1. 1 Support Programmes for the European Audiovisual Sector MEDIA Programmes and Media Literacy European Commission - MEDIA Programme and Media literacy Unit Aviva Silver - European Commission - July 2010 DISCLAIMER "The views expressed are purely those of the writer and may not in any circumstances be regarded as stating an official position of the European Commission."

2. The current situation of the European Audiovisual Industry

3. Plays an important role in terms of employment and has a substantial economic potential Holds a key role in building a European common identity Enhances intercultural dialogue and mutual understanding, which are key elements of European citizenship The European audiovisual sector

4. A fragmented market The production structures and the general framework in which the European audiovisual industry operates are fragmented Positive aspect: a culturally diverse and highly independent production industry reflecting the rich European heritage Negative aspect: the European industry is prevented from achieving a larger market share in relation to non-European imports

5. 5 Historical structural weaknesses Fragmentation of the EU markets Vicious circle of under-investment Under-capitalization of companies Micro-SMEs with little assets  MEDIA is historically an INDUSTRIAL programme: supporting the audiovisual industry partly to help it achieve a cultural impact

6. 6 Box office dominated by US films US films account for 65% market share with only 20% of the number of films released NUMBER OF FILM FIRST RELEASES IN EU 25 BY REGION OF ORIGIN 2002-2006 Source: European Audiovisual Observatory – LUMIERE Database EU 25USOtherEU 25 inc 18,5% 1 324 films 0,4% 7 161 films 61,3% 19,8% Total Films 2002-2006Total Admissions 2002-2006 EU 25USOtherEU 25 inc 3 589 million € 25,2% 65,3% 2,3% 7,3% In 2009 Europe: 26,7% Eur Inc: 4,2% US: 67,1% Other 2%

7. 7 The situation of European films Market share for European works –30% in cinema –40-45% in TV fiction (AVMS quotas) –20% in DVD Dominance of US and national films Market share for non-national European films: 7-8% for 20 years Without MEDIA, would have gone down to 1- 2% due to increasingly difficult market conditions for these films

8. 8 European cinema success stories Dancer in the Dark 2000 La stanza del Figlio - 2001 The Pianist - 2002 L’Enfant - 2005 The Wind that shakes the Barley - 2006 4 months, 3 weeks and 2 days - 2007 Entre les Murs - 2008Das Weisse Band - 2009 Palme d’Or

9. EU Audiovisual Policy and the MEDIA Programme

10. EU Audiovisual Policy Objectives To ensure the conditions necessary to underpin –the competitiveness of the European industry –the realisation of a zone for the free circulation of AV and media works –the development of cultural diversity

11. Instruments 1.The Audiovisual Media Services Directive (AVMS) A regulatory framework intended to realise a common market in broadcasting 2.The MEDIA Programme A European-level support scheme to complement national schemes (subsidiarity) EU Audiovisual Policy

12. Budget MEDIA 2007-2013 € millions

13. 13 Cultural diversity and heritage Transnational circulation of films Sector competitiveness 3 global objectives Fostering creativity in the audiovisual sector Strengthening the structure of SMEs Reducing imbalances between European audiovisual markets Supporting digitisation 4 crosscutting priorities MEDIA 2007 objectives

14. 14 MEDIA 2007 Action lines along the value chain Pre-productionProduction Circulation Development Training Pilot projects Distribution Promotion Single projects and catalogues Financing & co-productions Interactive works Scriptwriting Management Digital technologies Sales agents TV broadcasting Online distribution Distributors Exhibitors Access to markets Festivals Common actions Information tools 20% 55% 9% 7% 4% Media Desks 5%

15. 15 New actions since 2007 Digital cinema Interactive works Video-on-Demand Digital Cinema Distribution Initial Training Access to finance (MEDIA Production Guarantee Fund)

16. 16 Number of projects supported 2008 ACTION LINE MEDIA 2007 TOTAL FUNDING AWARDED NUMBER OF PROJECTS Training6.826.69246 Development23.669.395365 Distribution55.412.5401.149 Promotion and Festivals10.718.393138 Pilot Projects701.7503 Video on Demand6.259.13918 TOTAL€ 103.587.9101.719 Number of projects supported by MEDIA in 2008 per action line

17. New opportunities for the sector and challenges for MEDIA

18. New models bringing about new opportunities The second generation of digitisation leads to a complete restructuring of markets in AV industries The value-chain is about to undergo fundamental transformations New opportunities are emerging for European films –lower distribution cost, more space for niche products, consumer led model,… Producers need to consider and understand new emerging models –crowd-sourcing, etc

19. 19 Challenges for MEDIA The business models for existing media have been unable so far to grasp the opportunities of a changed world The new programme will –address the needs of the audiovisual industry in the context of digitisation and the emergence of new media –help it to find new ways of creating value and driving revenues

20. Second Digital revolution New challenges in a new market context 20 Booming number of services New ways of consuming Economic and financial crisis Shrinking sources of finance for cinema New market context for AV works 26 New technologies New opportunities Need to adapt Structural weaknesses of European AV sector Important costs involved Need to provide structural industrial support to the European AV sector

21. A new Programme beyond 2013

22. 22 Television A larger scope for a new programme? Cinema 3 main interacting areas of intervention Competitiveness Cross-media Circulation and new forms of distribution Strategic issues Interactive

23. Leads for reflection Rationalization of the value chain through vertical integration Research and development New business models adapted to the new market context Adapt the release windows system to new distribution channels Adapt legal framework for licencing rights Encourage dubbing rather than subtitling to increase commercial value and cross-border circulation potential 23

24. MEDIA International and MEDIA Mundus

25. Strategic Objectives Respond to global economic context Reinforce the action of MEDIA and vice versa the strength of a country or region on the international stage is conditioned by its original market size. Provide opportunities for all European professionals to benefit from international cooperation opportunities Preparatory Action MEDIA International : to test keenness of international operators to cooperate So far, responded very positively 25

26. 26 Basic Principles Strengthen cooperation between professionals from Europe and from third countries Mutual benefit & partnership International networking effect Coordinated by European professional

27. Expected impacts Constitution of cross-border industrial structures Globalization via new distribution means facilitated by reduced distribution costs Concentration of the distribution sector (sales agents and distributors) –Cfr example of Japan: concentration of the market via grouping of operators 27

28. 28 MEDIA MUNDUS Fully-fledged programme with a legal base 2011-2013 Decision adopted in September 2009 with a budget of € 15 million over 3 years € millions

29. 29 MEDIA Mundus action lines Pre-productionProduction Circulation Training Circulation (Finished films) Market Access (Work in progress) Development / Pitching Digital Technologies International markets Sales agents TV broadcasting Online distribution Distributors Cinema network Events and film literacy Right holders Distribution Financing Co-producing Markets, events & pitching