One of the most senior European Commission VPs this week gave a glimpse of how dramatic its new ideas are for a digital single market for Europe, which could mean tearing up the rulebook on global content distribution.
The speech came from the digital single market commissioner Andrus Ansip, speaking to a European Voice event on Creating Europe’s Digital Highways.
While most commentators have repeated words he said, “an end to geo-blocking” the true extent of that idea really hasn’t been thrashed out. When combined with an end to roaming charges, also called for in the same speech, it will mean that OTT video services can go Europe-wide to any device.
Initially, this is being talked about as a way of allowing travelers from one country in Europe to watch their own TV when they are in another. But it goes way beyond that. OTT delivery can be pushed across a border and can be translated or given subtitles for all of the major European languages.
Just picture something like Game of Thrones. Right now it is being simulcast over 170 countries, and that means 170 different territorial agreements with different broadcasters.
Right now this makes Sky rich in the UK, and people sign up for Sky or Now TV, just to get it. In Belgium that is Telenet in Flemish and Betv in French, in France it is Orange, in Germany and Italy it is Sky once again, and DTS in Spain. In every country the consumer has to break ties with existing pay TV partners, and either switch to the company that has the franchise or buy a second service. It also means that HBO leaves lots of money on the table. There are many, many families who will miss out on it purely because they cannot afford to switch, and these may well wait for the DVD, although that market is going away fast.
Now imagine if you could shop all over Europe for the cheapest option for HBO Now or HBO GO or if it was either on multiple ISPs, not just one in your country. HBO could give a Europe-wide multi-country license to anyone it likes, knowing that it would reach a far larger audience. Perhaps there might be less opportunity for upfront guarantees, but top content is likely to earn a much further reach.
Giving a popular program exclusively to one provider across Europe would make no sense and if it becomes illegal to geo-fence the content, then giving it to multiple providers who cannot be fenced in, means having multiple routes to each and every market.
Right now, content owners, typically Hollywood, prefer to divide and conquer Europe in steps, through different partners so that the tail can never wag the dog, so to speak. A geo-fencing law would put an end to that, with European partners unable to comply with content owners’ wishes, and having to simplify the entire rights regime in Europe.
In 2003 Faultline tried to imagine what an unregulated content market might be like, positing that eventually content providers could push their content out to an almost infinite number of routes to market, through a series of automated content exchanges, and as public opinion created content bandwagons, lifted by social media commentary, individual pieces of content would surge in immediate “flash flood” mentality and create content millionaires overnight.
That vision was a very purist form of a market and we know from long and painful experience that when a content owner has one success, they will pour most of that cash into the promotion to create another hit and another, to build a constant stream of revenue, irrespective of how good the content is. That’s how great TV channels force cable companies to take bad TV channels and include them into the basic TV bundle, a practice that creates more advertising inventory and so more revenue for each content provider, but foists poor, cheap content onto the unsuspecting consumer.
But it is a very different thing forcing an individual channel distributor like a cable company, to take weaker channels in order to continue with the supply of the good channels, compared to trying to put poorer content out on the open internet.
We’re not sure that the end-game is good for Europe if the European Commission perspective wins out, especially if it also gets its way with the death of roaming charges and a strong network neutrality ruling.
Would companies like Liberty Global need to continue buying every cable company in sight, in order to reach a wider audience? Well, no. If they wanted broadband revenues they would have to continue to buy into new territories, as would Vodafone, but wider content delivery would be assured. A pay TV company really could be set up by someone with imagination and access to the cloud. A whole new raft of companies might appear as Europe wide enablers – offering CDN connectivity, cloud encoding and transcoding, just in time packaging, UI design, and service testing which could serve the wider European internet.
Anyway, this is how the European Commission goes about its work. Every speech moves on an inch or two as it articulates the same vision it is pushing towards the European Parliament, until there are votes on it and it gets its way (usually).
That vision is due to be complete for the Digital Single Market and will be presented in May. Three strong components, new legislation on Net Neutrality, an ending to roaming charges and intra-European geo-fencing, will form its basis. It also wants better spectrum harmonization and a chance to bring spectrum to market sooner, and may eventually realize that it would be better to bring this to WiFi, and release more unregulated spectrum.
Ansip said, “We need to abolish roaming charges as soon as possible.
We need strong net neutrality rules and more coordination on spectrum.” He added “we need common rules for net neutrality. Then, we need an open internet for consumers. No blocking or throttling.”
He also claimed “95% of people complained that they had been geo-blocked and one in five Europeans sitting at home wants to access content from other EU countries; – more than a quarter want to access content from their own country when they are abroad. Cross-border e-commerce should be as seamless and easy as national e-commerce.”
If Ansip gets his way, there will be far less internet providers and far more content providers operating across Europe, with huge opportunities for the video ecosystem.