Supporting the European film industry

Written by Ivana Katsarova

Cinema was born in Europe, but at present the European film landscape is characterised by the strong presence of Hollywood ‘majors’ such as Sony Pictures, Walt Disney and Warner Bros. Strikingly, despite US-based companies producing only 622 films in 2013, compared to 1 546 European productions in the same period, they currently account for almost two thirds of the EU market.

The specific character of the film industry

The fragile balance between the cultural and industrial components of the film industry is the source of significant tensions between creative and market considerations. The small or micro-enterprises making up the EU film industry frequently face difficulties in raising the budgets required to compete on a global scale, due mainly to the high risk associated with the industry and its perceived lack of profitability. This accounts for the sector’s strong reliance on public funding; in 2009, the estimated amount of this aid in Europe ran to some €2.1 billion (excluding tax incentives and interventions by publicly funded banks or credit institutions).

The Commission adopted new film-support rules in 2013, aimed at preventing the ‘subsidy race’ which – based on the practice of offering tax incentives to draw foreign productions to a country’s locations in return for the employment of local film companies – was perceived as a distortion of competition between Member States.

In 2013, the EU started negotiations on a Transatlantic Trade and Investment Partnership (TTIP). In reaction to growing concern among professionals, the Commission asserted that the negotiations would not interfere with the EU’s cultural exception principle and would preserve public subsidies. In 2014, responding to long-standing calls from civil society, EU governments decided to disclose the TTIP negotiating mandate.

The European film industry in a nutshell

Even though EU production levels continued to grow in 2013, the estimated share for European films on the EU market dropped from 28.9% to 26.2%, while the share of US films increased from 62.8 to 69.1%, reaching its highest level in the past ten years. Yet, in spite of the ever increasing presence of major US producers, the EU film industry is quite dynamic. It encompasses around 91 000 companies, employing over 373 000 people, and reaping revenues of some €60 billion in 2011. Within the EU, the ‘big five’ – France, Germany, Italy, United Kingdom and Spain – account for around 80% of releases, industry turnover, and persons employed.

European Parliament involvement

Perhaps one of the best known cultural initiatives of the European Parliament, the LUX Prize has been awarded annually by the institution since 2007. It supports the circulation of EU (co)productions and aims at overcoming language and distribution barriers for European films. The LUX Prize focuses on fundamental EU values such as integration of vulnerable communities, the fight against poverty and combatting violence against women. As a rule, the films in competition are proposed by a selection panel composed of cinema professionals and appointed by the EP’s Committee on Culture and Education, but entries can also be submitted by MEPs or cinema professionals. Out of the 10 films selected, three go into competition, and one is awarded the LUX Prize through the votes of MEPs. The prize is focused on distribution – ‘the Achilles heel of European cinema’. This explains why the winner does not receive a direct grant. Instead, during the LUX Film Days, the three films in competition are subtitled in the 24 official EU languages and screened in more than 40 cities and at 18 festivals, allowing a large number of Europeans to see them and vote for the ‘Audience Mention’.