Can Europe Set Up a Digital Single Market Without Killing Copyrights? (Analysis)

Europe wants to create a single market for digital content, but critics say the plans could still “kill the film industry.”

Europe’s plans to erase national barriers to online commerce have been greeted by skepticism by the film and television industries, both on the continent and in the U.S.

The European Commission, the European Union’s executive body, on Wednesday, unveiled its proposals for a digital single market. They are wide in scope and include everything from a harmonization of cross-border taxes and regulation to cooperation on Europe’s digital infrastructure and an overhaul of EU copyright law.

Copyright is the focus of complaints for the film and TV industries, with critics balking at the Commission’s proposals to ban geo-blocking, the process whereby copyright holders in a single country can block consumers in another country from accessing their content online.

"I can't see how you can abolish geo-blocking and continue to protect copyright," said Martin Moszkowicz, head of film and TV at Constantin Film, the German company that produced the Resident Evil films. "It can't be that if someone buys, say, Game of Thrones for the U.K. valued for that market, then the rest of Europe gets to watch it. It becomes a buy one (EU territory), get 27 for free. It would be catastrophic for all creative industries."

Film industry bodies across Europe, as well as the Motion Picture Association of American, say ending geo-blocking will undermine territorial exclusivity, which they say is key to financing independent cinema, both European and American.

Territorial exclusivity means that when a film or TV series is sold to Europe, it is licensed separately to all 28 territories in the EU. Buyers – film distributors, television channels or SVOD platforms like Netflix – have exclusive rights for their individual countries. Virtually all major independent movies – from The Hunger Games to The Wolf of Wall Street – and a majority of big European films, are financed by pre-selling individual territories. Without territorial exclusivity, this system falls apart.

European Commission vice president Andrus Ansip, speaking at a press conference this week, said the Commission had “no plans” to end territoriality and, in another nod to the audiovisual industry in Europe, said any EU plans would involve a staunch defense of copyright. At the same time, Ansip was firm in stating that “unjustified geo-blocking” had to go, without exactly defining what kind of geo-blocking is “unjustified” and how, exactly, the EU plans to get rid of it.

"The proposals are very light on practical details," said David Johnson, CEO of independent rights collection agent Content Media Group. “How do you actually get rid of geo-blocking and still keep territoriality, which all of us who work in content creation see as essential? I think what people are really afraid of is unintended consequences if the Commission moves too fast.”

Tearing down national barriers will not result in a bigger market for national films, argues Nico Simon, a theatrical exhibitor who owns  cinemas across France and the Benelux region. He worries the Commission’s plans will create a single market where only the Hollywood studios, which already operate on a pan-European basis, can compete.

“If the European Commission goes this way, they are really preparing their own market for the invasion of American product,” he says. “If we want to kill European audiovisual culture and diversity, then the European Commission is on the right path.”

Wednesday’s proposals did not include any specific calls of legislation, and Ansip acknowledged that EU national governments would try to slow things down, something he warned against.

“We have to hurry up…or we will get left behind,” Ansip said. Currently, not a single market leader among Internet providers in the EU is European. According to the EU’s own figures, GDP in Europe could be increased by $466 billion (€415 billion) a year if a harmonized market in digital services were to be set up.

With few concrete proposals on the table, the industry will have to wait until the Commission addresses the issue in an agenda meeting in late June. For now, industry associations will be upping the lobbying pressure on national politicians to address their concerns.

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