EC U-turns on geo-blocking, driving stake into OTT heart

The abolishment of geo-blocking in European Union (EU) countries this week has pro-consumer implications in areas such as online shopping, roaming charges and the use of credit cards abroad, but the news for the OTT video industry isn’t so rosy – as the EU’s law makers have U-turned on including streaming services in these new regulations.

This goes against everything the European Parliament said in its draft law proposal back in May, which outlined scrapping the act of offering an online content service in one EU country and that country alone. This ruling was set to benefit the OTT video industry across Europe while striking a blow to content pirates, but the European Parliament, European Commission and European Council have all crumbled under pressure from broadcasters and studios, which argued that the removal of geo-blocking will weaken the financial value of content. What they meant was it would weaken the financial value of their existing old broadcast businesses.

Instead, the EC has decided to do away with geo-blocking for outlets of news and current affairs rather than the wider streaming market, in what is a technologically backwards step. We’re not sure where this will leave services such as Sky in Spain, which we understand relied on the prior ruling.

The EC has not addressed its sudden change of heart directly, instead focusing on how the consumer retail business will benefit. However, trade body Cable Europe was quick to voice its opposition, as the decision means that the internet and mobile platforms have been excluded from the retransmission framework – even affecting catch-up TV on linear services. Cable Europe is referring specifically to the Copyright Regulation (also called SatCab), which applies rules on the exercise of copyright and related rights applicable to online transmissions of broadcasters, and the retransmissions of television and radio programs.

The clearing of rights is complex, according to Cable Europe, and its dissatisfaction on the ruling is because the removal of geo-blocking had the potential to simplify the process and therefore improve the availability of content in a given Member State.

Cable Europe MD Caroline van Weede said, “This is a deeply disappointing outcome. The Parliament has done consumers a disservice by failing to be more progressive. The current licensing structure for cable retransmission of linear TV programs should also apply to mobile and the internet. The exclusion of time-shifted services from the EP text is another missed opportunity. Conversely, a technology neutral approach would have served consumers well, supporting investment in new services and the availability of content anytime, anyplace, anywhere. This decision is out of step both with today’s environment, and with our aspirations to serve the digital consumer of tomorrow.”

Ridding streaming services of geo-blocking may have upset the US studios, but those in Hollywood have always limited distribution to a local country inside the EU, believing they can get more money by licensing movies exclusively in each territory.

Meanwhile, The Association of Commercial Television in Europe’s (ACT) newly appointed Director of Policy and Legal Affairs, Agnieszka Horak, described the vote as “definitely a step in the right direction. It acknowledges the value of territorial exclusivity in ensuring EU citizens can watch a wide range of high quality TV programs. Commercial broadcasters have long believed that the wrong legislation on this issue would reduce the amount, quality and diversity of TV content. We thank all the Members of the European Parliament who have helped us take a step towards better legislation.”

Commissioner Elżbieta Bieńkowska, in charge of Internal Market, Industry, Entrepreneurship and SMEs, said, “We are upgrading the EU Single Market to the digital world by giving consumers the same possibility to access the widest range of offers regardless of whether they physically enter a shop in another country or whether they shop online. Next stop: bringing down prices of cross-border parcel delivery, which still discourage people from buying and selling products across the EU.”

Axing geo-blocking in online content is a significant decision in the broader plan to create a Digital Single Market, but the wider reaching effects of this initiative are still open for debate – spanning varying competition laws, overseas litigations, consumer protection, and piracy. However, the ruling should not be confused with this more ambitious push to create a Digital Single Market, which aims to protect consumer rights and data, while allowing companies big and small to market their products across the EU. This should, in theory, help some smaller companies which struggle to break out of their home markets – giving them a chance to market to the 500 million consumers in the EU. At least that’s what the EU says.