Confronting the great digital transformation, the European Union is engaged in a defining effort on many fronts. At a regulatory level, the 2016 General Data Protection Regulation addressed data property and privacy issues. The 2020 package Digital Services and Digital Markets Acts proposes to define the obligations of “gatekeepers” and the rules of a level playing field for services and platforms. By so doing, the EU promotes itself as a culture of its own. It then comes as no surprise that the effort also involves initiatives regarding the mother of global cultural wars, the film and TV industries.
The great coronavirus pandemic is reshuffling the cards in the film and TV battles for subscribers. Home entertainment has taken central stage as cinemas, outdoors and city venues are a no-go. Netflix, Amazon Prime, Disney Plus, WarnerMedia, Apple TV and others now operate subscription campaigns across the world with spectacular success. As the big streaming platforms storm across the Atlantic, they meet the diversified, heavily structured balance of the European entertainment landscape. How is content creation in Europe, with its quality and public support but fragmentation and localism, affected by these changes? How can European production companies and distributors take advantage of genuinely worldwide telecoms networks which make all content available everywhere?
These questions are far-reaching. The audiovisual industry represents 3.3 per cent of EU GDP, close to seven million jobs. Out of 8,000 films produced in the pre-Covid world, Europe produces about 1,200, with 250 to 300 by each of the UK, France, Germany, Spain and Italy. It compares to India’s 2,000, Nigeria’s 1,000, 750 in the US, 700 in China, 600 in Japan and 270 in South Korea.
Video on demand is the most dynamic segment of the entertainment market on all continents: in Europe, its revenues increased from €388m in 2010 to €11.6bn in 2020, while in America $32bn is expected in 2021 and in Asia $18bn. Annual growth rates are between ten and 15 per cent. How can Europe take advantage of this expansion on an increasingly global scene, as powerful actors with global ambitions emerge on all continents?
The US has developed a powerful imprint in global entertainment. It has created unforgettable stories, characters and heroes, and turned cultural references into policy ingredients. Meanwhile, many countries on all continents have for decades been creating great cinema and television, from France, Italy, the UK, Spain and Poland in Europe to China, South Korea and Taiwan in Asia, and Brazil, Mexico and Argentina in South America.
Those creative industries already enjoy international recognition. Will the nascent multi-polar world order accommodate a plurality of cultural identities strongly expressed in films and shows? Is a rebalancing on the way?
Europe does qualify as an “identity of cultural diversity”. The EU’s 450 million citizens across 27 member states use three alphabets and speak 24 EU official languages. Europe’s diversity of cultural heritage, landmarks and landscapes are without peer. They are assets worth building upon.
Films and TV shows have a powerful attraction beyond mere consumption. From Harry Potter’s draw to theme parks in Florida to Game of Thrones’ representation of Dubrovnik and Northern Ireland, our post-lockdown destinations are affected by what we consume. Now, Paris nostalgia (and its creators’ and actors’ talent) has propelled Lupin to the top of the charts on Netflix.
But beyond tourism, real or virtual, and its hard currency benefits, the rationale for European support for its film and TV creative industries is to illustrate, for Europeans themselves and for the entire world, a distinct civilisation. Deeply ingrained as a policy, it is an act of faith in Europe, materialised in a complex set of regulations and funding mechanisms.
Public funding and broadcaster investment were the single most significant financing source for European fiction films in 2018. They accounted for 26 per cent and 21 per cent of a total of €2bn. France has made a name for itself with its elaborate framework of providing grants for the creation of French and European films and co-productions, not exactly through public funding but through the recycling of a tax on movie tickets. In addition, France is asking that between 20 per cent and 25 per cent of a streamer’s local subscriptions revenues be invested in European products, and 85 per cent spent on French-language content, commissioned to independent French producers.
Public funding budgets pale in comparison to what is now at stake in content creation. Disney spent $27.8bn on original content in 2019 and Netflix spent $19.1bn in 2020, an increase of 253 per cent in five years.
But big dollars or euros are worth little without a pool of creative talent, and creative talent and viewers’ expectations have a mysterious relationship. Dallas famously resonated in small villages in rural Algeria as everyone there unexpectedly felt a strong identification with the millionaire oil barons’ characters. Achieving the alchemy of demonstration, identification and exoticism is what studio bosses and creative talent crave, and that politicians believe will increase their influence. Creators in Europe have become better at this in recent years, as demonstrated by Money Heist from Spain, Babylon Berlin from Germany, Gomorrah from Italy, Borgen from Denmark, Call My Agent from France, and numerous British shows.
The big question is: will European creators be able to ride the transformative wave from linear TV to streaming? Piggybacking on the streaming giants is a tempting option. Netflix has 200 million subscribers and 20 per cent of the worldwide streaming total. It was the streaming leader in all European countries in 2020, with the notable exception of Germany and Austria (Amazon). National streaming services rank third place only in Denmark (TV2 Play) and Italy (TIMvision). European governments’ efforts to have international platforms secure at least 30% of European works in their catalogues and reinvest in local content paradoxically strengthens this trend.
An interesting avenue for international growth lies in exchange agreements with streaming services in countries with strong film and TV creation centres which share Europe’s creative ambitions. We might think in particular of South Korea, Taiwan or Japan in Asia, or look towards Latin America or Africa. South Korea, for instance, has built immense soft power in film, TV series, design and, of course, pop music. Parasite was the first non-English speaking film to win the big prize at the Academy Awards. Taiwan is upgrading its status as a producer of Mandarin-speaking films, ready for tightened censorship of creativity in China, and providing content for the huge Chinese diaspora. Challenges confronting creators in many countries are similar. Is there a chance for a diversity alliance?
The rivalries between nations are not only economic and military, but also involve soft power. Europe considers its own social values and vision of worldwide cultural diversity part of its newly heralded “open sovereignty” strategy, with culture and democracy intertwined with global economic ambitions. But soft power is not infinitely malleable. It is one element of the multi-dimensional political capital.
A virtual image projected on the world screen must reflect observable reality. China tried for a while to engage in rosy soft power. The authoritarian policy shift and Hong Kong crackdown put an end to it. India’s Bollywood was heralded as an attempt at soft power, soon curtailed with encroachments on democracy and terrible misogyny. Europe is justified in its cultural aspirations, but it should be careful that its artsy ambitions are compatible with a degree of hard power and efficiency.
Gérard Pogorel is Professor Emeritus at Télécom Paris