Digital Single Market – Political or consumer driven?


Background and EC Rationale

On 6 May last year the European Commission revealed proposals to end ‘unjustified geo-blocking’ and a modernisation to copyright law. The creation of such a ‘digital single market’ is designed to result in a more harmonised copyright regime which provides incentives to create and invest, while allowing transmission and consumption of content across borders, building on Europe’s rich cultural diversity. A total of 16 initiatives for the Digital Single Market (DSM) strategy were unveiled by Commissioner Andrus Ansip, Vice President of the DSM, and Gunther Oettinger, Commissioner for the Digital Economy and Society. The EC’s DSM strategy sets out three pillars for the preparations of the policy unveiled:

  • Better access for consumers and business to digital goods, including the tackling of geo-blocking and modernising copyright law;

  • Shaping the environment for digital networks and services to flourish;

  • Creating a European Digital Economy and Society with long term growth potential.

The Commission stressed that it did not want to change the principle of territoriality and “and understands it is important for the creative sector, especially for the film industry”. It added. “The Commission aims to facilitate the licensing of rights and ensure a better access in the digital world. This means, for example, that if a film is available on a video-on demand service in an EU country, Europeans outside the country can also pay to see it. This is not about opening access to all content for free. It is about a win-win situation for creators and users; about nurturing cultural diversity in the digital age”.

Political Motivation?

It can be argued that the badge of DSM exists at least in part as an excuse to justify the EU Commission’s competence (over that of member state governments) to take on the issues discussed – “single market” issues being clearly in the Commission’s competence. There is a view that the Commission wishes to persuade Europe’s citizens that it is delivering results for them, in order to stem the rise of anti-Europe parties in many EU Member States.

Further, Stan McCoy, President and Managing Director, Motion Picture Association EMEA stated he thought “this is the leadership of the European Commission working to prove they are relevant, capable and even visionary. They are unable to save every migrant, wrest back Crimea, or find jobs for all young people in Greece and Spain, but they can offer a promising digital future!”

Industry Resistance

Following issuance of the proposals an alliance of 11 international organisations from the fields of production, distribution, exhibition, publishing and sports rights issued a statement in reaction to EC’s strategy. The signatories – ranging from the FIAPF producers’ association and the exhibitors’ organisation UNIC through Independent Film & Television Alliance (IFTA) and the MPAA to the International Video Federation (IVF) and Germany’s Bundesliga – indicated that they were “extremely concerned” that some of the Commission’s policy options could “negatively impact the sustainability of the film and audio-visual sector, and severely decrease the level of incentives for the production, distribution and dissemination of high quality films and audio-visual works across Europe”. Moreover, the alliance said that it was troubled by the lack of evidence provided by the Commission to demonstrate that the proposed changes will add quality jobs and growth in Europe.

Whilst appreciating that the Commission had ‘in part’ acknowledged the concerns of the audio-visual sector by stating that it intends to respect ‘the value of rights in the audio-visual sector’, they pointed out that ‘delivering on that promise would require significant changes in the Commission’s approach. In particular, mandating any form of cross-border access by EU law in the audio-visual sector would not create or increase value, but more likely lead to its transfer to the benefit of a few big global Internet platforms, which will ultimately reduce consumer choice and cultural diversity” the alliance said.

IFTA President and CEO Jean M. Prewitt said that her organisation was deeply concerned that “the Commission persists in addressing online rights in isolation from the rest of the AV value chain including theatrical distribution. This gap reveals a fundamental misunderstanding of the needs of creators and European distributors to create a financing and marketing strategy that integrates all types of distribution platforms within a territory in an effort to reach the widest audience”.

The broadcasters’ case against DSM is that it would have unintended consequences for high-value content in sport, film and TV drama and entertainment:

  • Owners selling on a pan-European basis would find that smaller national platforms would be unable to pay;

  • Online rights would be snapped up by large international players such as Netflix or large mobile or cable companies;

  • Content would simply be withheld from online distribution until exclusive, lucrative national broadcast windows have expired – resulting in less content and less choice than there is now;

  • There would be a risk that smaller markets and minority languages could be marginalised.

All of these factors lead to the overall problem of the difficulty of financing big shows across different territories.

Can’t Stop the Future

There are some genuine concerns about the proposals but digital disruption is very well established and is only going to accelerate and increase in scale and pace over the years ahead. Digital rights holders have been impacted massively by the digital changes over the last 15 years and the process has been very difficult and challenging but new opportunities have been opened up and new things created that simply weren’t in existence before. We therefore need to be careful not try and prevent progress but being mindful of the motives of the EC and ensuring the decisions are data based rather than ideological, and ensuring proposals genuinely serve consumers and creators.

#Market #digital #political #industry #copyrightlaw #geoblocking #digitalsinglemarket

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