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Towards an even more fragmented European audiovisual market?

· May 24, 2016

Spring has come and the sun is (sometimes) shining, so you may have been busy hiking among the bluebells of Hallerbos and not realised that the European Commission will release its proposal for new audiovisual rules “fit for purpose in the digital age” on May 25.

We could spend months discussing whether a reform of these recent rules was truly necessary – given how successful and plural Europe’s media already is – and if so, what should this reform entail. Viewpoints differ indeed strongly between industry players and among Member States. My own country, France, is certainly making its arguments on “cultural exception” heard! Therefore, let’s focus on whether the issues likely to be covered by this reform – financing obligations, quotas, minor protection, scope extension – would fit within the Digital Single Market.

First, the very existence of this single market rests on the Country of Origin principle, i.e. the fact that a company only has to apply the law of its Member State of establishment when providing a service in other Member States. It is crucial for this principle to be maintained in its entirety, as any exception would weaken the single market and force all cross-border service providers to deal with 28 national laws… and to contribute to all financing obligations’ systems at the same time. In other words, this would create a situation very far from a “level playing field” and at odds with the aims of the Digital Single Market.

Introducing quotas of European works for VOD services would also be a counter-productive measure for the development of the VOD market in Europe. Rigid numerical quotas may indeed become barriers to entry for new players and would incite VOD services to invest in quantity and not quality content. Such a measure would not support the European creators actually creating work likely to be watched across the EU. It is also unnecessary, as VOD services are not constrained by programming hours. As a result, interested users may watch European content at any time. Investments in European works should be driven by consumer demand – and it’s already working, as VOD providers are investing strongly in European content.

Introducing some flexibility for commercial rules would be legitimate – especially on sponsorship and product placement, as they constitute important means of financing for audiovisual media services across the EU. However, we would advise some caution regarding additional provisions on minor protection for VOD services. Would additional regulation be more effective than kids profiles, parental controls and PIN codes implemented by stakeholders?

Last but not least, and as we argued on DisCo last year, the European audiovisual rules have been drafted for TV broadcasters and VOD services – and not for video sharing platforms. Internet is not TV, and those platforms are already heavily regulated at the EU level through the e-commerce directive, consumer protection regulations and unfair commercial practices rules. Any issue should therefore be first addressed through those regulations, so as to avoid any additional fragmentation to the Digital Single Market.

When we look at today’s European TV and online video markets, it is clear that they are flourishing. However, the online video market is not yet mature and so the Commission should be careful not to hinder its growth.

European Union

DisCo is dedicated to examining technology and policy at a global scale.  Developments in the European Union play a considerable role in shaping both European and global technology markets.  EU regulations related to copyright, competition, privacy, innovation, and trade all affect the international development of technology and tech markets.