You will be redirected back to your article in seconds

Cannes: E.U. Digital Plans Make European Consumers ‘Worse Off Over All,’ New Report Suggests

Industry commissioned report on collateral damage of cross-border access presented at Cannes Festival

Not just Europe’s film and TV industries but E.U. consumers would suffer substantially if the European Commission presses ahead with plans to push for a unified digital market across Europe, a new report, presented Sunday at the Cannes Festival, contends.

The 99-page study, commissioned and funded by industry players in Hollywood and Europe, comes after a year of wrangling between them and the European Commission over the European Union’s plans to push for a unified digital market.

Announced May 8, 2015, the EU’s Digital Single Market strategy aims to ease cross-border access of online content in one EU country by citizens in another. One underlying assumption is that broader access would benefit consumers.

But the new study, “The Impact of Cross-Border Access to Audiovisual Content on EU Consumers,” by London-based economic consultancy Oxera and media consultancy Oliver & Ohlbaum, suggests that the result would be the opposite.

“The [European] Commission says good things about evidence-based policy making, but they haven’t had the benefit of a solid economic analysis of consumer welfare until now,” said Stan McCoy of the Motion Picture Assn. of Europe.

The new study says that borderless access to online content throughout the EU’s 28 member states would expose the industry to:

*Producer revenue losses up to €8.2 billion ($9.3 billion);

*A drop in content of up to 48% for TV content and 37% for films;

*Consumer welfare losses of up to €9.3 billion ($10.5 billion), with “consumer welfare” defined as a measure of individual benefits derived by people consuming particular goods or services.

Unfettered cross-border access “sounds like a great idea,” Felipe Florez Duncan, of Oxera, said at the report’s presentation at Cannes on Sunday. However, he added, “less content will get made, and consumers will be worse off overall.”

“The problem is that cross-border access undermines the economic model the industry is built on” — that is, territory-by-territory licensing, said another of the report’s authors, Sean McGuire of Oliver & Ohlbaum.

One problem with cross-border access is that, as the study puts it, “if buyers believe that the audience will have already seen the content on other services (such as international VOD providers, or the original broadcaster’s catch-up service), they will be unwilling to invest or will substantially reduce any investment.”

Also, the study adds, “consumers will switch their premium film pay-TV to cheaper services abroad offering much of the same content, again draining revenues from the industry.”

The result would be uncertainty over future revenues, which would weaken established funding mechanisms such as output deals, co-production agreements and pre-sale agreements, the report said.

But Andrus Ansip, the European Commission official leading the campaign for a Digital Single Market, described the industry’s concerns as overblown. “The principle of territoriality has to stay,” he said in an interview Sunday with Variety. “We never said that we will destroy this system.” But borderless access has to be made “easier” for EU consumers, he added.

Despite Ansip’s reassurances, industry players see a stealth campaign to dismantle the system of territory-by-territory licensing.

In response to this, the industry could try to introduce pan-European licensing. Or it could argue for limiting rights-holders’ sales to satellite and cable platforms, to restrict cross-border access of content via catch-up or OTT services.

Other possibilities include adjusting content pricing across Europe, or enforced dubbing, so content would only be attractive to consumers who understood the dubbed language, creating separate markets based on language.

None is a very satisfactory solution, the study contends. A pan-European licensing model would result in “the concentration of key rights in the hands of a few large operators,” which could elbow out local players.

Michael Ryan of the Independent Film & Television Alliance said that the present system of territoriality worked well. “If it ain’t broke, don’t fix it,” he said.

The report was funded by the serried ranks of major movie and TV companies – 21st Century Fox, Entertainment One, Constantin, the U.K.’s Sky and ITV – plus industry organizations such as the Motion Picture Assn. of America and the Intl. Federation of  Film Producers Assns, whose members include the MPAA and IFTA.

More TV

  • Pete Davidson Sits Out Final 'Saturday

    Pete Davidson Sits Out Final 'Saturday Night Live' Sketches of 2018

    Just hours after “Saturday Night Live” cast member Pete Davidson posted a message on social media that said he “really [didn’t] want to be on this Earth anymore,” he was absent from the final 2018 live sketches of the late-night sketch comedy show. But although Davidson did not take part in the sketches or appear [...]

  • Pete Davidson photographed by Peggy Sirota

    Pete Davidson Posts Unsettling Message, Deletes Instagram

    UPDATED: “Saturday Night Live” cast member Pete Davidson posted a disturbing message Saturday morning stating he doesn’t “want to be on this earth anymore,” then deleted his Instagram account. In the post, Davidson wrote, “I’m doing my best to stay here for you but i actually don’t know how much longer i can last. all [...]

  • Disney Channel Fires 'Andi Mack' Actor

    Disney Channel Fires 'Andi Mack' Actor Arrested for Plotting Sex With Minor

    Disney Channel has severed ties with “Andi Mack” actor Stoney Westmoreland following his arrest for allegedly trying to arrange a sexual encounter with a 13-year-old. “Stoney Westmoreland, an actor working on the series ‘Andi Mack,’ was arrested in Salt Lake City today,” a Disney Channel spokesperson said in a statement Friday. “Given the nature of [...]

  • Russian Doll

    TV News Roundup: Natasha Lyonne's 'Russian Doll' Sets Netflix Premiere Date

    On Friday’s roundup, Netflix announces the premiere date for “Russian Doll” and Benedict Cumberbatch’s “Brexit” film has a premiere date on HBO FIRST LOOKS Showtime has released a new teaser for the upcoming comedy series, “Black Monday,” which will premiere Sunday, Jan. 20 at 10 p.m. ET/PT. The series stars and is executive produced by Don [...]

  • Vanity Fair Review

    TV Review: 'Vanity Fair'

    There’s something comforting about the predictability of a period piece novel adaptation in the Masterpiece Theater tradition. Knowing the story, or even just the rhythms of the genre, there are rarely many surprises. The women will toss off witticisms and cry careful, pretty tears; the men will steel their jaws and declare their love, ideally [...]

More From Our Brands

Access exclusive content