Preparing for a Fully Converged Audiovisual World

Download the document

Executive Summary

Our sector is in good shape and confident about the future. Viewing of linear television continues to increase. Advertising and subscription revenues for broadcasting, while not immune from recession and the macro-economic cycle, provide a solid basis for diversification and innovation. Specifically, new forms of distribution (OTT etc) are an opportunity rather than a threat and ACT member companies are enthusiastically launching new services (among the 3000 VoD services now available in Europe);

We remain committed to a high level of investment in content, which underpins our growing popularity with viewers. To date we have established a virtuous circle relying on operators’ contractual freedom to invest in, commission and produce the best content and to negotiate appropriate distribution deals, whether exclusive or not, across platforms, time periods and geographies. Broadcasters’ investment in new or existing services, is only possible if there is a thriving market in the production and acquisition of content underpinned by strong intellectual property rights.

The sustainability of current financing models for content production, rather than regulation per se, should be at the heart of the Commission’s thinking. EU media policy should be measured against whether or not it increases the range and choice of content on our consumers’ screens and the financial viability of those involved in bringing content to the screen;

Media convergence is a reality but its long-term implications are as yet unclear. In the words of a recent report for OFCOM; “the impact of innovation is currently nascent and a sudden single transformation (a ‘Kindle’ or i-Tunes’ moment) is unlikely. Instead there will be a messy but exciting period of innovation in technology and services whose cumulative disruptive impact will be significant”

Turning to the future of regulation at EU level, the current AVMS regime has important strengths (country of origin regime, platform neutral) which must be preserved;

As a first step, any evaluation as to the future framework of content regulation at EU level should be based on a rigorous and detailed exercise of scenario planning. An important additional complexity which must be taken into account in this scenario planning is that European media markets are heterogeneous and will experience the phenomenon of media convergence in different ways and at different speeds. To namebut two of the factors, broadband speeds and the strength of local content production markets vary widely across the EU. This may mean that different EU media markets are experiencing different scenarios at the same time, a further challenge to detailed regulation at the EU level – put simply, the challenges facing media content policymakers in Estonia are likely to differ from those in Germany;

The two-tier (linear/non-linear) AVMS regime made sense when the text was negotiated in 2006 – and may continue to do so – but may be challenged and become unsustainable in a future when consumers will be enjoying linear and non-linear content interchangeably, sometimes on the same screen, as well as video content delivered from the open internet subject to no content regulation.

As the European Audiovisual Observatory recently noted, “the vagueness of the [AVMS] provisions has forced member states to find individual solutions to many unsolved questions when transposing AVMS into national laws”. This is not necessarily a criticism – as the EAO report continues, “the vagueness of the notion of TV-likeness offers regulators a tool to include or exclude a whole bunch of services for pragmatic reasons”. In the medium term, there is much to be said for retaining the “TV like” concept and its pragmatism. But the concept may need to be developed and updated as new business models emerge and some Member States confronted with new or borderline cases may welcome interpretative guidance from the EC, on request. This should however not be binding on other markets who may be developing their own solutions.

The scenarios to be examined by the EC should include, as a minimum:

  • A “status quo plus” model in which the core of the AVMS-D remains valid also into the foreseeable future and issues of interpretation around “TV-like services” can be dealt with by requesting assistance from the EC;
  • A scenario in which there is a fundamental shift in advertising markets, calling into question broadcasters’ ability to sustain current levels of expenditure in content;
  • A scenario in which competition is predominantly from global or unlicensed players including competition with the same content from different sources. In such a scenario, where consumers spend a substantial part of their time on services which are not licensed in the EU/EAA, the utility of policy goals which can only be applied to EU-based services must be questionable, and in particular detailed quantitative advertising rules imposed on linear players would give rise to a distortion of competition;
  • A scenario in which co-regulation or self-regulation by operators can deliver the policy goals sought by AVMS-D

There should also be separate work – although without any regulatory outcomes – examining the likely future shape of and challenges for the production of content;

Any rethink of EU-level content regulation should be much more based on principles than on micro-management and should also examine whether policy goals are better delivered via self-regulation. If regulation is needed, other instruments rather than, or in improved co-ordination with AVMS (i.e., E-commerce, Data Protection, Electronic Comms framework, etc) may already provide the solution;

Signal integrity will become a key issue (without which the concept of editorial responsibility becomes impossible to sustain);

Commercial overlays and other novel techniques should not be possible without the prior consent of the broadcaster. This is an important extension of the principle of editorial responsibility: the entity which holds the NRA licence must be in a position to make a prior assessment as to whether a particular overlay should be permitted or not.

Other key principles include a high level of protection of minors, the retention of clear and unambiguous COO regime, the principle of editorial responsibility and ethical (qualitative) rules on commercial communication;

These principles should prove capable of being read across to all current and future platforms, whether by statutory licence or self/co-regulation. Self and co-regulation will necessarily play a greater role in future, there are positive examples from some European markets;

Regardless of whether or not a one-size-fits all must-be-found provision may be introduced in a future rethink of European content regulation, we would call on the Commission to ensure that, in the event that findability does become an issue in some markets, publicly-funded broadcasters do not benefit from preferential treatment;

On protection of minors and disabled access, there is a commercial imperative which drives players in our sector to position ourselves as best in class;

Our response will cover many of the detailed questions in the Commission Green Paper. But before so doing, we will consider:

  • The current strengths of EU audiovisual markers, in particular our response to convergence and the state of the content business;
  • Future challenges, including the changing nature of value chains and challenges to current arrangements for financing content;
  • Regulation of our sector to date;
  • Preconditions for a successful revision of the current framework