SUGGESTIONS FOR IMPROVEMENT OF MEDIA SUPPORT FOR DISTRIBUTION

Eurpean netwrk f independent distributrs SUGGESTIONS FOR IMPROVEMENT OF MEDIA SUPPORT FOR DISTRIBUTION Main pints : The definitin f the independent Eurpean distributr The speeding up f cntracts and payments The refrm f Media Selective Supprt (beneficiary, eligible films, award criteria ) The refrm f Media Autmatic Supprt (increase f the generated supprt n a first rung f admissins ) 1

THE DEFINITION OF THE EUROPEAN INDEPENDENT DISTRIBUTOR MEDIA Prgram and independent distributrs What are the aims f the Media Prgram? Encuraging transnatinal distributin Encuraging investment in prductin, acquisitin, marketing and prmtin f nn-natinal Eurpean wrks Encuraging c-rdinated marketing strategies between the different actrs f the sectr Imprving the circulatin f Eurpean nn-natinal films n the Eurpean and Internatinal markets Encuraging the creatin catalgues f wrks with high cultural value. Supprting the digitisatin f Eurpean wrks. The independent distributrs embdy mst f the aims f the Media Prgram Arund 75% f the nn-natinal Eurpean mvies are released by independent distributrs The independent distributrs defend fragile wrks with high cultural value that embdy the Eurpean Cinema f tday and tmrrw. The independents ften discver new talents and supprt them until they finally reach success amng public and critics (Ken Lach, Michael Haneke ). Amng the authrs they ve discvered and defended: Fatih AKIN, Pedr ALMODOVAR, The ANGELOPOULOS, Jacques AUDIARD, Rbert BEGNIGNI, Catherine BREILLAT, Laurent CANTET, Nuri Bilge CEYLAN, Claude CHABROL, Yussef CHAHINE, Patrice CHEREAU, Les Frères DARDENNE, Manel DE OLIVEIRA, Arnaud DESPLECHINS, Andreas DRESEN, Stephen FREARS, Tny GATLIF, Paul GREENGRASS, Rbert GUEDIGUIAN, Bent HAMER, Michael HANEKE, Otar IOSSELIANI, Benit JACQUOT, Aki KAURISMAKI, Krzysztf KIESLOWSKI, Mike LEIGH, Ken LOACH, Pavel LOUNGUINE, Nikita MIKHALKOV, Nanni MORETTI, Françis OZON, Rman POLANSKI, Jacques RIVETTE, Eric ROHMER, Carls SAURA, Ulrich SEIDL, Lne SCHERFIG, Istvan SZABO, Denis TANOVIC, Bertrand TAVERNIER, André TECHINE, Tm TYKWER, Thmas VINTERBERG, Lars VON TRIER, Wim WENDERS, Michael WINTERBOTTOM.. 2

But independent distributrs cannt g n wit this wrk if their fragile and difficult psitin cmpared t enrmus structures like TV r Telecmmunicatin netwrks is nt taken int cnsideratin. Even thugh the situatins are very different in Eurpe, the cnclusin is the same: the independent distributr is characterized by the risk he takes by releasing a fragile Eurpean wrk. Why can this definitin be integrated in the Media Prgram? There s already a definitin f the independent Eurpean prductin cmpany that is used by Media. Media Develpment supprt is reserved fr independent prductin cmpanies. An independent prductin cmpany is a small and medium cmpany that desn t have any specific link with a TV netwrk. The definitin f the Eurpean independent distributr An independent distributr is characterized by 2 elements: His editrial wrk (discvery f Eurpean talents, ften awarded in festivals, wh represent Eurpe s cultural diversity) His financial weakness due t the absence f cash flw, f prper capitals because there s n grup behind t financially supprt the MG and P&A. Therefre, is cnsidered as independent a distributr that hasn t gt any specific link with a grup that has gt a substantial market share n its first market. By grup, we understand: TV netwrk Telecmmunicatin netwrk Distributin cmpanies wned by nn-eurpean capitals By specific link we understand abslute capitalistic independence Distributrs wh wn a cable channel (but nt the platfrm) r a VOD platfrm (r the cntrary) are cnsidered as independents. 3

MEDIA SUPPORT: STATEMENT A very gd system that has made its prfs All the Eurpean distributrs agree t say that the supprt f the Media Prgram has been essential fr bth the circulatin f nn natinal Eurpean mvies and the existence f small and medium independent cmpanies that are necessary t maintain a certain cultural diversity. Therefre, ur prpsals tday are dmed t imprve it, and nt at all t questin it, in rder t crdinate mre Media s bjectives with Media s supprt. The main questin is: thanks t Media, independent distributrs still exist tday. Hw can we make that they still exist tmrrw? But than can be imprved Public supprt is dmed t crrect the market s imperfectins. Thugh, the market f theatrical distributin has changed a lt in the last few years and has becme very unfair: the basic rules f cmpetitin are ften vilated. Eurpean distributrs all face the same prblems tday: a decline in attendance, an unprecedented inflatin in the number f films and prints, and a reductin in the amunt f time the mst challenging mvies play in cinemas. Mrever, vertical and hrizntal integratin has been n the rise ver the past few years. New frms f integratin have appeared: televisin netwrks are investing in traditinal frms f film and have created their wn distributin cmpanies. The first result f this grwing integratin is t inflate prmtin csts, which undermines independent distributrs wh cannt cmpete against their massive prmtinal campaigns. It is imprtant t emphasize the fact that what is harmful t distributin will als negatively affect prductin and exhibiting. It is necessary t take all these changes int cnsideratin and t think f a pssible adaptatin f the Media supprt (which hasn t been changed since 1988) in rder t help the distributrs wh really take risks t release difficult but prmising nn natinal Eurpean mvies and therefre really need the supprt f Media t g n ding this. S we think that the system, even thugh it wrks well and has helped several distributrs t release Eurpean mvies, culd be imprved. 4

MEDIA SELECTIVE SUPPORT Glbal prpsals fr Media Selective Supprt : T limit the perid between date f applicatin, date f delivery f the agreement by the Cmmissin and date f cncrete payment. Smetimes, befre the lans have been fully paid by Media, the distributr has t pay them back, which is very prblematic fr small cmpanies, especially in small cuntries. The payments shuld be transferred between 3 mnths after the signature f the cntracts (release statement) and then 3 mnths after the financial statement in rder t reach their initial gal: t prvide distributrs with cash flw s that distributrs can knw befrehand when they can cunt n receipt f the payments. T allcate the Selective Supprt t the exclusive benefit f the distributr (the nn returnable sums are nt t be included in the ryalty statement fr the benefit f prducers). Prductin cmpanies have all srts f benefits and a measure built t strengthen Eurpean distributin shuld nt be fr the benefit f prducers. T supprt mre mvies: in 2005, arund 40 films were supprted by Media, which is nt enugh t supprt the diversity f Eurpean prductin t day. Refrm Prpsals f Media Selective Supprt 1/ Eligibility Criteria Eligible sciety: Applicants fr supprt shuld be independent Eurpean distributin cmpanies. Eligible films: At the mment, films with a prductin budget ver 25 millin are nt eligible fr supprt. But the big Eurpean art huse mvies (Almdvar, Haneke) ften have a budget f 8-12M. Only big French r English mvies (Stalingrad, Vatel, le transprteur 2 ) have budgets ver 15M. We suggest that films with a prductin budget ver 20 millin are nt eligible fr supprt. MEDIA Plus supprt may cver up t 50% f the eligible csts fr a distributin campaign f films with a prductin 5

budget under 15 millin and 25% f the eligible csts fr a distributin campaign f films with a prductin budget between 15 millin and 20 millin. 2/ Award Criteria When a distributr applies fr autmatic supprt, there shuld be ne mre pint fr selective supprt in rder t avid penalizing the mvie and the grup f distributrs wh applies fr the selective supprt fr this precise mvie. Statement: many independent distributrs release a lt f first feature films but have always difficulties t release secnd feature films. It s always mre difficult t make an authr grw up than t discver him. S when a distributr has released the first mvie f a yung directr, there shuld ne pint mre fr him if he releases his secnd film. This wuld be a way t encurage perseverance and discvering wrk. One mre pint if it s a first r secnd feature film presented (r awarded) in fficial cmpetitin f a Festival (A categry). Creatin f a third gate: Slate funding This supprt shuld be a cmplement t the current Media Supprt t the distributin f single prjects. It wuld give less paperwrk fr bth the Cmmissin and the distributrs. Supprt t a prgram f Eurpean mvies It really helps the distributrs wh have a regular activity in Eurpean cinema. Fr example: the distributr shuld present a prgram f 4 Eurpean mvies including 2 nn natinal Eurpean mvies within 2 years. 6

MEDIA AUTOMATIC SUPPORT Aimed at encuraging and helping the trans-natinal distributin f Eurpean films, this financial aid fr reinvestment is determined n the basis f the number f admissins achieved by the nn-lcal Eurpean films during the previus year. We think that the system, even thugh it wrks well, culd be imprved. Our bjective is nt t change the glbal balances f the supprt between cuntries, but t change the repartitin f the supprt t the different distributrs within a cuntry. Glbal prpsals First f all, applicants fr supprt shuld be independent Eurpean distributin cmpanies as sn as the definitin exists. We culd think f giving the distributrs the chance t built up a fund during f.i. 3 years. This wuld mean a very much wished limitatin f bureaucracy and it wuld als mean that the fund can be fully used fr real investments in new films. It shuld prevent the cnsequence f the guidelines that leads t a decrease f the fund in cases that the initial calculated budget fr a P&A investment appears t be lwer in reality later. The difference between calculated and real csts shuld nt get lst fr the distributr and shuld stay in his fund fr new investments. We culd think f allwing submitting applicatins fr re-investment until date f release f the film in the cuntry (and nt within 3 mnths after signature f the cntract between sales-agent and distributr as it is the case tday). Smetimes guidelines even make applicatin fr a re-investment prject that the distributr has already been cmmitted t, impssible. This happens in cases where the Cmmissin allws nly the start f new applicatins after a certain date. If a distributr signed his agreement mre than 3 mnths befre that date n applicatin is pssible, althugh he has re-invested in a new Eurpean prject. We culd think f limiting the perid between date f applicatin, date f delivery f the agreement by the Cmmissin and date f cncrete payment. 7

Refrm prpsal: t increase the autmatic supprt n a first rung f admissins Why a refrm f Media autmatic supprt? The distributr is nt at the same level f risk fr every admissin. The first admissins represent the biggest risk fr Eurpean distributrs because their investments (MG, Prmtin and print csts..) are rarely recvered. When a film is successful (mre than 75 000 admissins fr large cuntries fr instance), this first rung f admissins ften allws the investments t be recvered but als a TV and a vide sale which are new incmes fr distributrs. The idea wuld be t integrate new parameters, in particular t increase the autmatic supprt n a first rung f admissins (fr example t duble it = 200%), t maintain it when the film achieves mre admissins than this first level (100%) and this as far as pssible. There is the pssibility t decrease the maximum t 500 000 admissins fr big cuntries, and t ther caps fr medium and small cuntries: fr instance, 75 000 admissins fr small cuntries and 200 000 admissins fr medium cuntries. In fact, the current cap f 700 000 admissins is has been calculated n the basis f admissins f large cuntries this cap desn t mean anything fr small r medium cuntries which never achieve anyway these 700 000 admissins. Our suggestin fr Media - Under the first rung f admissins: Rate > 100% (f.i. 200%) - Over the first rung f admissins : Rate 100% (it s very imprtant t maintain this rate) This first rung f admissins will f curse vary frm cuntry t cuntry. We have chsen the same three grups f Eurpean cuntries (small, medium and large) as Media Prgramme, but this is nly a suggestin. Maybe it wuld be necessary t have 5 grups, fr example. Large cuntries : Germany, Spain, France, Italy + UK? Medium cuntries : Austria, Belgium, Denmark, Hlland, Nrway, Plen, Sweden Small cuntries : Bulgaria, Check republic, Estnia, Finland, Greece, Hungary, Island, Ireland, Leetnia, Lithuania, Luxemburg, Malta, Prtugal, Slvakia, Slvenia The admissin levels that we suggest are the fllwing. We still have t wrk n these first rungs with a study f the average number f admissins fr Eurpean films in each cuntry. Large cuntries : < 75 000 admissins : Rate > 100% Medium cuntries : < 25 000 admissins : Rate > 100% 8

Small cuntries : < 10 000 admissins : Rate > 100% Cnclusin This refrm increases the supprt fr all the cuntries in an harmnius way. The different parameters are nly suggestins and the criteria have t be refined by bth the cuntries and the Eurpean Cmmissin This measure really helps Eurpean distributrs by taking risks n difficult and fragile Eurpean films. Refrm prpsal: Reinvestment f the mney generated thrugh Media Autmatic The first prpsal suggests t wrk n the generatin f mney. We culd als think f playing with the reinvestment f the mney generated thrugh Media. The idea wuld be t increase the generated mney when it is reinvested in a certain type f nn natinal Eurpean mvies. Fr instance: Mvies that have a prductin budget under 5M (mvies with a big prductin budget are mst f the time released by big grups); Mvies in which the financial rle f the distributr is imprtant and even necessary fr the existence f the film (high MG). Mvies which have a certain P&A budget (this depends f curse n the categry f the cuntry): minimal and maximal number f prints, minimal and maximal prmtin budget. 9

EXCHANGE OF INFORMATION WEBSITE Gathering and exchange f Material The idea is t create a website that gathers all the material used by distributrs t release a mvie (psters, press phts, trailers, existing subtitles, number f prints available ) in rder t achieve a better use f the existing material in Eurpe and a better cmmunicatin between distributrs. Therefre, the Media Prgram shuld make it cmpulsry fr distributrs t make prmtinal material available t the Cmmissin in electrnic frmat fr publicatin n a newly created internet site. Furnishing this material shuld be cmpulsry a mnth after release, asking distributrs t d it as sn as pssible. Wh are the c-distributrs in Eurpe / in the wrld? On the same website, fr each film, there shuld be a list f all the distributrs in Eurpe (and in the wrld ) wh have released the mvie (with the date f release fr each cuntry) in rder t prmte exchange f experiences and clser ties between distributrs. DIGITAL CINEMA The transitin t digital prmises t be a lng and expensive prcess fr bth distributrs and exhibitrs. It is very likely that the tw systems 35mm prints and digital masters will cexist ver the next ten years, entailing a duble expense fr distributrs. As a result, it is essential that independent exhibitrs and distributrs make the transitin t digital at the same time, s that cinemas with digital equipment can screen Eurpean mvies and distributrs can find cinemas fr their digital masters. We have t rganize a brain s strming with Eurpa Cinemas in rder t prpse a suitable mdel fr independents in Eurpe VIDEO SUPPORT Slate Funding fr vide Supprt t a prgram f Eurpean mvies fr prmtin and acquisitin Less paperwrk fr bth the Cmmissin and the distributrs. 10