MEMBERS OF THE CONSORTIUM


                     MID-TERM EVALUATION OF

                            THE MEDIA PLUS AND


                                  APRIL, 9 rue Guénégaud, 75006 paris
                                       Tel / fax : 33 1 43 26 31 58

APRIL/ Media Consulting Group / SECOR for the DG EAC C3 – Final report           1

Alain Modot, Project leader (APRIL), David Waldron, Deputy project leader (SECOR),

Nadia Tiourtite, Coordinator, (APRIL), Golda Sellam, Media Expert (APRIL), Julie Salzmann, Responsible
for statistics (APRIL), Aymeric Guilhaumaud, Researcher (APRIL), Charlotte Giovannoni, Researcher
(APRIL), Franck Descubes, Researcher (SECOR),

Thierry Roussin, Member of the Steering Committee (SECOR), Marc Bonduel, Member of the Steering
Committee (MEDIA Consulting Group), Paul-Hervé Vintrou, Member of the Steering Committee (MEDIA
Consulting Group).

The European Commission
Directorate-General for Education and Culture

Neither the Commission of the European Communities nor anyone acting under its responsibility
shall be held liable for the use made of this report.
The opinions expressed in this report are those of its authors. The report does not necessarily
reflect the views of the Commission and the Commission may not be held liable for the accuracy of
the information it contains.
Reproduction is authorised provided the source is mentioned.

APRIL/ Media Consulting Group / SECOR for the DG EAC C3 – Final report                               2
                      Executive summary
  Midterm evaluation of the MEDIA Plus and MEDIA Training Programmes together with the preparatory action
                                      "Growth and audiovisual: i2i Audiovisual "

                  1. Objectives of the MEDIA Plus and MEDIA Training Programmes and of the
                     preparatory action "Growth and audiovisual: i2i Audiovisual"

MEDIA Plus and MEDIA Training

MEDIA has supported the European audiovisual industry since the MEDIA I and MEDIA II programmes, adopted
respectively in 1991 and 1996. MEDIA is therefore the result of a consistent policy, tested over time. In January 2001,
MEDIA Plus and MEDIA Training followed on from MEDIA II. They aim at strengthening the competitiveness of the
European audiovisual industry and enabling it to adapt to technological changes.

The legal basis for Community action is:

- Council Decision 2000/821/EC of 20 December 2000 on the implementation of a programme to encourage
development, distribution and promotion of European audio-visual works (MEDIA Plus – development, distribution and

- Decision n°163/2001/EC of the European Parliament and of the Council of 19 January 2001 on the implementation of a
training programme for professionals in the European audiovisual programme industry (MEDIA-Training)

The MEDIA Plus Programme is centred on three action lines: development, distribution and promotion. It provides
financial support to professionals and independent companies from the audiovisual sector, as a complement to national
support. The MEDIA Training Programme focuses on support for the training of European audiovisual sector

MEDIA Plus and MEDIA Training have a budget of 400 million Euro over 5 years (350 million Euro for the development,
distribution and promotion sections of the MEDIA Plus programme and 50 million Euro for Training).

A targeted and structured financial effect

The 350 million Euro of the MEDIA Plus Programme is broken down under the terms of Article 1.5 of the Annex of the
Decision of 20 December 2000 "Actions to be applied" as follows:
Development:               at least 20%
Distribution:              at least 57.5%
Promotion:                 approximately 8.5%
Pilot projects:            approximately 5%
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In 2001, the budget committed for the MEDIA Plus and MEDIA Training Programmes was 78.7 million Euro i.e. 96% of
the 80 million Euro envisaged. This amount was made up as follows: 13.264 million Euro for development, 33.279 million
Euro for distribution, 5.586 million Euro for promotion and 18.864 million Euro for training.
In 2002, the budget committed for MEDIA Plus and MEDIA Training accounted for 89.9 million Euro i.e. 97.2% of the
92.5 million Euro provided for in the budget. This was attributed in the following way:
Training:                    7.452 million
Development:                 13.695 million
Distribution:                38.047 million
Promotion:                   8.185 million
Pilot projects:              0.648 million
Development and distribution were the two most important action lines in terms of budget, with respectively 15.2% and
42.3% of the financial commitments.

The preparatory action “Growth and audiovisual: i2i Audiovisual"
At the Lisbon European Council of 23 and 24 March 2000, the Heads of State and government set a new objective for
the Union: "to become the most competitive and dynamic knowledge-based economy in the world. " The European
Council in particular called on "the Community and the Member States, with the support of the EIB, to make available in
all European countries low-cost, high-speed interconnected networks for Internet access and to foster the development
of state-of-the-art information technology and other telecom networks as well as the content for those networks."
Following the conclusions of the Lisbon European Council, the EIB Group launched the “Innovation 2000” Initiative,
whose aim is to promote investments in the information society, research and development, innovation and
competitiveness as well as human resources. In order to contribute to the demand for enhancing the conditions for the
use of information technologies, the EIB Group decided to support high-speed distribution means, especially in the
media sector, and established the i2i Audiovisual sub-programme
The Budgetary Authority decided to provide a complement to this Initiative and authorised the Commission to launch a
Preparatory Action "Growth and Audiovisual: i2i Audiovisual". This preparatory action aims to improve the
competitiveness and creativity of the European audiovisual sector and help it to adapt to new technologies by reducing
the banking and financial costs for European companies from this sector.
The i2i Audiovisual budget was 1.1 million Euro in 2002. The maximum Community support per project was 50,000 Euro.

                  2.   The background to the evaluation

APRIL/MEDIA Consulting Group and SECOR were chosen by the European Commission after an open call for tender,
published in the OJ1, to carry out the midterm evaluation of the MEDIA Plus and MEDIA Training Programmes and the
preparatory action “i2i Audiovisual”.

  Public service contract no. DG EAC/67/02 to allot in an open procedure and by call for tender "mid-term Revision of the MEDIA
APRIL/ Media Consulting Group / SECOR for the DG EAC C3 – Final report                                                            4
MEDIA Plus and MEDIA Training

The midterm evaluation of MEDIA Plus and MEDIA Training is provided for in Articles 12.3 and 9.4 of the Decisions
instituting the programmes. It is intended in particular to establish if adjustments need to be made to the Community
action. The analysis provided by the evaluation report will also be taken into account for the preparation of future
Community actions for support of the audiovisual sector.

The MEDIA Plus and MEDIA Training Programmes entered into force on 1 January 2001, the Midterm evaluation was
launched in April 2003, It covers those actions which preceded or were initiated before 31 March 2003.

The main objectives of the Midterm evaluation are:

    v to analyse the results of the MEDIA Plus and MEDIA Training Programmes over the reference period;
    v To identify the necessary adjustments and to make recommendations to optimise the actions of the MEDIA
         Training and MEDIA Plus programmes.

The preparatory action ‘i2i audiovisual’
The main objectives of the evaluation were to analyse the results of the first year of implementation of i2i audiovisual, in
accordance with the evaluation obligations pertaining to preparatory actions.

Background to the evaluation
The evaluation took place within the context of an audiovisual sector confronted with economic problems arising from
certain conditions, and notably:
    v - a crisis for cinema financing;
    v - a market downturn;
    v - a fall of advertising income for the sector;
    v - a financial and stock exchange crisis affecting certain large European operators;
    v - An increase in the financial fragility of the SMEs in the sector.

             3.   Methodology

The results of the midterm evaluation of MEDIA Plus, MEDIA Training and i2i Audiovisual were obtained using several
methodological tools:

    v For information collection: face-to-face interviews; the analysis of statistical data concerning the management of
         the MEDIA Plus and MEDIA Training Programmes, provided by the technical assistance D&S Media office;
         development of a general questionnaire available on-line and of specific questionnaires distributed by electronic
         means; finally, interviews with a number of professionals, at various professional events (in particular, MIP TV
         in April 2003, Cannes Festival in May 2003, public hearings held by the Commission in July 2003). All the
         countries participating in the programmes were covered in respect of the collection of information.

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    v For information analysis: Balanced Score Cards (BSC); SWOT table (Strengths, Weakness, Opportunities,
         Threats); case studies (12); statistical processing of the results of the questionnaires and of the interviews.
    v The network of experts established by the evaluator ensured geographic coverage of all the countries that
         participate in the MEDIA programmes.

The task set for the midterm evaluation was to analyse the short-term impact of MEDIA Plus and MEDIA Training on the
basis of the results obtained after two years of implementation. The evaluator gave priority to the assessment of the
implementation (input), the achievements (output) and the first results (quantitative and qualitative). Even if the analysis
of the impact of Community action can only take place in the context of a final evaluation, the midterm evaluation already
provides a clear view of the potential impact of MEDIA Plus, MEDIA Training and i2i Audiovisual.

         4.1.      The adaptability of Community action to audiovisual market trends

4.1. General state of the audiovisual sector market

Analysis of national and audiovisual European markets demonstrates their diversity, in terms of economics and
regulation, as well as in respect of public support policies. This heterogeneity and fragmentation limit the circulation of
European works but contribute to the creativity and cultural wealth of the European audiovisual sector.

If the principal indicators characterising the European audiovisual sector are considered (numbers of films produced,
audience, number of companies, household use, number of non-national European films distributed, number of screens
showing non-national European films, number of festivals etc.), three major groups of countries can be identified:

                      v The five large countries: United Kingdom, Germany, Spain, Italy and France

                      v Countries with low production capacity and/or restricted geographical and linguistic area
                      v Accession states.

  The differences between these three groups can be summarised by the following indicators:

                      v The amount of public funds intended for the support of the audiovisual sector

                      v The number of audiovisual companies active in audiovisual production and their size
                      v The number of films produced
                      v The number of films circulated outside their national territory
                      v The number of cinema admissions
                      v The importance of the advertising market
                      v The number of TV channels

Not withstanding these differences, European national industries operate in a comparable context:

                      v Crisis of cinema financing by television channels

                      v Increase in public support for industry

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                       v Difficulty of circulating cinematographic works from one market to another inside the Union, in
                            particular for television
                       v Fragmentation of the industry into micro-enterprises, whose existence often depends on a
                            single audiovisual project

The MEDIA Programme supports European industry with the aim of strengthening its competitiveness, while preserving
its specific character and exploiting its potential in terms of creation, cultural diversity and production structures.

Community action is not directly linked to the financing of production, but focuses on pre-production (training and
development) and post-production (distribution and promotion), leaving the financing of production to national schemes,
in accordance with the principle of subsidiarity. MEDIA trains professionals and makes available proficiency tools such
as databases and counselling. MEDIA acts to consolidate the Internal market and to improve its transparency, to
facilitate trade. Community action enables European industry to break through where American competition is at its
strongest, i.e. on cinema screens, and provides durable funding for the companies in the audiovisual sector. For
example in the distribution sector, 98 films supported by the MEDIA Plus Programme made more than 50,000 entries
outside their country of origin. 11 even exceeded one million entries in 2001. Overall, 9 films out of 10 distributed outside
their country of origin benefited from the aid of MEDIA.

The MEDIA Plus guidelines for TV distribution, which limit the distribution rights to seven years in order to ensure that
works have a chance of circulating, constitute another example of the central role of Community action. The reproach
made by distributors to independent producers often comes down to the statement that the producer bears no economic
risk whereas the distributor does. It is true that in the absence of any secondary audiovisual rights market in numerous
countries, the economic risk is high. Vis-à-vis such problems, the professionals of the audiovisual sector expect a
reaction from the Community.

The economic stakes linked to the audiovisual sector are enormous. The European audiovisual market represented 95
billion Euro (i.e. an increase of 5.2% in relation to 2000) in 2001. Between 1997 and 2001, its growth was 35%.
Television represented two thirds of the market, cinema (including video) 15% and the rest was music and leisure
software. The sector that experienced the strongest growth between 1997 and 2001 in Europe was rental and sales of
DVD (annual growth rate of 174%). The DVD sector confirmed its importance in 2002, a year in which sales turnover
equalled that of VHS cassettes. The annual growth rate of box-office return was 8.8% between 1997 and 2001.

In the current context of fragmentation of the Internal market for the audiovisual sector, and of market failure (for
linguistic and cultural reasons, but also linked to the SME sector structure), there is a risk that, in the absence of
Community action, the Internal market potential will not be exploited fully or will only be exploited by large non-European
companies. The negative consequences for growth and employment are obvious. It should be borne in mind that in
terms of revenue, the United States’ main export earner is the audiovisual sector, and its principal market is Europe. The
European Union’s trade deficit with the United States is 7-8 billion dollars annually.

The European audiovisual sector is made up largely of micro enterprises (SMEs) whose economic life and fate is often
linked to individual projects. The sector is still highly labour intensive. These two factors mean that it is not able to profit
fully from the positive effects of economies of scale. In addition, the high risks associated with the audiovisual sector
APRIL/ Media Consulting Group / SECOR for the DG EAC C3 – Final report                                                        7
stem from the fact that the success of projects is based on a number of random factors, public taste, cultural aspects,

The role of public policy for the sector is to increase positive externalities to maximise the development potential of the
sector, which translates directly into growth and employment. In this respect the exploitation of the Internal market
potential is a positive externality. Due to the nature of the structure of the sector, full exploitation does not imply that
public policy should try solely to create large market players but rather to create an environment adapted to SMEs that
will facilitate circulation of non-national European audiovisual works.

For the long term, it is clear that MEDIA Plus does not have a budget adapted to the practical needs of the European
audiovisual sector. In these circumstances, the Preparatory Action i2i could become an additional tool
integrated into MEDIA Plus, with the aim of facilitating access by European SMEs to external financing. This
could contribute for example to the setting up of a European guarantee fund or the reduction of bank charges,
and have a positive effect on the development and transparency of the European audiovisual market.

4.2. The MEDIA contribution to the improvement of circulation of works within and outside the European Union
(TV distribution, sales agents, training, promotion)
The MEDIA Programme has contributed directly and indirectly to the improvement of circulation of European
audiovisual works.

The distribution action line has specifically focused on this objective. As a result of support for distribution and
for sales agents, 98 films were distributed outside their national territory over the reference period.

The indirect action of the training and promotion lines should be added to this direct action. Promotion of a
project has to be conceived right from the development phase and implemented from a marketing and market-
prospecting viewpoint. An approach that puts the promotion/marketing/prospecting triptych at the centre of
professional practice could strengthen the creation and value chain.

4.3. The MEDIA contribution to the structuring of SMEs: development support, Slate-funding support, sales
agents, networking of producers.
The European audio-visual sector is characterised by a dual structure: Large groups of producers and distributors
alongside a plethora of small entrepreneurial structures with a low number of permanent employees.

MEDIA Plus is well adapted to this context and to the specific needs that it creates. Admittedly, the funding needs of
companies and political aspects of the distributor/producer separation, which impact on the development of the
audiovisual industry, do not form part of MEDIA’s tasks. However, its actions (e.g. the MEDIA TV distribution rules or
slate funding support) provide a partial response to these problems.

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For these reasons, the tools used by MEDIA Plus have to be maintained and strengthened, and close attention paid to
slate funding, training, networking of professionals and market access.

4.4.     Specific consideration and regime for the accession countries
The accession countries of Central and Eastern Europe have made enormous efforts to embrace European standards.
They still have far to go. In order to find appropriate solutions it would be advisable to identify and define accurately the
obstacles and difficulties experienced by the cinematographic and audiovisual operators in these countries.

4.5.     The MEDIA contribution to adaptation to technological developments
The market, whether that of professionals or consumers, adapts with some difficulty to technological developments.
Numerous obstacles remain, linked notably to a lack of investment in equipment.

This finding is the basis for the strategic importance, for the MEDIA Plus programme, of supporting on-line training
projects, portal and database projects. It is equally important:

         v to incorporate more of the ICT costs in the eligible costs

         v to increase, within the promotion action line, support for "virtual" promotional actions
         v To incorporate, within the distribution action line, the design costs of on-line promotional actions.

4.6. The European added value of MEDIA for the large countries: Germany, Spain, France, Italy, and the United
The overall analysis of the midterm evaluation report shows that the distribution of MEDIA support is well balanced.
MEDIA support backs up national support. The amount of MEDIA support is inversely proportional to the size of the
market (in terms of number of films produced and public).

Countries such as the Netherlands or Belgium, which are not classified among the five most important countries, also
receive a considerable share of certain promotion programmes (The Netherlands with Market Place), or of training
(Belgium with EAVE).

On the other hand, certain mechanisms (selective distribution for example) could benefit from increased selectivity and
others (for sale agents, for example) from strengthening positive discrimination in order to guarantee a well-balanced
distribution of support for all the areas of the programme.

4.7. The European added value of MEDIA for countries with a low production capacity and a restricted linguistic
The analysis of MEDIA shows, in line with the aims of support for cultural diversity and for the economic structure in
these countries, that positive discrimination and targeted support (points system, subtitling, dubbing, aid for promotion)
enable the creative industry and the professionals of these countries to achieve recognition outside their borders. This
result is essential not only from the point of view of creation of an internal market, but also for the promotion of European
cultural creation.
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Digital technology, which now enables multilingual distribution of a channel (one channel with images or 3 or 4 channels
for various language versions) or the insertion of several language versions for a DVD, should facilitate the circulation of
works produced in these countries.

    5. The various areas covered by the MEDIA Plus and MEDIA Training Programmes

    5.1 MEDIA Training
The MEDIA Training Programme aims at the qualitative strengthening of audiovisual professionals' training and of co-
operation among the providers of European audiovisual training. The assessment shows that this area is performing well
and has put in place support adapted to the needs of industry.

Support for training contributes significantly to the existence of training with a European dimension for audiovisual sector
professionals, covering on average 49% of the budgets of training projects. The training projects have contributed to
improving the competence and the know-how of European professionals. The majority of the training was continuous,
and respected the balance between different nationalities, as required by the guidelines.

Among possible improvements, the midterm evaluation showed the need to concentrate on the one hand on the control
of training costs, which are high on average, and on the other hand on the need to encourage the networking of the
various training projects.
The evaluation also drew attention to the need for specific handling of the needs of the accession countries. Efforts
should also be made to develop training in international marketing and to increase the participation in on-line training
and adaptation to new technologies. Lastly, it would be desirable to include the question of the training of professional
trainers within the priorities of the MEDIA Training Programme
The MEDIA Training Programme achieved undeniable results, even if the impact on the final beneficiaries of the
programme can only be appreciated fully over a longer period. The efforts made to improve the networking of training
bodies are also steps taken in the right direction.

         5.2 MEDIA Plus Development
The objectives of MEDIA Plus - Development sector are the strengthening of the development phase, the improvement
of competitiveness of the sector’s independent SMEs and the encouragement of the use of new technologies in
audiovisual production.

The development sector is structured according to objectives adapted to the sector and meets its goals. Development
support makes it possible to reduce the risks borne by European independent companies in the development of their
audiovisual projects by taking on a significant share of development costs (16% on average). Funding is attributed in a
satisfactory way between fiction, documentary, animation and multimedia projects. In the sample of projects considered,
99 went into production. These results confirm the relevance of the development sector for the industry and the
adequacy of the instruments set up.

In Europe the development phase is not taken sufficiently into account in the audiovisual production chain, especially in
comparison with American practices (on average 1% of the production budget in Europe is devoted to development as
APRIL/ Media Consulting Group / SECOR for the DG EAC C3 – Final report                                                   10
opposed to 10% in America). MEDIA support is therefore essential for the sector, especially as the national funds cover
little of the development costs.

To increase its relevance in relation to the needs of the sector, the development sector should:

§   differentiate between above the Line and below the Line expenditure
§   Take into account the needs for support in setting up productions
§   Provide for a link with MEDIA Training, whose actions can also contribute to the development phase of a project (for
    example: writing workshops).
In the field of television, it is an error, for the producer, the author or others, to develop projects without any regard for
contingencies or knowledge of the constraints imposed by broadcasters. These projects are intended for programme
schedules subject to a particular editorial logic. The professionals who work for television cannot ignore the constraints
and the framework fixed by broadcasters. More detailed knowledge of the realities of the TV market has to be achieved
through more frequent professional meetings between those with editorial responsibility, the broadcasters and the
producers. The programme could facilitate these encounters.

The relevance and the effectiveness of the development sector are confirmed by the evaluation. It also underlines the
necessity of continuing its adaptation to the SMEs needs: lightening of constraints, importance of the need for financing,
increased need for flexibility in the use of support.

         5.3 MEDIA Plus Distribution.

         Cinema Distribution action

The MEDIA Plus Cinema Distribution action aims to improve the circulation of European works and to strengthen
European distribution.

The midterm evaluation confirms the relevance of the programme’s objectives and its effectiveness. MEDIA Plus
Distribution supported 9 out of 10 films distributed outside their national territory. The two systems set up, selective
support and automatic support produced satisfactory results. Support for the selective scheme increased over the
reference period. The reinvestment of the funds generated by automatic support proved satisfactory. Although the large
countries may have profited more in absolute terms from the distribution scheme, the impact of the programme on the
countries with a low audiovisual capacity was determining in terms of its weight in the financing plan of the projects. If
France and the United Kingdom are disadvantaged by the point system, they clearly profit from reinvestment.

Numerous professionals, however, wonder about the respective roles of the automatic and selective support systems
and consider that selective support should play a greater role of adjustment, of rebalancing and of support for niche
cinematographic works.

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         Sales agent action
The sales agent action is recent and its results are therefore difficult to evaluate. This support is linked to questions of
marketing and of international sales, which are nowadays at the core of the audiovisual sector and its consolidation.

The efforts in this area obviously have to continue. They should be accompanied by an identification of the most
promising markets and festivals at international level, which require, for this reason, the presence of sale agents. An
inventory of promotion and marketing tools should also take place.

In view of the precariousness of the sector and its doubtful profitability, the consistency of the MEDIA actions, in
particular with regard to distributors and sale agents, has to be the subject of close attention. Thus, a successful policy to
encourage groupings of distributors in Europe might have harmful consequences for sale agents, to whom producers
would no longer have recourse in the principal European sales territories.

         TV Distribution action
Support for TV distribution is significant both from the point of view of circulation and production of European
independent audiovisual works. This mechanism is intended to encourage the participation of non-national European
broadcasters in production budgets.

This action stimulates the production of TV works for the European market and obtains positive results.
The European potential of the works supported is reflected clearly by the significant amount of pre sales of European
rights, which represent up to 18% of the projects’ financing plans. France is the country that produces most works,
linking the largest number of European and non-European broadcasters. Documentary is the most represented
programme type, which has the strongest attraction for European broadcasters and the highest number of linguistic
regions. Fiction and animation come second.

60% of the funding distributed within the framework of the TV distribution sector is shared between three countries (FR,
DE, U.K). This geographical concentration of support is explained by the market structure. The national financing
practices for televised work make the MEDIA Plus Programme more attractive and/or decisive in the countries where TV
channels do not pay in full for the works they commission.

The discussions with professionals held within the framework of the midterm evaluation confirm the importance of this
action, in view of the difficulties that independent TV producers encounter in face-to-face negotiations with their much
more powerful customers. The demands of the channels remain strong, but are directed towards television formats
rather than towards cinema. The setting up of co-productions in TV distribution remains difficult, especially with regard to
TV fiction. The only exception is for prestigious mini series, intended for prime time on the national channels. There is a
downturn in animation orders from broadcasters due to stockpiling of rights.

The TV distribution dimension (sale agents) could be strengthened insofar as the nature of the audiovisual market
(generally, the producer is connected solely with the partner broadcaster) makes the valorisation of rights catalogues
difficult on the national markets. The presence of distributors could have a positive effect on the perennially difficult
APRIL/ Media Consulting Group / SECOR for the DG EAC C3 – Final report                                                     12
negotiations between producers and broadcasters, by introducing a third party. In addition, the possibility of finding
complementary financing to complete financing plans on the international market would be a real opportunity for
producers. Lastly, an increased circulation of programmes from one national schedule to another (objective interest of
co-producers) could be a result.

         Cinema Network action
The Cinema Network action (Europa cinemas) aims to increase the programming of European films in theatres and to
encourage the setting up of a network of cinema owners to facilitate joint promotion actions.
The results of the first years of the MEDIA Plus Programme confirm the relevance of the objectives of this action: support
to cinemas resulted in an increase in the programmed performances. European entries increased by 18% over the
reference period. In respect of the cinemas supported, European entries account for 59% of the total entries.
The cinemas in the network showed on average 38% of non-national European works in 2002. In cinemas that didn’t
belong to the network the market share of non-national European works was only 8%.
The discussions with professionals show that the risk connected with the programming of non-national European films
apart from in certain areas (town centres, university areas) is high. More promotion and marketing for non-national films
would probably make it possible to overcome partially this difficulty.
The cinema network could probably increase its effectiveness in promotion and marketing, since it is in direct contact
with the audience and the market. The aid of MEDIA Plus is necessary to pursue this policy, because the network of
Europa Cinema consists mainly of small and medium sized cinemas, which have few means. Links with the promotion
action line could be envisaged to improve the visibility of the films shown. As the life and success of a work strongly
depends on the quality of its exhibition, it would also seem to be important to improve aspects such as the number of
copies, and to check the period for which the film is shown, information that is currently unavailable. Improvement of
promotion could also take place through increased co-ordination of the network, a more significant development of
common actions and of co-ordinated launch operations etc. The programme could thus improve its impact on circulation
and also on the promotion of European cinema.

    5.4 MEDIA Plus Promotion and Festivals

The Promotion and Festivals actions aim to increase the visibility of the European audiovisual industry by facilitating
access and participation by European companies to major European and international events. The action also aims to
encourage contacts between European promotion operators.

In the United States, promotion is designed and put in place from the development phase and often accounts for 10% of
the production budget. In Europe, promotion is considered too often only after production.

The midterm evaluation encountered certain difficulties in measuring the impact and the effectiveness of this support
policy. This difficulty concerned the festivals as well as promotion actions.

This can be explained mainly by the very nature of promotion actions, directed mainly towards communication rather
than promotion as such of the products and the works ("title business").
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Results show that 44% of the projects supported cover promotion activities and 56% festivals. The 70% quota of
European works in the festivals is easily met, the proportion reaching even 80% on average. On the whole, MEDIA is
involved in 21.5% of the festivals organised in European countries. The geographical distribution of support favours the
large countries. The promotion action nevertheless has a high European added value. Financing by MEDIA accounts for
on average 5% of the budget of the projects. Financing is targeted at specific costs. The concentration of support could
give rise to a more structured, strategic and accordingly more effective aid. But the impact in terms of promotion and of
audience education justifies the maintenance of wide-scale support to a large number of festivals, and hence to the
widest possible audience.

Television does not figure in the promotion section, both in regards to the programming of festivals and as a potential
tool to contribute to the promotion of European works or of the MEDIA Programme itself. The new Programme should
correct this omission.

A more market-oriented view of Promotion could increase the effectiveness of the programme. European SMEs should
also be enabled in parallel to use prospecting and marketing, and to have a more commercial approach to markets.

    5.5 Results of the pilot projects

The pilot projects aim to support the adaptation of the European audiovisual sector to new technologies. This objective is
confirmed as relevant by the evaluation. The limited number of pilot projects supported under the programme MEDIA
Plus does not detract from their goal or their importance, in particular in terms of the budget (3.4 million Euro). 54
applications were received, proof of the success of the action. All the lines of action were covered, except for line 3
(promotion). A second call is currently under way. It does not form part of this evaluation.

The aid that MEDIA Plus provides is significant (20.71% of the average finance budget of a pilot project). Projects
assemble on average 4 European countries apart from that of the project sponsor.

The action priorities are relevant, in the context of a market that is not ready to assume fully the challenge of new

    v The business models for on-line distribution and/or archives services are tentative (free versus paying)
    v D - Cinema is numerical from beginning to end but the contact points with the market (film theatres) are not so.

The pilot project action clearly shows there are certain needs to be met so that the European audiovisual sector can
profit from the opportunities created by digitisation. In particular, there is a need to digitise content, equip film theatres
and digitise archives.

5.6 The preparatory action i2i Audiovisual

APRIL/ Media Consulting Group / SECOR for the DG EAC C3 – Final report                                                     14
The Preparatory action i2i has successfully met (at the end of its first year) its support objective and that of access to
banking credits. However it would be appropriate to attribute greater budgetary and structural importance to this action
given the stakes. The integration of i2i into MEDIA Plus would undoubtedly give more weight to this action.

i2i is favourable to small producers who, as they have limited possibilities of negotiating, pay more expensive bank
charges than the larger companies (on average 8% versus 4-5% for more important companies). The preparatory action
i2i enables these small enterprises to decrease bank charges considerably. In bearing a part of the costs generated by a
loan, it reduces the divergence between the rates paid by different parties.

The completion guarantee is expensive (between 4-6% of the production budget depending on the case). However, it
reassures financial investors and banking establishments on two fundamental elements: the product is made following a
pre-set timetable within the limits of a pre-set budget. i2i Audiovisual, in meeting 50% of the completion guarantee,
enables small producers to take out more easily a guarantee favoured by financial partners. The completion guarantee is
an instrument that has become common in Europe (the United Kingdom, Germany, Scandinavian Countries,
Luxembourg, etc), in particular because of the increasing amount of European co-productions.

The i2i mechanism, in meeting 50% of insurance costs, enables small producers to reduce the cost of the guarantees,
which they have to meet and which are sometimes required to be assigned by the banking and financial establishments.

    §    integration of i2i audiovisual in Media Plus

The advantages of integrating i2i Audiovisual in Media Plus would be numerous, and in particular:
    §    The possibility of creating a kind of development/pre-production "package", which would enable producers to
         adopt a longer-term strategy for the management of their productions;
    §    The existing potential between support for development above the Line and support for pre-production and for
         financial setting up of works would be strengthened.

         6. The organisation and management of the MEDIA Plus and MEDIA Training
6.1. Did the programme reach the audience targeted?

The number of applications is increasing for all the calls for proposals (Cf. BSC), which shows that the programme is
increasingly known by professionals. The results of the on-line questionnaire show that this visibility is mainly the result
of the organisational structure: 48.67% of the beneficiaries in our sample had heard about MEDIA Plus from the MEDIA
Desks (Cf. graphic no. 30).

It is also interesting to note that, for certain beneficiaries, the training supported by MEDIA played an information role for
the programme. 46.67% of the beneficiaries questioned judged the programme good in terms of visibility and of
accessibility. 43.33% considered it to be satisfactory and 10% considered it to be poor.

APRIL/ Media Consulting Group / SECOR for the DG EAC C3 – Final report                                                     15
6.2. The organisation of the programmes: guidelines and commitment of expenditure

The organisation of the programme is on the whole satisfactory. Criticisms concern mainly the eligibility criteria, the
definition of eligible costs and the time taken for payment of the support. These criticisms should however to be qualified,
since 93.28% of the beneficiaries questioned declared themselves to be satisfied overall.

The selection of applications takes place on average within 6-8 weeks after the end of the call for proposals. The
selection of applications in development in the longest, as each file is evaluated by two independent experts. The
selection of training applications also takes longer as the Parliament has to approve the lists of projects proposed for co-

Once the Commission has decided to award co-financing, an advance payment is usually made within 45 days. A
second payment is made at the end of the project.

6.3. Administrative management of the MEDIA Programmes

The current information system provides for an effective monitoring of the financial commitments. However, it makes it
difficult to establish statistical data concerning the nature and origin of the projects and the status of the partners
involved. It would be advisable to strengthen this control tool.

The MEDIA Desks, which are part-financed by the national authorities and the European Commission, effectively meet
their task as a source of information at a decentralised level. The resources at their disposal are sufficient.

However, it would be advisable to develop the role of the MEDIA Desks as a source of advice. The MEDIA Desks could
contribute effectively to the improvement of accessibility to the programme: the technicality of the files, the linguistic
questions, and the lack of European contacts dissuade certain SMEs, who would need structured help and advice.

         7. MEDIA and the logic of Community added value: synergy and subsidiarity
7.1. Articulation with programmes for third countries:

Greater co-operation in audiovisual matters between the European Union and third countries and a more active
presence of the European audiovisual industry on markets outside Europe would be a natural extension of the MEDIA

The European Union supports the audiovisual sector, information and communication technology and the cinema in third
countries through a number of programmes. This does not mean that these budget headings should be within MEDIA,
but that implementing synergies with the other Directorate-Generals of the Commission could be put in place to
rationalise the interventions. In this respect, co-ordinated or even integrated management between MEDIA and Euromed
Audiovisual should be encouraged.

APRIL/ Media Consulting Group / SECOR for the DG EAC C3 – Final report                                                   16
The European Union would first need to choose the objectives for collaboration (ex: distribution and trade, exchanges,
training etc), the technical basis for collaboration, and finally the tools, in the light of the geographical areas (ACP, ASIA,
BALKANS, etc).

It is neither possible nor desirable to open the European programmes to all in an undifferentiated way, but it is essential,
on the contrary, to use the diversity of tools available to the Union and its professionals to cover a wide range of actions
and to increase the impact (at a commercial or cultural level, as regards training, etc).

7.2. A Community action subsidiary to national and supranational policies
          National policies

MEDIA is linked in a coherent way with national aid, where it exists. Professionals moreover have understood the
interest of accumulation, which, in a number of cases (TV distribution, sale agents, and development) enables them to
reach a good level of financial support.

                  v The problem of matching-funds and the effects of complementarity

                                      The case of training

The problems of matching funds are crucial for a number of projects. In countries that do not have training funds, the
solutions available to project promoters are either a considerable increase in study costs or to abandon support requests
to MEDIA (since one of the principal eligibility criteria would not be met). This risk concerns more particularly the
accession states, evidenced by the abandon of one of the rare projects from Bulgaria.

                  v Overall MEDIA complementarity with Member States’ aid

The audiovisual sector has become an important issue for all countries. Information on a European scale about existing
national and European aid is becoming a central issue for the overall effectiveness of the MEDIA programme.

The diversity and the complexity of the system increase the inequalities between those who master the information flow
from the markets, and those who, for various reasons, do not receive useful information or are unable to cope with the
information collected (dates of the calls for proposals, knowledge of the criteria, capacity to mobilise a European
network, possibility of mobilising national matching funds, possibility of devoting time and resources to the constitution of
the files etc).

                  The supranational regional policies
Supranational funds support projects with a European added value, often in favour of countries with low production
capacity or with a reduced linguistic area. The constitution of regional blocks appears to be an effective
decompartmentalisation tool for countries with low production capacity and with a restricted linguistic area. Other regions
are beginning moreover to adopt this system, for the moment only in respect of development (cf.: the Baltic and Balkans
funds). MEDIA alignment with these funds should be envisaged.
APRIL/ Media Consulting Group / SECOR for the DG EAC C3 – Final report                                                      17
                       7.3 The added value of Community intervention: networking of European professionals
One factor of MEDIA’s added value resides in the networking of companies ("networking"). This networking is well
adapted to the micro and small enterprises, which are trying to work within the Internal market.

MEDIA has been incorporated into the professional practices of SMEs, of distributors, of multiplexes and of subsidised
public bodies. It is a programme that fulfils the overall role assigned to it. However, to have a real industrial impact in the
current international context and to act at the key points of the sector’s economy (export, promotion, development, and
access to consumers), it should have increased financial resources.

The MEDIA programme is a success overall for the sector as shown, in particular by the numerous oral and written
contributions received during the evaluation. This effectiveness has to be consolidated and built on. MEDIA Plus has in
particular to consolidate its capacity to support the networking of SMEs and of micro enterprises in the context of the
European market.

Lastly, MEDIA has a role to play in the introduction of transparent practices, an essential need for the sector. By
requesting more transparency from its beneficiaries, MEDIA will contribute to facilitating future evaluations of the
Programme, but will in particular increase the confidence necessary to attract new financing.


The Mid-Term Assessment of the Media Plus and Media Plus Training programmes is positive. With 54 green lights and
two red lights, it is safe to say that the Media Plus and Media Plus Training programmes are highly effective and are
suited to the needs of the sector and of beneficiaries, providing appropriate categories of support. The indicators used
for evaluation show that the tools set up by the commission produced satisfactory results and achieved their midterm
goals. They were particularly necessary in the difficult economic period of the year 2001/2003.


Media Plus operates in line with changing needs (newcomers, funding crisis, consolidation of the industrial base,
international expansion), which are increasingly at the heart of the problems of European professionals. ).

European added value
The evaluation team looked at the extent to which the different fields of support of the MEDIA programme provided their
full measure of European added value through an analysis of the guidelines of the different programmes that are
separate and complementary to the many national support schemes. European added value is particularly pronounced
in the implementation of European networks.

The first assessment of the programme after 18 months of implementation demonstrates a high level of results.
Effectiveness is also measured by the fact that Media Plus accompanies risk-taking by European SME, which are
otherwise increasingly hesitant to develop pan-European actions and strategies and to try to get a foothold on European
APRIL/ Media Consulting Group / SECOR for the DG EAC C3 – Final report                                                      18
Efficiency and quality of programme management
Media Plus is a programme becoming known by an increasing number of European professionals and it is logical to
conclude that its reputation will grow even more. It is also important to note the timeframe difference between the
Commission (e.g. the timing imposed by the new Financial Regulation) and professionals. From that standpoint, it is
essential for the Media programme to stay on course between the internal requirements of the Commission’s services
and the expectations of a sector that today has fully integrated the advantages of this programme into its professional

The evaluation demonstrates that Media Plus and Media training tools are on line with the market trend and the needs of
the companies and that Media is a beacon which encourage the film and TV world stakeholders at every turn to think
and act more European.

APRIL/ Media Consulting Group / SECOR for the DG EAC C3 – Final report                                              19

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