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Berlinale: Tussle Over Unified Digital Market in Europe May Be Coming to a Head

Opposition to European Commission’s push for pan-European digital services shaping up as Berlin Fest narrative

The final countdown appears to have begun.

For nearly two years, the industry in Hollywood and Europe has sparred with the European Commission over proposals for a single digital market across the continent, which industry execs say would destroy the territorial film and TV licensing system that forms the backbone of their business. Now, the commission’s centerpiece proposal – an overhaul of copyright laws that would allow broadcasters to offer online services outside their country of origin – sits in the hands of the European Union’s Council of Ministers.

As the council considers the draft legislation, there is growing fear that the industry’s objections are being ignored. “Despite a totally united industry effort for many months, the concerns of the creative industries in Europe have not been heard or even taken into account,” said Martin Moszkowicz, at Germany’s Constantin, one of the country’s biggest film-TV companies.

The issue is set to arise at the Berlin Film Festival. MPAA Chairman Chris Dodd is expected to outline the commission proposal’s potential impact on territoriality at a brunch Feb. 15, at an annual film-policy debate, and at an event sponsored by the German Federal Film Board. Various panels and meetings at the Berlinale will also touch on the topic.

The proposed new regulation, first introduced by the European Commission last September, envisages that a broadcaster licensed for one E.U. country would be permitted to offer its “ancillary” online services, such as catch-up players, in all E.U. member states. For most of Europe’s industry and Hollywood, that raises major concerns.

“The prime concern is the erosion of the ability to license rights on a country-by-country basis,” said Stan McCoy, president and managing director of the Motion Picture Assn. Europe, Middle East and Africa.

For example, a producer in need of financing could find herself in a weak position when faced with demands by her home-territory broadcaster that rights to her film be made available for replay on online services across the E.U. Another fear is that consumers could see shows and movies on another country’s catch-up player before they are aired or released in their own country.

“At stake is the future ability to finance production, marketing and distribution in Europe by co-production deals and/or pre-selling future distribution rights,” said Benoit Ginisty, chief representative of the Brussels-based Intl. Federation of Film Producers Associations (FIAPF).

Criticism of the proposal has even emanated from government officials in France and Germany, the E.U.’s two most politically powerful countries.

In a four-page document issued in December, Germany’s upper house of parliament asked pointedly whether the proposal took rights-holders’ interests sufficiently into account. Germany’s Ministry of Justice has also argued that pan-European digital access would not help strengthen the entertainment industry in Europe. The French Ministry of Culture has likewise expressed concern about the proposed copyright legislation.

Their intervention could be critical as the E.U. Council of Ministers, which is made up of representatives from all 28 E.U. member states, considers the draft regulation. The council makes decisions not by unanimous vote but by a qualified majority system, which grants more weight to large countries such as Germany and France.

”Key E.U. governments have made high-level statements against the territoriality regulation proposed in September,” McCoy said.

The MPAA and FIAPF want the European Commission to go back to the drawing board. What’s needed is “a fundamental course correction,” Ginisty said. “The proposal on the table is unworkable.”

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