Building a thriving European audiovisual industry

The new European Commission took office at the beginning of December. Within its actions, one is to prepare an action plan and a strategy for the Audiovisual Industry, to be adopted by end of 2020. What measures are to foresee to take the Audiovisual Sector forward?

KEA attended the conference organised by the Finnish EU Presidency last September to discuss the competitiveness of the European audiovisual industry and to develop a shared European vision. The event’s conclusions are likely to shape the next EU programming and legislative cycles with the forthcoming policy priorities:

• Developing policies to break siloes between AV sectors on one hand and between science, research and art on the other to make the most of digital opportunities and encourage cross-innovation.
• Encouraging collaboration and teaming up amongst European players across the value chain to be able to build scale.
• Making full use of existing funding opportunities to harness synergies between EU programmes (e.g. Creative Europe, Horizon Europe, InvestEU) and increasing EU funding and financial engineering mechanisms through guarantee facility and equity investment.

Interactivity, one of the new frontiers in content production

The main objective of this conference organised under Finland’s Presidency of the Council of the European Union was to provide a platform to discuss how to promote a thriving European content industry in the 2020s. The conference considered the formidable market opportunities linked to the online content consumption explosion. In an interconnected world where interactivity is one of the new frontiers in content production, phenomena such as rising demand for new immersive AV experiences, incredible growth of gaming content, increased opportunities to give new life to European cultural heritage through technology, and importance of artificial intelligence to target audiences have arisen. The arrival of 5G means increased access to data and data delivery, while continued growth in subscription services is to be expected.

The conference also looked into the impact of VR, AR, AI and machine learning on the development of new media content as well as the management of AV businesses in production, licensing and distribution through data management.

Europe should make the most of this “golden age for TV drama”

It was felt that Europe should make the most of this “golden age for TV drama” and its capacity to nurture creativity through a unique system of public investment and partnerships (cultural and film agencies, AV funds, Public TV), regulatory support and financial incentives. The cultural and creative sectors (CCS) employ 12 million people and are worth more than € 110 billion in Europe, but are still facing challenges in terms of their competitiveness. Most of these challenges are well-known and not new: underfunding, lack of scale in the face of international competition, too limited a capacity to produce for a global market as well as distribute and market internationally. Increased international market concentration, new consumption trends and business paradigms largely driven by data management are adding to the challenges.

There are several gaps that hinder competitiveness in the CCS:

• Insufficient knowledge of technology, which weakens the capacity of the sector to embrace the digital shift and notably, its opportunities in managing consumption data.
• Insufficient focus on the demand of the industry in art and higher education.
• Insufficient apprehension of new consumption patterns and trends.
• Lack of investment in developing ambitious production and distribution initiatives with worldwide potential capable of branding European players as a source of quality content.
• The size of European largest media players as compared to the financial and marketing muscles of internet giants (Facebook, Apple, Amazon, Google, Netflix, Tencent, Alibaba, Disney, Comcast…).
• The weak market share of European content in international markets.
• Gender bias in project evaluation and funding.

Creativity should be fostered to sustain innovation

Creativity is a prerequisite of innovation. At EU level, fostering creativity could mean investments into skills development and competence building, cross-innovation and creative ecosystems to retain talent in and attract it into Europe. Observations from the conference suggest that this would entail:

• Recognising that artists, creative talents and cultural workers are primary assets in innovation and disruption strategies. They should be empowered to spearhead and influence innovation for the latter to be economically and socially meaningful.
• Integrating IT and entrepreneurship modules on business models and marketing into art and higher education curricula to foster the development of new skills and competences and better focus on the demand of the industry.
• Making the most of creative hubs, innovation labs and incubation centres prevalent in European cities to encourage entrepreneurial, experimental and collaborative working processes across disciplines, contributing to the development of a decentralized and internationally connected creative ecosystem in which Europe is at the heart as a centre of creative and free expression.
• Developing policies to break siloes between AV sectors on one hand and between science, research and art on the other to make the most of digital opportunities notably in the deployment of technical services and use of new forms of immersive storytelling (AR, VR, XR).
• Promoting media literacy to keep up the demand for quality and diverse content and ensuring that all educators have the possibility to update their professional competences if needed.

Competition calls for scale

The conference suggests that competition in the digital single market and global markets calls for scale. Different partnerships both within and across the public and private sectors can bring major competitive advantage by helping different players reach critical mass and encourage cross-innovation.

• Encouraging collaboration and teaming up amongst European players across the value chain to be able:
  • • • to invest in ambitious projects and catalogues of content to feed into distribution pipelines,
      • to fund pan-European and international marketing campaigns,
      • to mutualise technical, licensing and service costs to improve the offer to consumers and develop competitiveness in data management,
      • to develop pan-European or local subscription linear services.
• Developing relationships between media players and technology companies and research labs to enable AV companies to make better use of algorithm, artificial intelligence and big data in targeting audience and advertisers or in easing licensing processes.
• Ensuring funding for joint pan-European endeavours across the value chain.

A list of policy recommendations to insure the digital competitiveness of the EU has been made

For the European Union to be in a position to shape its own digital future in which the audiovisual and digital media industries are at the core, the conference highlighted the importance of policy that allows for:

• Making full use of existing funding opportunities to harness synergies between EU programmes (e.g. Creative Europe, Horizon Europe, InvestEU).
• Increasing EU funding and financial engineering mechanisms through guarantee facility and equity investment to reinforce financial and investment capabilities of European players.
• Ensuring and monitoring the implementation of the Audiovisual Media Service Directive across Member States to support the deployment of digital services that promote cultural diversity and a strong cultural offer representative of local European cultures (so far only 8 out of 28 Member States have adopted specific legislation in this respect).
• Encouraging a competition policy that is not only focused on impact of concentration on prices but also on consumer choice and the diversity of offer.
• Ensuring that large international digital platforms do not discriminate against European content and smaller independent players in licensing terms.
• Integrating AV policy consideration in terms of competitiveness and market access in EU trade and external relation policies.
• Developing funding schemes that support experimentation in distribution and marketing at pan European level (notably with a view to promote distribution of European works with better data management or through cost mutualisation).

Philippe Kern