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The Italian film industry has condemned Paramount for offering concessions to the EU in an ongoing antitrust case. It joins the ranks of leaders in the European audiovisual industry who claim that the studio’s recent actions threaten their very existence.
Last summer in Brussels, the European Commission’s Directorate-General for Competition (COMP) filed an antitrust complaint against the big six studios — Paramount, Disney, NBCUniversal, Sony, 20th Century Fox and Warner Bros. — for illegal agreements with Sky U.K. which blocked EU consumers from accessing pay-TV content and services from outside the U.K. and Ireland.
Paramount is the first studio to offer the EU a deal, which would broaden the licensing access Sky U.K has with Paramount films, in exchange for dropping the probe into their European film licensing deals. It’s a step in the direction of creating a single digital market across the EU which ultimately would break down the country-by-country licensing rules that regulate the sale of pay-TV content.
But the European film industry is not happy with Paramount’s move.
“In Brussels, we made it very clear how we finance and produce our films,” said Lucky Red’s Andrea Occhipinti, president of ANICA Distributors. “We don’t understand Paramount’s decision. Probably for them, Europe is just another market for films that are already produced and financed elsewhere.”
According to Occhipinti, Paramount’s concessions may undercut the very existence upon which European film financing is based.
“For the European producers and distributors, pay-TV and free-TV investments are crucial to finance their films and series. In order to do so, pay-TV and free-TV geo-blocking and exclusivity are the mandatory conditions,” he added. “Without these premises, there will not be the European audiovisual industry and the cultural diversity our films expressed.”
Other industry figures seem even more suspicious of Paramount’s actions.
“As it is rumored that Viacom intends to sell Paramount. It is believed that Paramount’s offer to settle with the DG Comp is to avoid any potential liabilities that may interfere with such a sale. It is not understood to mark a change in the studio’s position on the matter at hand,” said Cattleya’s Marco Chimenz, president of European Producers Club.
While the European Commission has opened its case with the U.K., it has not ruled out extending the case to further pay-TV markets in France, Italy, Germany and Spain. According to the industry, this will upset the very core upon which current financing models exist and thrive.
“The proposed settlement definitely does not change the position of European producers: If geoblocking clauses are ruled unlawful, the European paradigm for financing films and television drama is in peril,” said Chimenz. “Ultimately, pay-television operators would drastically reduce their investment in local European productions, and this would likely decimate our business and competitiveness.”
He continued: “Indeed, this would not only dramatically affect our audiovisual industry (which employs more than seven million people) just when it has entered a period of solid economic and creative growth, but such a reduced volume of content would also deprive European consumers of the opportunity to view diversified European product and thereby to become more familiar with the culture and habits of their European neighbors.
“Such a result would seem to contradict the obligation of the European Union, to preserve culture diversity. We strongly encourage DG Comp to take the position of the European industry and the ultimate needs of European consumers into due consideration.”
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