On-demand services

IRIS Plus 2016-3: VOD, platforms and OTT: which promotion obligations for European works?

Author: Francisco Javier Cabrera Blázquez, Maja Cappello, Christian Grece, Sophie Valais, European Audiovisual Observatory

Published: 11/01/2017

The European audiovisual market has been facing huge transformations during the past years. Whereas the European cinema market has been facing a period of stagnation and the physical video market a rapid decline, new players and business models have seen the light and are now re-shaping the overall picture: both paid and advertising-financed on-demand services have consolidated their position, and over-the-top players and online platforms are offering their services in various forms. As a result, viewers can now benefit from both well-established traditional broadcasters and on-demand players, and viewing habits have of course also changed significantly.

These market changes are also reflected in the regulatory framework, which poses a very preliminary issue of setting the right definitions and identifying the related obligations, including those concerning the promotion of European works under the various headlines of production, programming and visibility as enshrined in Articles 13, 16 and 17 of the Audiovisual Media Services Directive (AVMSD).

So far audiovisual media services have been regulated differently depending on whether they are linear or non-linear, while services that do not fall under the editorial responsibility of their providers, such as video-sharing platforms, have remained outside the full scope of the obligations set by the AVMSD. On-going reforms in various fields are challenging the qualifying features of these concepts, so the question is whether these subjects will remain substantially excluded. As reference for the underlying issues an earlier issue of IRIS Plus of 2016 devoted to “On-demand services and the material scope of the AVMSD is still relevant.

But even once the nature of the service itself has been defined, it might be necessary to have a closer look at the programming in order to assess the targeted audience. Services provided in a given member state may indeed be regulated differently, depending on the country of origin of the programme. The question is whether additional rules may be adopted in the targeted member state.

As is well known, the main rationale for the regulation of audiovisual media services at EU level has been the internal market, with the country-of-origin principle at its core. According to this principle, audiovisual media service providers have to abide only by the rules of the one member state with jurisdiction over them, but can nonetheless operate in all member states. At the same time, this principle does not prevent member states from establishing higher standards at national level.

However, a receiving member state with stricter rules than those laid down by the AVMSD cannot restrict the reception of services from another member state on the basis of those stricter rules. Whereas exceptions apply in specific circumstances, in principle service providers may choose the jurisdiction that, from a regulatory standpoint, best fits their purposes. In order to avoid this “jurisdiction shopping” when it comes to the rules aiming at promoting European works, the on-going reform of the AVMSD proposes to allow the targeted member state to impose financial obligations on providers of on-demand services, established in other member states, against the turnover generated in the imposing country. Nevertheless, services established outside the EU but targeting its member states are not included by the proposal.

In this landscape, the present issue of IRIS Plus starts with an outlook of the latest market developments, before exploring the regulatory context, and sets out international and European obligations as well as national frameworks. The report then continues considering self- and co-regulatory tools and case-law, and provides an outline of the main aspects of the current reform of the AVMSD in this field. For the national overviews, national correspondents of our network have been involved in the checking of the information provided. Our acknowledgments therefore go to Eva Lievens, Christophoros Christophorou, Jan Fučík, Gianna Iacino, Andres Joesaar, Enric Enrich, Anette Alén-Savikko, Amélie Blocman, Lorna Woods, Alexandros Economou, Polyák Gábor, Ronan Ó Fathaigh, Ernesto Apa, Kevin Aquilina, Jurgita Iešmantaitė, Ieva Andersone, Mariana Lameiras, Eugen Cojocariu, and Erik Ullberg.

Some questions inevitably remain unanswered as is unavoidable during an on-going revision process. For example the issue concerning the vagueness of the obligations concerning on-demand services in the current wording of the AVMSD, which has caused great disparity among member states and to a certain degree of forum-shopping: will this be solved by the Commission’s proposal?

It is not to the charge of this report to provide even a tentative answer to such a question. The report rather aims at providing a gateway to relevant information on these issues that constitute the legal background against which the obligations on on-demand service providers for the promotion of European works should be considered.

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