MEDIA 2007 is setting aside $5.4m(Euros 4m) this year to invest in Video On Demand and Digital Cinema Distribution.

The money will be invested in six projects, with applications open until July 9 and services expected to be running by June 2008.

'We think it is important that Europe gets off on the right foot and that we don't end as we did in DVD with an 80% US market share in DVD,' the Media Programme's Aviva Silver said.

'We want the European industry to wake up and take into account these new possibilities.'

Silver acknowledged that there has been 'a tightening of the belt' in 2007 because of Romanian and Bulgarian accession.

However, in 2008, she anticipates that there will be more money available to the Programme and that it will be possible to launch new schemes.

The MEDIA 2007 programme lasts until 2013 with a budget of 755 million Euros.