The European Union's audiovisual market is the largest in the world. It is set to grow by about 70% over the next ten years and this rapid expansion presents enormous opportunities and challenges for the industries concerned and society as a whole.
While the framework is being put in place for developing new communication infrastructures for the 21st century, the battleground is shifting more towards production content and the images themselves.
Driven by the proliferation and diversification of audiovisual products and services made possible by digital technology, demand for films, television programmes and multimedia products is rapidly on the increase.
In this area where the European industry still suffers from a massive trade deficit (6 billion dollars or the equivalent of about 250 000 jobs), strengthening the competitiveness of our companies is a top priority in order to raise the profile of our cultural and linguistic diversity, so that the public can get the most out of the opportunities offered by the new media, and to translate the growth into jobs to bring the number of people employed in the industry in Europe (1.8 million) closer to the level in the United States (2.6 million).
The European Union's audiovisual policy has two basic objectives:
These two objectives are pursued taking full account of the cultural aspects of the audiovisual industry, which are a key feature of it, in accordance with the Treaty (Article 128(4), strengthened by the draft Amsterdam Treaty).
Measures taken under the audiovisual policy also contribute to the development of the information society.
When the current Commission took up office in February 1995, the main policy instruments were being overhauled. Within the first few months of its term of office, the new Commission put forward proposals on the following:
The last two of these are principally designed to boost the programme industries. The MEDIA II programme focuses on creating the European audiovisual area and supplements the directive, as well as complementing it in certain respects. For example, Chapter III of the directive contains legal measures designed to strengthen programme industries, while MEDIA II gives financial encouragement for actual distribution of programmes within the European audiovisual area.
Furthermore, in October 1996 the Commission presented to the European Parliament and the Council a Green Paper on the protection of minors and human dignity.(4) The aim is to ensure that ethical aspects are taken into account in the development of audiovisual services to strike the best balance between freedom of expression and protecting the general interest.
l The Council decisions concerning MEDIA II (1996-2000) were quickly adopted in 1995 and the programme was allocated an overall budget of ECU 310 million. The development and rationalisation of the Community instruments supporting the programme industry made it possible to identify priority areas for measures to boost the industry's structures. MEDIA II consequently focuses on training, development and distribution with a European approach to better circulation of audiovisual works both in Europe and worldwide. The programme has been running since January 1996. A mid-term evaluation is to be made in 1998. Over the five years the programme is expected to yield the following results:
Development grants (ECU 60 million)
Distribution grants (ECU 205 million)
Training grants (ECU 45 million)
- 200 training initiatives
(involving 1 700 professionals and 650 institutions).
l The new Television without Frontiers Directive has recently been adopted.(5) It is the cornerstone of the European audiovisual area. The new directive, which was the product of some excellent interinstitutional work, was adopted by the Council virtually unanimously. It is more up-to-date, clearer and more comprehensive than the 1989 directive. In the age of digital technology, it provides a sound legal framework for television broadcasters to be able to expand their activities in the European Union, in particular thanks to the consolidation of the principle whereby broadcasters fall under the exclusive jurisdiction of the country in which they are based. The concrete rules in the directive safeguard the general interest by coordinating national requirements in certain areas such as advertising, sponsorship, teleshopping, the right of reply and the protection of minors and human dignity. The directive maintains the flexible system of promoting the dissemination of European works, which was introduced in 1989. New provisions concerning television coverage of major events, such as sports events, are designed to enable Member States to ensure that the public can get to see these events on in-the-clear television. The directive has brought the whole system up to date and improved it.(6)
l The Guarantee Fund has been extremely well received by both the European Parliament and the Economic and Social Committee. Progress was made during the round table discussion at the Council meeting of 30 June. Most Member States reaffirmed their solid support for the proposal, although it has not yet proved possible to secure the unanimity required. The Luxembourg Presidency has stated that it will endeavour to achieve a positive outcome at the Council in November.
l The Commission departments successfully completed the consultation procedure on the Green Paper on the new audiovisual and information services. The results of the procedure were presented to the Council meeting of 30 June 1997 in the form of a working paper.(7) The paper was unanimously welcomed by the Member States. Several ministers congratulated the Commission on its pragmatic approach, in particular the way it had managed to strike the right balance between freedom of expression and protecting general interest (such as the protection of minors) in line with its commitment to supervised self-regulation. The ministers are now waiting for a proposal for a Council Recommendation from the Commission. My intention is to put the relevant proposals before the Commission in October.
II. Development of the audiovisual industry and the challenges facing it
One of the characteristic features of the audiovisual industry is its capacity for rapid expansion, particularly in response to new technologies. Its very nature makes it a cultural industry par excellence. Here the challenges for society are also important.
II.1 An industry with strong economic potential
The audiovisual industry has considerable economic potential. This potential is plain to see from the spectacular increase in the number of television channels(8) and was confirmed by a study recently carried out by the consultancy firm NORCONTEL on behalf of DG X.(9) The study gives a forecast of how revenue from the industry (broadcasting, the film industry, videos, off-line and on-line multimedia) is likely to grow over the period 1995 - 2005, with particular reference to revenue from the programme industries' revenues. It reveals certain basic trends in the audiovisual industry in the European Union:
· The audiovisual industry displays strong growth characterised by the increase in direct household expenditure as against other types of revenue, such as advertising and licence fees: for the countries studied the industry's overall revenue is estimated to grow by 69% on average over the period with the portion accounted for by direct expenditure by households rising from 33% to 48%.
· The most innovative products and services, such as interactive television and multimedia applications, should make a significant contribution to this growth over the period 2000-2005. These will expand the audiovisual market rather than replace existing products and services.
b) Revenue from European programme industries set to grow
· European programme producers look set to account for a larger share of the revenue in this rapidly expanding market: their share of the industry's total revenue is reckoned to rise from 28% in 1995 to 30% in 2005, with a 55% increase in revenue over the period, even though they will still be very much in a minority position on their home markets.
· The market for in-the-clear television will remain decisive for programme producers, since it is likely to still account for 65% of their revenue in 2005 (as opposed to 85% in 1995) in a market that is rapidly expanding as a whole.
· The increase in the market share of European programme producers is likely to be particularly marked in markets other than in-the-clear television (cinema, video, pay television, interactive television and multimedia applications). In these industries which are largely dominated by American products, the market share of European products could rise from 13% in 1995 to 21% in 2005, if current policy is merely sustained.
c) A challenge for European programme industries
· Europe has a huge "audiovisual consumption" potential. To derive maximum benefit from this potential, European programme industries need to improve their competitiveness, for example by developing marketing and brand policies, making economies of scale, particularly in the area of distribution, and selling their products further afield worldwide.
· The new products and services also require the cultivation of certain know-how, for example concerning linguistic and cultural aspects, making the best use of archives, integration and copyright management.
II.2 An important vehicle of culture and a societal phenomenon
Audiovisual industries play a crucial role in conveying culture both in terms of distribution and production. They also play an important part in the development of our societies.
The average European spends more than three hours a day in front of the television and children spend as much time watching television as they do at school.
Preserving and developing the European social model means making better use of audiovisual capacities as a major means of communication, conveying information and knowledge and forming identity.
The industrial challenges :
· To profit from the rise in demand for audiovisual products, the European industry will need to be able to increase the share of European products and works in its own market;
· To cope with the globalisation of the market, it needs to market its products and services further afield, particularly in the emerging markets of central and eastern Europe, South America and Asia;
· To respond to the demand for a wider ranger of products, it needs to forge ahead with integrating new technologies, developing new applications and contents and creating a competitive position for itself in tomorrow's markets;
· To meet these challenges, the European industry can avail itself of strong communications groups (4 of the 10 major communications groups in the world are European) and of a network of small businesses with strong creative potential. Moreover, our linguistic and cultural diversity, which has long been seen as a handicap, may turn out to be an advantage in tomorrow's audiovisual environment.
Be this as it may, there is still much to be done to improve our industries' competitiveness and realise the full potential of the audiovisual sector for society.
· Reflecting cultural diversity is not only a sine qua non of European integration, but also crucial for the success of our audiovisual works and services. Furthermore, linguistic diversity must be safeguarded to ensure that everyone has access to information and culture.
· The challenges are to help disseminate and raise the profile of European cultures in all their diversity outside the Union and to use audiovisual capacity as a powerful tool for integration and dialogue throughout Europe. Particular attention should be given to developing exchanges and cooperation with the countries of central and eastern Europe.
· We must help exploit the full potential of audiovisual services and, in particular, the new services in training and education, with special attention to developing audiovisual education for young people and taking account of the influence of images on children.
· A balance must be struck between the cultural and commercial value of certain contents (major sporting events, museum and library collections and the like).
III. New audiovisual policy priorities as the year 2000 approaches
Although the achievements of audiovisual policy to date have brought about obvious changes in the way the industry is structured and operates, which justifies continuing with and building on the measures taken, the challenges of the digital age highlight certain persistent shortcomings which need to be tackled on four major fronts:
· New information and communication technologies must be incorporated into the European contents production and exploitation process (benefiting from the technological convergence we have seen in the audiovisual, telecommunications and publishing worlds).
· The European audiovisual industry must improve its competitiveness and establish a presence worldwide.
· Cultural diversity and the potential for society of the audiovisual industry must be given a higher profile.
· Full account must be taken of the general interest and the European social model in designing and implementing Community financial and legal instruments for the audiovisual sector.
While the current audiovisual policy instruments are still in force, we need to look ahead to how the policy will need to be shaped in the future, bearing in mind that one of the recitals in the new Television without Frontiers Directive notes the Commission's undertaking to submit a Green Paper specifically on the cultural aspects of the new audiovisual and information services to supplement the Green Paper on the protection of minors and human dignity. A consultation and analysis process therefore needs to be launched. A high-level seminar on digital broadcasting will be organised next November in conjunction with the Luxembourg Presidency. I am also in touch with the British authorities concerning the possibility of holding a major audiovisual conference in London in 1998 (the Commission took part in similar events in Paris in 1989 and in Brussels in 1994). This means that some of the preparations are already being made for us to lay the foundations for a new audiovisual policy for the year 2000 onwards. I am also intending to set up a high-level think tank to consider the issues in greater depth and come up with some concrete guidelines. It is to be chaired by me in my capacity as the Commission Member responsible for audiovisual policy and made up of independent figures acknowledged for their professional know-how concerning audiovisual industry issues. The think tank's job will be to devise policy guidelines to meet the challenges referred to above. It will have to answer the following questions:
Digital technology is set to transform the European audiovisual landscape. How can the European content production industry (film, television, multimedia) get the most out of these developments? How can the authorities at European and national level rise to the industrial, cultural and societal challenges? What consideration is to be given to the general interest, in particular ethical considerations, in the new audiovisual context in order to safeguard the European social model?
These three questions are tightly focussed on the main challenges we are facing. Answering them will be vital for devising an audiovisual policy suitable for the new millennium.
The think tank is to meet soon after the summer recess in September and should issue its report in February 1998. Its findings will help in drawing up the proposals I intend to submit to the Commission in the second half of 1998. I will, of course, keep you informed of how the work is progressing.
(1) Council Directive 89/552/EEC and COM(95)86.
(2) Council Decision 95/563/EC of 10 July 1995 and Council Decision 95(564)EC of 22 December 1995.
(3) Proposal for a Council Decision of 14 November 1995 (COM(95)546 final).
(4) COM(96)483 final.
(5) European Parliament and Council Directive 97/36/EC.
(6) However, the Television without Frontiers Directive does not by itself cover all the ground of the Community legal framework needed to set up and operate the European audiovisual area. This is why it was supplemented in 1993 with a directive on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission (93/83/EC). This is currently being transposed into national legislation in the Member States under the supervision of Mr Monti's departments. The proposal for a directive on the legal protection of restricted access services is being made in the same vein.
(7) SEC(97)1203.
(8) The number of television channels in Europe has tripled since 1989 to 250. With the development of digital broadcasting there could be ten times as many.
(9) NORCONTEL "Economic Implications of New Communication Technologies on the audiovisual markets" May 1997. Summary published in the Financial Times of 17/6/1997.