Posts Tagged Country of origin
One consultation down, just a couple more to go. On 30th September the consultation period on the Audiovisual Media Services (AVMS) Directive closed. This is one review that the Commission is trying to fast-track with a proposal announced for the first quarter of 2016.
The priorities in the consultation for SAA (summary here) are the promotion of European works, ensuring fair competition between OTT services wherever they are established, keeping the scope of the Directive fit for purpose and that advertising rules continue to protect the moral rights of audiovisual authors.
The section on the promotion of European works strikes us an obvious tool to achieve the Commission’s objective of improved circulation of European works, particularly online. Online is exactly where we feel the current version of the directive doesn’t do enough. Covered by Article 13 of the Directive, the current text leaves Member States free to choose how to implement it, with just a list of 3 example methods of how to promote European works given. Unfortunately the reality is that this article has been poorly implemented (or even just copied and pasted) with no monitoring systems in place. This leaves us with situations like on Netflix where you have to look for European works (or even national works) under the rubric “Foreign Films”.
Not only are these Member States missing a trick by not encouraging promotion of European works, but when combined with the country of origin principle, they are also creating unfair competition between services in markets where stricter rules apply.
SAA would like to see Article 13 strengthened across Europe and the opportunity for forum shopping limited to a minimum. If there is no desire to strengthen Article 13 among the member states then maybe the country of origin needs to be refined for OTT services so that all operators in a market play by the same rules.
Our second main point is on the scope of the Directive. Services like YouTube or Dailymotion aren’t considered as audiovisual media services. These services have ‘channels’, ‘networks’ and paid for subscriptions, they have autoplaying playlists of content for ‘lean back’ viewing. The question of editorialisation has always been key, but there can be less and less doubt that, whether by human or algorithm, these services editorialise, promote sponsored content and suggest content. These services need to be brought into the scope of the Directive and the articulation of the AVMS Directive and the eCommerce Directive improved.
Finally, on the issue of advertising, we would like to see calls for the weakening of the requirements for linear services being resisted. In contrast, the requirements for non-linear services need to be strengthened as advertising techniques develop online that can blur the line between creative works and advertising.
The Commission will now go and look through the responses it has received and we will get on with answering the other consultations on the table. The European Parliament will undoubtedly express its opinion in its report on the Digital Single Market which addresses the AVMS Directive among many other issues. The Member States are also keen to see action here so I don’t think it will be too long before we are writing about the Directive again.
Is the Audiovisual Media Services Directive still fit for purpose? This was the very important debate launched by the Italian Presidency of the Council at a conference on the audiovisual market and regulation on 23 and 24 October in Rome.
While Italy has not yet been hit by Netflix, the impact of this global distributor of audiovisual works was on everybody’s mind. First established in Luxembourg and then moved to the Netherlands, Netflix entered the European market from the Nordic countries and the UK and then deployed itself in France, Germany and Belgium last September. While Netflix’ activity in the Nordic countries and in the UK did not create local political turmoil, its arrival in the three other countries has triggered high concerns and hot debates. Why? The answer is very simple: Netflix is hitting the audiovisual policies of the latter group but not the former. You could rightly ask: but are these policies not harmonized and the same for all EU countries due to the AVMS Directive?
The answer is no: the AVMS Directive has not fully harmonized audiovisual policies, in particular in the field of the promotion of European works.
Netflix, like any other EU-established, online distributor of audiovisual works with editorial control of its service, is covered by the AVMS Directive. The main interest of the AVMS Directive for these services is the country of origin principle. It allows them to provide their services across Europe while only respecting the rules of the country where they are established. Country-of-origin is fair when the country of establishment is a real connecting factor which reflects the place of the main activities of an economic operator – as is the case for most broadcasters. But for online operators, in particular global ones from outside Europe, their country of establishment does not really reflect the center of their activities but more a place they choose for fiscal reasons in total disconnection with the countries they target for their activity.
The possible adverse effects of country-of-origin can be neutralized when rules are harmonized. It eliminates the interest for economic operators to establish themselves in the country with the least stringent rules. The problem is that the AVMS rules on the promotion of European works by on-demand services are not harmonized. Article 13 only gives examples of ways to promote European works: prominence (which can be implemented in many ways), shares in catalogues, and financial contributions to sector support funds. The countries who make use of these options (in particular by imposing financial contributions) as well as the national competitors to these international services, very much suffer from services targeting their market while being established in a Member State with no such obligation.
The Member States with audiovisual policies which request all operators who distribute audiovisual works to contribute to the economy and cultural diversity of the sector started their campaign for a revision of the European framework last week in Rome. They will take advantage of the refit exercise of the AVMS Directive next year to pressure the Commission to allow derogations to the country of origin principle so that they can impose obligations on all operators active in their market. As the European Commission is less enthusiastic to reform the AVMS Directive than the Copyright Directive, it’s too early to say if there will be AVMS 2 – the sequel, but this is definitely one to be continued…