Citizens of European Union (EU) member states will soon be able to access their OTT video subscriptions in any country within the Union, thanks to a content portability agreement reached between the European Parliament and European Commission (EC) this week, as part of its Digital Single Market modernization.
Broadcasters and media firms who hold premium content rights were up in arms about the proposal several months ago, citing that it would weaken trade deals for content rights on a country by country basis. However, the European Broadcasting Union (EBU) then approved the EC’s proposal changes in December, which now state that paid online TV services will have to adhere to the rules, while free services such as catch-up portals offered by broadcasters, will have the choice of whether or not to opt into content portability.
This is another significant pro-consumer move from the EC, unless you live in the Netherlands of course where the EC has been on a mission to crush competition in the local market. But this week’s ruling adds to similar positive consumer regulations such as the scrapping of roaming charges, set to be enforced in June this year, as well as the Commission’s stance on net neutrality and recent €500 million investment pledge for broadband infrastructure build out.
The main beneficiaries of such a cross-border content strategy will be consumers with multiple properties across Europe, who will now be encouraged to cut off their assorted pay TV packages. Meanwhile the major broadcasters will win big, taking advantage of cheaper content deals across borders and rights will no longer be required for online offerings on home soil, as well as a much wider consumer reach.
The losers here will be the content creators. Another European broadcasting body, the Association of Commercial Television (ACT), has also piped up with criticism about how it will lessen the financial value of content. The ACT claims that the move will result in less homegrown European content, leading to initial losses of €9.3 billion ($9.94 billion) a year.
Backers of the Digital Single Market argue that European content should not be confined within certain borders, and believe it will lead to job creation and positive economic growth.
Service providers can now make their online offerings available on the same range of devices for which they can currently be accessed in their native regions, and will be able to verify traveling subscriber details via payment details or proof of internet contract.
The impact on the big pure play OTT services like Netflix and Amazon will be minimal, due to these platforms already being widely available across the EU member states, but now they will be able to bolster their content catalogs in regions of Eastern Europe, which have very limited programming compared to the West. Netflix noted that the Digital Single Market could accelerate the company’s target to shift to an even share of original and third-party titles in its offering.
The EC says its content portability strategy aims to allow operators to avoid discussing licensing terms with individual rights holders, and therefore make it easier to provide content packages which originate in other member states. All 28 member states (Brexit pending) have been urged to put together tailor made teams for handling licensing negotiations.
The new rules will be thrown into action at the start of 2018, following official approval and adoption by the EU Council.
In July, the European Commission eliminated the key stumbling block to create a Europe-wide content major, by eliminating key language contained in contracts of top US studios, starting with Paramount. Hollywood studios have always limited distribution to a local country inside the EU, believing they can get more money by licensing movies exclusively in each territory.
This ruling by the EC against Paramount was a clear driver behind Sky launching a bouquet of foreign language packages recently, taking advantage of a loop hole in which geo-fencing is not permitted inside the EU, meaning that holding the language rights to programs allows the language rights holder to distribute the content anywhere in the EU, regardless of the content rights holder’s objections.
VP of the Digital Single Market, Andrus Ansip, said: “Today’s agreement will bring concrete benefits to Europeans. People who have subscribed to their favorite series, music and sports events at home will be able to enjoy them when they travel in Europe. This is a new important step in breaking down barriers in the Digital Single Market. I warmly thank the European Parliament rapporteur Jean-Marie Cavada, the Maltese Presidency of the Council of the EU and all those involved in reaching today’s compromise. Agreements are now needed on our other proposals to modernize EU copyright rules and ensure a wider access to creative content across borders. I count on the European Parliament and Member States to make it happen.”
EU Commissioner Tibor Navracsics, commented: “Digital technologies provide new opportunities to enjoy cultural content on the go, and people are eager to use them. Today’s agreement opens new doors to citizens while at the same time protecting creators and those investing in the production of cultural or sport content. This balanced solution is an encouraging sign for our efforts to build a Digital Single Market that offers new opportunities for both creators and consumers.”