Parliament's report on Media & Audiovisual Action Plan at a critical time for film sector's recovery

The ongoing COVID-19 crisis presents unprecedented challenges for European film distributors. Distribution is a fragile sector by its nature, dealing with an important gap between the upward investments and the future potential incomes.

Due to the COVID-19 pandemic the level of risk to the sector is critical since the numerous lockdowns have forced the closure of cinemas and tragically undermined the reach of many films, while those that could be held back for a release post-crisis will have to take their chances in an overcrowded and disrupted market.

Distributors across Europe are suffering a severe cash flow shortage that:

Threatens the investment in existing and future productions.
Curtails the marketing and release of culturally diverse films, all around Europe.
Challenges the international circulation of films.

Given these extremely challenging conditions FIAD is glad to see the European Parliament dedicate time and effort to assess how the "Media & Audiovisual Action Plan" can support the sector recover through an Own Initiative Report.

As the European film sector is a central tenet of Europe's rich and diverse culture - and film distributors are the lynchpin of the film value chain, helping to connect filmmakers with finance and finished films with wide-ranging audiences - FIAD is looking forward to working with the CULT Committee on how the report can reflect the challenges faced by film distributors and offering recommendations for a sustainable and swift recovery.

Central to the recovery is a combination of immediate financial support and mid-long term policy changes to support the pillars on which our sector depends: protection of Copyright and preservation of territorial exclusivity.

Please see below for a write up of the CULT Committee's exchange of views on this report on 19 April 2021:

MEP Melbarde (ECR,LV) initiated the exchange by stressing the “difficulties and challenges” faced by the audiovisual and news sectors. While there is an obvious need for “targeted financing to help alleviate revenue drops”, Melbarde states the challenges are even broader – there is a need to create a level-playing field, and to transform and promote the sectors. Melbarde stated that the rise of VOD platforms is creating “issues regarding intellectual property and the future of independent production”, and threatens the diversity of the sector.

MEP Šojdrová, standing in for Shadow Rapporteur Zovko (EPP, HR) emphasised that the competitiveness of the sector is dependent on “important issues” such as “copyright, territorial exclusivity and cross-border distribution of content”, and the existence of a level-playing field. This will benefit the “economic component of the sectors, save thousands of jobs” and ensure cultural diversity.

Smeriglio (S&D, IT) stated that the pandemic has exacerbated the weakening of audiovisual sector, “which was already highly fragmented”. Further, Smeriglio spoke of the importance of setting up an interactive tool for “informing media companies about financing tools available”, and stressed the need for Member States to do their part in helping the sector, for instance, through NextGeneration EU.

Farreng (Renew, FR) expressed her content with Action 6, regarding ecological practices in the media sector. She continued her intervention by criticising the lack of “direct support for cinema theatres”, which constitute “a pillar of our audiovisual sector” and are “intrinsically linked to the value chain“. In particular, the MEP expressed concern for the delicate situation of distributors, alerting that “40% to 60% of their revenue (…) comes from cinema theatres, which have been heavily affected by this crisis.” Farreng further reminded her colleagues that SME’s, “which constitute 90% of the audiovisual sector” and are dealing with severe liquidity shortages, are not sufficiently considered.

Nienass (Greens, DE) agreed that “cinemas are important” and expressed his support for greening the sector.

Shadow Michels (Left, DE) was represented by her colleague Barrena (ES). Michels worries that the pandemic will enable streaming platforms to “extend their market dominance”. Furthermore, recovery programmes must consider the fact that film “production stood still”.