Proposed changes to the Audiovisual Media Services Directive – see EU later?

This reflects the Commission’s overall aim to provide a “better balance” between the rules that currently apply to traditional broadcasters, video-on-demand providers and video-sharing platforms.  The changes are lighter-touch than expected, although the Brexit vote makes it uncertain how far they would be implemented in the UK.

Key changes

Promoting European works

The Commission aims to introduce an obligation on on-demand services to reserve at least 20% of their catalogues for European works and to ensure adequate prominence of such works.  This would encourage on-demand services such as Netflix to move away from their currently heavy reliance on US-produced content.

Further, the revised Directive would require on-demand service providers to contribute financially to European works (based on turnover generated in the imposing Member State), either through direct investment or through the payment of levies to national film funds.  But these quotas and other rules would not apply to services with low turnover or a small market presence.

Advertising flexibility

A daily limit of 20% of advertising between 7.00 a.m. and 11.00 p.m. would replace the current limit of 12 minutes per hour for television advertising slots, and broadcasters would be able to choose more freely when to show adverts during the designated times.  Additionally, films made for television, cinematographic works and news could be interrupted more often (i.e. every 20 minutes rather than every 30 minutes), and isolated spots would be admissible.  The revised Directive would also introduce more flexibility for broadcasters and on-demand providers in using product placement and sponsorship announcements, which are excluded from the proposed 20% daily limit.

Regulating video-sharing platforms

The current Directive does not apply to user-generated content offered on video-sharing platforms, such as YouTube.  Those services are instead subject to the E-commerce Directive.  Probably one of the most significant changes is the Commission’s proposal to extend the scope of the Directive to video-sharing platforms, but only in relation to the protection of minors from harmful content and the protection of all citizens from incitement to violence and hatred.

Comment

Light-touch regulation

The European Commission’s proposal is not as radical as some might have been expecting or fearing. The Commission has therefore decided not to change existing rules that work, while to a certain extent de-regulating traditional broadcasting.  Whether the Commission has in fact achieved its intended “level-playing field” is open to debate.  In particular, exactly what falls under the new definition of “video-sharing platform service” will no doubt be open to different interpretations.

So the revised Directive is set to continue on the principle of minimum harmonisation, meaning that Member States can take their individual needs into account when implementing the Directive.  In the past Member States have generally adopted stricter rules than those set out within the Directive.

UK implementation

In its response to the consultation last year, with the exception of the protection of minors, the UK government essentially saw no significant problems with the Directive in its current form.  It viewed the Digital Single Market as a key priority for the UK.

But, with the UK’s recent vote to leave the EU, it is uncertain how far audiovisual services would continue to benefit from free movement.  Many service providers operate from the UK under the Ofcom regime and, if the UK were to leave the single market, principles such as the country-of-origin principle would have huge implications for any audiovisual service providers currently regulated under UK laws who want to continue to benefit from the free movement of services.

Further, the Brexit vote creates uncertainty over the 20% minimum quota obligation for European works.  If UK programmes were to cease to qualify as European works, their sale value to other EU broadcasters could well be affected, meaning that financing such programmes could be harder in the first place.

It could still take some time until the revised Directive is adopted.  The proposed Directive will now be reviewed by the directly elected European Parliament and the EU Council of Ministers, which represents the Member States’ governments.  But after the Brexit vote, the UK government could well have lost any influence over how or whether these proposed changes will be introduced.

To read the full article, click here.  Article written for Entertainment Law Review.