European Commission announcement on its strategy for a digital single market

On 6 May 2015 the European Commission published its much-anticipated communication on its digital single market strategy (DSM).

In a nutshell the main points of immediate relevance for film and other audiovisual industries are, as expected, that the Commission wants to overhaul the copyright regime and to examine the Audiovisual Media Services Directive (AVMS) to assess its fitness for purpose in a digital era.

On copyright, the Commission states that it “will make legislative proposals before the end of 2015 to reduce the differences between national copyright regimes and allow for wider online access to works by users across the EU, including through further harmonisation measures. The proposals will include:

(i) portability of legally acquired content
(ii) ensuring cross-border access to legally purchased online services while respecting the value of rights in the audiovisual sector
(iii) greater legal certainty for the cross-border use of content for specific purposes (e.g. research, education, text and data mining, etc.) through harmonised exceptions
(iv) clarifying the rules on the activities of intermediaries in relation to copyright-protected content and, in 2016
(v) modernising enforcement of intellectual property rights, focusing on commercial-scale infringements (the ‘follow the money’ approach) as well as its cross-border applicability.”

On AVMS the Commission says it will “review the Audiovisual Media Services Directive with a focus on its scope and on the nature of the rules applicable to all market players, in particular measures for the promotion of European works, and the rules on protection of minors and advertising rules.” The current scope of AVMS is traditional TV and on demand audiovisual media services, although the obligations on the latter are in some respects lower.

The BFI has been fully engaged with the UK Government and at a European level with its counterparts in other member states through the EFADs group (European Film Agency Directors). The EFADs have been speaking directly to the Commission to put forward its arguments at the highest level. On 6 May the EFADs issued a joint public response to the publication of the strategy and this is pasted below, along with a statement prepared by the BFI dated 9 March.

Over the coming months and continuing into 2016 the BFI will be working in partnership with EFADs and all our stakeholders to examine the proposals in full detail and seeking to help steer the Commission towards outcomes which are acceptable to the industry and which allow market players the freedom to continue delivering broader access to audiences across Europe.

At the UK level we chair a cross-industry working group which meets to discuss the DSM strategy proposals and what steps are needed. We will be engaging with civil servants in relevant Government departments who are developing the UK’s position and we will of course be active in speaking to the new Ministers and their political advisors once they are in place following the General Election.

EFAD statement dated 6 May 2015:

Digital single market strategy: the EFADs welcome the overall strategy but remain vigilant.

The European Film Agencies Directors’ Association (EFADs) welcomes the publication of the digital single market strategy, an action plan from the European Commission to seize opportunities and deal with the challenges of the digital age.

“Like the European Commission, the EFADs believe that the digital era offers huge opportunities for film which the market is already seizing to the benefit of audiences across the whole of Europe. The EFADs are strongly committed to increasing access for audiences to the widest possible range of films and fully support the objective to improve the online distribution and access of EU works, both within the EU and beyond, but this should not come at the expense of the sustainability of the film industry. The industry remains concerned that any plans to prevent geoblocking will undermine territorial licensing with damaging consequences for the industry, for audiences and cultural diversity”, says Peter Dinges, President of the Association.

Many of the messages from the representatives of the audiovisual and cinema sector as well as Member States seem to have been heard. The EFADs are pleased to see that, on the whole, the Commission takes a more moderate and balanced approach on copyright reform, recognising the need to ensure that the financing of films, authors’ rights and cultural diversity are not undermined.

The EFADs also welcome the emphasis on enforcement issues. It is necessary to take more ambitious actions at EU level to fight illegal content on the internet. The EFADs strongly support follow the money initiatives as well as plans to require from technical intermediaries greater responsibility and due diligence.

Regarding the proposed revision of the Audiovisual and Media Services Directive, the EFADs want to see measures that will ensure all operators are treated equally in terms of financing and promotion of European works and that there is proper promotion of European works. We also welcome the announcement of an assessment of the role and responsibilities of online platforms. The EFADs would like to address how these platforms contribute to the creation, access and promotion of European works.

However, the EFADs remain concerned about potential implications of the Commission’s plans. While the EFADs support market-led initiatives designed to enable portability of rights, any prevention of geo-blocking would undermine territorial licensing and have significant negative impacts on:

  • theatrical and online distribution of films : distributors will not invest in promotion and marketing activities in a country for films that are easily available online in another one
  • financing of films: presales will decrease as exclusive exploitation in a territory will not be guaranteed anymore
  • cultural diversity: independent films from diverse European sources and languages that require more investments for distribution and promotion will become less visible and less promoted in VoD platforms.

In this respect, the EFADs are reassured to see the Commission recognising that “The financing of the audiovisual sector widely relies on a system based on territorial exclusivity, which as such cannot be considered as unjustified geo-blocking”.

The EFADs will continue to play an active role in the dialogue with the European institutions and all interested partners in the sector.

BFI holding statement dated 9 March 2015:

The UK film industry is committed to increasing access for audiences to the widest possible range of films and going with the grain of changing consumer behaviour in ways which will benefit the sector. The digital era offers huge opportunities which the market is already seizing to the real benefit of consumers across the whole of Europe.

But the industry is seriously concerned that some of the public statements made by the European Commission about reforming the digital single market would risk undermining the existing business model for film in the UK with damaging consequences for the industry, for audiences and for cultural diversity. The BFI as lead agency for film shares these concerns.

The BFI is working together with the UK Government and other film agencies in Europe to ensure that wider consumer access does not come at the expense of the sustainability of the film industry.

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