EU’s new frontier

Techies up in arms as org reins in content for fresh platforms

LONDON — Internet giants AOL and Yahoo, as well as British telco BT and even Blighty’s mighty BBC, are warning that the European Commission’s sweeping overhaul of media laws will slow the incredible growth of new media.

This comes despite assurances from Brussels that it won’t impose broadcast regulations, including quotas that demand half of all content is European, on services like video-on-demand and Internet protocol TV.

On Dec. 6, Viviane Reding, European Union commissioner for Information Society and Media, unveiled draft legislation updating 1989’s Television Without Frontiers directive.

Renamed the Audiovisual Media Services directive, it will, for the first time, include all platforms on which people receive content, from TVs and computers to handheld devices.

All platforms — old or new — must protect minors and prevent incitement to racial or religious hatred.

The commission has not extended local content quotas to new media services, despite lobbying from European content producers and broadcasters, who want a level playing field. Reding says she believes such quotas are not feasible.Draft contains one sentence that calls for new-media companies to “promote, where practicable and by appropriate means, production of and access to European works.”

What that sentence means in practice is down to individual governments to decide, but it could be anything from flagging European content on a VOD portal to a tax on ISPs and telcos that is used to fund local production, much like current regulations in France.

ISPs and telcos worry how it will be interpreted by pols in each EU member state.

“We see the text as very uncertain … and we’re very worried about the impact that it might have,” says Richard Nash, secretary general of EuroISPA, which represents roughly 900 Internet service providers across the EU, including AOL and Yahoo. “My fear is that this will put obstacles in the development and rollout of innovative services.”

“The difficulty is that there is now carte blanche for anybody to put down amendments,” says Ross Biggam, director general of the Brussels-based Assn. of Commercial Television.

In its submission, BT said the regs were unenforceable over the many thousands, perhaps millions of content providers and objected to the uncertainty this would cause in the market while the draft was debated.

Even the BBC, already governed by EU broadcast laws, worries: “Over-regulating new media may slow down their take up and favor delocalization outside the EU.”

The next two years will see intense lobbying as the directive passes through the European parliament.

Reding believes the changes, unveiled at a meet in Strasbourg, France, are essential to create a level playing field.

And many broadcasters will be pleased to see their less-heavily regulated new competitors, especially deep-pocketed telcos, governed by some of the same rules that apply to traditional TV.

“For us, this was the most important point,” says Pascal Albrechtskirchinger, German pubcaster ZDF’s representative to the EU. “Everyone who offers content has to comply with the same principles. Why should we have a competitive disadvantage?”

A more radical solution would have been to do away with quotas and protectionism for all platforms. But Reding is maintaining broadcast quotas because they “have greatly stimulated European independent content production.”

Others argue that the increase in European production was an inevitable development as the market matured, and that the vast range of content now offered by the Internet makes quotas obsolete.

“Even if you believe the quotas were instrumental in kick-starting the investment we now have, do we still need them?” Biggam asks. “It’s at best very questionable. I just think it was too political a question for this proposal.”

However, the draft ends the 20-minute gap between advertising breaks while maintaining the maximum of 12 ad-minutes per hour.

It also legalizes product-placement for the first time, allowing broadcasters to tap extra coin at a time when demand for spot advertising is falling.

“Product-placement is everywhere, partly illegally, nearly always cheating the consumer,” says Reding. “I want to get order into that mess with very clear rules, which say under which condition product placement is possible.”

In the U.S., the market for product placement is growing at 21% a year on average, and Reding assumes that Europe will follow that curve. However, the proposed changes will face opposition from consumer groups, and the new revenue streams will still only account for a fraction of the traditional ad market.

“People tend to portray (product placement) as the magic bullet which will solve all the medium-term issues of free-to-air commercial television, and we don’t believe it is for a moment,” says Biggam. “It’s a sensible clarification but it’s not in itself going to be the savior of free-to-air commercial television in Europe.”

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