Europe cannot help but compare its performance to the US. Creating a level playing field with Hollywood is an essential driving force for film policy.

But there is an essential difference that cannot be underestimated in discussing the advance of digital change: Europe, for all the rhetoric, is a group of countries that are culturally, legally, technically and politically highly diverse.

Therefore, talk of a single European digital cinema policy is currently fanciful.

The continent simply cannot move forward as a single entity and advances will by necessity be piecemeal, whatever the ambutions of European political leaders.


Yet Europe in many ways ought to be well placed to take advantage of digital opportunities. Europe, and the Nordic countries in particular, initially led the way in mobile telephony. Ericsson and Nokia became household names around the planet.

Bluetooth - a technology that allows electronic devices to communicate with each other was invented in Northern Europe.

And of course the founder of the internet was British. In the key technologies for the future of film, Europe still has a strong advantages.

In broadband adoption, Denmark, Sweden and Finland remain world leaders, ahead of even South Korea and Japan.

The potential opportunities available to the European film industry by embracing technological developments such as broadband have long been clear, not only to the industry, but also to the European Commission.

Access to fast internet services is the cornerstone of all digital services in the home. Without it, there is no digital revolution.

Indeed, as the EC's Commissioner for Information Society and Media, Viviane Reding, commented, 'Broadband means European creators can distribute regional and local content on a global scale or in niche markets.

'Diversity is one of Europe's competitive advantages - broadband can make it fly.'

But the flip side of Europe's 'diversity' means that it also has to deal with the realities of a fragmented continent.

Broadband penetration currently stands at around 17% of the European population (EU 25) and while high growth is expected, it will come piecemeal.

However, it is not just penetration of broadband that will limit the uptake of services such as VOD (Video on Demand), speed is also an important issue.

Available statistics recognise any broadband speed above 144 kilobits per second, while next generation services such as IPTV and high defi nition demand speeds of at least 2 Megabits.

Once again, the difference between rural areas is pronounced, with average speeds being half that available in cities.

The Commission clearly recognise that these and other problems are stunting the uptake and development of broadband. As a result, the EC is currently working on a Green Paper, due this year, that will address the absence of a single market in broadband.

In the current context, it is difficult to see how it will inspire unified growth that will allow concerted pan-continental development.


The technicalfragmentation of the continent is matchedin business itself.

Film-making in Europetends to be a solitary activity, or at least carried out by small companies, yet the a digital world favours the collective.

In addition, there are the issues thrown up by a wide range of service providers that want to lead new media developments such as VoD.

Small film companies will find it hard to negotiate rights deals with large-scale providers such as telecoms companies.

That is the argument for collective action allowing film-makers to pool their influence to demand a better deal. The necessity for such co-operation has been made more obvious by the failure of Europe to share in the private equity boom that has enriched the USA.

'We are not able to finance the industry's modus operandi,' says Joseph Vogten, adviser in audiovisual finance at the European Investment Bank.

Vogten warns that what European fi lm-makers want is micro-finance for individual projects, but that is one thing that the EIB cannot do.

Independents may be able to reduce the impact of their unequal relationship with the studios, but to do so they - and the bodies that can help support them - will need some imagination.


One strategic course is simply to get bigger. The company has long spoken of its aim to create a European distribution network with entities in the key European territories. At present, only the

Benelux deal exists but sales chief Maraval says: 'In a year and a half, we'll be there. We don't have a choice.'

The reason Wild Bunch does not have a choice, he explains, is because competitors such as Pathe, Alliance Films (the Canadian company that owns UK distributor Momentum Pictures and Spanish outfi t Aurum) and Studio Canal - which now owns Optimum Releasing in the UK and which is understood to be seeking a German partner - are present in multiple territories.

Further, he explains, Wild Bunch is presently unable to compete in the French theatrical marketplace with broadcaster subsidiaries such as SND of M6 and TFM of TF1.

Joining forces seems to be the means to survival in the new international marketplace. But not at any price.

'The global market will have to consolidate,' says Philippe Aigle, CEO of

French sales outfi t Celluloid Dreams. 'Companies will be sold, positions will change.

The financing will come either from the US or from Europe but business is more structured today and the sector is becoming more industrialised.'

Becoming a big company is obviously not open to all. But the aggregation of assets is an option. There are two main mechanisms here:

» pooling resources

» or signing up to an aggregating service

Actively pooling interests goes against the grain of the cottage industry approach of most national fi lm businesses.

It has climbed the business agenda to an extent though, particularly in light of successes in the US in securing private equity funding through slate financing.

Proposals for a slate of European productions from different companies have been mooted without serious action so far.


For the purposes of this report, it is the potential for online services that feature product from different companies that is more relevant.

Creating a platform for amalgamating indie product not only makes sense, but also has a track record of sorts.

The creation of Dreamachine by French sales company, Celluloid Dream, and the UK's Hanway Films was a case in point.

The partnership was quickly loosened when it came to sales, but it makes much more sense in terms of an online platform