12/06/2025 - A new report examines how public funding shapes the creation and distribution of audiovisual content across the continent, outlining key legal frameworks and emerging policy trends

The European Audiovisual Observatory (EAO) has published a comprehensive new report entitled “State Aid and the Audiovisual Sector”, offering an in-depth analysis of how public funding mechanisms shape the production and dissemination of audiovisual works within the European Economic Area (EEA). The publication, which was co-authored by Dr Olivier Hermanns and Justine Radel-Cormann, of the Observatory’s Department for Legal Information, not only provides a legal overview of state aid regulations, but also details how member states use these tools to promote cultural diversity and innovation in the audiovisual sector.

The report opens by reaffirming the importance of state aid as a driver of audiovisual creation, especially in cases where market forces alone would not sustain diverse and culturally significant productions. Covering EU member states as well as Iceland, Liechtenstein and Norway, the study outlines the various forms of state aid available – including direct grants, fiscal incentives and other financial tools – and emphasises their central role in nurturing a vibrant, pluralistic media landscape in Europe.

One of the key findings concerns the legal framework underpinning state aid in the audiovisual sector. According to EU law, state aid is generally prohibited if it distorts competition and affects trade between member states. However, exceptions are allowed under specific conditions, particularly when aid supports works of cultural significance. The report underscores the role of the European Commission in assessing whether such support complies with Article 107 of the Treaty on the Functioning of the European Union (TFEU). In particular, aid may be exempt from notification requirements under de minimis rules or the General Block Exemption Regulation (GBER), provided it meets criteria laid out in the Cinema Communication.

The study also delves into the notification process. Between 2020 and 2024, over 30 state aid mechanisms were notified to the European Commission for evaluation, with 12 countries – including Belgium, Denmark, France, Germany, Ireland, Italy, Poland, Slovenia, Spain and the UK – routinely submitting aid schemes for approval. These mechanisms primarily targeted the production of films and series and, in some cases, also covered video games. The most common forms of support were direct subsidies and tax credits.

These schemes were designed to serve four strategic objectives: cultural preservation and promotion, economic support and competitiveness, fostering innovation and creativity, and broader industry development. In addition to stimulating production activity, some national schemes also reward audiovisual works that attain artistic recognition abroad or focus on accessibility for underrepresented groups, including people with visual or hearing impairments.

A separate chapter is devoted to emerging priorities within the design of state aid mechanisms. Increasingly, member states are integrating goals related to environmental sustainability, diversity and gender equality, and social inclusion into the funding criteria. The report highlights how these new considerations reflect evolving societal values and underline the broader role of the audiovisual sector in shaping public discourse and representation.

While the scope of state aid varies by country, the report points to a growing trend of convergence among member states, as schemes adapt to new content formats, transmedia storytelling and innovative cultural expressions. The inclusion of video games as eligible cultural products, subject to specific conditions, marks another step towards a more inclusive definition of audiovisual works under EU policy.

The report concludes by reaffirming that state aid remains a cornerstone of European audiovisual policy. As market dynamics shift and new forms of content emerge, the flexibility and responsiveness of national support schemes, anchored by EU-level oversight, will be essential for maintaining a diverse and competitive European audiovisual ecosystem.

You can download the full report here.