European Commission Announces Digital Single Market Plan

The European Commission announced 16 steps Wednesday to help Europe embrace the digital revolution and open up more digital opportunities for businesses. Though the commission has assured that the single market will not mean the end of selling territory-by-territory or of window holdbacks, many film and television business observers continue to question what effects the plan will have on their business.

“The aim of the Digital Single Market is to tear down regulatory walls and finally move from 28 national markets to a single one,” said the commission’s announcement, which it says could contribute $471 billion to the region’s economy and create hundreds of thousands of new jobs.

Commission president Jean-Claude Juncker said, “I want to see pan-continental telecoms networks, digital services that cross borders and a wave of innovative European start-ups. I want to see every consumer getting the best deals and every business accessing the widest market – wherever they are in Europe.”

Likely to affect the media business most among the 16 points of action which the commission says it will deliver by the end of 2016 are: rules to make cross-border e-commerce easier; ending “unjustified geo-blocking”; and a “modern, more European copyright law.”

The copyright reform aims to reduce the differences between copyright law in various countries and allow for wider online access to works across the EU — often called portability. “The aim is to improve people’s access to cultural content online — thereby nurturing cultural diversity — while opening new opportunities for creators and the content industry. In particular, the Commission wants to ensure that users who buy films, music or articles at home can also enjoy them while travelling across Europe.”

The plan also promises to make the audiovisual media framework fit for the 21st century, adapting existing standards to new business models for content distribution.

The European Council meeting on June 25 and 26 will further consider these proposals.

Libby Savill, a leading entertainment lawyer at Latham & Watkins, described the proposals as “problematic to say the least.” She said: “Rights holders want and often need to slice and dice rights to finance what is very often culturally specific content to maximize its value.”

The European Commission does give rights-holders some reassurance, she said, when it stated that it would respect the principle of territoriality, although there are still big questions to be answered about how that can be squared with the notion of portability. Whatever the answers, Savill sees major changes ahead for the entertainment licensing business.

“It proposes to safeguard the value of audiovisual rights, particularly in connection with financing EU content,” she said. “How is that to be achieved without geo-blocking and other contractual border controls? Whatever the solution — no doubt involving access through paywalls — it is going to lead to wholesale change in the way rights holders and platforms do business in Europe as well as renegotiation of current licensing arrangements.

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