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This Autumn Will be Critical for the Creative & Cultural Sectors in Europe
After a busy period for the cultural and creative sectors, we’re looking forward to the summer break. Yet we’re well aware that some people in Brussels will still be hard at work, putting the final touches to the Commission’s plans for its second package of copyright-related proposals.
Over the past few months, our members have been busy making themselves heard, compiling studies that make clear the potential implications of weakening copyright protection and undermining territorial exclusivity, notably for audiovisual works and for the sports audiovisual ecosystem: audiences would lose out not only in terms of reduced variety of production, but also in terms of reduced quality.
Likewise, our members have been making the case that including copyright-protected content in the Geo-blocking Regulation would risk causing a reduction in the diversity of offerings in many creative sectors – the opposite of what we all want to achieve. We think that the Portability Regulation – with the appropriate safeguards to preserve the principle of territoriality – is the right tool to help increase audiences’ enjoyment of creative content, and would not want it undermined by ill-conceived changes on other fronts, in particular the possible application to online services of the principles enshrined in the Satellite and Cable Directive, and especially its Country of Origin principle.
We will also continue to make the case that any change to the current regime of exceptions and limitations to copyright needs to be justified by a sound economic and legal analysis. We think that the current rules, together with a wide variety of business practices, provide flexibility to innovate and find new ways to meet consumer demand, and give national governments the scope to respect their individual legal traditions and pursue policies suited to their country’s circumstances.
Come September, all these issues will be at the top of the political agenda in Brussels, and you can be sure that we’ll be very active in promoting informed debate between decision makers, the creative and cultural sectors and other stakeholders. On 12th October, together with the Creative & Cultural Industries Intergroup in the European Parliament and the Representation of the Free State of Bavaria to the EU, we’ll bring together high-level figures from politics and the creative industries to discuss the pressing questions around the sectors, and look at what they mean for Europe’s digital future.
We hope you can join us for the discussion then. In the meantime, enjoy your summer!
Film Festivals and Markets – Beyond the Red Carpet
An interview with Anders Kjærhauge, Administrative Director of Zentropa
Anders Kjærhauge is the Administrative Director of Zentropa, one of Scandinavia’s most well-known film production companies. Founded in 1992 as the result of the co-operation between director Lars von Trier and producer Peter Aalbæk Jensen on the feature film “Europa”, Zentropa has produced more than 150 international and Scandinavian quality features, co-productions, and low budget films. The company produces internationally award-winning directors and screenwriters such as Thomas Vinterberg, Susanne Bier and Lars von Trier.
While Anders is about to pack his luggage for the Cannes Film Festival and Market, he accepted to answer a few questions on the importance of film festivals and markets for his productions as well as on the current outlook for the European film industry. A great opportunity to get insight into how a film is produced from the first synopsis and idea to the big screen and beyond.
Why are film festivals and markets important for a production company such as Zentropa?
When it comes to the main film festivals and markets, it is very common to hear that it is all about the red carpet, stars and glitter. But for the industry, the festival and accompanying market is vital to our business. I heard that the upcoming Film Market of the Cannes Festival and the Festival itself will gather more than 10 000 professionals including more than 3000 producers, 2000 distributors, 1500 sellers and 800 festivals programmers. The reason why is because the main film festivals give our films a tremendous opportunity to be seen by diverse audiences and the accompanying market provides a platform for producers, buyers and distributors to meet and invest both in films that are under development or in the making and films that have not found distributors yet in the various countries around the world.
Of course another reason to go to film festivals – and maybe the most rewarding one – is when your film is in competition but that means that you have been able to manage all of the previous steps, from developing the idea into a script, from writing into shooting, editing and ending up with a fully-fledged film.
So you go to film festivals and markets with projects that have not been shot yet?
Actually this is an essential part of our work. We need to secure the financing of our films and we often do that by cooperation internationally with other producers in co-productions and/or pre-selling future distribution rights in different countries around the world. I would say that finding future distributors and buyers for a finished film can, of course, sometimes be tricky. But convincing partners to invest in a project that is just an “idea” with only a script and perhaps a director’s name is the most complicated part as it involves a lot of both creative and financial risks. When we talk about internationally acclaimed directors such as Lars Von Trier or Susanne Bier, it is somehow easier but when it is a first film, this part is almost the most challenging moment of filmmaking.
Could you briefly explain how your films are financed?
Of course, even if each film has its own “way”, its own business model, I can give you the general lines. First of all, a film always starts with a good story. Once you have a convincing story, you need to pre-finance the next steps, including the development into a synopsis, a script, selecting the creative contributors, shooting the actual film, the salaries of everybody, including all the technical crew and staff. To do so, you need to convince buyers or distributors to invest in the film in exchange of future exclusive rights of distribution in certain territories and distribution channels. Those pre‐sales of future exclusive distribution rights can be as important as up 30 to 47% of the total budget of a film or TV production. In the case of A Royal Affair which Zentropa produced with Nikolaj Arcel as the co-author of the script and director, pre-sales represented 37% of the full budget. The full amount was raised from 20 different financing sources, including 8 foreign pre‐sales for the Scandinavian territories, Poland, Germany, Switzerland, UK, Spain, Benelux and the US. This is money that we have to secure upfront before we can even begin making the actual film.
Then we need to choose how and where the film will be shot. The entire crew is hired and the shoot can begin. As the final editing touch is being made, we plan the strategy of marketing and selling the film. At this stage, knowing the audience is essential as it depends on many cultural factors. We need to choose to which festivals we will submit the film, the details of its theatrical distribution, home entertainment (DVD and online) and cable and TV distribution. This, of course, depends on each territory.
As you can see, the production of a film is a very long road and, as producers, we usually only get to recoup our initial investment after all the other partners. When the film is a success of course because most of the time, it is very hard to recoup our initial investment.
What did you do at the Berlinale Film Festival and Market then?
I/we went there for the usual work which we have already discussed, presenting scripts and new projects but also because one of our recent films, “The Commune” directed by Thomas Vinterberg, was selected for the competition.
How did it go?
It went very well. Trine Dyrholm, the main actress, was awarded the Silver Bear which is a great achievement for her but also for the entire team that worked on this film. When the selection of the film for the Berlinale Main Competition was announced, we were thrilled. As you can guess, there is no better outset for a release than having a film selected to be in the programme of a major film festival. It is the best reward we can dream of in view of all the risks, the time and efforts it involved for so many people. The shooting started in 2014 and we are only reaping now the first rewards.
How was The Commune started as a project?
Thomas Vinterberg had just been nominated for the Golden Globe and the Academy Award for The Hunt. He came to us with this story about the clash between personal desires, solidarity and tolerance in a commune in Denmark in the 70’s. We decided to produce it in co-operation with Toolbox Film, a Danish production company. TrustNordisk, an international sales company based in Denmark, immediately started to pitch the film in festivals and film markets. They took the project to the American Film Market and made a deal with French distributor Le Pacte. As previously discussed, this part of pre-financing is crucial. We needed to share the risks and get some pre-financing in order to start with the shootings at the earliest moment possible.
How many companies and funding have been involved?
“The Commune” was produced by Sisse Graum Jørgensen and Morten Kaufmann for Zentropa Entertainments19 in co-operation with Toolbox Film, co-produced by Film I Väst, Zentropa International Sweden, Topkapi Films and Zentropa International Netherlands with support from the Danish Film Institute, DR, Eurimages, and Nordisk Film & TV Fond, The Netherlands Film Fund, the Swedish Film Institute and the MEDIA programme of the European Union. Nordic distribution has been handled through Nordisk Film Distribution and TrustNordisk handled international sales. As you can see from the first steps till the final release, a lot of financial partners are involved. Again, the financial risks have to be shared.
How do you see the outlook for the film industry in Europe?
There are many quality productions and an incredible diversity of films being released every year across Europe. Of course there is always room for improvement, but a lot of those films are exported beyond their home markets and if you just see how many European films are running for international awards or are winning prizes in the major film festivals around the world, it is just amazing. We have an amazing creative force in Europe which reaches audiences throughout the globe.
As a production company, do you feel supported by the European authorities?
In terms of financial support, the European institutions are helping a lot, for instance, through the “MEDIA” programme which has supported Zentropa since the beginning on various productions and distributions. We would not have been able to grow without the MEDIA programme. We have not always been in agreement but we always listened to each other since we had a mutual goal: the development of quality European films. I have heard that during the last Berlinale, there were 20 European Union’s supported films, 5 of which were shortlisted for the Golden and Silver Bears. This is a great sign of dynamism, creativity and outstanding financial risk-taking.
Unfortunately, we are also aware that the fundamental legislation, copyright, which underpin our creativity and financial risk-taking could change soon in Europe. In my view, some of the changes under consideration could seriously harm the industry.
What kind of changes?
The European Commission is currently trying to implement its “Digital Single Market Strategy”, with a view “to contribute to the economic growth and job creation in Europe”. But the reality is that, as it stands now, several of the proposals under consideration have the potential to seriously undermine the creative and financial conditions for the film sector in Europe. I am not convinced either that the changes under consideration will increase economic growth and jobs in our sector – I am worried that the changes would reduce our current contribution of 107 billion Euros to the European economy and 1,2 million jobs in 2012.
For instance, one of the themes under consideration would involve putting an end to selling territorial exclusivity – or at least reduce such exclusivity to make it financially weaker. . As I explained to you earlier, the pre-financing of our films implies that we are able to pre-sell the rights on a territory-by-territory and an exclusive basis. The marketing strategy and many other factors are linked to this territorial approach. If you force an abolition of the frontiers, there will be only one territory, one distribution right, one negotiation, one contract and one financing source. In my view, it will be close to impossible to pre-finance our films anymore. The disappearance of this possibility of giving exclusive territorial rights in exchange of co-production or future distribution would make the whole financing and distribution system collapse.
It is as if the European Commission in a certain way is starting to destroy what they have built for the last 15 or 20 years. The cornerstone of our sector is the freedom to finance and license works in a mix of different models, partnering with future distribution partners and platforms of different sizes, scope and geographical footprint, for the benefit of the Europeans and their incredible cultural diversity. We really must preserve this commercial and contractual freedom.
What would you recommend for a modern and dynamic European film sector then?
The European Union should look to its vibrant film sector and the online marketplace to continue to provide innovative business models and features, including portability of services, by acknowledging the importance and primary role of market-driven solutions in a fast growing technology-reliant environment. I can well understand the desire of European audiences to be able to access their subscription services at home when they are abroad on holiday or for business. But the best way to promote such innovation is through market-led growth that further enables the private sector to adapt and develop new services that are responsive to evolving consumer interests and real, demonstrable demand. These services should be encouraged but currently, I do not see the European proposals going in that direction.
We can respond to consumer demand for each work by electing to license each audiovisual work on a territorial, multi-territorial or pan European basis. Territorial exclusivity also supports the development of the fast growing audiovisual online services across Europe, of which there are now over 3,000. This diversity is driving change and innovative solutions so European audiences can access and watch film and audiovisual content in the widest possible range of options.
Preserving cultural diversity both in the range of films which we produce and in the range of different distribution options offered to audiences is a key objective of European public policy and the European Union should celebrate and champion this diversity – both in production and in distribution ‐ and not impose business models which would favor a small number of multinational platforms.
What should we wish you for Cannes Film Festival and Market?
Interesting and productive meetings with filmmakers, distributors, buyers, see good films and… the sun to enlighten the stay!
Europe Needs More & Better Information About the Risks of Piracy
Cultural and creative content represents the livelihood of millions of people today. Copyright is the economic foundation stimulating creation, innovation, investment, production and dissemination of their content across Europe and beyond. Without an adequate level of IPR protection, the diversity that the cultural and creative industries offer would simply disappear. Thus the trends displayed by the latest European Union Intellectual Property Office (EUIPO)’s survey of 15-24 year olds’ online consumption habits are very worrying for CW!. This survey shows that a quarter of the young Europeans asked admitted to intentionally using illegal sources to access online content over the past 12 months, citing convenience and prices. In particular, the fact that nearly one in four of those surveyed believe there is nothing wrong in accessing digital content from illegal sources for personal use is a serious cause of concern.
CW! believes that the survey highlights the need for more and better information about the risks of piracy and its consequences, as well as the need to continue to provide the public with easy-to-access information on the rapidly-expanding range of legal offers online.
Today, there are over 3,000 audiovisual services online platforms in Europe through which consumers can access their favourite TV programmes, music, e-books, games, movies and sports in their own languages (for an overview please see our page). These offers are expanding by the day. Dozens of public awareness-raising campaigns have been launched over the years about the negative impact of piracy and counterfeiting such as Operation Creative in the UK, Respect Creativity in Italy, Contrefaçon non merci in France, Ante las falsificaciones, no seas cómplice in Spain, Zrób to SAMo! Do the SAMe! In Poland or Intellektika in Estonia (for a comprehensive overview, we suggest you visit the EUIPO Public Awareness Campaign register).
CW! members are taking this effort one step further by contributing to the development of a European platform showcasing legal offers soon to be launched by the EUIPO. This one stop shop will offer comprehensive information about legal digital content offers across Europe. We hope that this will help young Europeans to make informed decisions as consumers online and to better protect the livelihoods of the millions of their fellow Europeans who work in the creative industries.