Europe cutting in

EU to take on U.S. pic, TV dominance

BRUSSELS — European culture chief Marcelino Oreja on Wednesday called on the EU to prepare for a period of massive expansion in pic and TV services over the next 10 years.

In an eight-page end-of-term report to the European Commission, which scrupulously avoids overdramatizing U.S. dominance in the sector but is everywhere full of policies designed to combat it, Oreja predicts that the EU’s audiovisual market will grow by 70% between 1995-2005.

Oreja wants the industry in Europe to get a bigger piece of the action than it currently enjoys — his report notes it still suffers from a “massive trade deficit” of $6 billion — and identifies “strengthening the competitiveness of our companies” as a “top priority.”

The report says the EU should try to translate the growth in the industry as a result of new media into jobs to bring the number of industry people employed in Europe (1.8 million) closer to the level in the U.S. (2.6 million).

While Oreja’s report contains no radical plans about how the EU should reduce its trade deficit with the U.S., it does announce that the culture commissioner will be setting up a high-level think tank to advise the EU about how to compete more effectively in the future.

Citing a study produced recently for the Commission, Oreja’s report predicts that between 1995 and 2005:

The market share of European product in areas largely dominated by U.S. producers (cinema, video, pay TV, interactive television and multimedia applications) could rise from 13% in 1995 to 21% in 2005 “if current policy is merely sustained.”

Overall revenue in the EU will grow by 69% on average.

European producers will see an increase in revenue of 55%.

Household expenditure will grow from 33% to 48% as a share of total revenue as people make increasing use of new services such as pay-per-view.

The market for traditional TV programs will shrink from 85% (in 1995) to 65% in 2005.

The EU has allocated just under $330 million to the film and TV industry for the period 1996-2000 under the Media II Program, which is intended to help in areas such as distribution, project development and training.

Oreja hopes to supplement this with an audiovisual guarantee fund to encourage film and TV production in Europe, but he will have to overcome opposition from Austria, Germany, the Netherlands and Sweden before the scheme can go ahead.

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