Public consultation on Assessing State aid for films and other audiovisual works

Transcription

1 Public consultation on Assessing State aid for films and other audiovisual works Commission Communication on certain legal aspects relating to cinematographic and other audiovisual works, COM(2001)0534 final, OJ 2002/C 43/6 Introduction ANICA (Associazione Nazionale delle Industrie Cinematografiche, Audiovisive e Multimediali) is the Italian association representing national industries active in the field of movie production and distribution and related audiovisual technologies. ANICA welcomes the opportunity to submit its comments to the consultation. For convenience, the questions have been numbered. Replies to questions 1. What should be the objective of State aid for films and audiovisual works? ANICA maintains that the objective for State aid for films and audiovisual work should extend to all aims listed in the Commission issues paper ( 28). It is imperative that State aid favours the whole value chain of the cinema industry (e.g. development, production, distribution, marketing), and in particular its weakest participants, i.e. the SMEs active throughout the entire chain. In principle, the aid should focus on, and be aimed at, the industry, rather than the (audiovisual) product. The SMEs of the audiovisual sector have recently initiated a dialogue with the Ministry of Economic Development aimed at adapting the traditional evaluation tools (i.e. rating) for business access to credit to the specific characteristics of the movie industry. That should allow the audiovisual sector SMEs to access the Fondo Centrale di Garanzia (Central Guarantee Fund) for the SMEs, established to support the manufacturing and services sectors. It is in any case imperative that the link between the cine-audiovisual industry and the cultural value of its product be maintained and reinforced. 2. How should one measure that this objective is fulfilled? By safeguarding the cultural test principle.

2 3. What would be the most effective way for the Commission to control this subsidy race? While sharing the Commission s concern for possible subsidy races between Member States, ANICA stresses that it is of outmost importance that film productions are attracted within the EU and that possible measures against subsidy races do not jeopardise the development of the EU cinema industry vis-à-vis third Countries. Having said that, a subsidy race between EU Member States should be tackled through a consistent application of the cultural test, as mentioned by the Cinema Communication, and of appropriate territorial requirements. In this context, while fully preserving the subsidiarity principle, minimum requirements for the cultural test could be usefully introduced throughout the EU, thereby providing a harmonised minimum set of requisites, which Member States remain free to integrate and expand further. It is essential to define unambiguous criteria that allow to establish a link between the investment and the given territory, in order to avoid that location be based on purely economic criteria (e.g. labour costs). Conversely, ANICA would not welcome any ceiling on the film budget, which would only hold back investments from third Countries. Limits, where appropriate, should be imposed only as a percentage or the total aid. For example, the Italian tax credit provision took all the relevant variables into account, thereby striking the right balance between the two goals of cultural production and reinforcement of the industry. 4. What factors should be taken into account by State aid assessment criteria for activities other than production? Within the context of the cine-audiovisual sector, the relevant factors shall take adequately into account the capacity to create or preserve qualified employment, the increased productivity and the resulting ability of creative industries to sustain the EU economy. 5. How should the switch of cinemas to digital projection be covered by future rules on aid to cinema? The switch to digital projection should be included amongst the objectives of State aid to cinema. ANICA observes that the most serious market failures in this respect are the limited capacity of SMEs and of enterprises in areas with limited commercial capacity (e.g. rural areas, small towns) to invest in the digital switchover. Therefore, the most important criteria under which State aid should be assessed should be related to the size of the enterprise (focus on SMEs) and the location of the business (focus on unprofitable areas). 2

3 6. Should the scope of the Communication extend beyond films and TV productions to other types of audiovisual projects? If so, what definition of 'audiovisual project' should be used? ANICA advises against any extension of the scope of the Communication beyond films and TV productions. Furthermore, the notion of audiovisual project can be hardly defined and it risks being an empty box: it is observed in this respect that no definition of work can be found in the AVMS Directive. 7. Should the current maximum overall aid intensity remain as 50% of the production budget, with higher aid intensities for difficult and low budget films? ANICA thinks that the current maximum 50% aid intensity, with higher aid intensities for difficult and low budget films, delivered good results. A similar approach could be usefully adopted (see question 6 above) for the movie theatres of towns and small peripheral centres, in the light of the high social and cultural potential that these activities bring about, both for the education of young artists and the maintenance of a minimum quality of life standard to the benefit of those citizens with limited mobility (i.e. difficult or low profitability theatres ). 8. If activities other than production are to be covered by the Communication as well, would it be appropriate to set the maximum overall aid intensity as 50% of the total project budget (covering script-writing, development, pre-production, principal photography, post-production, distribution, promotion and marketing costs)? ANICA agrees, in principle, with the overall aid intensity proposed by the Commission. It would also welcome more favourable aid ceilings for SMEs. In any case, it should be made clear that the above ceilings are to be applied separately to each stage of the production chain. Enterprises along the industry chain are very different and perform different activities; it would be neither suitable, nor fair, to impose a ceiling on the overall budget, without further distinction. Therefore, aid intensity should be applied to, at least, the five main stages of film making, namely: development, production, distribution, marketing and post-production. This would particularly allow SMEs to develop know-how independently from the covering wing of the majors. Moreover, it would be appropriate to set dissimilar aid intensities according to the relevant activity. Some activities which require more support, such as development and marketing, shall be allowed a higher aid intensity (above the general threshold of 50%). 3

4 9. Would it be appropriate to encourage cross-border cooperation by allowing a higher overall aid intensity (of perhaps 60%) for film projects which involve activities in more than one Member State, including co-productions? ANICA agrees with the proposed higher intensity for film projects which involve activities in more than one Member State, including co-productions. ANICA would welcome EU initiatives to encourage SMEs cooperation, in particular on tax incentives schemes. 10. If other types of audiovisual projects are to be covered by the Communication, what should the appropriate maximum overall aid intensity be? As explained in the reply to question 6 above, ANICA advices against the extension of the Communication to other types of audiovisual projects. 11. Should Member States be allowed to impose territorial conditions on aid for audiovisual projects? If so, would it be fair to limit this to 100% of the aid amount or is there a more appropriate benchmark? ANICA believes that a limit should be imposed with reference to a share of the total budget and not to the total amount of aid. Having said that, a limit of 100% of the aid amount is not appropriate, as it would create problems to inter-member States productions. This limit could conceivably be applied only to entirely national productions. 12. Should conditions on production support be imposed to encourage a smooth digital transition, such as ensuring that a digital master is produced and requiring that publicly-funded works are released under Creative Commons Attribution-ShareAlike licences? ANICA maintains that conditions such as the above should not be imposed. Conversely, a higher aid intensity could be allowed for productions which produce digital masters, as these are not currently sustained by the market alone. A requirement that works are released under Creative Commons and similar could be envisaged only where the entire project is publicly financed. 13. Should distribution support cover distribution on all platforms (ie, not only, for example, for releasing in cinemas)? ANICA agrees that distribution support should cover all platforms. In particular, ANICA would welcome support to the activities of collection, digitalization and marketing on digital platforms of national movies heritage of all times. This activity is currently 4

5 fragmented and investments can be hardly sustained by independent actors. ANICA is developing a project of that sort, currently at an advanced stage, on Italian cinema. 14. Since most European films receive public support, it could help to develop film culture/literacy and ensure that supported films are safeguarded for future generations if such funding is conditional on the supported films being deposited and available for cultural/educational use. Should a new Communication invite Member States to do so, especially if the public funding is over 50% of the film's budget? ANICA believes that an access obligation should not be imposed where the project is cofinanced by private investors. This is particularly the case if one considers that the average public support to Italian production currently amounts to a minority share of the film budget; in such a case, an access obligation would unreasonably penalise private operators financing the largest part of the total amount of the project. 15. Should a new Communication include additional State aid rules for supporting initiatives designed to encourage businesses to take advantage of the digital revolution? ANICA believes that the digital revolution shall be supported. However, it considers that support should chiefly cover distribution of EU products, in order to avoid favouring non-eu multi-national operators. Moreover, supports could be linked to the (EU) nationality of the operators, in order to reinforce the internal know-how and capability of producing new revenues. 16. Are there any other issues which the Commission should consider in a new Communication? ANICA does not have any further comments at this stage. * * * * ANICA is available to expand on any of the issue above. For any further information, please contact: Francesca Medolago Albani (f.medolago@anica.it), Alessandra Fratini (a.fratini@fratinivergano.eu). 5