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What regulations and support policies are in place in Europe in support of the film exhibition sector?

Following the release of Top Gun Maverick, Spielberg famously whispered to Tom Cruise "You saved Hollywood's @ss and you might have saved theatrical distribution". This blockbuster helped to kickstart cinema going after COVID on both sides of the Atlantic. But in Europe we're turning to more sustainable and structural support policies such as regulation and public support funding as concrete measures to get the exhibition sector back on track. So how does it work?

The European Audiovisual Observatory's latest report, "Curtains Up on Regulation and Support Measures for the Cinema Exhibition Sector" delves into the intricacies of regulatory frameworks and support mechanisms that shape the cinema exhibition landscape in Europe. It has been authored by Sophie Valais, Deputy Head of the Observatory's Department for Legal Information.

The first chapter provides an in-depth overview of the cinema exhibition sector, tracing its historical evolution from the late 19th century to the present day. It explores the film commercialization circuit, detailing the value chain from pre-production to commercial release. This section highlights the roles of distributors and exhibitors in the theatrical exploitation of films, and examines market trends, including cinema attendance and the structure of the European box office. The chapter also discusses new strategies being employed to attract cinema audiences in an era increasingly dominated by the streamers, a tendency which predates but was exacerbated by the COVID pandemic. 

Chapter two analyses Europe's dual approach to public intervention in the cinema sector. It presents a comprehensive overview of competition rules on the one hand, and sector-specific regulations designed to ensure cultural policy objectives on the other. This chapter also provides concrete examples of national regulatory tools at both economic (special permits for cinemas’ operations, vouchers towards certain audience groups for example) and cultural levels (quotas, commitments or bonuses to promote programming diversity for example), reflecting the wide variety of approaches across Europe. This chapter also outlines the relevant EU legal framework, discussing issues such as theatrical exclusivity, release windows, and territoriality.  In addition, the author addresses EU rules on competition and state aid as they apply to the cinema sector, providing a thorough analysis of the regulatory environment that supports the diversity and sustainability of cinema in Europe.

Chapter three outlines European public support mechanisms for cinemas, presenting the evolution of public film policies from the notion of "cultural exception" to the broader concept of “cultural diversity”. The chapter also details the conditions under which state aid is deemed compatible with the common market under EU competition law and examines the assessment criteria for national support schemes under the 2013 Cinema Communication. In addition, it examines various national and supranational support schemes, such as support to arthouse and rural cinemas, renovation of cinemas, and innovative strategies designed to attract new audiences. The author also highlights the diverse approaches to supporting film distribution and exhibition across Europe.

In her conclusion, the author underscores the importance of the collective cinema experience as a cornerstone of cultural and social life. She emphasizes the need for a balanced approach that integrates technological innovation with public policies aimed at supporting the exhibition sector. The report concludes that "a multi-faceted regulatory framework, combined with industry-led initiatives and a renewed focus on inclusion, sustainability and representation, can help the cinema industry meet the challenges of the digital age and ensure the continued vitality and cultural diversity of the European film landscape."

Essential reading for policymakers, cinema operators, and stakeholders in the audiovisual industry, offering valuable insights into the regulatory and support measures currently available to the cinema exhibition sector in Europe.