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Why Film Bizzers Are Still Outraged Over Europe’s Digital Single Market Plan

Producers, Film Sales Agents Fear End of Geo-Blocking Would Hurt Business

“Nightmare” and “disruption” are some of the more polite words industryites are using to describe the European Commission’s looming plan to apply its digital market strategy to film and TV programs.

The commission fired off its first salvo last year with a proposal to scrap copyrights in each territory, and replace them with pan-European licenses, sparking an outcry from film and TV players across the Continent.

The debate will pick up steam May 6, when the EU releases its report on combining the 28 European territories into a common market for digital goods, which would eliminate so-called geo-blocking, which bars consumers from accessing content across borders.

Filmmakers, producers, distributors, exhibitors and guilds are protesting the proposal, known as the Digital Single Market, arguing that it would serve the interest of only global giants such as Netflix, Amazon and Google, which would benefit from a simpler way to distribute content across Europe. While politicians insist the idea of multi-territory licenses won’t be part of the plan, industryites remain concerned about the effects of passive sales and portability which, they maintain, would greatly impact windows and marketing.

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The commission’s proposal began as a way to strengthen European companies, and to try to place them on an even footing with U.S. tech giants. But many see a contradictory result. “Ironically, the plan so far is expected to serve only the interest of U.S.-based multi-territory platforms, and disrupt the European market, affect small and medium companies, and hurt the financing of independent films,” said Christine Eloy at Europa Distribution, an org that reps 140 indie distributors in Europe.

Although less threatening than a pan-European license, the idea of passive sales — content that’s viewable outside a rights-holder’s borders but cannot be advertised there — also is seen as a slippery slope for industryites. Jean Prewitt, who heads the Independent Film and Television Alliance, which organizes the American Film Market, argued that the concept would allow a handful of multinational companies to control financing.

“Cross-border access would make it possible for broader offerings to dominate markets,” she explained. “It would make it difficult for smaller platforms in local languages to survive.”

Kirsten Niehuus, co-chief exec at German film and TV funding body Medienboard Berlin-Brandenburg, said that a single-market European zone would make the licensing of film rights within the EU impossible, eliminating co-productions and endangering the entire European movie industry. “A world without European films would be possible to live in, but only if you don’t care about culture,” Niehuus said.

An overriding problem with passive sales is that windows are different in each country, says Daniela Elstner, managing director of sales company Doc & Film Intl., and VP of ADEF, the association of international sales agents.

For instance, in France, which has Europe’s most rigid release windows, day-and-date theatrical and VOD are banned. Yet both are allowed in the U.K., and other territories. Though such hold-backs may seem complicated or old-fashioned, as Netflix has charged, the entire film and television finance and sales business outside the U.S. is built on that structure. “Today, a movie can take up to two years to get theatrically released across all of Europe,” Elstner said. “Every distributor has its own timeline and strategy.”

One casualty of the passive sales concept, argued Eloy, would have been the theatrical life of Paolo Sorrentino’s recent Oscar winner “The Great Beauty,” released in Italy and France in May, but not until September in Belgium. Under the cross-border scheme, a Belgian citizen could have accessed the film on Italian or French VOD platforms at the same time they could see it in Belgian theaters— meaning that the cost of the Belgian distributor’s marketing campaign would benefit rights-holder in another country, said Eloy. “Not only would distributors cut back on minimum guarantees, but exhibitors would think twice about taking these films,” she added.

It would be folly to give every movie a wide release in Europe, said Nadine de Barros, head of sales company Fortitude Intl. “You can’t treat a continent as if it’s an individual country,” she said. “It would be an absolute nightmare.” Daphne Kapfer, managing director of distributors org Europa Intl., said that initially, the EU was considering a hold-back period of between three to five years, then 24 to 36 months between theatrical and home release. “Now it’s apparently abandoning the concept altogether,” Kapfer said, “although it could still change.”

The sale is considered “passive” because the purveyor isn’t allowed to advertise its content outside of its market, but Florence Gastaud, managing director of ARP, the French authors, directors and producers guild, says that in today’s online world, it’s impossible to monitor the spread of advertising and who sees what promotion for a film or TV show.

Still, no one truly expects that the plan the EU announces May 6 will bring the apocalypse down upon the movie world; whatever is unveiled will be hotly debated in the weeks to come before a consensus is reached.
If anything, Elstner said she hopes the outcome will encourage distributors and sales agents to work together to release European movies on a shorter timeline in order to take advantage of synergies between marketing campaigns and maximize festival exposure.

Trying to modernize their approach, European industry players are also lobbying to get the E.U.’s Media Program to fund more initiatives like IFFR Live (launched with Fortissimo Films, TrustNordisk, Doc & Film and KPN ), Walk the Way (with aggregator Under the Milky Way) and TIDE Experiment to test day-and-dating and close-range releases within Europe.

And while many see the idea of a European digital single market as presently untenable, the clout of Netflix, Amazon and Hulu could change that, said Brian O’Shea of Los Angeles-based international sales and finance company the Exchange, who calls the prospect “a very real threat that should be taken seriously.”

Insiders consider the recent announcement that Gunther Oettinger, the EU commissioner in charge of digital economy and society, would be appearing in Cannes as a hopeful sign that could encourage more dialogue. Oettinger will unveil his Digital Single Market policy during a conference titled “The Moving Image: Connecting European Films to a Global Audience” as part of the European Film Forum on May 18.

The proposals are expected to go into effect in some form over the next two years.

Dave McNary and Leo Barraclough contributed to this report.

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