RESTRICTEDWORLD TRADE
ORGANIZATIONS/C/W/40
15 June 1998
(98-2437)
Council for Trade in Services Original:  English
AUDIOVISUAL SERVICES
Background Note by the Secretariat
I. Introduction
1. At the request of the Council for Trade in Services, the Secretariat has prepared this Note on
audiovisual services as part of the information exchange programme.  It is intended to serve as abackground to more extensive discussions by Council Members.  It is expected that further
information will become available and may serve as the basis for an addendum to this paper, which
currently reflects the disproportionate availability of information on the policies of the European
Union and other developed countries.
2. Audiovisual services typically reflect the social and cultural characteristics of nations and
their peoples, and are consequently regarded as being of great social and political importance.  For
these reasons, government regulations and public support programmes play a major role.  The
regulations on audiovisual services concern not only social and cultural issues, but also the promotion
of domestic industry and foreign content restrictions.  To accommodate rapid technological change
and the new multimedia services, governments will, according to the OECD, need to modify theirregulatory structures.  The social and economic issues at stake, however, are both important and
complex
1, and they were reflected in the discussions on this sector during the Uruguay Round.  A
Working Group on Audiovisual Services held a number of meetings during the Round, and at its
request the Secretariat produced a note on "Matters Relating to Trade in Audiovisual Services" which
examined the drafting history of GATT Article IV, th e applicability to this sector of concept and
principles such as market access and national treatment and the content of relevant international
agreements.  This paper was circulated on 4 October 1990 as MTN.GNS/AUD/W/1.
II. Description of the Sector
3. As defined in the Services Sectoral Classification List (MTN.GNS/W/120), Audiovisual
services are sub-sector "D." of  "2. Communication Services".  The six sub-categories listed, and their
associated listing under the United Nations "Provisional Central Product Classification" (CPC) are as
follows;  a. Motion picture and video tape production and distribution services (CPC 9611);b. Motion picture projection service (CPC 9612);  c. Radio and television services (CPC 9613);
d. Radio and television transmission services (CPC  7524);  e. Sound recording (CPC n.a.);  and f.
                                                     
1Major sections of this Note rely upon the following documentation:  OECD, Content as a New Growth
Industry, DSTI/ICCP/IE(96)6/FINAL, 22 May 1998;  OECD, Policy and Regulatory Issues for Network-Based
Content Services, DSTI/ICCP/IE(96)9/REV1 (and CORR1), 4 August 1997 (and 14 October 1997);  European
Commission, Panorama of EU Industry 1997;  European Audiovisual Observatory, Statistical Yearbook 1997 ,
Strasbourg;  and the Europa server (http://europa.eu.int).S/C/W/40
Page 2
Other (No CPC categories specified, but could co ver, for example, the contents of multimedia
products).
4. Under the Provisional Central Product Classification, CPC 9611 is further divided into:
Promotion or advertising services (CPC 96111);  Motion picture or video tape production services
(CPC 96112);  Motion picture or video tape distribu tion services (CPC 96113);  and Other services in
connection with motion picture and video tape pr oduction and distribution (CPC 96114).  CPC 9612
is subdivided into:  Motion picture projection services (CPC 96121);  and Video tape projection
services (CPC 96122).  CPC 9613 is subdivided in to:  Radio services (CPC 96131);  Television
services (CPC 96132);  and Combined programme making and broadcasting services (CPC 96133).
CPC 7524 is divided into:  Television broadcast transmission services (CPC 75241);  and Radio
broadcast transmission services (CPC 75242).
5. Especially for the sub-category of Radio and television transmission services (CPC 7524),  it
sometimes becomes difficult to determine exactly the boundary between services classified under
telecommunications and those classified under audiovisual services.  As a general rule of thumb,
however, it has become accepted that commitments involving programming content are classified
under audiovisual services, while those purely involving the transmission of information are classified
under telecommunications.
6. At the national level, definitions of statistical categories, as well as the availability of
information, vary widely in regard to audiovisual services.  As noted in an earlier Secretariat
document, A Review of Statistics on Trade Flow s in Services (S/C/W/27, p.5), "the framework of
negotiated commitments does not match the existing structure of trade statistics".  Consequently, care
should be used in evaluating the statistical information presented within this Note.2
III. Economic Importance of the Sector and its Main Economic Features
7. Little information about the audiovisual sector is available on a national accounts basis, evenfrom OECD countries.
3  According to the European Commission, the audiovisual industry in the EU
employs an estimated 1.8 million people, and may reach 4 million by 2005, an indicator of the high
growth potential resulting from rapid technologica l change.  Total employment in the U.S. motion
picture and videotape industries for 1995 was listed at about 590,000.  In Japan, broadcasting, motion
picture and video production as of 1994 were list ed as employing about 111,000 persons, with annual
sales of nearly ¥4 trillion.4
8. More information is available concerning the output of audiovisual products, at least in regardto selected countries and markets, as well as in re gard to related infrastructure such as the number of
movie screens.  Information from the United Nations indicates that China has by far the greatest
number of cinemas, at nearly 140,000, followed by the United States (nearly 25,000) and India (about13,500).  Annual cinema attendance per capita is listed as highest in Lebanon, at slightly over 35
                                                     
2In the publication Panorama of EU Industry 1997 of the European Commission, for example,
audiovisual services are defined as comprising five main sub-sectors:  motion picture and video production;
motion picture and video distribution;  motion picture projection;  television activities;  and studios for soundrecording.  Multimedia products and services are included under a separate category.
3The 1997 version of the OECD publication Services:  Statistics on Value Added and Employment, for
example, provides information only for Canada and the United States in respect to the Radio and televisionbroadcasting category, and for only Canada, the United States and Iceland in respect to the Motion pictures
category.
4Internet site of the Japan Information Network (http://jin.jcic.or.jp/stat/data/07IND86.html).S/C/W/40
Page 3
times, followed by China (12.3 times) and Hong Kong (10.3 times).  (Current film industry statistics
for selected markets are presented in Table 1).  In regard to the diffusion of televisions and radio
receivers, the United States has by far the greatest number, at 210 million and 547 million,
respectively.  Following in regard to televisions are Japan at 77 million and the Russian Federation at
55 million;  for radio receivers, second is China at nearly 220 million and Japan at 113 million.5
9. According to India's National Film Developm ent Corporation, India has the world's largest
film industry, producing an average of seven hundred feature films and nine hundred short films
annually.6  The United States is the second largest producer, and there are important film production
industries in many other countries, including for example Australia, Egypt, Brazil, Russia, France,
Germany, Italy, Spain and the UK.  Hong Kong is regarded as the second largest film exporter, and
the third largest producer after India and the United States.7  Unfortunately, little detailed information
on the audiovisual industries of developing countries is easily available, so most statistics concern theOECD countries.
8   Table 2, for example, shows that the investment level in feature films is highest in
the United States, despite that fact other major markets, including the EU, produce a greater number
of long-length feature films.  Table 2 also contains statistics for the same group of countries on the
number of films released annually for public display, showing that among these countries Japan
releases the largest number.  It is likely however that the number of releases in India is larger still.
10. It should be noted that in the film industry, and undoubtedly in other audiovisual sectors as
well, it becomes difficult in practice to actually de termine the nationality, or even the overall number,
of productions, due to numerous co-production arrangements, definitional differences, and other
related factors.  To define the origin of audio-visual products can be extremely difficult:  is the
defining characteristic of a film the nationality or residence of the producer, the production location,the origin of the financing, the nationality of the actors or the director?  There is no generally accepted
rule in these matters, and in fact it is increasingly common for film production to be an international
enterprise.
9
11. In regard to recorded music, the largest mark et is found in the United States, followed by
Japan, Germany, the U.K., France, Canada and Brazil (Table 3).  There is a distinct linkage betweennational growth rates (and economic conditions as a wh ole) and growth rates for music spending;  the
sector is also closely linked to the cycle of new hardware technologies.  The arrival of CD technology,
for example, served to rejuvenate the entire market , offsetting the decline of LP records.  The major
companies are also making efforts to diversify th eir operations into related markets, including film
production, book publishing, broadcasting and retailing operations.
12. Market shares for audiovisual products as a whole, as defined by official statistics, vary
widely between sub-sectors:  the United States is the largest market for audiovisual products as awhole, and is the largest overall producer.  Market shares for U.S. films in both the EU and Japanese
                                                     
5United Nations, Statistical Yearbook, Forty-First Issue, New York.
6Internet site of the National Film Development Corporation, Ltd. (http://www.nfdcindia.com).
7United States International Trade Commission, General Agreement on Trade in Services:
Examination of the Schedules of Commitments Submitted by Asia/Pacific Trading Partners, 1997, p. 6-12.
8An example of developing-country information at the national level is the Internet site of Cinema
Brasil  (http://www.cinemabrasil.org.br).  A regional cinema index can be found at the Yahoo Internet site(http://www.yahoo.com/Entertainment/Movies_and_Film/Regional/Countries).
9Karl F. Falkenberg, "The Audiovisual Sector", as found in Jacques H.J. Bourgeois, Frédérique Berrod
and Eric Gippini Fournier, editors, The Uruguay Round Results, Brussels, 1995.S/C/W/40
Page 4
markets are quite high (Tables 4 and 5).  The EU, however, is dominant in world-wide music
recordings, with three European groups controlling over 40 per cent of the world market.10  I n
television programming the United States is extr emely strong, but producers in Japan and elsewhere
are also playing an increasingly important role.11
13. Trade figures for audiovisual services must also be interpreted with caution.  Definitions vary
widely, even at the OECD level.  In the "film s and television" category of the OECD publication,
Services Statistics on International Transactions 1970-1994, for example, data for Japan are defined as
"films rentals", for Germany as "films and television", for France as "audiovisual programmes", forCanada as "films and broadcasting" and for Austria as "culture and entertainment".  In addition, cross-
border trade figures alone may be deceptive as affiliates trade (for which data are extremely limited)
is often very substantial.  In the case of the United States, cross-border exports in 1994 were about
US$3.5 billion, while imports were only about US$ 136 million;  the figures for affiliate trade,however, were very different, with U.S.-owned ov erseas affiliates reporting US$4.2 billion in sales
and foreign-owned affiliates in the United States reporting US$8.1 billion in sales to US distributors.
This latter figure is due to the fact that foreign-owned affiliates together accounted for about 25 per
cent of U.S. box offices sales in 1994, a figure which has subsequently declined.
12
14. Intra-EU trade in regard to films remains rather limited, with France and Italy the most
significant exceptions, importing between 30 and 40 per cent of films released in their respective
markets from other EU Members.  In the United States, nearly 90 per cent of film distribution is
handled by only 8 companies;  in Europe, distribution is much more fragmented.  Only one EU-based
company is said to have its own marketing and theatrical distribution network in the United States.  In
video, the five largest EU distributors are said to be controlled by major US producers.  Nonetheless,
EU-based companies are also very active as distributors.  For music, the largest companies have
recording and production facilities located in all major markets.
15. According to the OECD, "The changing nature of content production has eroded the
traditionally distinct definitions of many textual, audio, and visual services, expanded the possibilities
for market development, and broadened the range of economic interests concerned".13 Traditional
audiovisual and music content has been distributed through such physical media as video tapes and
CD-ROMs, via the cinema, satellites, cable TV or radio networks, and is characterised by passive
consumption.  The new multimedia products combine digitalized text, data, audio, and still and
moving images, and are often characterised by interactivity with the consumer.  Distribution can be
through physical media such as CD-ROMs, as well as  through the Internet or the other new networks.
The rise of Internet-based services also offers major possibilities for alternative product development
processes.
                                                     
10Five companies account for approximately 70 per cent of the market for music sales:  BMG
(Germany), PolyGram (Netherlands), Sony (J apan), Time Warner (US), and EMI (U.K.).
11According to the European Commission, "US producer s have been much more efficient in cashing in
on Europe's broadcasting growth because their own very large domestic market gives them enormous priceadvantages" (Europa server, "Audiovisual Policy", (http://europa.eu.int/pol/av/en/info.htm)).
12At the time, Sony (Japan) owned Columbia Pictures and TriStar, Seagram (Canada) owned MCA,
and Credit Lyonnais (France) controlled MGM (United States International Trade Commission, General
Agreement on Trade in Services:  Examination of the Schedules of Commitments Submitted by Asia/Pacific
Trading Partners, 1997, pp. 6-1 and 6-3).
13OECD, Content as a New Growth Industry, DSTI/ICCP/IE(96)6/FINAL, 22 May 1998, p. 6.S/C/W/40
Page 5
16. With the digitalization of audiovisual production, content creation is now often outsourced to
small specialized firms.  The high cost of special effects, however is rapidly raising average film
production costs.  Faced with declining market share, producers in the EU are consolidating into
larger groups controlling distribution and/or production facilities.  The growing interest of industrial,
financial and other companies (notably communications firms) in film investments has also resulted inthe creation of large new film production groups.  Increased concentration has been accompanied by
greater vertical integration.
14
IV. Regulatory Structure, Relevant Trade Restrictions and Industry Support Programmes
17. In most countries, audiovisual media are regulated far more heavily than text media,
reflecting their great potential for social, economic and cultural influence.  As the OECD notes, "Most
countries promote domestic audiovisual content production through a variety of policy measures and
institutions.  But the most comprehensive policy frameworks are usually contained in legislationconcerning broadcasting markets, content ownership and programming".
15  The "Television without
Frontiers" Directive of the EC, for example, adopted in 1989 and amended in 1997, establishes basic
rules for advertising, protection of minors, broadcasting of major sporting and other events, protecting
the right of reply and the promotion of European works.  Cultural obligations are set out more or less
explicitly by European laws and regulations, especially those applicable to public service bodies.  InIndia the cinema industry benefits from the freedom of expression provisions of the Indian
Constitution. This right, however, is subject to "reasonable restrictions" imposed (under Article 19(2)
of the Constitution) in the interest of sovereignty and integrity of the State, friendly relations with
foreign States, public order, decency or morality or in relation to contempt of court, defamation or
incitement to an offence.
16  Similar concerns underlie the regulation of the industry in many other
countries.
18. According to the European Commission, ke y weaknesses of the European programming
industry include:  fragmentation into national ma rkets;  a low rate of cross-border programming,
distribution and circulation;  chronic financial deficits;  and an inability to attract the necessary
financial resources.  In this context, the audiovisual policy of the European Union has the objectivesof establishing and ensuring a Europe-wide environment for audiovisual services and helping to
develop a strong, progressive programming industry able to compete on world markets.  Policies
include encouraging training for professionals, supporting the production and distribution of European
audiovisual products and eliminating internal barriers to EC-wide broadcasting distribution.
17  Special
programmes intended to contribute to the EU fi lm industry include the Media Plan II of the EU
Commission, designed to promote adaption to the demands of the single market;  the Eurimages
initiative of the Council of Europe, intended to enhance EU-wide co-productions;  and the Eurekaprogramme to promote the use of new technologies.  Public funding to support domestic content
                                                     
14In the view of the OECD, "The correct response to this dilemma is really neither a complete yes or no
to vertical integration and cross-media ownership.  Rather, a balance may be achieved between the maintenance
of competitive markets and the growth of SMEs on the one hand, and efficient and highly competitive largeenterprises on the other." (OECD, Policy and Regulatory Issues for Network-Based Content Services,
DSTI/ICCP/IE(96)9/REV1 (and CORR1), 4 August 1997 (and 14 October 1997), p. 8.).
15OECD, Policy and Regulatory Issues for Network-Based Content Services,
DSTI/ICCP/IE(96)9/REV1, 4 August 1997, p. 5.
16Internet site of the National Film Development Corporation, Ltd.
(http://www.nfdcindia.com/censor.htm).
17Europa server, "Audiovisual Policy", (http://europa.eu.int/pol/av/en/info.htm).S/C/W/40
Page 6
production in the United States is at relatively low levels, but individual states do provide a range of
incentives to attract production, and federal funds are distributed for film and video art productions.
19. Substantial subsidies are granted in a number of WTO members:  the OECD publication,
Policy and Regulatory Issues for Network-Based C ontent Services, for example, provides information
on the support programmes of Australia, Canada, the European Union and the United States (details
of various government expenditures in the audiovisual sector are provided in Tables 6, 7 and 8).18
Some countries also impose an obligation upon their TV chains to invest in domestic film production.
19  According to the same OECD publication,  howe ver, "OECD governments are increasingly relying
upon policies aimed at indirectly stimulating domestic content creation through tax breaks or
increased contributions from the private sector or non-profit organizations, rather than direct funding
measures.  This is sometimes a matter of historical tradition (as with public broadcasting in the United
States), partly the result of increasing pressures to reduce government spending and budget deficits,and partly the product of a growing realisation that  direct funding is less effective than indirect
support".
20. The OECD notes that "a large number of institutions exist for the promotion of domestic
content within OECD countries.  In particular, national public broadcasters have often been dedicated
to promoting and carrying a certain quantity of domestically produced audiovisual content, whiledirect grants, tax write-offs and low-interest loans are also provided for film production, and (in some
countries) the development of special (and in particular digital) effects".
20  The amendment of the
"Television without Frontiers" Directive in 1997 strengthened the requirement that Television
channels should broadcast a majority of European productions excluding news programmes, sporting
events, advertising, games, teletext and teleshopping services.21  In Canada, the Canadian
Radio-Television and Telecommuni cation Commission promotes domestic content through a number
of policies, including quotas on broadcast airtime.  Private radio station licensees are asked to make
financial commitments to domestic talent development as part of their license renewal applications.
In India, as in a large number of other countries, market access for foreign films is formally restricted
to a limited number of titles per year.22
21. Governments, as noted in the Introduction to this Note, will probably need to modify
regulatory structures to accommodate the new multimedia audiovisual services.  As observed by the
OECD, "Governments have traditionally used the licen sing of broadcasting facilities to ensure the
implementation of policy goals in respect to foreign and domestic content carriage. The restricted
electromagnetic spectrum available for analogue transmission provided a technological rationale for
the regulatory procedures which underpinned these policy goals... . However, with the greater number
of channels available for broadcasting which digital terrestrial over-the-air, satellite and cable
                                                     
18OECD, Policy and Regulatory Issues for Network-Based Content Services,
DSTI/ICCP/IE(96)9/REV1, 4 August 1997, pp. 14-20.
19According to the Panorama of EU Industry 1997 (p.27-11), EU film production "will remain
dependent on legal and financial programmes planned by the EC and national institutions".
20OECD, Policy and Regulatory Issues for Network-Based Content Services,
DSTI/ICCP/IE(96)9/REV1, 4 August 1997, pp. 14.
21WTO, Trade Policy Review - European Community 1997, May 1998, Geneva, p. 60.
22India, however, is among the few countries which have formally listed these restrictions in their
GATS schedules.S/C/W/40
Page 7
technologies allow, [the new environment] makes a restrictive approach increasingly difficult to
justify."23
22. Deregulation policies in the 1980's, for example, resulted in the increasing emergence ofprivate television channels.  With the liberalization of the telecommunications market in 1998 in
many major markets, telephone and cable operators are expected to enter the television transmissionmarket.  In the emerging markets for digital television, control over decoding standards is expected to
be the major issue, with competing groups attemp ting to impose their own standards.  For music
recording services, reforming policies concerning intellectual property rights is an important
challenge, considering that most music copyright laws are administered nationally whereas on-line
computer services such as the Internet are linked to  international networks.  Piracy of both music and
video recordings is a major problem for many developing countries, such as India, as well as for
developed nations.
23. Competition policy in respect to the audiovisual sector is another area where the OECD
argues that changes may be needed:  "With the increased number and variety of network-based
services, competition policy also needs to play a much greater role in the regulation of audiovisual
content.  However, the evolutionary nature of convergence also means that competition policy needs
to be applied with a more constant and detailed attention to market, sectoral, product andtechnological evolution".
24
V. Negotiations on Audiovisual Services and Existing Commitments under the GATS
24. These social and economic concerns, and the pressures for change exerted by new
technology, underlay the discussion of audiovisual services in the Uruguay Round, in which there was
a heavy focus on the cultural specificity of the film and television industries, in particular.  There wasno specific recognitions of these concerns in the text of the Agreement, but at the end of the Round
only 13 countries made commitments in this sector. A substantially larger number took MFN
exemptions.  As a result of accessions, the number of Members making commitments has since risen
to 19.
25. The majority of the 19 Members who have made commitments to date in audiovisual services
(Table 9), have followed the sectoral classification in W/120, with some modifications or exceptions.
In some cases, however, national definitions have been used.
25  In one case, CPC 7524 has been
included under commitments on audiovisual services, but defined as "Radio and television cable
services".  For the numerous MFN exemptions taken in the audiovisual services sector, national
definitions have primarily been used.
26. Among the six sub-categories which compose a udiovisual services, Motion Picture and Video
Tape Production and Distribution Services has a total of 17 specific commitments, followed by
                                                     
23OECD, Policy and Regulatory Issues for Network-Based Content Services,
DSTI/ICCP/IE(96)9/REV1, 4 August 1997, p. 11.  The OECD also makes the claim that "In particular, the
principle of open access to essential resources to ensure non-discrimination, innovation and competition couldbe usefully applied to traditional broadcasting concerns in regard to ensuring pluralism in ownership, culturalcreativity and diversity" (p.5).
24OECD, Policy and Regulatory Issues for Network-Based Content Services,
DSTI/ICCP/IE(96)9/REV1, 4 August 1997, p. 11.
25This number includes one case where commitments were made under 2. C. (Telecommunications
services), but the sub-categories concerned (CPC 75241 and 75242) are classified as Audiovisual services under
W/120 and the Provisional CPC.S/C/W/40
Page 8
Motion Picture Projection Services with 10.  Only the Central African Republic and the United States
have made commitments in all six sub-categories.  New Zealand has commitments in five
sub-categories (i.e. all except sound recording), Panama and Gambia in four, and Hong Kong and
Japan in three.
27. Table 10 shows the distribution of commitments by mode of supply.  It will be seen that the
majority of commitments in all modes are subject to limitations, but this is true of most if not all
sectors.  In these industries, where temporary working abroad is so frequent, the level of limitations in
market access commitments for the presence of natural persons may suggest significant trade barriers.
28. By individual sub-category, the instance of full bindings (i.e. "None") in respect to both
market access and national treatment is greatest for Motion Picture Projection Services, followed by
Radio and Television Services (Table 11).  The lowest instance is in respect to the "Other" category.
The highest level of full bindings in respect to both sub-sector and mode of supply concerns nationaltreatment for the cross-border supply of Radio and Television Services, at 71 per cent.  This and other
figures should be regarded with care, however, considering the low number of commitments in
several sub-categories.
29. The most common restrictions appearing in schedules, other than those concerning natural
persons, include limits on foreign shareholdings, rest rictions on the share of screening time allotted to
foreign productions, and exclusion from national treatm ent in respect to domestic subsidies.  In the
case of market access in respect to the presence of natural persons, as for most sectors listed in GATS
schedules, the most common entry is "Unbound, except as indicated in the horizontal section".
30. In the context of the Uruguay Round negotiations, audiovisual industry representatives in a
number of Member countries suggested that the cinema and broadcasting sectors should be excludedfrom the Agreement in order to protect national industries and cultures from being overwhelmed by
foreign products.
26  An alternative approach was to suggest exemptions from certain disciplines in
recognition of the cultural specificity of these industries.27  No agreement was reached on these
approaches.
31. A large number of MFN exemptions have been taken in regard to audiovisual services.
Counting the European Community as a single entity, a total of 33 MFN exemptions28 specifically
mentioning the audiovisual sector are in place, wi th an additional eight MFN exemptions applying to
all services sectors, potentially including audiovisual.  The exemptions most commonly cover co-
production arrangements for film and television productions, typically granting national treatment
status in respect to eligibility for financial assistance, tax benefits and simplified entry procedures for
natural persons.
                                                     
26Karl F. Falkenberg, "The Audiovisual Sector", as found in Jacques H.J. Bourgeois, Frédérique Berrod
and Eric Gippini Fournier, editors, The Uruguay Round Results, Brussels, 1995.
27This approach would have accommodated exemptions from the m.f.n. clause for audiovisual industry
assistance programmes, permitted the continuance and extension of public aid and operational subsidies,allowed screen time to be reserved for indigenous production of films and TV programmes, and permitted theregulation of existing and future broadcasting technologies and transmission techniques.
28The 33 exemptions covering audiovisual services are by:  Australia, Austria, Bolivia, Brazil, Brunei
Darussalam, Bulgaria, Canada, Chile, Columbia, Cuba, Cyprus, Czech Republic, Ecuador, Egypt, EuropeanCommunity, Finland, Hungary, Iceland, India, Israel, Liechtenstein, New Zealand, Norway, Panama, Poland,Singapore, Slovak Republic, Slovenia, Sweden, Switzerla nd, Tunisia, United States and Venezuela.  The eight
general MFN exemptions potentially impacting audiovisual services are by:  El Salvador, Malaysia, Peru,
Philippines, Sierra Leone, Thailand, Turkey and the United Arab Emirates.S/C/W/40
Page 9
32. Agreements mentioned in the MFN exemptions include those for the promotion of European,
Latin American and Arab audiovisual works.  Preferential treatment in regard to screen-time access is
also given in many cases.  The most wide-ranging MFN exemptions are those of the European
Community and Venezuela.  Some MFN exemptions also provide for potential retaliatory measures
against unilateral measures imposed by trading partners.
VI. Sources of Additional Information
33. Relevant sources of additional information also include the following Internet sites:
-  Asia-Pacific Broadcasting Union (http://www5.jaring.my/abu/intro.htm)
-  Council of Europe (http://www.coe.fr)
-  European Audiovisual Observatory (http://www.obs.c-strasbourg.fr)
-  European Broadcasting Union (http://www.ebu.ch)
-  European Cinema Yearbook  (http://www.mediasalles.it/yindex.htm)-  Infosearch broadcasting links (http://www.broadcastinglinks.com)
-  Internet Film and Video Resources:  Li st of Trade and Professional Organizations
    (http://www .echonyc.com/~mvidal/orgs.html)
-  Motion Picture Association of America (http://www.mpaa.org)
-  OECD (http://www.oecd.org)- Recording Industry Association of America (http://www.riaa.com)S/C/W/40
Page 10
Table 1:  Cinema Exhi bition in Europe and
other Continents:  Key Facts, 1994
Europe USA Japan Australia
Population 383 m.  ca. 257 m. ca. 125 m. ca. 17 m.
Number of screens 18.805 26.586 1.747 1.028
Number of inhabitants per screen ca. 20.400 ca. 9.700 ca. 71.000 ca. 16.500
Gross Box Office Revenues** (in
million ECU)3.058* 4.293 1.259 281.0
Admissions (in millions) ca. 688.7* 1.210 123 63.6
Frequency per head of population 1.9* 4.7 1 3.7
Average ticket price (ECU) ca. 4.44* 3.55 10.23 4.42
* Not including Ireland and Portugal.
** ECU Values 31 Dec. 94:  1 ECU = 1.223 US$;  1 ECU = 122 Yen;  1 ECU = 1.583 A$
Data referring to Europe include the following countries:  Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Iceland, Irel and, Italy, Luxembourg, the Netherlands,
Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.
Source: Eropean Cinema Yearbook 1995 (As found in OECD, Content as a New Growth Industry ).S/C/W/40
Page 11
Table 2:  Film and Video:  Worldwide Cinema Industry
(units) 1985 1990 1991 1992 1993 1994
Number of long length feature films produced including co-productions
EUR 15 547 526 578 544 574 514
Deutschland 64 48 72 63 67 60
España 77 47 64 52 56 44
France 151 146 156  155 152 115
Italia 89 119 129 127 105 95
United Kingdom 47 47 46 42 60 70
USA 356 477 583 519 450  N/A
Japan (1) 319 239 230 240 238 251
A u s t r a l i a 4 2 3 42 73 02 32 9
Number of feature films released
EUR 15 (2) (3) 288 (3) 271 269 253 250 (3) 251
Deutschland 309 303 334 288 263 263
España 409 328 329 318 306 345
France 456 370 438 381 359 387
Italia 345 495 430 437 397 373
United Kingdom 248 277 283 227 236 N/A
USA 426 401 404 379 440 420
Japan 583 704 697 617 590 553
Australia 212 254 239 227 236 N/A
Film production investment (million ECU)
EUR 15 (4) 930.5 1 163.6 1 378.3 1 253.0 1 218.3 1 350.4
Deutschland 106.9 97.5 117.0 107.4 144.6 162.5
España 65.8 50.9 96.2 60.6 62.4 42.0
France 305.0 475.7 540.2 533.5 469.7 437.3
Italia 192.0 220.5 302.1 239.3 196.2 216.1
United Kingdom 172.2 203.0 228.2 185.3 169.6 334.3
USA 3 266.7 3 586.2 4 002.9 3 412.4 3 612.3 4 115.5
Australia N/A 86.3 73.1 45 34.7 88.1
(1) Films released during the reference period.
(2) Average number of films released.  Excluding Ireland.(3) Estimates excluding Sweden.(4) Estimate.
Source: Eurostat, national sources, others (as found in European Commission, Panorama of  EU Industry (1997
).S/C/W/40
Page 12
Table 3:  Top 10 Countries Shares of World Music Market by Sales
1995 Retail Value
(USD millions)Per Cent Share
USA 12 102.0 30.5
Japan 7 552.1 19.0
Germany 3 269.6 8.2
UK 2 571.6 6.5
France 2 391.8 6.0
Canada 1 113.1 2.8
Brazil 1 053.1 2.7
Netherlands 716.5 1.8
Australia 680.5 1.7
Italy 582.7 1.5
TOTAL 32 032.8 80.7
Source: IFPI (as found in OECD, Content as a New Growth Industry ).S/C/W/40
Page 13
Table 4:  Market Shares of US Films in Europe (per cent)
1989 1990 1991 1992 1993 1994
Belgium*69.5 73.4 79.6 72.9 71.8 74.7
Denmark 63.7 77.0 83.3 77.7 74.0 66.7
Finland 70 80 80 63.0 63.0 66.0
France 55.5 55.9 58.0 58.2 57.1 60.0
Germany 65.7 83.8 80.2 82.8 87.8 81.6
Greece 86 87 88 92 - 82
Ireland 75 87 91.5 - - -
Italy 63.1 70.0 58.6 59.4 68.1 65.0
Luxembourg 87 80 85 78 80 84
The Netherlands 75.6 85.8 92.5 78.8 89.3 90.0
Norway 72.0 70.0 65.0 68.0 74.0 72.7
Portugal 81.0 85.0 85.0 - 61.2 -
Spain 73 72 69 77.1 75.5 72.3
Sweden 69.3 82.3 70.5 65.5 72.7 70.0
Switzerland 71 76 77 67.3**72.4 79.8
United
Kingdom84 89 84 90.6 94.2  -
*Brussels only
**Non-European films, i.e. US and other countries
Source: European Cinema Yearbook 1995 (as found in OECD, Content as a New Growth Industry ).S/C/W/40
Page 14
Table 5:  Japanese Film Market:  Releases and Annual Revenue
Year Number Films RevenueTotal
Revenue
Domestic Western Domestic Western
1983 317 181 41 442 37 331 78 773
1984 333 232 33 120 35 086 68 206
1985 319 264 35 295 34 080 69 375
1986 311 289 36 182 36 454 72 636
1987 286 351 30 638 33 098 63 736
1988 265 485 32 532 32 993 65 525
1989 255 522 31 272 35 883 67 155
1990 239 465 29 407 41 675 71 082
1991 230 467 27 847 38 687 66 534
1992 240 377 28 134 34 227 62 361
1993 238 352 25 692 46 119 71 811
Source :Cinema Almanac, Jijeigatsuushinshah, Inc. Information provided by the Japan Information Network
(as found in OECD, Content as a New Growth Industry) .
Table 6:  Australian Federal Government Film Industry Expenditure
Year Australian Film
CommissionFilm
AustraliaAustralian
Film, TV and
Radio SchoolAustralian
Children's
TV
FoundationNational Film
and Sound
ArchiveAustralian Film
Finance
CorporationTotal
SM SM SM SM SM SM
94-95 18.7 6.4 10.7  2.1 9.1 54.0 101.0
93-94 17.9 6.5 10.5 2.0 9.1 57.0 103.1
92-93 17.0 5.9 10.7 1.2 8.3 61.9 105.0
91-92 16.6 6.8 10.3 1.2 8.2 68.0 111.1
90-91 16.1 5.6 16.6 1.2 9.3 66.0 114.8
89-90 16.1 5.9 9.0 0.6 8.6 54.8 85.0
88-89 15.5 15.9 10.7 0.6 7.6 70.0 120.3
87-88 20.6 23.0 0.5 4.5 48.6
86-87 21.1 16.4 0.5 4.2 42.2
85-86 20.2 8.7 0.5  3.4 32.8
Source: Australian Film Commission (as found in OECD, Policy and Regulatory Issues for Network-Based
Content Services).S/C/W/40
Page 15
Table 7:  Main Support Measures in Canada for Individual
Cultural Industries at the Federal Level
Sector (main
programmes)Direct financial
assistance (incl.
grants)Tax measures Local content requirements Foreign investment
provisions
All sectors (CulturalIndustriesDevelopment Fund)
aCan$2.8b infederal andCan$3.0b in sub-
federal funds
(1994).Throughout the cultural
sector.Investment Canada Act
requires that anyinvestment in new or
existing businesses
meets a "net benefit"test.
Broadcasting Can$1.5b in 1994
(federal funding ofCBC radio andtelevision
network).Tax breaks for
advertiserspurchasingadvertising time
on Canadian TV.- 60 per cent of Canadian
content for conventional TV;
- 20 per cent Canadian
content for cable-TV
- 30 per cent Canadian
content for radio broadcasts(music) at federal level;
- 65 per cent French content
for radio broadcasts in
Quebec.Ownership limitations
of 20 per cent perindividual investor and33.3 per cent for
holding companies.
Film and video
(funds administered
by Telefilm Canada
and the NationalFilm Board)Can$240 million
in 1994 (federal
funding for
Telefilm Canadaand the NationalFilm Board).Canada Film and
Video Production
Tax Credit.See above. Acquisition of existing
Canadian distributors
not permitted;
investment in newdistribution companiesonly under certain
conditions.
Sound recording
(Sound RecordingDevelopmentProgram)Can$5.5 million in
1994  (federalfunds).See above.
Music productions mustfulfil specified criteria toqualify as Canadian works.
Publishing of booksand magazines(Book PublishingIndustry
Development
Program;PublicationsDistribution
Assistance Program)Postal subsidy for
Canadianmagazines.Tax breaks for
advertisementsplaced inCanadian
magazines.
Excise tax onadvertisements insplit-run editions.Acquisition of
Canadian controlledbusinesses notpermitted.
New businesses must
be in the form of aCanadian-controlledjoint venture.
a The Fund grants financial support and provides advice to Canadian cultural industries.
Source: WTO Secretariat on the basis of information provided by the Government of Canada (as found in WTO, Trade
Policy Review -Canada 1996, February 1997, Geneva, p. 122).S/C/W/40
Page 16
Table 8:  European Public Support for Film and Video, 1994
(in million ECUs)
Country Total
SubsidiesSupport Production Support Distribution Support Exploitation1
%% %
Germany 76 440 59 272 77.54 7 794 10.20 9 374 12.16
Austria 14 902 14 041 94.22  861 5.78 - -
Belgium 8 150 7 847 96.28 303 3.72 - -
Denmark 10 470 9 860 94.17 239 2.28 371 3.55
Spain 21 703 19 997 92.14 636 2.93 1 070 4.93
Finland 6 204 5 289 85.25 727 11.72 188 3.03
France 124 950 50 572 40.47 8 234 6.59 66 144 52.94
Greece 4 921 4 504 91.53 417 8.47 ND -
Ireland 1 673  1 673 100.00 - - - -
Italy 74 408 31 330 42.10 19 581 26.32 23 497 31 58
Netherlands 9 090 8 963 98.60 127 1.40 - -
Portugal 5 489 4 727 86.12 338 6.16 424 7.72
United Kingdom 1 888 1 888 100.00 - - - -
Sweden 16 304 15 443 94.72 608 3.73 253 1.55
Total EU 376 592 235 406 62.51 39 865 10.59 101 321 26.90
Iceland 5 356 5 356 100.00 - - - -
Norway 7 929  7 929 100.00 - - - -
Switzerland 7 897 7 589 96.10 308 3.90 -  -
Eurimages 21 139 21 139 100.00 ND - - -
EFDO 11 245 - - 11 245 100.00 - -
Nordic Film F. 6 439 6 002 93.21 437 6.79 - -
Gen. TOTAL  10 219 6 887 64.92 3 909 11.88 422 23.21
1Support to distribution and exhibition.
Source: International Federation of Film Producers Association (FIAPF), "Film Funds 1994" (Paris:
April 1996), as found in OECD, Policy and Regulatory Issues for Network Based Content Services).S/C/W/40
Page 17
Table 9:  Summary of Specific Commitments - Audiovisual Services
Countries 02.D.A 02.D.B 02.D.C 02.D.D 02.D.E 02.D.F TOTAL
Central African
Rep.XX X X X X 6
Dominican
RepublicXX 2
El Salvador X X 2
Gambia X X X X 4
Hong Kong X X X 3
India X 1
Israel X  1
Japan X X X 3
Kenya X X 2
Korea RP X X 2
Lesotho X X X X 4
Malaysia X X 2
Mexico X X 2
New Zealand X X X X X 5
Nicaragua X X 2
Panama X X X X 4
Singapore X X 2
Thailand X X 2
USA X X X X X X 6
Total 17 10 7 8 7 6 55
Legend:
02.D.a. Motion Picture and Video Tape Production and Distribution
02.D.b. Motion Picture Projection Service02.D.c. Radio and Television Services
02.D.d. Radio and Television Transmission Services
02.D.e. Sound Recording
02.D.f. OtherS/C/W/40
Page 18
Table 10:  No. of Countries by Mode of Supply
Mode of Supply Market Access National Treatment
Full Part No Full Part No
1) Cross-border Supply 4 10 5 4 9 6
21% 53% 26% 21% 47% 32%
2) Consumption Abroad 5 12 2 5 10 4
26% 63% 11% 26% 53% 21%
3) Commercial Presence 3 15 1 5 14 0
16% 79% 5% 26% 74% 0%
4) Presence of Natural
Persons0 1 721 1 44
0% 89% 11% 5% 74% 21%S/C/W/40
Page 19Table 11:  Percentage by Sector and Mode of Supply - Audiovisual Services (Percentages in each activity)
I. Market Access Cross-border Consumption abroad Commercial presence Natural persons
Full Partial No Full Partial No Full Partial No Full Partial No
Motion Picture and Video Tape
Production and Distribution29 47 24 29 59 12 18 65 18 0 88 12
Motion Picture Projection Service 40 30 30 60 30 10 30 60 10 0 90 10
Radio and Television Services 43 29 29 43 43 14 14 71 14 0 86 14
Radio and Television Transmission
Services25 50 25 38 50 13 0 75 25 0 75 25
Sound Recording 29 57 14 43 57 0 29 57 14 0 71 29
Other 0 67 33 17 83 0 0 83 17 0 67 33
II. National Treatment Cross-border Consumption abroad Commercial presence Natural persons
Full Partial No Full Partial No Full Partial No Full Partial No
Motion Picture and Video Tape
Production and Distribution29 35 35 29 47 24 29 59 12 6 71 24
Motion Picture Projection Service 50 20 30 60 20 20 70 30 0 10 70 20
Radio and Television Services 71 14 14 57 29 14 57 43 0 14 71 14
Radio and Television Transmission
Services50 38 13 50 38 13 25 63 13 13 63 25
Sound Recording 57 29 14 57 29 14 57 43 0 14 43 43
Other 33 33 33 33 50 17 33 67 0 17  50 33
Note: Percentages may not add up to 100 due to rounding .
Basis of total is listed sectors.
__________