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The Network - 23/06/2010


The regional policy of the European Commission and the digitalisation of cinemas:


Many independent cinemas will not be able to finance digital projection equipment alone or with the VPF systems proposed by third-party investors. Consequently certain theatres look to their municipal and regional governments for part of the necessary financing. At our two last Annual Conferences the possibility of the European Commission's regional policy playing a role was widely evoked. To give interested exhibitors a better idea of what's involved we spoke with Pierre Godin of DG REGIO.

1 – How did you come to be involved in the discussion on the digitalisation of cinemas?

In principle the European Commission's Directorate General for Regional Policy (DG REGIO) does not participate in this type of sector-oriented discussion, because it is interested in the regions in a broad sense. Nevertheless it can happen that representatives from certain sectors seek a better understanding of the support open to them. As a result EUROPA CINEMAS invited DG REGIO to its annual conference in Paris in November 2008. It just so happened that a month earlier DG REGIO had been invited to a meeting of a group of experts on digital cinema organised by the Commission's DG Information Society. We hesitated before accepting EUROPA CINEMAS' invitation, because this subject seemed very specific compared with our global approach. Your organisation was able to convince us that it would be useful for us to attend. Since then I have been regularly called upon to talk on the subject, for example last 6 March during the event organised by the Spanish presidency at Barcelona.

2 – How would you characterise the development of digital projection in cinemas?

Digital projection in cinemas is not my domain of expertise. As a political analyst at DG REGIO my duties are to develop synergies with the European Union's policies concerning research, innovation, higher education and the cultural and creative industries. So I don't have direct experience in that sector. Nevertheless I have learned from my meetings with professionals concerned by digital projection in cinemas that the transition to digital technology would involve very high equipment costs for exhibitors. Such costs could imperil the livelihood of small independent cinemas and have negative consequences for local and regional development. So I am well aware of professionals' concerns, and that leads me to consider the issue from the perspective of public support for regional development.

3 – Could you give a quick overview of the "European Union's Regional Policy" and "Cohesion Policy"?

The objective of the Cohesion Policy is defined in the Lisbon Treaty: "In order to promote its overall harmonious development, the Union shall develop and pursue its actions leading to the strengthening of its economic, social and territorial cohesion. In particular, the Union shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions." (See Title XVIII: Economic, social and territorial cohesion, Article 174).
To put it more simply, one could say that the European Union's Regional Policy is a part of its Cohesion Policy, and that it is implemented by means of the European Regional Development Fund (ERDF) and the Cohesion Fund, which are financial instruments serving primarily economic purposes. The European Social Policy is also part of the Cohesion Policy and is implemented by means of the European Social Fund (ESF), which is an instrument serving primarily social purposes. Under the current regulations the ERDF and ESF are known as "structural funds". Other funds and financial instruments can contribute to the realisation of the Cohesion Policy's objectives, notably the European Agricultural Fund for Rural Development (EAFRD).

4 – And how could digitalisation further the aims of the Cohesion Policy?

In any given region, if a socio-economic analysis showed that the transition to digital technology could lead to the disappearance of small cinemas with negative consequences on local and regional development, one could look into the possibility of public support under the Cohesion Policy. This support should be part of an integrated global approach respecting the procedures defined by the regulations on Cohesion Policy. The support should also be compatible with the priorities defined at the European level (in the Community Strategic Guidelines) and at the national and regional levels (in the programmes presented by member states and approved by the Commission).

5 – Which funds are open to supporting the development of digital projection in cinemas?

The ERDF, the ESF and the EAFRD could all intervene for the reasons and under the conditions laid out in my answers to questions 3 and 4.
I will limit myself to discussing the ERDF, an instrument administered by DG REGIO where I work.
The question of support for digital projection in cinemas may be examined on three levels: the local level, the regional level and the national level, depending on whether it is a question of financing equipment in one theatre, a regional plan or a national plan for digitalising cinemas.
Equipping a cinema with digital technology may not be financed in isolation by the ERDF, but must be part of a more general local or regional development project financed in the context and according to the priorities of a regional or national ERDF programme.
ERDF financing of a regional plan for the digitalisation of cinemas is only possible if the plan is needed to realise the priorities of an ERDF programme in which the region is already involved.
Financing a national plan for the digitalisation of cinemas through the Cohesion Policy is only possible if the plan corresponds to the priorities that all the regions have set for themselves in their ERDF programmes. In practise such a situation is unlikely.

6 – What questions should a cinema ask to determine whether it might be eligible for funding in the context of the Cohesion Policy?

Exhibitors interested in such financing should find out about the existence and priorities of Cohesion Policy programmes in the region and state where the cinema is located. I would invite them to consult the DG REGIO Website:
By clicking on the region concerned they may identify programmes applicable in the region and find out the contact information of authorities charged with managing these programmes.
Exhibitors must then ask themselves whether the digitalisation of the theatre can indeed contribute to realising a priority of one of these programmes. These priorities may span from projects on regional attractiveness, equipment for leisure and cultural tourism, urban renewal, rural diversification, information and communication technology, innovative enterprises, cultural and creative networks, human capital, etc. The situation could differ depending on the member state and the region. Even if the project corresponds to one or more of the programme's priorities, financing is not automatic. Exhibitors must always consult the authorities charged with managing the programmes to explore with them the financing possibilities and selection criteria. It is useful to remember that Europe will invest a total of 347 billion euros in the regions from 2007-2013 under the Cohesion Policy (notably 5.9 billion in the cultural domain, 10 billion for urban and rural renewal projects and 15.2 billion for the development of digital infrastructures).

7 – Are some geographic regions more likely to correspond to the objectives of the Cohesion Policy than others?

Exhibitors should consult the programmes applicable in their region (see the answer to question 6). No region is more eligible to receive financing for digitalisation under the Cohesion Policy than others. Nevertheless the 84 regions covered by the Convergence Objective (that is those backward in their development) will have access to a generally higher level of financial support.

8 – Who should cinemas contact regarding possible support in the context of the Cohesion Policy?

Exhibitors should contact the authorities responsible for managing the programmes applicable in the region concerned. They are the ones responsible for selecting the projects that will benefit from European support.
Moreover, I'd like to stress that the programmes of the Cohesion Policy must be elaborated and implemented in partnership with the regional authorities concerned, including representatives from civil society. This partnership implies exchanges, debate and reflection on what's at stake for the region.

April 2010
Regional Policy - Inforegio

Barcelona Conference, 5-6 march 2010 (Presentation by Pierre Godin)