15/11/2013 - The EU Commission presents its new adaption of state aid guidelines for films and other audiovisual works

With the presentation of the new Cinema Communication, the European Commission sets the rules for film funding in Europe. Since 2011 when the public consultation process started, the various drafts for the Cinema Communication led to intense discussions between the European Commission, the Member States and the film industry. One of the hot topics was the territorial spending obligation for film producers. Due to the Cinema Communication of 2001, the 80 percent production budget rule applied. From now on, Member States can require that 160 percent of the aid amount granted is spent in their territory. Furthermore it can be required – regardless of the aid amount granted – that a minimum level of production activity is carried out in their territory as a condition to receive the aid.

The EU Commission also skipped the original plan to disallow the funding terms for goods and services for supported film productions. That means that the film funding organzations can still set the conditions where the goods and services for a supported film have to be spent. In order to that  the funding conditions for the German Federal Film Board (FFA) and the German Federal Film Fund (DFFF) don't have to be changed fundamentally. With this decision, the Commission followed the arguments of the EFADs network of European national funding agencies. “I am relieved that the EU Commission considered our suggestions,” comments Eberhard Junkersdorf, FFA president. “On the long run, the national film and cinema industry as well as the cultural diversity in Germany can only be guaranteed when a regional or national territorial spending obligation will be also possible in the future.“

A positive feedback also came from Amanda Nevill, CEO of the British Film Institute, who underlined that the Commission listened to the suggestions of the industry which have been developed in partnership with other European countries. “This successful outcome is a great example of what can be achieved when the main agencies for film in the UK and across Europe come together and pool expertise.”

While the Cinema Communication of 2001 applied only to state aid for film production, the new Cinema Communication allows aid for a wider scope of activities. It includes all phases of an audiovisual work from concept to delivery to audiences. The intensity of the aid that can be granted to a film continues to be limited in principle to 50 percent of the production budget. Distribution and promotion costs can be supported with the same aid intensity. However, coproductions funded by more than one Member State can now receive aid of up to 60 percent of the production budget. Furthermore, there are no limits on aid for script writing or film project development, or for difficult audio-visual works.

“The objective of these revised rules is to encourage vibrant audio-visual creation in Europe while preserving cultural diversity everywhere in the EU,” concludes Commission Vice-President Joaquín Almunia. “They provide a common EU framework for the state support granted by Member States which takes into account the European dimension of the audio-visual sector and seeks to ensure its continued viability and competitiveness.”