EU legal framework

IRIS Plus 2016-1: On-demand services and the material scope of the AVMSD

Author: Francisco Javier Cabrera Blázquez, Maja Cappello, Gilles Fontaine, Sophie Valais, European Audiovisual Observatory

Published: 03/06/2016

Providers of VoD services originate from almost all links of the audiovisual value chain. They come from the traditional worlds of television channels and telecom operators, but also from film producers and distributors, content aggregators, video sharing platforms and even from audiovisual archives and public support funds. This complexity brings together business models with new actors and new roles, also in addition to the provision of new services and new consumption habits.

The implications of this in legal terms are at the centre of the current debate on the revision of the Audiovisual Media Services Directive (AVMSD). It is namely only a certain type of VoD services that currently qualify as AVMS, based on specified criteria: a) they must be TV-like; and b) they must fall under the editorial responsibility of an audiovisual media service provider. This must be assessed on a case-by-case basis, and if the criteria are not satisfied the service is likely to fall under a different regulatory framework, namely the E-Commerce Directive.

The question of which regulatory framework applies – either the AVMSD or the E-Commerce Directive – is not without relevance: where the AVMSD foresees an objective responsibility for any content made available in a catalogue, also by third parties, the E-Commerce Directive entails a liability exemption and the provider has to intervene only when asked to do so. Falling under the scope of the AVMSD also brings a set of obligations that the E-Commerce Directive does not entail, such as promotion obligations for European works and ex ante control over the content with respect to protection of minors or human dignity. This of course presents the whole question under a special light and, as it all depends on how a service is qualified, the classification exercise becomes particularly important.

On this topic, the European Audiovisual Observatory published a report in 2013, just a few years after the expiry of the deadline for the implementation of the AVMSD by the member states. The IRIS Plus What is an on-demand service addressed the various criteria set by the AVMSD for the assessment of a service in terms of being “TV-like” and explored the most recent national developments in this regard.

Now that the offer of audiovisual services has developed in many areas and that the consumption habits of the viewers have changed as well, the field has become unstable and the debate on the material scope of the AVMSD is relatively heated.

Various institutions are becoming involved, and many contributions have been offered since the preparatory activities for the revision exercise started with the publication of the “Inception impact assessment” by the European Commission in October 2015. Many options have been scrutinised in the last months, and have been examined in light of a set of studies commissioned by the European Commission under the REFIT exercise: maintenance of the status quo; clarification of the scope via Commission guidance; broadening of the scope to encompass services that are currently outside the definition of AVMS (basically “non-TV-like” services) and/or providers that fall outside its geographical scope but are targeting EU audiences (with a significant presence in the EU in terms of market share); assessment of the role of platforms and intermediaries foreseen by the Digital Single Market strategy.

Based on these preparatory activities, on 25 May 2016 the European Commission issued a new proposal for a Directive amending the AVMSD in order to reflect these market, consumption, and technological changes. One of the main focuses of this was the material scope of the Directive and the nature of the rules applicable to all market players.

This publication aims to provide a guide to the latest developments in the debate on the material scope of the AVMSD for on-demand audiovisual services, following the usual structure of our new IRIS Plus reports: Chapter 1 sets the scene by providing a description of the most recent market developments concerning the offer and the consumption of services available on-demand and briefly outlines the main underlying regulatory issues; Chapter 2 recalls the history behind the adoption of the AVMSD, and sets out the criteria set by the directive for the qualification of the regulated services; Chapter 3 touches upon national implementation of the AVMSD and provides examples of guidelines adopted in selected countries which were aimed at helping operators in the qualification process; Chapter 4 sets out a selection of self- and co-regulatory systems put in place in a certain number of member states for the regulation/registration of on-demand services; Chapter 5 explores the approaches taken in European and national case-law to the concrete assessment of the criteria set by the AVMSD for the qualification of on-demand services falling within its scope; Chapter 6 concludes with a reflection on the state of play of the on-going revision process of the Directive and looks into future regulation.