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European Commission

MEMO

Brussels/Cannes, 9 October 2012

Digital opportunities for distribution and financing of European films in the EU digital market

Joint Statement by Vice President Kroes (Digital Agenda) and Commissioner Vassiliou (Education, Culture, Multilingualism & Youth) following MIPCOM roundtable in Cannes with representatives of the film industry – including distributors, film directors, producers, broadcasters and telecom operators – to discuss the opportunities created by the digital revolution for the distribution and financing of European films in the EU digital market.

1. The opportunities offered by the digital revolution

VP Kroes and Commissioner Vassiliou share the view that digital technology has opened up new possibilities for the distribution of European films. They urge the European film industry to reap the full benefits of this technological progress and adapt their business models in order to better disseminate European films, increase their audience and improve the conditions of their financing.

Both Commissioners acknowledge that new distribution methods and new business models mean potential additional sources for film financing. Bigger audiences also mean potential additional revenue. They also recognise that EU territorial fragmentation remains a challenge, but consider that Europe's myriad of languages and cultures is a spur for creativity.

The digital shift from an economic model based on the limited offer of television channels to one based on user demand makes it even more urgent for rights-holders to strengthen their online distribution strategy. European films need to be increasingly present in VOD platforms. Rights-holders should strengthen the presence of European films on global platforms including iTunes and Netflix with efficient promotion and branding.

2. The different ways to finance and distribute film, the sequencing of release windows

The Commissioners underline the importance of the cinema, and recognise that theatrical release plays a crucial role in creating the brand identity of a film and has an impact on its success on other distribution platforms. Nonetheless, they recognise that the sector faces major challenges in terms of adapting release window practices in most Member States, and for exploiting the new opportunities offered by digital distribution.

The roundtable explored whether the current windowing system is still best suited to the new distribution models, taking into account changing audience behaviour (content anytime, anyhow, anywhere) and the fact that new players like the operators of VoD platforms or Connected TV manufacturers/Hybrid TV platform operators are potential investors in film production. Both Commissioners acknowledge that new distribution methods and business models can generate new sources of film financing which are not necessarily detrimental to cinema distribution or the audience of broadcasting services. They underline that the relationship between theatre release and other forms of distribution does not need to be a zero-sum game. Direct competition does not necessarily exist between cinema, on the one hand, and DVD and/or VoD, on the other. The roundtable supported experiments with simultaneous or near-simultaneous releases of films (VOD and cinema) that have taken place in some countries.

The results of this rich discussion will feed into the preparation of the Commission proposal for a Council recommendation on European film in the digital era. The Commission will continue to consult with Member States and stakeholders on the best way to promote the visibility of and access to European films in the digital era.


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