Battered, bruised, but upbeat

Date: 04/05/05

After a difficult period in recent years, things may be looking up for the European entertainment industry.

The sector was one of the hardest hit by the economic slowdown in the early part of the millennium, as the recession curtailed media spending for businesses and killed consumer appetite.

Piracy has also been a big factor in profit cutting, particularly for the music industry. CD-burning and file-sharing have been in danger of becoming the norm and the industry has fears of a whole generation growing up with the assumption that access to music should be cost-free.

But more recently, several areas of the industry seem to be getting a grip on things. DVDs are now a roaring trade and satellite and cable television have boomed. Broadband internet access has also become a huge growth driver, and as technologies converge, content providers and telecom companies, previous archrivals, have begun to seek out a common goal.

In its 2004-08 outlook, global consultants PricewaterhouseCoopers estimate that the European entertainment and media market will increase by 5.4% in the coming years and reach a value of €351 billion by 2008.

Broadband, mobile communications and digital products like DVDs are likely to be at the forefront of the boom, and the company forecasts that filmed entertainment, TV distribution, the internet and video games will "average double-digit growth compounded annually through 2008".

In the ever-changing technology scene, the European Commission is trying to do its bit. The industry has been heartened by the rearrangement of departments that the Barroso Commission introduced, which has seen media integrated into DG information society. With the current EU drive for competition and innovation as part of the Lisbon competitiveness agenda, that is a pretty good place to be.

The Commission had already announced the overhaul of its seven copyright directives before last November's changeover and it plans a proposal later this year regulating collective rights management.

Piracy remains a big problem; global pirate sales in 2003 have been valued at around €3.5bn. Customs Commissioner László Kovács has promised a crackdown on all areas of piracy, but music producers claim that enlargement is likely to make the problem worse.

But the EU's expansion has produced benefits; both new members and candidate countries are experiencing a welcome boom in revenues as Hollywood-weary producers make their way east to take advantage of the cheaper film-making opportunities.

There is also a wealth of potential cultural enrichment to be gained from the ten new member states, the Commission is also revising its rules on protecting the EU's cultural heritage.

If rapporteur Gyuli Hegyi has his way, this could see all member states obliged to archive every future piece of broadcasting produced.

At the same time, despite being the member state most in fear of losing its cultural roots, France ponders letting foreigners benefit from its filmmaking industry, thanks to the makers of heart-warming Gallic favourite, Amélie.

Author takes a look at the promising prospects of the European entertainment industries to overcome the years of recession, with Broadband, mobile communications and digital products like DVDs at the forefront of the present boom. Brief summary of the European Commission's recent activities in the field.

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