Cinema: the double-edged power of the European Union

Article  by  Axel SCOFFIER  •  Published 29.10.2014  •  Updated 29.10.2014
European policies in favour of cinema do not replace national policies, and cannot stimulate production in small countries within the Union.The defence of the French model taken on by professionals in the sector against reforms proposed by Brussels appears to vindicate the French system as a role model.


Europe has been a production ground for a long time for the film industry, whose level of dynamism varies across the continent: the abundance and diversity of French cinema is surprising, and yet it has not actually reached international critical mass; British cinema is more fragile, but produces big hits with the help of American studios; some traditional film-making countries, like Italy, have seen production levels fall since the 1980s, for lack of regulation in the sector; elsewhere, production is very irregular and mainly geared towards the national market... The distribution of European cinema throughout the rest of the continent remains weak, while the markets are dominated by American cinema. Several kinds of national schemes support the local film industry, while some fiscal competition seeks to attract international projects. The European Union provides support for the various stages of production, but at the same time has threatened public funding schemes for the sector.

European cinema, a major cultural and economic issue

The existence, the autonomy, and the power of the European film industry in its own right are strategic matters that touch upon many different areas. It is first and foremost an economic affair: the creative industries are now recognised as an important part of the economy in developed countries, creating jobs and wealth. So, how can we maintain this industrial tissue within a given country, while maintaining and developing it? It is, of course, also an artistic issue: do European film-makers have the means to make the films they want? It is obviously an eminently political question: how to we keep our own means of cultural expression under our own control? Democracy, both at national and supranational level needs ideas, creation, conflicting points of view, including artistic ones, and justifies what in France we often refer to as the “cultural exception” – namely defending culture as a field that is distinct from other sectors in international agreements and public policy. It is also finally a geopolitical matter: can Europe as a cultural entity exist independently of its member states on the one hand, and of the United States on the other? If the European Union wants to operate other than just as a single market, and if greater cultural integration is desirable, it may be a good idea to foster greater vitality in cinematographic creation, and especially wider distribution of films between countries within the Union, and beyond.

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A large market dominated by American cinema

Europe forms a large market for films: 933 million cinema tickets were sold in 2012. When calculated in relation to the population, the figure comes on average to 1.8 tickets per inhabitant per year, compared with 4.1 per inhabitant in the United States, despite great disparities (3.3 tickets per inhabitant in France compared with 0.9 per inhabitant in Greece). American cinema dominates, with a market share of 63 %, followed by European films (a market share of 33 %, but the market in each case is dominated by national films). In fact, in each country, foreign cinema from other European countries accounts for 10 % of ticket sales! French cinema has the highest number of sales in Europe outside of France, followed by British cinema.

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The level of production varies from one country to another

A large number of films are still produced in the European Union: 1,299 films were made in 2012, compared with 819 films in the United States (in 2011). These films, however, have on average budgets that are well below those of their American competitors, and their renown is much less significant. France is the country that produces the highest number of films in Europe (279 films in 2012); Germany and Italy follow with 154 and 134 films made; the United Kingdom produces fewer (103 films), but is a co-production partner for American cinema geared towards Hollywood, and whose films enjoy a broader audience. Each country has its own complex public funding systems whose budgets, scope and decision-making scale differ.

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Markets and industries whose level of dynamism differs between countries

European cinema now suffers from two ills: the level of film production is low in many countries; the level of film distribution between countries is low; and their renown outside of Europe is low. France, however, stands apart thanks to the particularly high number of productions, screens, and its cinema-goer frequency rate; it is also one of the few countries where films from other European countries are accessible, and many authors come to produce or co-produce their films there (Amour, by the Austrian, Michael Haneke, who won the Palme d’or in 2011, was produced and shot in France). Last spring, important players in France within this system managed – with great success – to convince the European Commission of the importance of the notion of cultural exception. We must also, however, note the astounding success of other European, international films made in the United Kingdom in close collaboration with Hollywood, shaking our perception of European cinema somewhat. Are Skyfall (2012), Harry Potter (2001-2011), Gravity (2013) European films? They are indeed the product of a British company, EON Production, or of a London producer, David Heyman… and the actual subject matter of two of these films is British, and therefore European. What’s more, it can’t be denied that this British model is starting to spread throughout Europe: Inglourious Basterds (Tarantino, 2009) and The Grand Budapest Hotel (Wes Anderson, 2014) are made in Germany (in the Babelsberg studios in Berlin), and Die Hard 4 was produced in Hungary (in the Origo studios in Budapest).

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A programme to help all the stages of the European film industry

Support for culture has never been a priority in Europe. The first form of support was not introduced until 1988 under the impetus of the Council of Europe (a body outside of the European Union): this is a support fund for co-productions, which would then become EURIMAGES. Within the European Union, at the end of the 1980s, a series of studies and papers paved the way for the MEDIA programme (Measures to encourage the development of the audiovisual industry), proposed by the European Commission and implemented by the Council of the European Union in 1990. Since then, this programme has grown and since January 2014 it has been called Europe CREATIVE.
The first MEDIA programme was launched in 1991 to encourage the development, distribution and sale of European films outside their country of origin. It now operates in 28 member states of the European Union and other countries like Norway, Iceland, and Switzerland. The programme is adopted for five to seven years: MEDIA I from 1991 to 1995, MEDIA II from 1996 to 2000, MEDIA Plus and MEDIA Training from 2001 to 2006, and MEDIA 2007 from 2007 to 2013. For the 2014-2020 period, the MEDIA programme merged with the MEDIA Mundus programme, which added skills for other cultural industries as part of Europe CREATIVE.
The budgets are not very high compared with other sectors supported by the Union, but they increase each year. They apply to all stages of the production chain, with a marked emphasis on aid for distribution.
Aid for training
Training film professionals is a priority for the MEDIA programme, with particular emphasis placed on the transnational dimension. The programme supports continuous training for professionals, as well as initial training, with particular attention paid to project management skills (Maia Workshops), expertise in new technologies and script development (with the writing workshop, eQuinoxe Europe, for professionals who have already written a fiction feature film). The programme has handed out over €8 million to European institutions such as the German Film and Television Academy (Berlin), Fémis (Paris), INA (Paris), the Fundación Cultural Media (Madrid), the National Film and Television School (London) for various exchange projects, workshops, conferences…
Aid for production
A small part of the programme’s budget is given to support to develop projects and produce films for cinema screens, television, and digital platforms. There are many eligibility criteria for applications, for sums between €30k and €60k for individual projects, and between €50k and €200k for catalogues of projects (slate funding: three projects chosen within the same application), and limited to 50% of the budget. The overall aid budget in 2014 is €17.5 million. A number of criteria have to be met to be selected:
“The propositions are assessed by independent experts. Aid is granted to applicants that achieved the highest number of points based on criteria relating to the projects submitted: the quality of the project and potential for distribution in Europe (50 %), the quality of the development strategy (10 %), the quality of the marketing and distribution strategy (20 %), experience, potential, the capabilities of the creative team (10 %) and the quality of the funding strategy / project feasibility (10 %). Additional points will automatically be given to projects for a young audience (<16 years; 10 points), to projects co-produced with a European country where a language other than that of the applicant is spoken (5 points) and to projects from countries with a low production capacity (10 points).”
The CREATIVE programme also supports television productions, provided that at least three distribution companies from three different European countries are involved in the funding, with a maximum budget of 12.5 % of the total, and limited to €500K (for fiction and animated films). In 2014, the budget allocated to this programme is €11.8 million.
For producers, this programme constitutes a non-negligible additional source of funding.
Aid for distribution
The Europe Creative programme supports distribution in three ways: automatic support, selective support and support for sales agents.
Automatic support aims to encourage European distributors to invest in the distribution or co-production of non-national European films. The amount of the aid is generated by paid tickets for these recent, non-national, European films, outside of their original country, over the previous calendar year. It must be reinvested in the co-production of non-national European films or in their distribution (as a guaranteed minimum or just the costs entailed in bringing out the film)[+] NoteSource: MEDIA FranceX [1]. In this way, distributers of European films in Europe are encouraged to re-invest in non-national films the following year. Automatic aid is indexed according to past successes, increased in France by 150 % for 70,00 tickets sold, or reduced by 35% for ticket sales of between 300,000 and 600,000, with a maximum of 600,000 ticket sales. The aid distributed in 2013 accounted for a total of €20 million. In 2012, based on 2011 income, 27 German distributors received a share of €3.3 million in automatic aid, including NFP (Neue Film Produktion) (€0.5k), StudioCanal (€0.5k for Populaire, Sammy 2, Vous n’avez encore rien vu, La Taupe, CloClo, Sans identité…) and X Verleih AG (€0.3k)…
Selective aid encourages distributors to invest in the promotion and distribution of non-national, European films by helping them to cover the costs of advertising and promotion, as well as making and distributing copies. The following may submit an application:groups of at least seven European distributors - coordinated by an international sales agent – that take care of the distribution of European films outside their country of origin. But German, Spanish, French, Italian and British films with a production budget of €10 million are not eligible. In 2013, Soda Pictures Limited and Arthaus Stiftelsen for Filmkunst received aid for the distribution of the German film Hannah Arendt, respectively in the United Kingdom and in Norway: they received €13k and €10k. The total amount of this aid is €8 million, distributed according to the country where the film comes out and the number of screens.
Aid for sales agents is meant to encourage and support wider transnational distribution of European films by providing assistance for international sales agents involved in their distribution. A potential fund is generated and determined by the agent’s activity, over a given number of countries and calculated over a reference period and for a percentage of the automatic aid generated by the film concerned. To become effective, this aid must be reinvested in guaranteed minimums or promotion costs for new European films, up to a limit of 50 % of costs. This fund, for example, gave Les Films du Losange €30k, StudioCanal €86k, and Wild Bunch €200k in 2012.
Finally, the distribution of European films outside of Europe is supported by the MEDIA MUNDUS programme.
Aid for operating the cinema network and distribution via the Internet
The largest part of the budget of Europe Creative is allocated to operating European cinemas and digitizing cinemas.
The Europa Cinemas association serves as an intermediary between MEDIA and European cinemas that accept to distribute their films. It distributes around €10 million per year to a network of cinemas that agree to distribute more non-national, European films. There are three stated aims: to boost programming and increase tickets sales, to promote initiatives for young audiences, and to foster the diversity of films shown in cinemas.
Help is also provided for showing films via other channels, in particular digital channels. Universciné, the French video on demand platform, received €750k in 2012 thanks to this scheme, and adopted a truly European strategy in cooperation with other European players and through the EuroVOD platform. Curzon, the independent British cinema network also launched its video on demand service and received €400k from MEDIA in 2012.
Promotion of European cinema in Europe and the rest of the world
The Europe Creative programme also provides funding to promote European cinema through aid to over one hundred cinema festivals per year (€3.14 million in 2014, of which €19 to €75k was handed out for each project). The programme also helps producers and distributors to access film markets and to build up promotion tools for their films.
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The Council of Europe and the EURIMAGES programme

Since 1988, Eurimages has been the Fund of the Council of Europe for aid to co-productions, to distribution and exploitation of European cinematographic works. 35 states are members of this Fund. It has an annual budget of €25 million, and has supported over 1,500 European co-productions since it was created, handing out around €468 million. It operates four aid programmes: for co-productions and distribution, and the operating and equipping of cinemas. Eurimages provides aid either through an advance on income (for aid to co-productions) or by way of a subsidy (for other cases). In 2012, Eurimages provided aid for Le passé, by Asghar Farhadi (Iran-France), Nymphomaniac, by Lars Von Trier (Denmark), The Cut by Fatih Akin (Germany) as well as L’Ecume des Jours by Michel Gondry (France) – each film received over €500k.

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Awarding and official recognition of European cinema

Apart from international festivals (Cannes, Venice, Berlin), that pay no attention to the European dimension of films, and national ceremonies (Césars, BAFTA etc.), two European institutions bestow awards upon European cinema: first, the European parliament, with the LUX prize, and second, the European cinema academy, an association based in Berlin, and which is the equivalent of the Academy of Motion Picture Arts and Sciences in the United States. The European parliament awards the LUX prize to a remarkable European film chosen by MEPs for its cinematographic quality and its depiction of the universality of European values, of cultural diversity and the process of continental construction. The parliament also assists the distribution of films selected in several European cities during the autumn before the winner is chosen (in December). In 2013, the British film A Selfish Giant, the Italian film Miele, and the Belgian film The Broken Circle Breakdown were selected and the Belgian film received the LUX prize. The film that wins the award also receives help with subtitling in the 23 official languages of the European Union.
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Is the European Union a threat to European cinema?

Apart from the specific programmes that it funds, the European Union plays a role of regulator that may conflict with national policies that do not fall within the overall global plan being defended. Several debates shook up the European film industry in 2013: first, the preparations for the free trade negotiations between the United States and Europe, carried out by the European Commissioner for Trade, Karel de Gucht, in March, questioned the principle of cultural exception and threatened the fragile balance in Europe with a surge in American films; second, the Cinema Communication could have destabilised national aid systems by disconnecting them from the location of the expenditure.
A large number of personalities from the European film industry took a stand against the first issue. A petition against including the film industry in the free trade agreements - “cultural exception is not negotiable” - was signed by fifty European film-makers, such as Costa Gavras, Radu Mihaileanu, Stephen Frears, Ken Loach, Luca Belvaux, Michel Hazanavicius, Dariusz Jabłoński, Cristian Mungiu, Daniele Luchetti, and the actress Bérénice Béjo – in other words respected personalities in the field, and whose films have enjoyed great success (in particular The Artist, showered with Oscars in 2012). Personalities from outside Europe joined the movement: the American, David Lynch, the New-Zealander, Jane Campion, and the Brazilian, Walter Salles… In May, fourteen European culture ministers demanded that the audiovisual sector be excluded from the negotiations (the German, Austrian, Belgian, Bulgarian, Cypriote, Spanish, French, Hungarian, Italian, Polish, Portuguese, Romanian, Slovakian and Slovenian ministers). Right in the middle of the Cannes Film Festival, Steven Spielberg used the closing ceremony of the awards to slip that cultural exception was “the best way to support diversity in filmmaking". A few days later, during a conference organised by the CNC, Harvey Weinstein said: “The cultural exception encourages filmmakers to make films about their own culture. We need that more than ever (…) The most important thing is to preserve the environment of cultural film, because it’s good for business, too”. Eric Garandeau, then president of the CNC, added that the French system even supports foreign films “produced or co-produced with France, in particular the Coen brothers, Amat Escalante, Asghar Farhadi, Valeria Golino, James Gray, Rithy Panh, Lucia Puenzo, Mahamat Saleh Haroun, Hiner Saleem, Paolo Sorrentino”. The debates were long between the president of the European Commission, José-Manuel Barroso, and the various stakeholders. Then the top echelons of the French state entered the debate. The Prime Minister, Jean-Marc Ayrault, declared the following in June, with the backing of the French president:
“France will oppose the opening up of negotiations, if culture, if the cultural industries, are not protected and are not excluded from the negotiations. France will go as far as to use its right of veto. It’s our identity; it’s our fight. We are not alone, but we are leading the fight with the support of national representatives.”
The process ended at the European Parliament on 11 June, where Bérénice Béjo went to represent her movement and read a letter from the film-maker Wim Wenders, who denounced “this open-heart surgery on Europe, without anaesthetic”… On 14 June, the European Commission finally removed the audiovisual industry from the negotiating mandate of the European Union.
Later on, during the autumn, the debate on the new Cinema Communication created a stir in the sector. The project consisted in weakening the link between aid and where expenditure takes place, in the name of free competition between European states. Finally, the new Cinema Communication adopted on 14 November left it up to European countries to decide whether or not they wanted to grant aid at national level, in the name of cultural diversity “which requires the preservation of resources and know-how within the industry at national and local level”: the obligation to territorialise expenditure is allowed up to a maximum of 160 % of the amount of the aid and no more than 80 % of expenditure.
European policies in favour of cinema do not replace national policies, and cannot alone stimulate production in small countries within the Union, nor can they relaunch the industry in large countries undergoing decline (Italy, Spain…). However, their support at all levels probably means that the European film industry will fare a little better and films will spread more between countries. Much more than that, the defence of the French model taken on by professionals in the sector against various reforms proposed by Brussels appears to vindicate the French system as a role model.
Photo credit: TP Com

Translated from the French by Peter Moss
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  • 1. Source: MEDIA France
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