Inclusion is not our biggest challenge, but our greatest untapped opportunity

                                                                                                British Film Institute


We live in strange times. But these are also great times, namely for those that develop and produce serialised content. Figures for European serialised content have been going through the roof in the past years and examples follow one after the other of locally produced content that reaches global audiences, from German Babylon Berlin (2017) to the Luxembourg original Capitani (2019) or the Spanish examples of La Casa de Papel (2017) or Élite (2018). What all these examples have in common, is that on one side they seem to attest to the potential that a European audiovisual policy that revolves around diversity and inclusion, namely of small countries’ locally produced content, has in terms of boosting the sectors development. At the same time, all of them confirm the key role SVOD platforms have in promoting the circulation and visibility of diverse European audiovisual content. We can obviously look at this in a positive light and celebrate the fact that audiences in the UK now watch subtitled content on a regular basis, or that people across Europe are now watching content produced in Luxembourg. After all, these phenomena seem to attest a more plural and democratised distribution landscape where locally produced content is offered opportunities never imagined in the past. Or we can also have a more negative outlook and just postulate that this movement is a direct consequence of how fast the FAANG (Facebook, Amazon, Apple, Netflix and Google) companies positioned themselves in the face of EU policy, specifically the latest version of the Audiovisual Media Services Directive (AVMSD), and quickly came up with new marketing and distribution strategies that not only fulfil the new regulatory requisites but also allow them to target audiences in novel manners, that we postulate threaten the sustainability of local producers, the diversity they foster and the strong connection this has with PSM in many European countries, namely small ones.

Independently of all that, the fact is that the surge in audiovisual and filmic production in Europe is here to stay, not only as a consequence of the already mentioned AVMSD implementation, but also of the changing viewing and algorithmically driven consumption habits, and that is why the call for diversity and inclusion, the untapped opportunities of European audiovisual landscape, is now more urgent than ever. I also think that this urgency implies we discuss the consequences of the implementation of the AVMSD from a point of view that is not solely focused on the relation between the directive and platforms, and all the discussion around quotas and taxation this entails, but that we look at the consequences the directive has for this quest for a more diversified and inclusive European audiovisual landscape, namely when we consider the perspective of small countries.

Fig. 1: The Luxembourgish Capitani has done exceptionally well internationally

Since the late 1980s, the main imperative for European policymakers has been to unify the territorially fragmented European TV market and thus increase the competitiveness and cross-border accessibility of European audiovisual content, which has been notorious for traveling far less than US programming. The idea of a single television market, articulated for the first time in the so-called Television Without Frontiers directive (TWF 1989), was based on “negative” economic integration removing market barriers and simplifying rules for cross-border broadcasting, which was further developed by the Satellite and Cable Directive (1993) and the “first” Audiovisual Media Services Directive (AVMSD 2007).

Although predominantly market-oriented, European policymakers tried to balance these economic measures with protectionist instruments of “positive” integration aimed at supporting European audiovisual industries and cultures: quotas for European television programmes (in TWF and AVMSD) and funding schemes for the European audiovisual industry, of which the MEDIA programme in its different reincarnations is by far the most famous instrument. The European Commission’s MEDIA programme was launched in 1991 to fund training, development and cross-border distribution, leaving the support of European film co-production to the Council of Europe’s Eurimages programme (1989), which is regulated by the European Co-production Convention (1992). Along the years MEDIA changed a lot, not only in terms of focus along the value chain, moving from a stronger focus on production to higher support for distribution or promotion, but also in terms of the stakeholders it targets and the modes of funding it promotes. Videogames or more experimental types of production were not originally considered as eligible for funding under the MEDIA programme and until the Creative Europe programme was implemented in 2014, funding for film schools, since then only available under E+, was also available under Creative Europe. At the same time, and probably as an attempt at reflecting the converged nature of our media landscape, the programme was further embedded in Creative Europe and nowadays it is operated in close articulation with many other instruments targeting the cultural sector. Nevertheless, MEDIA is still the main transnational source of funding for European producers – including the UK – and a key instrument for the promotion of co-productions, the main driver for the circulation of European produced content outside of its country of origin. Until the platforms came and challenged the will of the regulators!

The launch of the MEDIA programme signalled the moment when film and audiovisual media, hitherto strictly governed by national regulators, ultimately began to be understood as not just an economic force, but also a key cultural tool to promote Europeanness as well as intercultural understanding, and thus to assist in the process of European integration. This intervention of European policymaking into the audiovisual sector was further grounded in Article 128 of the Maastricht Treaty (1992) stipulating that the newly established European Union was to carefully balance respect for Member States’ “national and regional diversity” with “bringing the common cultural heritage to the fore,” while specifically mentioning audiovisual content creation (Kolokytha and Sarikakis, 2018). Both economic and cultural, the policies of negative and positive integration aimed at creating a counterbalance to the US media influence. This has not changed much to the present day, except that the goal of shaping a common European identity was replaced after the 1990s with the objective of protecting the cultural diversity of Europe. Both economic and cultural media policies were recently reformulated in the strategy for the Digital Single Market (presented in 2015) and in the revised AVMSD (2018 – implemented across all member states between 2020 and 2021).

This regulatory initiative is in part a reaction to the growing importance of VOD services for the distribution of cultural content and to the unprecedented dominance of US-based technology companies known as FAANG. The appreciation of the directive under this perspective even led to it being labelled “the Netflix directive”. National debates were intensive across Europe when the time came for the directive to be transposed to national legislation, with approaches varying a lot from country to country, from the “harder” French approach to much lighter approach in many other countries, namely small ones such as Portugal.

The development of Internet-based communication and services exposed larger European states and markets to challenges and structural disadvantages—such as a decrease in national control over market developments due to competition from multinational corporations such as the FAANG group, which draw advertising and subscription revenues from local markets—known until recently only to smaller states. On the other hand, it is creators, producers and consumers (especially ethnic minorities and long-term migrants) in small states who can potentially profit the most from the transnational flow of audiovisual content across national borders and free themselves from the limits of small markets. However, EU media governance has not as yet achieved any of its key objectives. Despite the simplification of the cross-border clearance of copyrights introduced by EU regulation, the European audiovisual market remains fragmented due to the licensing and business practices of legacy media players. Local producers, distributors and broadcasters strategically prefer exclusive territory-by-territory licensing in order to retain control over the sequence of distribution windows in individual national markets as well as over their marketing budgets and the investment they do in localising content that they want to protect from cross-border cannibalisation by competitors.

And this state of affairs generates an almost schizophrenic loop for small, and now also for large, countries: on one side they depend on the territory-based model of transaction for their sustainability, while on the other side they are eager for new and greater opportunities for the circulation of the content they produce! Territory-based models are at the centre of the European audiovisual industry. They determine national markets and the attitudes of local players that want to protect themselves from cross-border attacks by competitors. They claim that guarding territorial barriers is a way to protect European media industries and cultural diversity against the massification (Americanisation) of cultural production, distribution and consumption. At the same time, territorial licensing practically traps cultural content within the constraints of national borders and inhibits wider cross-border accessibility, thus hindering the development of pan-European cultural exchange and diversity, which is the objective of the above-mentioned support programmes and content quotas. Recent industry studies show that although the volume of European film production is relatively high (more than 2,000 feature films annually) and its share in theatrical as well as in TV and VOD distribution is higher than that of US content in terms of total supply (65% of theatrical distribution in the EU between 2005 and 2018), the ability of European films to travel across national borders and generate revenues in foreign markets is much lower (33% of all admissions, 12% generated by non-national EU films – data European Audiovisual Observatory, 2019). And, importantly, all these limitations apply to the small and peripheral markets of the EU significantly more than to the large EU countries (Higson, 2018). Although VOD distribution provides broader access to non-national EU films than cinemas and TV, its efficiency depends on investment in targeted marketing campaigns and on the selective approach of transnational online services (i.e., on their acquisition strategy and recommendation algorithms), which again disadvantages content coming from small peripheral markets.

The EU’s cultural and media policymakers currently face several challenges and this is particularly true in the case of small countries: how to stimulate interest in non-national production and thus increase its crossborder circulation of audiovisual content in Europe out of the realm of the FAANG? How to overcome cultural and language barriers dividing European national audiences? How to design support programmes so that they fund not just development and production, but also efficient cross-border distribution and promotion over the Internet? And more generally: how to balance national and European regulation so they would more effectively face the global competition of FAANG while also making use of the US-based services as (currently) the most efficient vehicles for cross-border online distribution of European content? The question remains whether today’s territorial fragmentation and practice of territory-by-territory licensing actually help to sustain the fragile audiovisual ecosystem and cultural diversity, or if they rather hinder access to European content. In addition, it remains to be seen whether the policy of negative integration potentially increases or weakens the global competitiveness of European audiovisual industries. So far, it seems that the EU policymakers are inclined to economically motivated regulations (integration of the market, barrier-free access to products and services, European works defined by investment share) and tend to downplay or leave to national regulators the cultural and social aspects of market integration that are crucial for developing democracy and citizen participation (free movement of ideas, access to cultural heritage, support for creativity through contact with foreign cultures, etc.). Finding new ways of attaining this balance in a context of profound transformations in audience behaviour and production practices is the main challenge regulators, but also other stakeholders, face. And this is where I believe academics, namely television studies scholars, can have a key role, by providing empirical but critically framed data and reflections that go beyond the economic and market driven assumptions that have mostly influenced the final form of the current AVMSD.

My understanding is that existing regulations do not sufficiently take into account differences between large and small countries. The model we have, whereby pursued cultural-political objectives and adopted regulatory measures apply to all countries, regardless of their size and the specificities of their media systems, is not allowing us to seize the opportunities diversity and inclusion entail. The fact is that not all cultural political goals—such as cultural diversity—can be achieved the same way regardless of the size and specificities of the media contexts in question. Evidence suggests bigger states prefer a market approach endorsing freedom of choice and at most economic interventions to prevent market failure, while the small states lean more toward interventionist regulatory policies protecting the domestic media system against competition from abroad. Finding a balance between small and big countries is a big challenge all over Europe and we need to face the fact we are not addressing it properly. The discussion around quotas and taxation of content is preventing us from actually focusing on the core issue: how can we produce better and more flexible regulation that fosters diversity and inclusion?

The best example of the loop we have been talking about was probably the discussion about a Digital Single Market in Europe. The European Commission’s Digital Single Market strategy is a key example of an economically motivated policy that does not take different sizes and positions of markets into account. It attempted to unify the European digital market by removing the territorial parcelling of the digital market by banning geo-blocking measures. It also aimed to simplify rights clearance through a legal fiction according to which the use of the work on the Internet takes place where the user (broadcaster, VOD service provider) has its principal establishment. According to the prevailing opinion of representatives of the European audiovisual industries, these legislative proposals threaten not only local producers and distributors, but also consumers, especially those tied to small markets. The arguments can be summarised as follows: producers will tend to create mainstream content in a widespread language that will have greater commercial potential within the single market than local content in the language of a small country. At the same time, local platforms will not have enough funding to purchase premium content (such as sports events) with pan-European availability and will only offer a limited amount of cheaper content. Local platforms will be gradually pushed out of the market, resulting in the unification of supply due to the dominance of transnational platforms and limited supply of content with international (cross-border) audience appeal. The homogenisation of content and the dominance of transnational online services in a pan-European audiovisual space will therefore harm Europe’s cultural diversity. The funny thing is that the AVMSD directive tried to overcome the problems of the digital single market, namely via the introduction of the “country of origin” principle, but the fact is that the platforms managed to comply with principles of the directive, namely by producing in local languages as in the case of the example of Capitani at the beginning of this blog, but are anyway moving forward with their logics of market dominance. It is still not clear where this leaves local distributors as cultural mediators who market, promote, localise and culturally mediate foreign audiovisual productions, but clearly they are not tapping into the opportunities diversity and inclusion entail.

Finding a balance between small and big countries in terms of regulatory and production models and distribution platforms is crucial or we will soon be faced with a European landscape where, in a paradoxical manner, only the FAANG, and not local stakeholders, invest in content production.


Manuel José Damásio is the Head of the Film and Media Arts Department at Universidade Lusófona in Lisbon, Portugal and the Chair of the board of the European Association of Film and Television Schools (GEECT/CILECT). He has worked both in academia and industry for more than twenty years.



Higson, A. (2018). The circulation of European films within Europe. Comunicazioni Sociali, 3, 306–323.

Kolokytha O., Sarikakis K. (2018) “Film Governance in the EU: Caught in a Loop?”. In: Murschetz P., Teichmann R., Karmasin M. (eds) Handbook of State Aid for Film. Media Business and Innovation. Springer, Cham. Pp:62-87.