What We Know as “Portability” Nears Review by the European Parliament

Europe’s regulation on the “portability” of online content subscriptions is nearing a reality for EU consumers, with far-reaching consequences for the European marketplace and those who license content along national boundaries. IFTA has consistently been one of the loudest voices at the European Commission and among the Member States, emphasizing the relationship between territorial exclusivity in all media/channels and production financing and that marketplace – rather than legislative – solutions must be encouraged in the rapidly changing digital arena.

In 2015, the European Commission adopted an action plan to secure a “Digital Single Market” to provide consumers throughout the EU with seamless online access across borders to goods and services, including film and television programming. The initiative stems in part from what the Commission perceives as a lack of availability of online content across the EU. Initial pronouncements by the Commission threatened to prohibit any form of territorial limitation on copyright licenses to online platforms and thus would eliminate the ability of producers to secure financing through exclusive licensing arrangements.

Independent producers and their distributors within the EU are acutely concerned that the Commission’s all-encompassing push for a Digital Single Market will severely limit producers’ and distributors’ ability to structure and finance production within and outside of Europe.   Independents rely on their ability to raise production financing by licensing exclusively to distributors who are experts in each local market, culture and language. They also rely on strong copyright rules to protect their creativity and investment and that is why IFTA, its Members and other European Producers, sales agents and their distributors as well as unions are speaking up as the Commission considers a path that will have critical consequences on our industry.

As the Commission moves forward, its first legislative proposal in connection with the Digital Single Market is set for review by the European Parliament. This initial proposal on “portability” is now narrowly directed toward enabling EU-based subscribers to online services with access to those services while they are temporarily traveling elsewhere within the EU. If properly contained to its stated purpose and current text, the proposal would avoid significant disruption to the economic relationships underpinning our industry.

However, the Commission has not relinquished its broader effort to ensure cross border availability of online services and content in Europe, irrespective of the industry’s reliance on territorial exclusivity and geo-blocking in audiovisual distribution agreements. Forthcoming legislative proposals with the aim of promoting online, cross-border access to content throughout the EU are expected to be released by the Commission on September 21. Leaked documents indicate that the Commission will propose a legislative instrument to establish copyright rules applicable to certain online transmissions, along with a new negotiation mechanism with respect to online VOD platforms. At the same time, the Commission is expected to propose a new Regulation to extend certain provision of the Cable and Satellite Directive to certain online services offered by broadcasters (such as BBC’s iPlayer).

Further proposals are expected to expand the scope of the Exceptions and Limitations allowed under the Copyright Directive. The leaked documents also signal the Commission’s intention to examine and take action with respect to the so-called “value gap” and possible disparities in authors’ and performers’ remuneration from online distribution of content. 

Alongside this flurry of legislative activity, the Commission continues to pursue a competition case against major pay TV providers in the EU, challenging the territorial nature of their output agreements.

IFTA and others in the audiovisual field remain actively engaged with the Commission and with Member States to ensure that the fundamental rights of copyright owners are not compromised by these initiatives.