Strengthening International Circulation Capacity of Films from Small Ecosystems
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The international competitiveness of Europe’s audiovisual sector depends not only on production volume, but on the ability of works to circulate across borders and to international markets. For small European ecosystems, challenges related to scale (small audience bases, constrained box office potential, modest production volumes, and comparatively small distribution companies) restrict bargaining power, risk capacity, and participation in global sales markets and transnational distribution networks.
This policy brief outlines policy gaps affecting distribution capacity in the CresCine ecosystems (Denmark, Ireland, Portugal, Croatia, Estonia, Lithuania, and Flanders in Belgium) and proposes policy directions for strengthening competitiveness. The brief is based on the report “Building Distribution Capacity and Improving International Circulation for Films from CresCine Small Markets” [link to be included]. The report draws on a combination of document analysis and semi-structured interviews. [link to methodology to be included].
Structural Constraint: Smallness in Distribution Networks
In global sales markets and transnational distribution networks, bargaining power is closely related to scale. Small markets face three cumulative constraints in this domain, among other contributing factors:
● Limited domestic box office.
● Lower capitalisation of independent distributors.
● Reduced ability to absorb marketing and acquisition risk.
The interviews reveal a distribution ecosystem that is more selective and more polarised than in the pre-pandemic period. Acquisition decisions are increasingly title-specific rather than portfolio-based, reducing the space for cross-subsidisation of costs within packages. Festival recognition can function as an entry ticket into global markets, yet it by no means guarantees downstream sales.
Interviews with European film distributors and experts in international sales and promotion confirm that acquisition strategies are increasingly selective and title-driven. Festival recognition can provide initial access but no longer guarantees downstream sales. In general, mid-budget European films face shrinking screen space and shorter exploitation cycles.
In the interviews, distributors emphasise that the market has become increasingly more selective. “You don’t buy under packages, and you don’t sell under packages,” argues a distributor, noting that both buyers and audiences are increasingly “cherry picking.” Festival “buzz” can help “open some doors,” especially after a high-profile festival launch, but he underlines that it is not a guarantee. In his view, if a title was not picked up by “global buyers” or “multinational buyers,” this can also be read by the market as a negative signal.
These developments raise a fundamental strategic question for policymakers: are existing national regulatory frameworks and funding instruments adequately aligned with current market realities to secure meaningful and durable cross-border circulation of works originating in small CresCine ecosystems?
Key Policy Gaps Identified
Festival visibility without structural export capacity
Most CresCine markets prioritise:
● Festival participation support
● National stands at Cannes and EFM
These instruments improve symbolic visibility but do not systematically build reinvestable export capacity.
Weak distributor-centered support and support for international sales & circulation
Some CresCine ecosystems face the challenge of fragmented distribution sectors and limited distributor capacity. Independent distributors face structural constraints, including rising marketing costs, limited bargaining power in a globalized film industry, and increasing operational risks.
Across most CresCine ecosystems, distributors are rarely treated as primary beneficiaries of public support. Given that distributors carry marketing risk and negotiate access to platforms and screens, weak distributor capitalisation directly reduces cross-border circulation potential.
The analysis of policy support provided by national screen agencies shows that across the CresCine small ecosystems, support for international sales and circulation typically extends little beyond festival-related promotion measures.
France offers a clear example through the National Centre for Cinema and the Moving Image (CNC) and its Fund for the Promotion of Cinematographic Works Abroad, This automatic scheme credits France-based international sales agents/exporters based on a film’s theatrical admissions abroad, festival circulation, and SVOD availability across at least two foreign territories (with higher amounts for wider multi-territory and multi-platform availability), and it can then be reinvested in international MGs (rights acquisition) and/or international promotion spending.
The challenge of films with limited theatrical prospects
The growth of on-demand viewing also raises the policy question of whether films with limited theatrical prospects should be allowed to move more quickly from theatrical release to digital platforms to reach broader audiences.
Denmark’s “low-selling titles” measure offers a promising example of performance-based flexibility that aligns with audience behaviour and reduces opportunity costs from holdbacks. The Danish Film Agreement 2024–27 introduced a performance-sensitive approach to windowing, allowing films with lower box office results to move more rapidly to digital platforms and television. This policy approach moves away from traditional fixed exclusivity periods by encouraging earlier online availability for titles with limited theatrical prospects, aiming to enhance audience reach for films that struggle commercially. The underlying rationale may be relevant for policymakers in other small territories seeking to extend film lifecycles.
Investment obligations for global streamers do not necessarily support circulation
Several CresCine markets, including Croatia, Flanders, Denmark, and Portugal, have implemented investment obligations for streamers such as Prime Video and Netflix under Article 13(2) AVMSD. Ireland, Estonia, and Lithuania have not yet adopted such policy measures. The remaining EU Member States without investment obligations for streaming services are small audiovisual markets, such as Cyprus, Malta, and Bulgaria.
While these measures may increase production and acquisition financing, evidence from the report “Strengthening International Circulation Capacity in Small CresCine ecosystems” suggests:
● Investments may remain domestically confined.
● Cross-border availability is not systematically incentivised.
If obligations do not incorporate circulation-oriented criteria, smaller markets risk remaining without proportional benefits in international reach. This raises broader EU questions about how investment obligations contribute to competitiveness and European cultural diversity beyond national borders.
Netflix for example licensed Croatian films under its investment obligations in Croatia, but these titles are largely confined to the domestic catalogue and are not made available in other territories. This confinement indicates that such investments may have a limited impact on international circulation and transnational visibility. In 2023, Netflix included 12 contemporary Croatian films in its catalogue, all from the distributor Blitz. The first film offered by Netflix, The Diary of Paulina P., by Neven Hitrec, is available only in the Croatian catalogue. Also, Goran Dukić’s musical “Do Pigs Go to Heaven?” can be watched only in the global streamers’ catalogue in Croatia.
Still, come of the interviewed Croatian policymakers emphasise that investment obligations, including when implemented through the licensing of domestic titles, can deliver cultural value by ensuring that Croatian younger audiences have access to nationally relevant films within widely used streaming catalogues such as Netflix.
5 Policy Pathways
Based on the analysis, there are five forward-looking policy pathways for CresCine ecosystems:
lifecycle optimisation;
flexible windowing for films with limited theatrical prospects;
strengthening the bargaining power of distributors through capacity building;
linking investment obligations to circulation outcomes; and 5) multi-window coordination as a competitiveness tool.
1. Circulation capacity as a competitiveness pillar
A first strategic scenario would involve recalibrating policy frameworks to treat circulation capacity or lifecycle optimisation as a core competitiveness pillar. This implies greater emphasis on distribution expertise, international sales positioning, and multi-window exploitation strategies. The objective is not to reduce production support, but to align it more closely with downstream market outcomes and international reach.
2. Flexible windowing for films with limited theatrical prospects
As theatrical runs shorten and on-demand viewing expands, uniform windowing practices may reduce the ability of smaller titles to capture audiences across platforms. A second scenario envisions more flexible and performance-sensitive release strategies, allowing films with limited theatrical prospects to move more quickly across windows. The aim is to reduce opportunity costs and extend audience access without undermining the strategic value of cinema.
3. Strengthening distributors and sales agents’ bargaining power through capacity building
Given their limited scale, small-market distributors and sales agents often operate with constrained risk-bearing capacity. A third scenario focuses on enhancing the structural position of distributors within transnational networks. This would involve reinforcing professional capacity, cross-border collaboration, and sustained market presence. The goal is to improve negotiating leverage in increasingly selective and concentrated global distribution networks.
4. Linking investment obligations to circulation outcomes
Investment obligations for streaming services represent an important financing mechanism, but in small markets, they risk remaining confined to domestic catalogue presence.
A fourth scenario would place greater emphasis on how such obligations contribute to cross-border circulation. The objective is to ensure that regulatory frameworks (including quota and prominence policies) not only stimulate production but also enhance circulation and market access. Overall, there are many European non-national films available on VOD, due to quotas, but they underperform in terms of circulation and viewing.
5. Multi-window coordinated release strategies
In a fragmented viewing environment, films require coordinated release strategies across cinema, transactional, subscription, and advertising-based windows. A fifth scenario outlines the importance of integrated planning and discoverability strategies that extend the lifecycle of titles beyond their initial theatrical exposure. This approach recognises that circulation outcomes depend on strategic sequencing.
