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Battle With E.U. Escalates Over Territorial Licensing in Europe

The entertainment industry’s battle with the European Commission over territorial licensing is turning into a drawn-out war that continues to be the talk of many on the Croisette. And it isn’t always clear who’s winning.

Just a few days before Cannes opened, a European Parliament committee voted largely to accept the commission’s proposal to let broadcasters buy rights to movies and TV for transmission throughout Europe on their catch-up and simulcast streaming services, as long as the broadcasters have cleared the rights in their home-base country.

The proposal was vigorously opposed by Hollywood and Europe’s entertainment sector, which depend on local licensing for the bulk of their international business. On May 2, more than 400 trade organizations, companies and European film and TV executives, including the MPAA, addressed an open letter to E.U. governments arguing against the proposal. They said it would decimate rights-holders’ ability to license content on a territory-by-territory basis, allowing consumers to watch films and TV shows on catch-up services before their first-run theatrical release or broadcast in their home countries.

Benoit Ginisty, chief representative of the Intl. Federation of Film Producers Assns. (FIAPF), said some producers would feel pressured into agreeing to such pan-European licensing. “If you need your film to get made, and you need a deal with a broadcaster in your territory, a vast number of European producers would not be in a situation where [they] can say ‘no’ to a broadcaster” over pan-European rights, Ginisty said.

In the months ahead, at least two more European Parliament committees are expected to vote on the proposal. A final decision will be made by E.U. member states, some of which — such as France, Spain, and Italy — have pushed back against the proposal, siding with the entertainment industry. But it’s unclear whether their opposition will be enough.

The industry has already suffered a recent reverse. Last month, the European Parliament suggested that E.U. authorities should review the current exclusion of film and TV from an E.U. ban on “geo-blocking” — limiting online services to one country. That review could happen in about three years, said Charlotte Lund Thomsen, FIAPF’s legal counsel.

At Cannes, the European Film Agency Directors, a group composed of the heads of national films boards in 31 European countries, is expected to issue a statement on Monday. The body, which includes France’s CNC and the U.K.’s British Film Institute, will almost certainly express concern over the European Commission’s proposal and the suggested revisit of geo-blocking.

“The industry initially scored a victory last year when AV services were excluded from the commission’s geo-blocking proposal, and this was confirmed by the [E.U.’s] member states,” said Jean Prewitt, president & CEO of the Independent Film & Television Alliance. “But we may have won the battle but not the war as the European Parliament has inserted us into the review clause.”

Film and TV remain under “continuous attack,” Prewitt said.

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