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Digital Single Market strategy: The film industry troubled by the future implications


- Yesterday, the European Commission presented its planned strategy for a Digital Single Market, divided into three pillars and 16 initiatives

Digital Single Market strategy: The film industry troubled by the future implications

On 6 May, the European Commission presented its strategic plan for a Digital Single Market (DSM), split into three pillars and 16 initiatives (the document is available to view here). With the proposed geo-blocking and copyright regulations, the territorial and funding model for films is still pending. Today, professionals in the audiovisual and cinema sectors are remaining very prudent while also welcoming Commissioners Ansip and Oettinger's work. 

It could have ended up being a lot worse for the industry. The fact sheet published by the Commission provides answers to many questions that have been asked since January. A much more balanced plan than originally announced – especially on copyright reform – has been proposed. The copyright modernisation will “help deal with geo-blocking concerns, while respecting the value of rights in the audiovisual sector,” states the document. Regarding a European copyright framework, some particular characteristics of the film industry are highlighted specifically. “The Commission doesn't want to change the principle of territoriality of rights and understands it is important for the creative sector, and especially for the film industry. (…) As such, [territoriality exclusivity] cannot be considered as unjustified geo-blocking.” In addition, the Commission recognises that “each film has its distribution strategy, its release-windows system”. This is reassuring, and it means that the concerns of the film industry have been listened to. 

Yet the forecast scenario is not ideal. While insisting on the fact that he is “not supporting absolute territorial exclusivity”, Commissioner Ansip contributes to obscuring the policy options that would be used. Indeed, the difficulties come when the Commission gives details on how better access to digital content would be implemented. “For example, if a film is available on a video-on-demand service in an EU country, Europeans outside the country can also pay to see it.” In practice, this statement means that passive sales would become mandatory for the online world (ie, the principle that no one can be refused a product on the basis of nationality). In practice, this would undermine territorial licensing.

In a press release published a few hours later, the European Film Agencies Directors Association (EFADs) clearly explains the chain reaction of damage for the industry: “Distributors will not invest in promotion and marketing activities in a country for films that are easily available online in another one. (…) Pre-sales will decrease as exclusive exploitation in a territory will not be guaranteed anymore. (…) Independent films from diverse European sources and of different languages that require more investment for distribution and promotion will become less visible and more poorly promoted on VoD platforms.” The crux of the matter remains in the territoriality of rights, and distributors are well aware of this. “It would be unworkable,” asserts Christine Eloy, general manager of Europa Distribution. “In fact, the media chronology would be affected, and this could lead to a huge disruption of the market, less creation and fewer audiences for European films.”

Europa Distribution and the International Federation of Film Distributors’ Associations (FIAD) are due to publish a joint press release today. “The policy options at the Commission's disposal could be just as damaging as mandatory multi-territorial licensing,” both Christine Eloy and Jelmer Hofkamp, secretary of FIAD, insist. To the “win-win situation” concept repeatedly promised by the Commission, they respond: “The result will be just the opposite of what the Commission wants.” There have been countless expressions of concern in the industry after the DSM action plan was presented yesterday. Again, both time and dialogue are unanimously recommended by film-industry professional organisations.

(Translated from French)

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