State aid: Italian digital cinema tax credit
EU citizens, cinemas, film distributors, film producers, filmmakers, post-production facilities, film sector associations, as well as national, regional and local film institutes.
Deadline for comments from interested parties: 31 October 2009
Europe's cinemas are beginning to convert from 35mm (film) projection to digital projection but some have suggested that thousands of arthouse and local cinemas may face closure because they cannot afford the conversion costs. Italy has proposed to offer a 30% tax credit for the costs of installing such equipment.
The proposed aid measure raises a number of questions about the necessity, proportionality and adequacy of such support, which are outlined below. Further details are provided in the summary translated into all official EU languages, as well as in paragraphs 71-106 of the full Commission decision – see links below.
Please note that the Italian authorities organised a digital cinema workshop on 21 October 2009 during the Rome Film Festival in connection with this public consultation – see www.digital-cinema.it.
Outline of questions raised by the Commission:
Is €100,000 per screen a fair estimate of the cost of installing digital projection equipment? If so, is it affordable even with State aid?
Are there no commercial business models which could install digital projection equipment at least in the more profitable cinemas?
Would audiences find a wider choice of films at those cinemas receiving State aid for digital projection equipment? If not, what is the advantage to the taxpayer?
It has been argued that, if they cannot afford the equipment, many cinemas could close when film distributors switch from 35mm to digital. How real is this threat and what is the timeframe?
Would one-off State aid provide a sustainable and uniform solution for digital cinema? In particular, would the cinemas which could not afford the equipment without State aid be able to meet the apparently higher running costs of digital projection equipment and replace it at the end of its useful life?
Would cinemas be induced by the State aid to invest in one digital standard in preference to another?
As a condition of the State aid, would cinemas have to ensure that films released in any open digital format could be screened on the supported equipment?
In view of the limited number of cinema screens worldwide and the limited production capacity of projection equipment designed specifically for cinemas, would State aid for such equipment artificially inflate its price?
In connection with questions 4, 5 & 8, could State aid for digital cinema accelerate the closure of the least profitable cinemas?
Summary of decision to open formal investigation into Italy's proposed digital cinema tax credit
bg cs da de el en es et fi fr hu it lt lv mt nl pl pt ro sk sl sv
Decision letter sent to the Italian authorities
Press release IP/09/1181
How to submit your comments
Comments may be submitted by post, fax or e-mail, quoting the reference C25/09:
Directorate-General for Competition
Fax: +32 2 296 1282
All comments received will be communicated to Italy. However, information which is clearly marked "confidential" will be treated as such. Please identify any such information in your reply either by putting it in a separate annex or by providing an additional, non-confidential version of your reply. If you wish your identity to be treated as confidential, you may request this in writing, stating the reasons for the request.
The Commission is also following the topic 'digital cinema' on social networks such as Twitter.
Summary of the replies
Presentations made during the digital cinema workshop in Rome on 21 October 2009
National public authorities
- Centre National du Cinéma fr
- Commission Supérieure Technique fr
- Filmförderungsanstalt de
- UK Film Council en
- Altroconsumo en
- Associazione Nazionale Esercenti Cinema en it
- Federazione Italiana Cinema d'Essai it
- Audire en
- Mojo en
- Odeon - UCI en
- Celata Giandomenico en
- A digital cinema expert en
- Gaullier Bruno fr
- Luxereau François fr
- Noyon Françoise fr