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How does territoriality factor into the way films are funded in the EU? Bernt Hugenholtz, Joost Poort, Gijs van Til and Peter Lindhout have presented their study “Film Financing and the Digital Single Market: its Future, the Role of Territoriality and New Models of Financing” to the European Parliament’s CULT Committee.

In this study, the Institute for Information Law (IViR) takes a closer look at how territoriality factors into the way films are funded in the EU. Recent market and societal developments that have an impact on European film as well as the wide range of aid and incentives available for European films are also studied.

Copyright law grants film producers the right to licence the distribution of films to cinemas, television broadcasters and online per member state. As a result, films are sometimes already available in the producing state via a variety of distribution channels, yet not in other member states. This is due to the widespread practice of securing financing by means of presale agreements that grant exclusive rights for a specified period, distribution channel and country. From a film financing perspective,this is a tried and true method, albeit one at odds with the internal market principle.

The researchers suggest that a system of language-version exclusivity provides a more legally robust alternative financing model that would, in practice, give similar financial guarantees while allowing films to be made available throughout the EU. Ifthe territoriality-based system is nonetheless maintained, they recommend that it be based on temporary block exemptions granted by the European Commission (per film, for a period of two to three years following initial release) after which licences are valid throughout the EU.

The study and an extensive summary are available at