Important News about European Co-productions and Streaming Options vis-à-vis IP rights: A Discussion with Doreen Boonekamp

Discussions in Europe are taking place regarding a new funding chapter that puts social and cultural value above economic impact and yet takes into consideration the power of streaming and the rights’ holders share in this newest form of distribution.

Doreen Boonekamp, CEO of the Netherlands Film Fund for a decade, was also Chair of the OMC Group of Member States’ Experts on Co-production, an important arena for sharing experience and best practices from different EU Member States and different parts of the audiovisual value chain. This OMC Group aims for further development of Europe’s pluralism, freedom of artistic expression and cultural diversity, integrating them into a single business model which also favors talent retaining ownership of intellectual property rights as digital production and distribution mature.

Doreen Boonekamp and Vice Chair Alex Traila have created the report Coproductions that Shine to elaborate on how this new funding chapter might take shape. Doreen and I discussed the topic of coproduction and especially the role streamers are now playing during Cannes at the Dutch Pavilion.

From the Palme d’Or of the Franco-Italian Il Gattopardo by Visconti in 1963 to the Palme d’Or of the 2022 Eurimages-supported Triangle of Sadness, produced by Plattform Produktion and Coproduction Office, in co-production with Film i Väst, Essential Films, SVT, BBC Films, Arte France Cinéma and ZDF/Arte, in collaboration with Heretic, Bord Cadre Films, Sovereign Films and Piano Films, and with support from the Swedish Film Institute, Danish Film Institute, Eurimages, the BFI (awarding National Lottery funding), Medienboard Berlin-Brandenburg and Nordisk Film & TV Fond, there is a famous European tradition of film co-production, which is rooted in the fertile ground of networks and relationships between European audiovisual professionals.

Among the 27 EU countries that drive filmmaking in a Europe which is doing its best to be pluralistic and inclusive, the meaning of “co-production” is several producers working together to leverage their mutual resources (financial, talent and material) and artistic collaboration, and most importantly to share risks, rights and revenues, in order to produce an audiovisual work. “Official” cinematographic co-productions are covered by international conventions or bilateral agreements.

The OMC report on co-productions is not only about cinematographic works covered by the revised Council of Europe Convention on Cinematographic Co-production, but is more about creating and sustaining organic forms of cooperation among EU-27 producers in features and in the field of TV series, a format that is thriving. While acknowledging the importance of co-productions with countries outside Europe, the Group decided to focus only on co-productions among EU-27 Member States in this report.

The report, Co-productions that Shine, is addressed to policy-makers at EU, national and sub-national level, as well as to professionals working in the audiovisual industry. For the recommendations to have the greatest possible impact, private stakeholders across the whole value chain — from creatives to end-of-chain operators —must commit to them and to cooperate among themselves as well as with public institutions. Effective implementation of the recommendations will be instrumental in the transformation of the European ecosystem.

Read the entire report here.

SydneysBuzz: Thank you for taking the time to discuss the issues facing European coproductions. I think that for all its problems, Europe (the EU and its Economic Council) is still an oasis for culture. This union, creating and distributing co-productions has been going on for more than 30 years. We are now seeing a generational shift, not only here in Europe but worldwide.

Doreen: More than 30 years ago in Europe, a set of institutions was created with the sole purpose of fostering and facilitating the birth of a European film industry. Thirty years ago, these initiatives ensured continuity and further development of European pluralism, freedom of artistic expression and cultural diversity, integrating them into a single business model. The set of institutions were:

1. EAVE, the training ground for creative producers to develop international skills and projects
2. European Audiovisual Observatory, the collecting and distributing information on the state of play
3. Eurimages, supporting European co-productions
4. European Distribution Office, promoting and exporting European films outside Europe’s borders
5. MEDIA programme, enhancing the whole value chain from project development to support for festivals.

We knew culture, or more precisely storytelling through film and audiovisual works, catered to the unity of our continent’s inherited diversity. The centerpieces were authors and independent producers.

This is coming under question now as streamers move in and want to own the product in the way that the former Hollywood Studios used to do (and still do, though to a much lesser degree now). I know in France, the auteurs own their properties and I know producers want to own their work elsewhere, but the streamers want to dispense with such ownership.

Yes that presents a conflict. Today Europe is facing new challenges, and film and audiovisual are again at their heart.

At the same time, the challenges in terms of what is at stake are not so very different from 30 years ago. We do however feel the need to reconfirm the principles that bind us to safeguard creation and freedom of expression, as well as acknowledge and support the concept of cultural diversity to strengthen the European audiovisual ecosystem.

The main regulatory instruments that are relevant in the audiovisual sector are the revised Audiovisual Media Services Directive adapting it to the emergence of streaming and video sharing platforms, the new Copyright Directive protecting creators in the digital age, and the Cinema Communication that frames how state aid can be allocated to the audiovisual sector.

Under the old American studio system, countries “blocked” local returns from American movie exhibition so that rather than export profits back to USA, monies were allocated to local production (which rarely made it out of the countries where they were produced).

Yes funds coming from American blockbusters and films produced and distributed by the studios were often blocked from leaving some countries and so were put into productions in those countries.

Of course then USA represented 90% of studio film revenues and now USA brings in less than 30% from the USA domestic market, the return on investment in question is much greater internationally.

Today more players in Europe than before combine production and distribution. This is particularly relevant for streaming platforms, which are not just involved in online ƒdistribution, but increasingly in production. There is, however, the possibility for member states to impose levies or investment obligations to contribute financially to the production of European works. One of these investments obligations ensures that 30% of the European works in the catalogs of streamers contribute to the production of more European works. All of this is laid down in more detail in the revised Audiovisual Media Services Directive.

A number of powerful international streaming platforms have entered the European market and are successfully producing content in Europe. This has represented both an opportunity and a challenge for European independent audiovisual producers and works.

On the one hand, platforms can give European producers and artists access to financing and a wider international audience. On the other, the application by platforms of what could be defined as a “work-for-hire” model (i.e. the acquisition of all the intellectual property rights from the producer and/or from individual creators from the outset, worldwide and in perpetuity) can “lock in” producers/talents with the platform in question.

That raises concerns regarding ownership of intellectual property and represents risks for the diversity of content created and the autonomy of the European ecosystem.

This issue is particularly important as the importance of streaming has lately been considerably reinforced, as shown by recent trends in consumption habits. European citizens’ time spent on streaming platforms increased by 122% in 2020, driven in part by the closure of theatres in pandemic times. Video on demand outstripped live viewing by 68% to 32%.

Despite the difficulty of striking balanced relationships, strong European co-productions are in a better position to thrive in a post-COVID world. They are the very epitome of European works with public appeal. In this respect, co-productions are a response to and a way out of the current crisis. This is a renewed rationale for public funds to stimulate strong European co-productions, via incentives in their support.

Co-productions are powerful vehicles to address the challenges currently faced by the industry, namely the recovery from the crisis, the intensification of the digital domain, and the necessity of greening the sector.

What about IP rights ownership?

Over the last decades, the common understanding of co-production was to share IP rights as a return on investment for the creative and financial risks. This understanding of co-production has had a recognized structuring impact on the market.

IP is crucial for the monetization of content and for the independence from broadcasters and/or streaming platforms which comes with IP revenues.

In the TV sector, independent producers confirm that such IP requirements in public support have been instrumental when introducing reverting rights with broadcasters, with the obligation for exploitation rights to revert to the independent producer after 7 years (in the case of pre-sale to a broadcaster) or 10 years (in the case of co-production with a broadcaster).

Over the years, the requirement on intellectual property in the MEDIA programme has helped independent producers recover the intellectual property of the works produced. In so doing, the MEDIA programme has had a structuring effect on the TV market in Europe, and on co-productions.

I have heard that the major players (streamers like Apple, Amazon) do not want to deal with “small” European production companies. They just want to own the entire property which they own totally, produce and distribute.

When negotiating with major players, European production companies have limited bargaining power. This can result in models based on ceding full ownership of IP rights. This has in turn hindered the ability of the independent producers to recoup their investments and monetize their work on a long-term basis This leads to the need to reaffirm the classic European model based on independent production companies owning the IP and exploitation rights in line with the territoriality principle.

The European Producers Club (EPC) has carried out preparatory work on addressing this issue and has identified concrete guidelines on re-balancing these relationships (see Box).

The current situation of independent productions, in particular in the TV series sector, has professionals calling for the position of independent producers to be reinforced at critical moments of the production chain, notably in their relations with broadcasters and/or streaming platforms, and ensuring complementarity between national and pan-European public policies and support programs.

How can the balance of power between producers and streamers be equalized?

The question of the balance of power between market players with different business models not only influences the IP arrangements, but also fair access to viewing data. In the context of co-productions, co-producers should have access to data on the performance of their works.

While the box office figures of theatrical releases are monitored and available to professionals, the access to data from online exploitation, such as the number and length of views, is in the hands of the streaming platforms. This topic has been a recurrent request from independent producers in recent years. Access to this information is also crucial for public funding bodies, who need to calculate support in relation to a work’s performance.

The members of this OMC group stress the need to grant producers and relevant public authorities fair access to viewing data, as this is instrumental in understanding the audience in a fast evolving context. These figures are not only useful for producers and authors, and for film funds to adapt their support to the evolution of the markets, but also for the audience to make an informed choice.

Beyond access to data, any means favoring transparency, such as regular contacts and open dialogue, are instrumental in a healthy environment for strong European co-productions. The Media Outlook that the Commission services will publish in 2022 will also look at those trends and analyse their potential impact on the European market and existing business models.

What are your recommendations for stronger European co-productions?

The following recommendations emerged from the discussions of this OMC group and are addressed to policy-makers, key players and creatives in the audiovisual sector. Overall, they show how co-productions have the potential to make a special contribution by helping the sector address the combined challenges of the digital revolution, themCOVID-19 crisis and the greening of the audiovisual sector.

Our recommendations for producers are

1. Dream big and scale up to the European market.

As European co-productions rely on several partners from different countries, they trigger interest across borders. This is a way to increase the distribution of a given work, be it theatrical or online, and ultimately its audience. Therefore, production companies are encouraged to use co-productions as a launchpad to widen their native market from their original Member State to Europe as a whole.

2. Enhance co-creation within co-productions.

Starting cooperation upstream maximises the benefits of co-producing. To mean more than just pooling financial resources, co-productions imply co-creation. Relying on several producers reinforces the quality of the project, as it brings together the expertise of different producer profiles as well as of the different end-of-chain operators, such as broadcasters and streaming platforms. Collective writing boosts creativity and co-creation, which is the essence of European co-productions. Therefore, to maximise the benefit of co-producing, producers and authors are encouraged to develop contacts and to collaborate as early as the very preliminary stages of projects (conception, writing).

3. Nurture talents.

Talents are the foundation stones of European co-productions. Whether in front of or behind the camera, they benefit from and sustain the international career of a co-production. Production companies are those best placed to ensure that experience acquired from co-productions is shared among their staff and talents, to enable them to grow professionally and to think of Europe as their natural playground. Therefore, production companies are encouraged to use co-productions to develop talents at the European level and contribute to the strengthening, (re)positioning and consolidation of the European market.

4. Develop international skills.

Developing their network internationally is important for all professionals (producer, writer, director, cast, crew) if they are to feel comfortable with different working cultures, to open up to international job opportunities, and ultimately develop a genuine co-production mindset. International training schemes are particularly fit for this purpose. Whether they are dedicated to co-production or not, they are a unique way to liaise with professionals from other countries and become privileged co-production partners. European networks of professionals also enable best practice sharing, which in turn facilitates working together. Creative Europe MEDIA supports the development of talents and skills among professionals. Professionals are encouraged to take initiatives and responsibility in developing their international skills and European networks.

Our recommendations for film funds

1. Open up further to boost co-productions.

The COVID-19 crisis has hit the audiovisual sector hard and co-productions are an opportunity to recover and build the future together. This is also an opportunity for film funds to assess and if necessary adjust their support to co-productions and move towards more open requirements focused on the work’s contribution to the sector. Film funds are invited to increase incentives for co-productions, whether they are majority or minority, in three ways:

— Push dedicated envelopes for co-productions in order to secure continuity in support.

— Extend the support for co-productions to the script development stage, since the value of starting to work together as early as possible has been established and should in turn translate into possible support to co-producers to enable them to co-develop.

— Offer support to professionals to take part in international training programs.

2. Align to avoid incompatibilities.

Co-productions are complex vehicles to drive. Producers sometimes struggle to identify the relevant schemes to support their co-productions. More transparency about the different schemes (e.g. making information on schemes available in English) and clarity as to the granting criteria are needed to facilitate co-productions at European level. Online tools should be developed to give clear and simple publicly accessible information and guidance to professionals. Certain support schemes, including some on a regional or local level, as well as fiscal incentives, require extensive national participation in the supported works, such as days of filming, members of the cast or crew and national expenses. However, these requirements may be hard to combine and hence become less effective and efficient. Moreover, requirements related to national expenditures may also demonstrate limitations when faced with the intensification of the digital transition, the public health crisis and the greening of audiovisual.

Film funds are encouraged to streamline their conditions and to ease spending obligations to increase the chances of supporting works that are likely to act as locomotives for the sector and in addition to reduce the administrative burden for producers.

3. Play IP as a team.

Currently, there is a lack of fair deal structures, i.e. platforms oriented towards rights ownership in the long run versus independent producers having to sell their content and exploitation rights to stay afloat in the short run despite their interest in IP retention in the long run. This is exacerbated by differences in the players’ negotiating power. However, fair deals benefit the European audiovisual industry as a whole, as ownership of rights that can be exploited is instrumental in enabling independent producers to grow and in boosting the diversity of the cinematographic works and TV series developed and created. Therefore, public support, in particular selective aid, can structure the sector by incentivizing fair deals and reserving support to works produced by independent producers keeping a certain share of rights. To do so, public support schemes should in their selection process take into account IP and exploitation rights arrangements between the different partners.

Our recommendations addressed to all public and private players

1. Innovate!

Joining forces also creates an opportunity to try new approaches. On the financial side, different instruments are available, such as the Cultural and Creative Sector Guarantee Facility. On societal challenges, such as sustainability, the audiovisual industry has a specific responsibility to take the lead due to its power to influence attitudes. On the technological side, co-productions can experiment with new techniques, such as immersive or virtual production. Co-productions are an opportunity to innovate. It is up to the professionals to be bold and to film funds to accompany them in this process.

2. Expand the use of data.

Production companies, authors and relevant public authorities have an interest in accessing the data on the performance of the co-produced work, so that they get to know their audience better. This can feed into future works. The film funds and public authorities also have an interest in knowing the performance of the works they invest in. Therefore, viewing data is a powerful tool to support European ambitions. In this perspective, data on co-productions should be collected, shared and analysed across the value chain, including VOD services’ (viewing) data.

3. Ensure the diversity of co-productions as a key asset of Europe’s audiovisual industry at all times.

To ensure the competitiveness of Europe as a whole in the long run, it is critical to boost the diversity of works by not only involving independent producers, talents, funds and other key players in high production capacity territories, but also those in smaller territories, less spoken language areas as well as from other minorities and voices from underrepresented groups to ensure their access to funding. Since independent co-productions have proven to be the driving force for diversity, their position should be strengthened, clarified and respected in order to level the playing field which both cinematographic works and TV series need in order to blossom. Independent producers and independent production companies should enjoy fair contractual terms and clarification of the definition of independence for co-productions vis-à-vis all end-of-chain operators, including broadcasters and VOD services.

10 facts about the Creative Europe Program

The new Creative Europe program launched in 2021 comes with a significantly increased budget of EUR 2.45 billion for the next seven years (i.e. an increase of approximately EUR 1 billion compared to the previous programming period), and 58% is earmarked for the MEDIA strand.