the contents of
     training courses will have to be regularly updated.
2.2. Uptake of modules by training centres
     The aim of Community action in this field is to see to it that both initial and
      continuing training centres in the Member States, such as universities, colleges
                                             15
 ---pagebreak---        and vocational centres, incorporate the modules in their educational or training
       syllabuses.
       The Community will contribute financially to their doing so, by covering up to
       75% of the real cost of the operation up to a maximum of ECU 100 000 per year
       and per training centre. The aim is to ensure that the subjects covered by the
       modules get a permanent place on training courses.
2.3.   Networking of training bodies
       A good way of speeding up the impact of the proposed operations will be to
       foster cooperation and cross-border transfer of know-how between the various
       parties potentially involved, such as training centres, businesses and people
       working in the audiovisual industry, management and labour and the like.
       The Community could contribute financially to the following:
       2.3.1. Facilitating exchanges of teachers specializing in appropriate subjects and
               circulation of students and training specialists, by providing study grants
               (maximum grant ECU 5 000 a year);
       2.3.2. Organizing work-experience placements in companies in other Member
               States to supplement training in the classroom;
       2.3.3. Organizing teacher training seminars.
The training programme could involve between 60 and 100 training establishments and
400 or so grant-holding students each year.
                                            16
 ---pagebreak---                                      Proposal for a
                                COUNCIL DECISION
        on the implementation of a training programme for professionals in the
           European audiovisual programme industry (MEDIA II - Training)
                                      (1996-2000)
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 127(4) thereof,
Having regard to the proposal from the Commission*1*,
Having regard to the opinion of the Economic and Social Committee(2),
Acting in accordance with the procedure laid down in Article 189c of the Treaty,
Whereas the Heads of State or Government, meeting as the European Council in Brussels
on 10 and 11 December 1993, adopted the White Paper on Growth, Competitiveness and
Employment as the basis for action by the European Union and its Member States,
supporting an industrial development approach based on global competitiveness as the key
to growth and jobs; and whereas the White Paper, and Chapter 7 thereof in particular,
states the need to adapt vocational skills in line with industrial and technological
developments;
Whereas the Heads of State or Government, meeting as the European Council in Corfu
on 24 and 25 June 1994, took note of the report by the Bangemann Group entitled
"Europe and the Global Information "Society - Recommendations to the European
Council", in particular acknowledging the strategic importance of the audiovisual
programme industry in terms of content;
Whereas Article 128(4) of the Treaty requires the Community to take cultural aspects into
account in its action under other provisions of the Treaty; whereas participation in the
Programme should reflect European cultural diversity;
Whereas the Council, at its joint industry/telecommunications meeting of
28 September 1994, issued a favourable opinion on the Commission communication of
19 July 1994 entitled "Europe's way to the information society: an action plan"(3) and
emphasized the need to improve the competitiveness of the European audiovisual
industry;
(1)
        OJNoL
® _     OJ No L
(3)
        COM(94) 347 final, 19.7.1994.
                                           17
 ---pagebreak--- Whereas the Council took formal note of the Commission communication of
1 September 1994 entitled "An industrial competitiveness policy for the
European Union"(4) which identified "the close correlation between the development
prospects of individual technologies and products ... of the programs (... audio-visual
programmes, etc.) and of the associated services and networks" and the need to raise
training standards in order to make European industry competitive;
Whereas the Council took formal note on 17 June 1994 of the Green Paper "Strategy
options to strengthen the European programme industry in the context of the audiovisual
policy of the European Union"(5);
Whereas the Commission consulted the people in the industry on the options put forward
in the Green Paper, in particular by holding the "European Audiovisual Conference" in
Brussels from 30 June to 2 July 1994;
Whereas the European Parliament, in its Resolution of 6 May 1994(6), examined the
problems of the audiovisual industry, following Council Directive 89/552/EEC(7) (the
"Television Without Frontiers" directive), in preparation for the European audiovisual
conference, and took the view that the priorities established inter alia during the
discussions on amendments to the MEDIA programme, namely thefinancingmechanisms,
pre-production, distribution and training, were the best means of establishing coherent,
stable European networks;
Whereas the Economic and Social Committee issued its opinion(8) on the Green Paper on
strategic options to strengthen the European programme industry, stating that European-
level programmes such as MEDIA could have a positive influence on the development
of programme structures and means of production in Europe;
Whereas the Commission implemented the programme of measures to encourage the
development of the European audiovisual industry (MEDIA 1991-95), adopted by
Council Decision 90/685/EEC(9), including training measures to upgrade the vocational
skills of people working in the audiovisual programme industry;
Whereas the Council, at its meeting of 5 November 1993, after taking note of the
Commission communication of 23 July 1993 on the MEDIA programme mid-term
evaluation report, felt that it would be appropriate to examine suitable measures for
launching a MEDIA II programme after 1995;
Whereas the European Council in Essen on 9 and 10 December 1994 called on the
Commission to present proposals for a new MEDIA programme;
(4)
        COM(94) 319 final, 14.9.1994.
(5)
        COM(94) 96 final, 6.4.1994.
(6)
        OJNo C 205, 25.7.1994, p. 561.
(7)
        OJ No L 298, 17.10.1989, p. 23.
(8)
        ESC 1000/94, 14.9.1994, p. 6.
I?)     OJ No L 380, 31.12.1990, p. 37.
                                            18
 ---pagebreak--- Whereas the Council, at its meeting of 6 December 1994, adopted Decision 94/819/EC(I0)
setting up the Leonardo da Vinci Programme for implementation of a vocational training
policy in the European Community, of which Article 8(1) requires the Commission to see
to it that the Leonardo da Vinci Programme is coordinated with all the other Community
training schemes;
Whereas there should be proper coordination with vocational training operations
undertaken pursuant to the objectives of the structural Funds;
Whereas the emergence of a European audiovisual market requires vocational skills
adapted to the new dimension of the market, particularly as regards economic and
commercial management of the industry and the utilization of new technology at all
stages of programme design, development, production and transmission;
Whereas people in the industry must be provided with vocational skills that enable them
to take full advantage of the European and world-wide dimension of the audiovisual
programme market; whereas they should be encouraged to devise projects that meet the
demands of that market;
Whereas the initial training of future audiovisual professionals should incorporate the
right economic and technological components; whereas the speed of change in these areas
necessitates continuous training;
Whereas networking between vocational training centres should be encouraged so as to
facilitate the transfer of know-how and the development of training modules at European
level;
Whereas support for vocational training should take account of structural objectives such
as developing the independent production industry, in particular small and medium-sized
businesses, and developing potential where audiovisual production capacity is low, such
as in small countries or regions with less widely spoken languages;
Whereas operations in this Programme are all aimed at cross-border cooperation which
will enhance the value of action taken in the Member States or by those responsible for
training, in accordance with the principle of subsidiarity,
HAS DECIDED AS FOLLOWS:
                                         Article 1
A training programme (hereinafter referred to as "the Programme") is hereby established
to run for five years from 1 January 1996, with the aim of supplementing the action taken
by Member States and thereby providing professionals in the European audiovisual
industry with the skills they need, particularly as regards economic and commercial
management and use of new technologies, to exploit the European dimension of the
market to the full.
 (10>
         OJ No L 340, 29.12.1994, p. 8.
                                            19
 ---pagebreak---                                          Article 2
The aims of the Programme are:
(1)     to meet the needs of the industry and bolster its competitiveness by contributing
        to the development of initial and continuous training of audiovisual professionals
        on the know-how and skills they need in order to take account of the European
        market in developing businesses and projects, in particular in the fields of:
                economic and commercial management, including legal aspects;
                utilization and development of new technologies for the production of
                programmes with high value added;
(2)     to encourage cooperation and exchange of know-how between the parties involved
        in training, namely training establishments, the industry and businesses.
                                         Article 3
The measures described in the Annex shall be put into effect in order to achieve the
objectives laid down in Article 2. They shall be implemented in accordance with the
procedure set out in Article 6.
                                         Article 4
As a rule, recipients of Community support working on implementation of the measures
laid down in Article 3 must provide a proportion of the funding. Community funding
shall not exceed 75% of the cost of operations.
                                         Article 5
(1)     The Commission shall be responsible for implementation of the Programme.
        The Commission shall also be assisted by the Advisory Committee set up by
        Council Decision 95/.. ./EC of      1995 a programme to promote the development
        and distribution of European audiovisual works (MEDIA II - Development and
        Distribution) (1996-2000)(11).
(2)     The draft measures taken by the Commission and the procedure for consulting the
        Committee on that draft shall be the same as those laid down in Article 6(2)
        and (3) of the Decision referred to in paragraph 1.
w       OJNo
                                             20
 ---pagebreak---                                         Article 6
Within the six months following the first three years of the Programme's implementation,
the Commission shall submit to the European Parliament, the Council and the
Economic and Social Committee an evaluation report on the results achieved, with
proposals if appropriate.
When the Programme has run its full term, the Commission shall submit a report on the
implementation and results of the Programme to the European Parliament and the
Economic and Social Committee.
Done at Brussels,                                            For the Council
                                                              The President
                                            21
 ---pagebreak---                                       ANNEX
1.  ACTION TO BE TAKEN
    The programme is intended to help people in the industry adapt to the European
    and worldwide dimension of the market by promoting training on economic and
    commercial management, legal aspects and new technologies.
    The operations will cover both initial and continuing training.
1.1 Training on economic and commercial management
    This aims to develop the ability of people in the industry to conceptualize and
    exploit the European dimension in development, production, distribution and
    broadcasting of audiovisual programmes.
    The operations will cover the following:
           Promoting the definition and updating of training modules on management
           to supplement national and regional initiatives by giving them a European
            angle (initial and continuing training);
           Encouraging incorporation of the modules into existing syllabuses;
           Networking of training programmes; facilitating exchanges of teachers and
            students/professionals by providing grants and organizing work-experience
           placements in companies in other Member States and contributing to
           teacher training.
1.2 Training on new technologies
    This aims to develop the ability of people in the industry to use advanced creative
    techniques, such as computer graphics, multimedia and interactive technologies.
    The operations will cover the following:
           Promoting the definition and updating of training modules on new
           audiovisual technologies, to complement national and regional operations;
           Encouraging incorporation of the modules into existing syllabuses;
           Networking of training programmes; facilitating exchanges of teachers and
           students/professionals by providing grants and organizing work-experience
           placements in companies in other Member States and contributing to
           teacher training (initial and continuing training).
                                         22
 ---pagebreak--- 2.   IMPLEMENTATION PROCEDURE
2.1  Approach
     In implementing the programme the Commission will work closely with all parties
     concerned, such as training centres, professional associations and businesses. The
     Commission will see to it that there is a good geographical spread among the
     professionals participating in the programme and that Europe's cultural diversity
     is reflected.
2.2. Funding
     Community funds are intended to encourage the national/regional parties
     concerned to supplement existing training courses with modules on management
     and new technologies.
     Community outlay shall not exceed 75% of the training costs. The remainder will
     be provided by the national/regional parties concerned, who will be selected by
     tender.
     How much is allocated to management training and how much to training on new
     technologies will depend on the proposals submitted following the invitation to
     tender.
2.3  Implementation
     In implementing the training programme the Commission will be assisted by a
     contractor capable of coordinating the performance of the tasks laid down in the
     action plan.
     The contractor will be selected by invitation to tender.
r                -'
     The Commission will draw up terms and conditions for the contractor specifying
     how the tasks laid down in the action plan are to be implemented.
     The contractor must be a general-interest non-profit-making body.
      Selection will be based largely on the following criteria:
              professional experience in the training business, particularly economic and
              commercial management training and training on new technologies;
              contacts with the relevant parties at national, regional and European level;
              depth of familiarity with the European audiovisual industry and the
              Union's policy on it;
              experience of cross-border or European management;
              calibre of staff and soundness of management infrastructure.
                                           23
 ---pagebreak---                           FINANCIAL STATEMENT
1. TITLE OF OPERATION
   Training programme for professionals in the audiovisual programme industry
2. BUDGET HEADING INVOLVED
   B3-2010
3. LEGAL BASIS
           Article 127 of the EC Treaty, as introduced by the Treaty on European
           Union
           Council and Parliament Decision of.... on the implementation of a training
           programme for professionals in the audiovisual programme industry
4. DESCRIPTION OF OPERATION
   4.1     General objective
   The rapid growth in the supply of audiovisual programmes makes the industry a
   field with considerable potential for expansion.
   The anticipated developments in the programme industry will not be able to be
   translated into jobs unless people working in the industry receive high-quality
   vocational training, as concluded in the White Paper on Growth, Competitiveness
   and Employment. In the same way, the support mechanisms for the audiovisual
   industry will not be fully effective unless they are backed up by the skills needed
   to meet the new challenges.
   Vocational training is no longer the preserve of traditional schools and
   universities. Rapid changes in the economic environment and technology require
   not only extremely solid initial training, but also continuing training throughout
   working life.
   Training policy in the European Union is recognized as a Treaty objective
   (Article 172). In addition to steps taken by Member States, Community action
   would:
           round off the skills of professionals operating in a European context;
           make vocational training centres aware of the European dimension and
           encourage them to include appropriate up-to-date courses on their
           syllabuses;
           network existing training facilities.
                                        24
 ---pagebreak---    Action by the European Union should proceed on three fronts:
   (1)    Development and updating of supplementary training modules or refresher
           courses on how the European and international audiovisual programmes
           market operates and the prospects it offers.
           These modules will cover:
                   management training with a European dimension;
                   training on new technologies.
   (2)     Uptake of modules by training centres in their syllabuses.
   (3)     Networking of training centres by:
                   circulating teachers and students/experts on training (by providing
                   grants):
                   organizing work experience placements in companies;
                   organizing teacher training seminars.
   The Commission will be assisted by a contractor capable of coordinating the
   performance of the tasks laid down in the action plan. The contractor will be
   selected by invitation to tender.
   The Commission will see to it that the proposed operations are consistent with
   other Community training schemes, particularly under the Leonardo da Vinci
   programme and in line with Objective 4 of the European Structural Funds.
   4.2     Period covered and arrangements for renewal or extension
                   Five years (1996-2000)
                   Possible renewal" following assessment
                   Council Decision required for renewal
5. CLASSIFICATION OF EXPENDITURE OR REVENUE
   5.1     Non-compulsory expenditure
   5.2     Differentiated appropriations
   5.3     Type of revenue involved:       N/A
6. TYPE OF EXPENDITURE OR REVENUE
           Subsidy for joint financing with other sources in the public and/or private
           sector.
           There are no provisions for reimbursement or changes in the level of
           revenue.
                                         25
 ---pagebreak---     Where modules are incorporated into training syllabuses, the Community will
    contribute financially by covering up to 75% of the real cost up to a maximum
    of ECU 100 000 per year and per training centre.
    As regards networking of training centres, the Community's contribution will take
    the form of grants of up to ECU 5 000 a year or financial support for traineeship
    contracts between centres and contracts for work experience placements with
    companies (up to 75% of the real cost of operations up to a maximum of
    ECU 100 000 per year and per training centre).
    Seminars on teacher training will be subsidized by joint financing from the public
    or private sectors.
    The figures given on this financial statement show the total cost of Community
    funding, which represents up to 75% of the real cost of the operations.
7.  FINANCIAL IMPACT
7.1 Method of calculating total cost of operation (definition of unit costs)
    For the implementation of the plan over the 5 years, funding should be gradually
    increased over the first two years and then kept at the same level for the last three
    years.
    Two exceptions are teacher training and the development/updating of training
    modules which will require more funding in the first two years.
    How much is allocated to management training and how much to training on new
    technologies for each item of expenditure will depend on the proposals submitted
    following the invitation to tender.
    Average annual costs (tentative):
           The development and updating of supplementary training and refresher
           modules will entail an average annual cost of ECU 1 million, or
           one-twelfth of the average annual budget. This amount was estimated on
           the basis of information supplied by training centres in the audiovisual
           field. A large proportion of the expenditure will have to be allocated to
           research, meetings, travel expenses and translation.
           Uptake of at least 60 training modules will entail an average annual
           contribution of ECU 6 million, or 60 contributions of ECU 100 000. The
           latter amount (and the maximum percentage of Community subsidy)
           was based on the maximum amount permitted under the
           Framework Programme on Training. The estimated number of modules
           was based on the number 6f centres likely to participate in the scheme
           (60 out of the 400 centres in the European Union) in order to reach a
           significant volume of training courses.
                                         26
 ---pagebreak---                As regards networking of training centres. 320 separate grants will be
               provided at an annual average cost of ECU 1.6 million. Of the 400
               establishments in the Union providing training in the audiovisual field
               approximately 80 are likely to be involved in the network.
               Allocation of four grants to each training centre gives the average figure
               of 320 grants of ECU 5 000 a year. The amount was based on the grants
               provided under ERASMUS, suitably adapted for training for careers in the
               audiovisual industry. No centre may be allocated more than ECU 100 000
               in grants in any year.
                The Community's contribution for contracts on work experience
               placements will entail an average ECU 3 million a year to cover at least
                30 such placements.
                The unit cost of organizing teacher training seminars is estimated at
               ECU 25 000 per seminar. A larger number of seminars should be
                organized in the first two years of the scheme. The costs to be met involve
                subsistence expenses, travel expenses, organization, translation,
                publications and fees.
N.B.            The Commission will be assisted by a contractor selected by tender. The
                cost of this is included in the amounts for the various operations and
                represents 5% of the total.
                The figures in this financial statement show the total cost of Community
                funding, which is up to 75% of the real cost of the operations.
7.2     Itemized breakdown of cost
        Amounts are given at constant prices in ECU (1994 base)
                                                                     in ECU millions 1994
  Breakdown                 1996         1997       1998     1999       2000     TOTAL
                           budget
  Development and             1.255       1.255      0.830    0.830     0.830       5.000
  updating of
  modules
  Incorporation of            2.500       5.000      7.500    7.500     7.500     30.000
  modules
  Networking:
  - grants                    0.680       1.320      2.000    2.000     2.000       8.000
  - work experience           1.250       2.000      3.250    3.250      3.250     13.000
  - teacher training          0.500       0.500      0.334    0.333      0.333      2.000
  TOTAL                       6.185      10.075     13.914   13.913    13.913     58.000
                                              27
 ---pagebreak--- 7.3     Indicative schedule of appropriations
7.3.1   Schedule for proposed new operation
                                                            in ECU millions 1994
                      1996       1997        1998       1999      2000       TOTAL
  Commitment          6.185      10.075      13.914     13.913    13.913     58.000
  appropriations
  1996 payment        3                          -          -         -           3
  appropriations
  1997                3.185       5              -          -         -            8.185
  1998                    -       5.075       6.750         -         -           11.825
  1999                    -           -       7.164      6.750        -           13.914
  2000                    -           -          -       7.163     6.750          13.913
  2001                    -           -          -          -      7.163           7.163
  TOTAL               6.185      10.075      13.914     13.913    13.913          58.000
7.3.2 Schedule for the preliminary draft budget for multiannual operations whose basic
        instrument contains an "amount deemed necessary"
                                                                  in ECU millions 1994
 Situation    1995     1996                      TENTATIVE SCHEDULE
 by end       budge    draft
 1994         t        budget        1997        1998       1999      2000     TOTAL
      -          -       6.185      10.075      13.914     13.913    13.913     58.000
8.      FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN
        Payment of financial contributions shall be subject to presentation of itemized
        supporting documents prior to payment and progress reports. There will also be
        on-the-spot inspections and central monitoring.
        In addition, the various control bodies (Court of Auditors, -Financial Control,
        Authorizing Officer) shall carry out checks on the agencies managing the
        operations and on the recipients.
                                            28
 ---pagebreak--- ELEMENTS OF COST-EFFECTIVENESS ANALYSIS
9.1      Specific and quantifiable objectives: target population
         Specific objectives
To remedy the shortcomings in training for the career of producer: this type of
training is either non-existent in traditional courses or deals only in passing with
certain aspects which should be developed and tackled in the context of market
realities and the European dimension: pre-production, drawing up of business
plans, financial arrangements and marketing strategies etc.
To meet the challenge of new technologies. Developments anticipated in this area
owing to the advent of the Information Society will require well-targeted training
operations that hit the mark. Initiatives will need to be systematic and well
coordinated, focusing on digital techniques, multimedia and interactivity.
People working in the industry will need to be equipped with the right skills to
take full advantage of the European dimension of the audiovisual industry and to
develop projects that meet market requirements and have circulation potential
outside a single national market.
Continuing training should upgrade the skills of people already working in the
industry so that they can operate more effectively in both economic and
technological terms.
Initial training for future careers in the industry must incorporate as early as
possible a teaching component relating to the European dimension and
technological challenges.
 The operations will upgrade economic and commercial management skills in the
 areas of development, production, distribution/transmission, commercial
 exploitation and marketing. They are also intended to upgrade vocational skills in
 using new technologies for the production, distribution/transmission and
 commercial exploitation of programmes.
                                       29
 ---pagebreak---              Target population
    The target population is mixed comprising: higher education establishments that
    provide training for careers in cinema and television, colleges specializing in
    training on computer graphics, universities, people working in the industry,
    teachers and businesses. The operations are to cover training on management and
    new technologies. The aim is to translate this into highly skilled jobs at European
    level (the White Paper on Growth, Competitiveness and Employment predicts an
    extra 2 million jobs by the year 2000), maintain a high-performance business
    set-up at European level and systematically incorporate a European dimension into
    initial training syllabuses.
    9.2      Grounds for the operation
             Need for Community financial aid
    The proposed support scheme forms part of the Union's audiovisual policy.
    It is to operate on the principle of subsidiarity to support and supplement existing
    national-level operations. It satisfies the objectives set out in the Treaty, and in
    particular Article 127 thereof by:
                          facilitating adaptation to industrial changes;
                          improving initial and continuing vocational training;
                          stimulating cooperation on training between training centres or
                          between vocational training centres and companies.
             Choice of ways and means
    The aid provided by the Community in the form of grants covering up to 75% of
    the costs of operations is intended to encourage the parties involved at national
    and regional level to improve existing training.
    A considerable number of new high-level jobs are expected to be created as a
    knock-on effect.
    9.3      Monitoring and evaluation of the operation
    An evaluation report will be compiled after the operation has been running three
    years and a final report will be drawn up once the scheme has run its full course.
    9.4      Coherence with financial programming
    The expenditure is included in DG X's annual financial planning.
10. ADMINISTRATIVE EXPENDITURE (part A of the budget)
    Six extra posts (2 A, 2 B and 2 C) will need to be made available for managing
    and implementing the programme.
                                           30
 ---pagebreak--- CHAPTER m:              PROGRAMME FOR ENCOURAGING                                     THE
                        DEVELOPMENT AND DISTRIBUTION OF EUROPEAN
                        AUDIOVISUAL PRODUCTIONS
I.      INTRODUCTION
Among the difficulties currently facing the European programme industry the problem
of the low circulation of programmes and films made in Europe is the one cited by
people working in the industry as being the most urgent. The European market continues
to be dominated by works produced for the most part in the United States, whereas only
15% of works produced in the European Union are ever seen outside their country of
origin.
This imbalance, which initially affected film distribution, is now being seen to an
increasing extent in other media - video and television - as well.
Two factors are generally blamed for the low circulation of European productions: the
lack of cross-border distribution networks and the lack of works designed with the
European market in mind right from the development stage.
H.      CURRENT POSITION
 1.     Development: a neglected stage
The development of an audiovisual work is a key phase that precedes actual production
as such. The three main components are: screenplay writing, financial arrangements and
marketing. The quality of the preparation of these components determines not only the
quality of the work produced, but also the chances of its success on the market. Well
developed projects are more likely to appeal to distributors and encourage them to
contribute towards financing production.
The industry in Europe devotes far less attention and resources to development projects
than the industry in the United States does. Broadly speaking, investment represents a
mere 2 or 3 % of the production budget in Europe, whereas in the United States the
figure is between 7 and 10%.
For one thing there is little investment in the development of screenplay writing, which
is indispensable for the quality of afilmproject and its attractiveness to the market. What
actually happens is that the European system forces producers to start production as
quickly as possible because of lack of financial resources.
Furthermore, European producers also devote too little attention to drawing up a financing
plan or devising promotion strategies right from the development stage. In budget terms,
investment in marketing films produced in Europe is between 3% and 6% of the overall
cost of the film, whereas for films produced by the big American studios it may be as
much as 50% of the production budget.
                                             31
 ---pagebreak--- 2.       Structural weaknesses in distribution
Circulation of European audiovisual works has structural shortcomings that make it highly
uncompetitive when face with the might of American distributors operating in Europe
who rake in between 60 and 95% of box-office takings depending on the country.
In the space of ten years, European films have lost two-thirds of cinema audiences in
Europe. Revenue increasingly comes from a small number of mainly large-budget
productions made for the most part outside the Community.
Of the hundreds of distribution companies operating in the European Union very few
have maintained the capacity for pre-distribution investment in the form of advance
buying of transmission rights which helps to finance productions. Subsequently access to
the most commercially promising European films is increasingly difficult for European
distributors. This then means that they are unable to compile sufficiently attractive
catalogues and therefore have difficulty finding cinema outlets (lack of available screens,
inability to fix release dates). Since distribution companies are not involved with a film
right from the pre-production stage, they are rarely in a position to plan promotion
campaigns of any significant size.
Poor distribution of European works is also due to a lack of coordination between the
successive distribution stages of the same work via different media, i.e. between cinema
release, availability on video and TV screening. The cinema distribution and video
distribution of the same European film are often handled separately by totally different
companies, which means that investment is spread too thinly and marketing strategies are
not coherent. Screening of European works on television depends on national markets;
foreign programmes from other European countries, especially drama and documentaries,
hardly ever get shown (fewer than 10%). Having been made with the domestic audience
in mind, the programmes have the further difficulty of the language barrier preventing
them from appealing to other audiences.
HI.     GUIDELINES FOR EUROPEAN ACTION
1.      Development
1.1.    Objectives
        Given the requirements and characteristics of the market, it is essential to step up
        the resources invested by the audiovisual industry in the development stage of
        production by encouraging productions made with the European and world market
        in mind and offering the best chances of commercial success.
        At the same time action should be taken right from the development stage to
        consolidate the economic structures of production companies with growth potential
        on the European and world market. For this purpose, the companies should be
        encouraged to network so that they can work together on a set of Europe-wide
        projects. Experience from the MEDIA Programme has shown that this is the right
        approach to concentrate on.
                                              32
 ---pagebreak---        Particular attention should be given to production projects using new creative
       technologies, given the advent of the information society, as well as to companies
       specializing in the development of projects of this type.
       Operations should take account of structural objectives such as developing the
       independent production industry, in particular small and medium-sized businesses,
       and developing potential where audiovisual production capacity is low, such as
       in small countries or regions with less widely spoken languages;
1.2.   Priorities
        Support mechanisms for the development of audiovisual productions (drama,
       documentary, animation films and series) should be introduced.
       The mechanisms will have to address the three main aspects of the development
       stage:
                screenplay writing (financial support and professional assistance on writing
                techniques);
                financial engineering for productions (networking potential partners);
                marketing strategy (market research, planning marketing campaigns for the
                European and world market).
       Action is planned on three fronts:
1.2.1. Providing additional resources for screenplay writers and producers for developing
        projects aimed at the European and world market;
1.2.2. Supporting the structures of companies, in particular independent production
        companies, that have European growth potential and long-term strategies for
        developing a series of works;
1.2.3. Encouraging cooperation between companies that have joint development projects
        aimed at the European and world market.
       In implementing the three mechanisms particular attention will be paid to the
        development of innovative production projects using advanced creative techniques
        such as digital video, image synthesis, computer animation, virtual reality and
        dynamic cinema. Priority will be given to multimedia programmes and interactive
       television applications.
        As a rule, the financial support under these mechanisms will be granted mainly
       to independent European production companies in the form of advances to cover
       up to 50% of the costs of project development. The advances will be repayable
        from the first day of shooting.
        The implementation of the mechanisms will enable approximately a hundred
        projects with high circulation potential to be developed each year, including
        twenty or so involving new technologies.
                                              33
 ---pagebreak--- 2.        Distribution
2.1.      Objectives
         For European audiovisual works to be competitive on their own market and on
          the world market, their circulation must be stepped up by strengthening
          production, distribution and transmission structures.
         For this to happen, catalogues of European works must be compiled that can
         be used for the whole range of audiovisual media: film distribution, television
         broadcasting and video and multimedia production and distribution.
         To this end, distributors and broadcasters should be encouraged to be involved
         in financing works right from the production stage by purchasing in advance
         all or part of the rights. Their involvement will improve the supply and quality
         of works by making more resources available for production and ensuring that
         distributors and broadcasters are better placed to make best use of catalogues.
         The economic structures of distribution companies will also need strengthening,
         particularly in the cinema and video fields, to make them more competitive.
         Priority will be given to companies with development potential on the European
         market and long-term commercial strategies.
         Structural operations should extend to regrouping the companies into cross
         border cooperation networks working together to circulate European works aas
         widely as possible on the European and world market.
         Experience from the MEDIA Programme has shown that this is the right
         approach to concentrate on.
         Production and distribution companies, particularly independent ones, should
         be encouraged to attend large European and international commercial events,
         such as fairs and festivals, to maintain the effectiveness of their promotion
         activities.
         Operations should take account of structural objectives such as developing the
         independent production industry, in particular small and medium-sized
         businesses, and developing potential where audiovisual production capacity is
         low, such as in small countries or regions with less widely spoken languages;
2.2.     Priorities
2.2.1.   Film and video distribution
         Two types of operations are envisaged:
2.2.1.1. Encouraging distributors from several European countries to work together on
         financing film productions, since this is essential for the quality of films, their
         subsequent distribution and the compiling of catalogues for the European and
         world market.
                                             34
 ---pagebreak--- 2.2.1.2. Encouraging the networking of European distribution and production companies
         (film and video) on the basis of joint cross-border distribution strategies for a
         certain number of European works.
         Financial incentives will be granted to cover up to 50% either of the cost of
         advance purchasing of rights for works with high circulation potential
         (point 2.2.1.1.), or of cross-border distribution costs (point 2.2.1.2.) with upper
         limits to be set in each case.
         Support will take the form of advances repayable from the proceeds of
         exploitation of the rights on the European and world markets.
2.2.2.   Support mechanism for cross-border transmission of television programmes
         produced by independent companies (drama, documentaries, animation films
         and series)
         This mechanism will grant loans for joint European productions for the
         European and world market bringing together independent production
         companies and television companies that undertake to broadcast the
         programmes jointly in their countries.
         The programmes must be suitable for the secondary market.
         The mechanism will simultaneously benefit:
               the works:
              by encouraging the involvement of television companies in the production
               of proj ects put forward by independent producers and in broadcasting thèse
              works across Europe;
               by gaining access to the secondary market: video, cable, multimedia,
               interactive television;
               the companies:
               independent production companies will have a certain volume of
               production that is guaranteed to be broadcast across Europe;
               companies managing catalogues will have catalogues suitable for the
               secondary market:
               cooperation between companies:
               in particular between television companies, who will be encouraged to
               network to guarantee wider circulation of works.
         Financial incentives will be granted in the form of loans on the basis of
         production and distribution plans submitted jointly by independent producers
         and television companies.
                                             35
 ---pagebreak---        The loans will be granted to television companies in at least two countries
       working together with independent producers on production projects aimed at the
       European and world market. The coproducing television companies will keep the
       rights for initial and secondary transmission (within a time limit of up to 5 years),
       and the other operating rights, such as for the secondary market, will be held by
       the independent coproducers who may, where appropriate, transfer them to
       companies that manage catalogues of rights.
       Loans will be repayable without interest as soon as production is completed (on
       completion of the first episode in the case of series). The repayment deadline may
       be extended by a year, at the request of the beneficiaries, in which case interest
       will be charged on the loan.
       Real costs relating to dubbing, subtitling or multilingual shooting will not have
       to be repaid.
2.2.3. Alongside measures supporting circulation, there is a need for a set-up of services
       to help production and distribution companies get more involved in large
       commercial events organized at European and international level. (Particular
       attention should be given to small and medium-sized companies with development
       potential outside their own country).
       The services will help gain access to events, support companies' promotion
       operations, provide information on the type of commercial strategy needed at
       European level and put them in contact with potential partners.
       Particular attention will be given to services that provide more exposure for
       European companies and their production projects and products at world events,
       in particular by encouraging them to attend as groups and carry out joint
       promotion campaigns.
       The services will be provided for about ten events a year on the European market
       and at least two events for the world market.
3.     Financial instruments
       The Commission also intends to encourage the creation of financial instruments
       to mobilize funding for audiovisual production (film and TV).
       They will be funded in particular from the repayment of advances and loans
       granted under MEDIA I (1991-95) and under the proposed scheme for the
       development and distribution of European audiovisual works (MEDIA II).
                                             36
 ---pagebreak---                                      Proposal for a
                                COUNCIL DECISION
            on a programme to promote the development and distribution of
        European audiovisual works (MEDIA II - Development and Distribution)
                                      (1996-2000)
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 130(3) thereof,
Having regard to the proposal from the Commission(1),
Having regard to the opinion of the European Parliament^,
Having regard to the opinion of the Economic and Social Committee(3),
Whereas the Heads of State or Government, meeting as the European Council in Brussels
on 10 and 11 December 1993, adopted the White Paper on Growth, Competitiveness and
Employment as the basis for action by the European Union and its Member States,
supporting an industrial development approach based on global competitiveness as the key
to growth and jobs; and whereas the White Paper, and Chapter 5-C thereof in particular,
states the economic importance of the audiovisual industry;
Whereas the Heads of State or Government, meeting as the European Council in Corfu
on 24 and 25 June 1994, took note of the report by the Bangemann Group entitled
"Europe and the Global Information Society - Recommendations to the European
Council", in particular acknowledging the strategic importance of the audiovisual
programme industry in terms of content;
Whereas Article 128(4) of the Treaty requires the Community to take cultural aspects into
account in its action under other provisions of the Treaty; whereas participation in the
Programme should reflect European cultural diversity;
Whereas the Council, at its joint industry/telecommunications meeting of
28 September 1994, issued a favourable opinion on the Commission communication of
 19 July 1994 entitled "Europe's way to the information society: an action plan"(4) and
emphasized the need to improve the competitiveness of the European audiovisual
industry;
(1)
         OJ No L
(2)
         OJNoL
(3)
         OJ No L
(4)
         COM(94) 347 final, 19.7.1994.
                                           37
 ---pagebreak---  Whereas the Council took formal note, on 17 June 1994 of the Green Paper on "Strategy
 options to strengthen the European programme industry in the context of the audiovisual
 policy of the European Union"(5);
 Whereas the Commission consulted the people in the industry on the options put forward
 in the Green Paper, in particular by holding the European Audiovisual Conference in
Brussels from 30 June to 2 July 1994;
Whereas the European Parliament, in its Resolution of 6 May 1994(6), examined the
 problems of the audiovisual industry, following Council Directive 89/552/EEC(7) (the
 "Television Without Frontiers" directive), in preparation for the European audiovisual
 conference and took the view that the priorities established inter alia during the
discussions on amendments to the MEDIA programme, namely financing mechanisms,
pre-production, distribution and training, were the best means of establishing coherent,
 stable European networks;
Whereas the Economic and Social Committee issued its opinion(8) on the Green Paper,
 stating that European-level programmes such as MEDIA could have a positive influence
 on the development of programme structures and means of production in Europe;
Whereas the Commission has implemented a programme of measures to encourage the
development of the European audiovisual industry (MEDIA) (1991-95), adopted by
Council Decision 90/68 5/EEC(9), including measures to support the development and
distribution of European audiovisual works;
Whereas the Council, at its meeting of 5 November 1993, after taking note of the
Commission Communication of 23 July 1993 on the MEDIA programme mid-term
evaluation report, felt that it would be appropriate to examine suitable measures for
launching a MEDIA II programme after 1995;
Whereas the European Council in Essen on 9 and 10 December 1994 called on the
Commission to present proposals for a new MEDIA programme;
Whereas experience from the MEDIA Programme has shown that action is needed both
before and after production; whereas companies in the sector, in particular small and
medium-sized businesses, should be strengthened and cooperation between
distributors/broadcasters and producers should be encouraged;
Whereas the emergence of a European audiovisual market requires the development of
"European works", which means works from Member States of the European Union as
defined in Article 6 of Directive 89/552/EEC;
Whereas the competitiveness of the audiovisual programme industry requires utilization
of new technologies at the programme development stage;
(5)
         COM(94) 96 final, 6.4.1994.
(6)
         OJ No C 205, 25.7.1994, p. 561.
(7)
         OJ No L 298, 17.10.1989, p. 23.
(8)
         ESC 1000/94, 14.9.1994, p. 6.
(9)
         OJNo L 380, 31.12.1990, p. 37.
                                           38
 ---pagebreak--- Whereas there is a need for improvement in the circulation prospects of European
cinematographic works on the, European and world market;
Whereas there is a need for improvement in the television broadcasting prospects of
European works;
Whereas European producers and distributors should be more numerous and more
effective on programme markets;
Whereas the development of the European audiovisual industry requires mechanisms
capable of attracting public and private resources;
Whereas'support for development and distribution should take account of structural
objectives such as developing the independent production industry, in particular small and
medium-sized businesses, and developing potential where audiovisual production capacity
is low, as in small countries or regions with less widely spoken languages;
Whereas, in accordance with the principle of subsidiarity, action taken by the Community
should support and supplement action taken by the relevant authorities in the Member
States,
HAS DECIDED AS FOLLOWS:
                                         Article 1
A programme to promote the development and distribution of European audiovisual
works (hereinafter referred to as "the Programme"), to run for five years from
1 January 1996, is hereby adopted for the purpose of strengthening the European
audiovisual industry, particularly in the areas of development and distribution.
                                         Article 2
The aims of the Programme are as follows:
(1)     As regards development:
        - to promote the development of production projects aimed at the European and
          world market and to support companies capable of developing such projects;
        - to develop production projects that make use of new creative techniques and to
           support companies capable of developing such projects;
(2)     As regards distribution:
        - to encourage European distributors to invest in cinema film production and to
           set up cross-border structures to distribute the films;
        - to encourage television companies to cooperate in investing in the production
           of works aimed at the European and world market and to set up cross-border
           structures to transmit those works:
                                             39
 ---pagebreak---          - to support linguistic diversity of programmes;
         - to stimulate access to commercial events promoting European productions, in
           particular independent ones.
                                          Article 3
 The measures described in the Annex shall be put into effect in order to achieve the
 objectives laid down in Article 2. They shall be implemented in accordance with the
procedure set out in Article 6.
                                          Article 4
As a rule, beneficiaries of Community support working on the implementation of the
measures laid down in Article 3 must provide a significant proportion of the funding;
Community funding shall not exceed 50% of the cost of operations.
                                          Article 5
Financial support under the Programme may be granted in the form of loans, repayable
advances or subsidies. The repayments under the Programme, together with the
repayments from operations under MEDIA (1991-95), will provide the funds for financial
instruments to mobilize public and private financing for European audiovisual production.
                                          Article 6
(1)      The Commission shall be responsible for implementation of the programme.
(2)      The Commission shall be assisted by an committee of an adivosry nature
         composed of the • representatives of the Member States and chaired by the
        representative of the Commission.
         The representative of the Commission shall submit to the Committee a draft of
        the measures to be taken. The Committee shall deliver its opinion on the draft,
        within a time limit which the chairman may lay down according to the urgency
        of the matter, if necessary by taking a vote.
        The opinion shall be recorded in the minutes; in addition, each Member State
        shall have the right to ask to have its opinion recorded in the minutes.
        The Commission shall take the utmost account of the opinion delivered by the
        Committee. It shall inform the Committee of the manner in which its opinion has
        been taken into account.
(3)     The draft proposals for measures to be taken by the Commission, as referred to
        in paragraph 2, shall principally cover the following:
        - arrangements for budget implementation for the Programme;
                                             40
 ---pagebreak---        - arrangements for implementation of the operations set out in the Annex;
       - arrangements for monitoring and evaluating the operations.
                                        Article 7
Within the six months following the first three years of the Programme's implementation,
the Commission shall present to the European Parliament, the Council and the Economic
and Social Committee an evaluation report on the results achieved with suitable
proposals, as appropriate.
When the Programme has run its full term, the Commission shall submit a report on the
implementation and results of the Programme to the European Parliament and the
Economic and Social Committee.
Done at Brussels,                                            For the Council
                                                              The President
                                            41
 ---pagebreak---                                         ANNEX
 1.     ACTION TO BE TAKEN
The Programme is intended to enhance the competitiveness of the European audiovisual
industry on the European and world market by supporting the development of works with
genuine commercial potential and the creation and strengthening of cross-border
distribution and transmission networks;
The proposed operations shall cover the following:
1.1     Development
        Improving development opportunities (preproduction) for drama, animation and
        documentaries with a view to access to the European and world market:
        - by supporting the development of drama, documentaries and animation (cinema
           and television) aimed at a European and world audience, in particular by
           promoting improvement in screenplay techniques;
        - by supporting companies that have development project packages with
           European and world market potential;
        - by encouraging networking of companies with j oint development proj ects aimed
           at the European and world market.
1.2.    Distribution and transmission
        Improving film and video distribution for European works with high circulation
        potential on the European and world market:
        - by supporting the introduction of European distribution mechanisms
           encouraging distributors to contribute to funding production of works with
           commercial potential on the European and world market;
        - by promoting networking of European distributors with joint commercial
           strategies on the European and world market;
1.2.2. Television broadcasting
        Improving circulation opportunities for television programmes aimed at the
        European and world market:
        - by introducing a mechanism encouraging television companies to contribute to
           the financing of works with high circulation potential made by independent
           production companies and to distribute them on the European market.
        - by supporting linguistic diversity by means of dubbing, subtitling and
           multilingual production.
                                           42
 ---pagebreak--- 1.2.3. Promoting independent productions
       Improving access for independent producers and distributors to the European and
       world market by operating services and promotional activities at commercial
       events, such as markets, fairs and festivals, organized at European and
       international level
2.     IMPLEMENTATION PROCEDURE
2.1.   Approach
       In implementing the Programme, the Commission will work closely with the
       public authorities that handle support for the audiovisual industry in the Member
       States of the Union in order to ensure that the operations complement each other
       fully in accordance with the principle of subsidiarity. The Commission will see
       to it that there is a good geographical spread among the professionals participating
       in the programme and that Europe's cultural diversity is reflected.
3.     Funding
       Community funds are intended to improve market access opportunities for
       productions targeted on a European and world audience. They are also intended
       to strengthen production and distribution companies with growth potential on the
       European market and thereby help restructure the industry.
       In either instance. Community outlay shall not exceed 50% of the costs and shall
       be granted in the form of repayable advances. The remainder will be provided by
       the industry.
       Community support for linguistic diversity in production will be granted in the
       form of subsidies.
2.3.   Implementation
       In implementing the programme the Commission will be assisted by two
       contractors capable of coordinating the performance of the tasks laid down in the
       action plan.
       One contractor will handle development, the other distribution as follows:
       Development:
       - development of drama, animation films and series, and documentaries; and
          support to companies;
       - development of programmes using advanced creative technologies;
       Distribution:
       - film and video distribution on the European market;
                                             43
 ---pagebreak--- - broadcasting of television programmes on the European market;
- promotion of access for independent productions to the European and world
   market.
The contractors will be selected by tender.
The Commission will draw up terms and conditions for each of the contractors
specifying how the tasks laid down in the action plan are to be implemented.
The contractors will manage, on behalf of the Commission, the resources allocated
to them for the purpose of stimulating development and distribution in the
audiovisual industry. Resources will be conveyed to audiovisual project promoters
in the form of repayable advance or of loans.
The contractors must be general-interest non-profit-making bodies.
Selection of contractors will be based on the following criteria:
- their professional experience in development and distribution;
- their contacts with the relevant parties in the industry at national, regional and
   European level;
- the depth of their familiarity with the European audiovisual industry and the
   Union's policy on it;
- their experience of cross-border or European management;
- the calibre of their staff and the soundness of their management infrastructure.
                                     44
 ---pagebreak---                           FINANCIAL STATEMENT
1. TITLE OF OPERATION
   Programme to promote the development and distribution of European audiovisual
   works
2. BUDGET HEADING INVOLVED
   B 3 2010
3. LEGAL BASIS
   - Article 130 of the EC Treaty, as introduced by the Treaty on European Union
   - Council Decision of        on the implementation of a programme to promote the
      development and distribution of European audiovisual works
4. DESCRIPTION OF OPERATION
   4.1     General objective
   Low circulation of European programmes and films is today one of the major
   handicaps of the European programme industry. The European market is still
   dominated by productions from outside Europe, mostly the United States. Works
   produced in the European Union are hardly distributed outside their country of
   origin; only 15% of them are distributed outside the country where they are
   produced. This imbalance is even more apparent when it comes to subsequent
   video or television release. The low circulation of European productions is largely
   due to the lack of cross-border distribution networks and the absence of
   productions that match market requirements.
   Project development is a crucial stage in the life cycle of a television programme
   or film not just in terms of market access, but also in terms of the availability of
   pre-production funding opportunities. The industry in Europe devotes far top few
   resources to the project development stage. Producers tend to neglect the
   development phase, which has three main components: screenplay writing,
   financial engineering for production and promotion strategy.
   Pursuant to the Treaty objectives (Article 130 in particular) and in the light of the
   consultations held by the Commission following publication of the Green Paper
   on the ELTs audiovisual policy, development and distribution in the audiovisual
   industry must be fostered.
   As regards development, the action proposed by the Commission will proceed as
   follows:                                                   '
                                         45
 ---pagebreak---  The audiovisual industry will be encouraged to step up the resources it invests in
the development stage of production, with special emphasis on projects targeted
 on a European audience.
 Operations will be undertaken to consolidate the economic structures of
production companies that have expansion potential on the European market.
 These companies will be encouraged to network.
Particular attention will be given to production projects using new creative
 technologies, given the advent of the information society, and to companies
 specializing in developing such projects.
 A support mechanism will be introduced to develop audiovisual works in the
fields of drama, documentary and animation films and series. It will cover the
three main components of the development stage: screenplay writing, financial
engineering for production and promotion strategy.
The mechanism will simultaneously benefit:
(1)      the works;
(2)      the companies;
(3)      company regroupings.
As regards distribution, the Commission's aim is:
to make European works more competitive on their own market by stepping up
circulation through improved production, distribution and transmission structures.
* To improve film and video distribution opportunities it is essential to:
- introduce European distribution mechanisms encouraging distributors to
   contribute to the funding of production of works with commercial potential on
   the European market (over the five years repayable loans will help involve
   distributors in the distribution of about 130 to 140 films);
- encourage networking of European distributors with j oint commercial strategies
   on the European market to help compile distribution catalogues of European
   works aimed at the European and world market. This will help to restructure
   the economic set-up of distribution companies by regrouping them.
* To improve circulation opportunities for television productions it is essential to:
- introduce a support mechanism for Europe-wide broadcasting of television
   productions made by independent companies: drama, documentaries and
   animation films and series.
*  To improve prospects of access to the European and world market for
   production and distribution companies - in particular independent ones - it is
   essential to:
                                      46
 ---pagebreak---     - encourage more numerous and more efficient promotion operations by
      producers and distributors at commercial and promotional events, such as
       markets, fairs, festivals and the like.
4.2 Period covered and arrangements for renewal or extension
    - five years (1996-2000)
    - possible renewal following assessment
    - new Council decision required for renewal
5.  CLASSIFICATION OF EXPENDITURE OR REVENUE
    5.1     Non-compulsory expenditure
    5.2     Differentiated appropriations
    5.3     Type of revenue involved:       N/A
6.  TYPE OF EXPENDITURE OR REVENUE
*   Support for development:
    Financial support for development will be granted to cover up to 50% of the costs
    of project development in the form of repayable advances.
*   Support for film and video distribution:
    Financial incentives will be granted to cover up to 50% of advance purchasing of
    the rights of works aimed at a European audience in the form of advances that are
    repayable from the proceeds of exploiting these rights on the European and world
    market.
    Financial incentives for networking of distributors will be granted in the form of
    repayable advances to cover up to 50% of costs.
*    Support for Europe-wide broadcasting of television productions:
    Loans will be granted for coproduction of works aimed at a European audience
    made by independent production companies working together with television
    companies which undertake to screen the programmes jointly in their respective
    countries. Loans will be repayable without interest as soon as production is
    completed. The repayment deadline may be extended by a year, at the request of
    the beneficiaries, in which case interest will be charged on the loan. In addition,
    a non-repayable premium for quality dubbing or subtitling may be paid to
    broadcasters/producers who buy the programmes.
                                           47
 ---pagebreak---            All repayments of advances and loans will be collected by the two contractors
           selected by the Commission by tender. The funds will be used for financial
           engineering measures, which will be laid down in a future Council Decision,
           to fund audiovisual production.
           How much is allocated to the "new technologies" component for each operation
           will depend on the proposals following the invitation to tender.
 7.     FINANCIAL IMPACT
 7.1    Method of calculating total cost of operation (definition of unit costs)
 *       Development:
         Support for development has three components:
        - the works;
        - companies;
        - networking of companies.
For companies and company networking the level of support should be gradually
increased in the course of the five years of the implementation of the scheme. This
would make it possible to consolidate the desired restructuring.
For the support mechanisms for the works, the opposite approach should be adopted:
Community contributions should be gradually decreased to help the overall aim of
encouraging applications for restructuring operations.
A tentative breakdown of costs based on this approach is shown in Table 7.2. below.
The costs, which were calculated in the way set out in section 7.1, are shown as annual
averages. The figures are tentative.
        Support for works:
Judging by the support mechanisms for production development for documentaries, drama
and animation under MEDIA I (1991-95), support of ECU 40 000 per work is on average
adequate for significant results. Obviously development costs vary according to the type
of production: documentary, drama, animation, and within each type there can be
significant differences. Over the five years it is estimated that 625 works could receive
development support, which means a total of ECU 25 million over 5 years, or an average
of ECU 5 million a year.
        Support for companies
Under the MEDIA programm (1991-95) various structures provided financial support for
production companies developing various projects at the same time. Previous experience
in the field of drama shows that this approach calls for average amount of between
ECU 100 000 and ECU 150 000. To provide support for a reasonable number of
                                            48
 ---pagebreak--- production companies over five years, ECU 37 million will be needed (ECU 7.4 million
a year on average).
        Support for networking
The MEDIA programme (1991-95) concentrated on networking in the field of animation.
Extrapolating from results obtained in that field (10 groupings comprising 30 or so
studios), the amount needed per company involved in a grouping is in the region of
ECU 150 000. This will need to involve about a hundred production companies (in the
different fields of drama, documentary, new technologies and animation) in order to
achieve significant results. The amount needed for the five years is ECU 15 million
(ECU 3 million a year on average).
The total estimated cost for support for development is therefore ECU 77 million.
The average annual cost of the operation is ECU 15.4 million.
The Commission will be assisted by a contractor selected by tender. The cost of this is
included in the amounts for the various operations and represents 5% of the total.
*       Distribution:
The level of support for film and video distribution and improvement of production
circulation should be gradually increased over the first two years of the scheme and then
maintained level for the following three years. Support for company promotion should,
however, be increased throughout the first four years.
Distribution support comprises:
        * Support for film and video distribution:
        - Incentives for distributors to contribute to production funding;
        - Incentives for networking of distributors to compile catalogues.
        * Support for improving circulation prospects for television programmes.
        * Support for promoting companies on the European and world market.
*       Support for film and video distribution:
        - incentives for distributors to contribute to production funding:
        On the basis of experience of coordination under the MEDIA programme
        (1991-95) of structures responsible for distribution, and judging by the average
        number of films produced in the European Union (500), distributors should be
        encouraged to contribute to financing about 130 to 140 films. People in the
        industry consulted said that for a large-scale European film costing on average
        ECU 6 million, average support of about ECU 750 000 would be required to
        have the desired effect. The cost over the five years would therefore be ECU 102
        million (ECU 20.4 million a year on average).
                                            49
 ---pagebreak---  - Incentives for networking
 On the basis of the results obtained from film and video distribution under the
MEDIA programme (1991-95), regarding the amounts to be allocated, the number
 of films to be distributed and the number of distributors to include in successful
networks, a sum of ECU 800 000 is needed for the coordinated distribution of at
least 5 films by 4 distributors/ About 12 regroupings a year should be
implemented on average. The cost over five years is estimated at
ECU 48 million,or an annual average of ECU 9.6 million (see breakdown in 7.2.).
 Support for improving circulation prospects for European production:
As indicated in particular by the number of hours of television a year produced
in the European Union and estimated hourly costs and experience gained from the
MEDIA programme (1991-95), the average unit cost per television production is
estimated at ECU 500 000.
About 210 or so works should receive support at a cost of ECU 105 million over
the five years (average of ECU 21 million a year).
Support for promoting companies:
Experience under the MEDIA programme (1991-95) of markets and festivals
organized in the European Union and international events (particularly activities
to promote European films) suggest appropriate operations and average costs for
improving the prospects of European production and distribution companies.
Consideration should be given to specific operations for speeding up financial
arrangements and coproductions at events specially for these purposes. Over the
five years ECU 7.5 million will be needed for events in the European Union and
ECU 2.5 million for international events to guarantee the effective presence of
European companies. This comes to ECU 10 million over the five years (average
of ECU 2 million a year).
The Commission will be assisted by a contractor selected by tender. The cost of
this is included in the amounts for the various operations and represents 5% of the
total.
The figures in thisfinancialstatement show the total cost of Community funding,
which is up to 50% of the real cost of the operations.
                                      50
 ---pagebreak---     7.2     Itemized breakdown of cost
                                                   in ECU millions 1994
Breakdown               1996          1997         1998       1999     2000     TOTAL
                       budget
                                   Support for development
- works                          7           6            5          4        3      25
- companies                      6           7            7          8        9      37
- networks                       2.          3            3          3        4       15
Total                           15          16           15         15       16      77
                         Support for film and video distribution
* incentives for                15          18          20         23       26      102
distributors to
contribute to
production
* networking of             7.815       9.925        9.086     10.087   11.087       48
distributors to
compile catalogues
Total                      22.815     27.925       29.086      33.087   37.087      150
               Improving circulation prospects for television productions
                          (including quality dubbing and subtitling)
Loans                           15          15          25          25       25     105
             Promotion: improvmg access prospects to commercial events,
                              trade fairs, festivals and the like.
European events                0.5         0.5          1.5        2.5      2.5      7.5
World events                   0.5         0.5          0.5        0.5      0.5     2.5
Total                            1           1            2          3        3       10
GRAND                      53.815      59.925       71.086     76.087   81.087      342
TOTAL
    7.3     Indicative schedule of appropriations
                                                  51
 ---pagebreak--- 7.3.1   Schedule for proposed new operation
                                                 in ECU millions 1994
                            1996          1997       1998      1999      2000   TOTAL
   Commitment             53.815        59.925     71.086    76.087    81.087        342
   appropriations
   1996 Payment                38            -           -        -         -         38
   appropriations
   1997 Payment           15.815            42           -        -         -     57.815
   appropriations
   1998 Payment                  -      17.925         45         -         -     62.925
   appropriations
   1999 Payment                  -           -     26.086        46         -     72.086
   appropriations
   2000 Payment                  -           -           -   30.087        54     84.087
   appropriations
   2001 Payment                  -           -           -        -    27.087     27.087
   appropriations
   TOTAL                  53.815        59.925     71.086    76.087    81.087        342
7.3.2   Schedule for the preliminary draft budget for multiannual operations whose basic
        instrument contains an "amount deemed necessary"
                                                 in ECU millions 1994
Situation     1995          1996                        TENTATIVE SCHEDULE
by end        budget        preliminary
1994                        draft            1997       1998      1999      2000      TOTAL
           -            -        53.815      59.925     71.086    76.087    81.087     342.000
8.       FRAUD PREVENTION MEASURES; RESULTS OF MEASURES TAKEN
        Payment of financial contributions shall be subject to presentation of itemized
         supporting documents prior to payment.
         In addition, the various control bodies (Court of Auditors, Financial Control,
         Authorizing Officer) shall carry out regular checks on the agencies managing the
         operations and on the recipients.
                                                52
 ---pagebreak--- 9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS
   9.1     Specific and quantifiable objectives: target population
           Specific objectives
   Development
   To remedy the industry's shortcomings as regards the project development stage
   (production project development, drawing up of financing plans, marketing and
   promotion strategies, financial arrangements etc.) and in particular the
   development of innovative programmes using new technologies.
   Distribution
   To overcome the economic handicaps due to low circulation of films and
   television programmes which deprives the industry of the benefits of a large-scale
   market. This will be achieved mainly by bringing the distribution and production
   industries closer together, particularly in the area of films.
   To promote transmission and cooperation agreements between producers and
   television broadcasters.
   To improve market access for European productions.
   Target population
   The target population comprises various parties, such as production companies,
   distribution companies, television companies and companies handling new
   technologies.
   9.2      Grounds for the operation
           Need for Community financial aid
   The proposed support scheme forms part of the Union's audiovisual policy.
   It is to operate on the principle of subsidiarity to support and supplement existing
   national-level operations. It satisfies the objectives set out in the Treaty, and in
   particular Article 130 thereof by:
                        speeding up the adjustment of industry to structural changes;
                        encouraging an environmentfavourable to initiative and to the
                        development of undertakings throughout the Community,
                        particularly small and medium-sized undertakings;
                        encouraging an environment favourable to cooperation
                        between undertakings;
                       fostering better exploitation of the industrial potential of
                        policies of innovation, research and technological
                        development.
                                         53
 ---pagebreak---         Choice of ways and means
Financial incentives to mobilize additional investment from the industry and
increase the volume of activities considerably. This approach is fully compatible
with market realities, since it is designed to stimulate the market.
The mobilization of capital under the first MEDIA programme (1991-95) meant
that financial support from the Community had a multiplier effect of 4 on
average. This time support will help restructuring and will step up the leverage
of Community intervention.
The main areas of uncertainty relate to the fact that the audiovisual industry is an
intrinsically high-risk industry owing to its innovative nature.
9.3     Monitoring and evaluation of the operation
An evaluation report will be compiled after the operation has been running three
years and a final report will be drawn up once the scheme has run its full course.
        Performance indicators:
There will be a central monitoring system comprising two types of evaluation:
        statistical and financial information for evaluating management of the
        operations;
        statistical data will be collected and interpreted to evaluate the impact of
        the scheme as whole on the market (for example: how many companies
        are involved in networks; how many of the projects developed go into
        production; how much projects that are worked on after receiving
        development support under the scheme are worth; how many works are
        helped to go into circulation etc.).
       Details and frequency of planned evaluations:
       Questionnaires, statistical data collection; interpretation of replies and data;
       inspections carried out on the management structures.
       Assessment of the results obtained
       Reports are to be drawn up on a regular basis.
9.4    Coherence with financial programming
       The expenditure is incorporated into DGX^ multiannual financial
       programming.
                                       54
 ---pagebreak--- 10.     ADMINISTRATIVE EXPENDITURE (part A of the budget)
Management and implementation of the scheme will require 25 extra posts to be made
available:
        for development operations ( 2 A posts, 2 B posts and 2 C posts = 6 posts);
        for film and video distribution support operations, networking of distributors to
        compile catalogues; and improving circulation prospects of television works (6
        A posts, 4 B posts and 6 C posts = 16 posts);
        for promotion and improving access to commercial events: (1 A post, 1 B post
        and 1 C post = 3 posts).
                                           55
 ---pagebreak---                                            ANNEX
                                                                              2 July 1994
                      EUROPEAN AUDIOVISUAL CONFERENCE
                    Group discussing Community support mechanisms
 Chaired by: Michael FLINT
In its discussion of the issues raised by the Green Paper regarding Community support
mechanisms, the group took account of the four basic conditions which will determine
the future of the European programme industry:
 *       it must be competitive in the context of an industry that is increasingly open and
         global;
 *       it must be forward-looking and participate actively in the development of the
         information society;
 *       it must reflect the creative talent and personality of the peoples of Europe;
 *       it must be capable of translating growth into new jobs in Europe.
The group acknowledged that these were the basic directions for the industry's future.
The following points were also made:
 *       the audiovisual industry is at the forefront of industries with strong growth
        potential, especially in terms of job creation;
*       the issue of preserving the diversity of national and regional cultures is now
        clearly linked to the development of a European programme industry of a decent
        size that can pay its way;
*        digital compression technology is seen as revolutionary and is likely to radically
        alter the economics of the industry, in particular as it pushes the strategic role of
        the programme industry to the fore;
*       If the European Union intends to step up its audiovisual policy, it should do so
        soon.
Diagnosis
The group accepted the diagnosis of the current state of the film industry as formulated
in the Green Paper:
*       the fragmentation of the industry into national markets, which means that
        companies are too small to compete on European and world markets;
                                              56
 ---pagebreak--- *       the partitioning of national markets is compounded by a low rate of cross-border
        programme distribution and circulation;
*       the industry is trapped in a spiral of chronic deficit;
*       the industry is unable to attract the European capital, which is nonetheless
        available for investment in the programme industry outside Europç.
The television industry is facing:
*       soaring demand and increasing production costs;
*       low rate of programme circulation within Europe;
*       poor production structures and programme catalogues that are not attractive to
        European audiences.
Objectives
The discussion group also agreed with the objectives set out in the Green Paper. The
European Union should mobilize its human and financial resources to develop a
programme industry that is competitive on both its own market and the world market to
serve as a vehicle for its cultures, create jobs and generate wealth. It is a medium and
long-term policy, the ultimate aim being to make the European programme industry a
profit-making concern in an open and dynamic world market.
the so-called "Europuddings" that come out of contrived co-productions should be
avoided.
Existing Community instruments
The group agreed unanimously that the financial resources granted under the MEDIA
programme were inadequate for the desired objectives.
Potential solutions:
*       to keep the number of MEDIA projects at its present level, but to increase
        funding considerably;
*       to concentrate on a smaller number of projects and increase resources.
There were no criticisms of the action plan, since it is generally viewed as a success,
though it is still to early to make a full evaluation
                                             57
 ---pagebreak--- Other European instruments
The group felt that the overall results of Eurimages had been positive within its limited
remit of encouraging European television drama and film co-productions. However, it
needed additional funding, given the number of applications it receives, and it was
suggested that the eligibility condition which requires three countries to be involved in
the co-production should be changed to require producers from two countries plus a
distributor in a third country.
It was thought to soon to make any assessment of EUREKA Audiovisual.
Priorities
The group went on to discuss the suitability of the priorities set out in the Green Paper:
*        training (geared towards the market and new technologies);
*        preproduction and project development;
*        distribution and marketing, in particular high-quality dubbing and subtitling;
 *       stimulating private investment.
There was unanimous agreement that training should focus on:
 *       writers;
*        producers;
*        commercial businesses and financial management;
*        interactive and multimedia technology.
There was all-round support for prioritizing preproduction and project development.
As regards distribution and marketing, there was a consensus on the basic need for high-
quality subtitling and doubling to improve the circulation rate of programmes in Europe.
A distinction should be made between support mechanisms for television production and
support mechanisms for film production.
As regards television, a common position emerged between television broadcasters and
producers that a system of incentives in the form of premiums should be introduced in
order to encourage the screening of programmes from other European countries.
Incentives would be necessary because programmes from other European countries work
out much more expensive for broadcasters than non-European programmes. Since cheap
non-European programmes get shown so often in Europe, the audiences have got used
to them and are now more receptive to American programmes than to productions from
other European countries. It has nonetheless been shown that foreign programmes can
appeal to European audiences, if given enough exposure.
The objective that emerged most clearly (and was agreed on by a large majority) was to
produce and distribute between 15 and 20 large-scale film productions a year throughout
Europe.
                                            58
 ---pagebreak--- Incentives for distribution of full length films throughout the single market and
encouragements given to production via distributors would help, but there was no
agreement on what form they should take.
                                          • .•
As regards the proposal to encourage private-sector investment, the group felt that soft
loans financed from the resources mobilized by the EU plus national mechanisms would
be an adequate support system.
The question of whether priority should be given to companies or projects would have
to be decided in accordance with the type of incentives.
Geographical scope, timescale and financial implications of support mechanisms
Notwithstanding the comments below on the Member States and regions with low
production capacity, there was agreement that any EU support system should have
genuinely European objectives. Although unanimity was nor reached on how to put this
into practice, most of the group supported European (EU) mechanisms which would
provide incentives only to projects with international potential. National mechanisms
should also take European objectives into consideration.
In any case, there was agreement that a system of recycling funds within the audiovisual
industry would not be effective and new funds would be necessary. The incentives should
take the form of soft loans or guarantees that could be repaid or recovered, once a project
or a company started making a profit. However, the group felt mat certain incentives
could not take the form of loans, but would have to be granted as direct aid, for example
for training, restructuring of the industry (as was the case in the animation industry) and
premiums to promote the circulation of programmes from other European countries.
The group was unanimous in the view that the current level of financing, although
concentrated in priority areas, was inadequate. Although there was no all-round agreement
on exactly how much would be needed, certain parties floated the idea of
ECU 1.5 billion.
The group was of the opinion that if the EU saw the audiovisual industry as strategic for
employment, the level of support granted to it should match the level of support given
to other strategic priorities.
As regards film distribution, the group's opinion was that distributor groupings should be
encouraged. The group did not agree on concrete steps for achieving this, but it was
suggested that the Commission should look into the matter in cooperation with a working
party made up of financial backers and distributors. The support should be intended to
create distribution systems covering the whole EU.
If the Americans have set up systems of this type, it is hard to see why Europeans should
not be able to undertake Europe-wide film distribution.
Certain types of programme, for example documentaries, could be produced with the
international market in mind, provided that the right type of incentives are introduced,
which need not be costly.
                                               59
 ---pagebreak--- Member States or regions with low production capacity
On this matter the group reached the conclusion that maybe incentives should be
introduced at EU level to help the audiovisual industries in small countries to gain access
to the wider market and to the structures that should be set up to enable the
EU programme industry to get the most out of the European market.
                                           60
 ---pagebreak---                                                                   BSN 0254-1475
                                                            COM(94) 523 final
                                              DOCUMENTS
EN                                                                           15
                                     Catalogue number : CB-CO-95-043-EN-C
                                                             ISBN 92-77-85495-2
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