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Europe, Hollywood Hail Landmark E.U. Territorial Licensing Agreement

Industry organizations and major companies in Europe and Hollywood welcomed Tuesday a high-level European Union agreement that in large part preserves producers’ ability to sell movies and TV shows on an exclusive territory-by-territory basis.

Territorial licensing is a financial backbone of the film and TV business in Europe. Recognition of such licensing came last Thursday in an E.U. pact over an upcoming ruling on the so-called “country of origin” principle, which would allow a broadcaster in one of the E.U.’s 28 member states to make its online catchup and live-streaming programming available to consumers in other E.U. countries.

The European Commission, the E.U.’s administrative arm, backs this “country of origin” principle in its campaign to turn the entire E.U. into a unified digital market, where a customer in any one member country has access to the online programming of any of the other 27 E.U. nations. Film and TV industry reps in Europe and Hollywood oppose such a  system, saying it would allow consumers to view movies and TV programs on other countries’ streaming services before that content has its official release in the consumers’ homelands.

Last week’s pact saw both the Council of Ministers, representing E.U. member state governments, and the European Parliament push back against the commission. They decided instead to allow broadcasters to do pan-European online distribution only for so-called “ancillary” services, such as news, current affairs shows and the networks’ own productions.

That decision has been greeted with relief by the industry. “Our ability to license rights on a territorial basis is our currency, and the future of our production companies depends on our capacity to build IP capital through rights and catalogue,” said Börje Hansson, vice-president Europe of the Intl. Federation of Film Producers Associations (FIAPF), the global producers’ association.

“The new directive – in contrast to the original proposals – recognizes that these exclusive rights must be preserved, with only defined, limited exceptions for broadcasters’ ancillary online services,” added Jean Prewitt, president and CEO of the Independent Film & Television Alliance, representing independent film and TV companies worldwide.

But industry groups in both Europe and Hollywood – including the Motion Picture Assn., which represents the interests of Hollywood’s major studios- fear that the devil could be in the details, and warn that the battle is not over. The European Commission has not given up on establishing a Digital Single Market.

“Finally we are there,” E.U. vice president Andrus Ansip tweeted last Thursday. Thanks to the new directive, “broadcasters will be able to make radio programs, news & current affairs programs as well as their fully-financed own productions available online in all E.U. countries. [It’s a] big step for [the] Digital Single Market.”

“We understand the definition of ‘ancillary’ services is still subject to final agreement and urge the European institutions to define ‘ancillary’ services in the narrowest possible manner,” said a joint press release Tuesday by 18 entertainment trade organizations, whose signatories included the European Producers Club,  Europa Distribution and, from the soccer sector, the U.K.’s Premiere League and Spain’s La Liga.

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