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Over the last five years, media regulation and copyright law in Europe have been adapted to meet the new challenges posed by the Digital Single Market strategy, with a potential impact on the “country of origin” (COO) principle (which places content under the jurisdiction of the country where the audiovisual media service provider is established) and the principle of territoriality of copyright (whereby works are licensed on a country-by-country basis). The latest development in this field was the adoption of the Directive on copyright and related rights applicable to certain online transmissions in March of last year, which saw the principle of territoriality preserved after intensive discussion with stakeholders in the audiovisual industry.

The European Audiovisual Observatory, part of the Council of Europe in Strasbourg, has reviewed developments in media legislation over the past five years with regards to the COO principle and territoriality of copyright, and the way these principles operate in practice in financing production. It walks us through them in this very useful new report.

Chapter one sets the scene by giving an in-depth analysis of the role of territorial licensing in the pre- financing of audiovisual works through the pre-sale of rights to broadcasters and distributors on a territorial basis.

Chapter two presents an overview of international and European frameworks concerning territoriality of copyright and the COO principle, as laid down in copyright and audiovisual media legislation, focusing in particular on the latest developments in this field. The authors present the so-called Portability Regulation of 2017, which is designed to guarantee subscribers’ access to their content when in another country. Given that EU copyright legislation is based on territoriality, the Portability Regulation creates the “legal fiction” that the provision of service to a subscriber in another country actually still takes place in their country of residence even though they are on the move. Chapter two also looks at the recent review of the Audiovisual Media Services Directive (AVMSD) which was concluded in autumn 2018. The new AVMSD has defined the COO principle with greater clarity in which member state’s rules apply, for example. It has, however, introduced an exception to the COO principle in that it now allows member states to oblige media service providers based in targeting countries to contribute financially in some way to national film funding resources.

Chapter three zooms into legal provisions adopted at national level. The first section explores the notions of authorship and ownership specific to audiovisual works. It also looks at the exercise of rights and at rights clearance processes (transfer of rights to the producer, licensing to broadcasters or online platforms, for example). The authors focus on different licensing procedures and on the role of collective management societies in the European audiovisual sector. The second part of chapter three and the national analysis it provides focuses on the role of the COO principle in the financing of audiovisual works. For example, Germany, France and the Flemish Community of Belgium have imposed a domestic levy on VOD services also applicable to foreign VOD services targeting their audience.

Chapter four summarises the views of the industry on the above-mentioned legal developments and the discussions surrounding territoriality and the COO principle, in particular as far as licensing practices and financing are concerned. Chapter five takes us through recent case law concerning territorial licensing before and after the harmonisation of EU copyright legislation. The final chapter rounds off by looking at the state of play and potential impact of the legal developments described throughout this publication.