New Report Explores Impact of Movies On Demand

Bookmark and Share

Fri, 01/27/2017 - 11:38 -- Nick Dager

European films now get a longer lifespan thanks to their release via on-demand platforms, whatever their business model – subscription based, pay per view or advertising financed. This booming generation of new distribution channels represents a powerful means of boosting a film’s overall career. So it’s logical that European filmmakers are looking to on-demand services to give European movies a much needed shot in the arm. But what’s law got to do with it?

Can European legislation force VOD services to offer a glitzy shop window to European films?

The European Audiovisual Observatory, part of the Council of Europe in Strasbourg, focuses on this very question in a brand new report free.

The Observatory’s authors open the first scene setting section with an overview of the on-demand market in Europe. They point to the gradual stagnation of the European cinema market, accompanied by the swift decline of physical video sales and rental.  In contrast, subscription on demand was set to triple from EUR 1 billion to EUR 3 billion in 2016. The report states that, “On-demand audiovisual services are therefore set to become a main element of the audiovisual market worldwide in the upcoming years and thus to play a major role in the promotion, production and circulation of European works.”

This same section then provides an overview of the different on-demand services and their legal definitions, including the technical approaches recommended by the International Telecommunications Union and the Body of European Regulators of Electronic Communications to respectively video on demand and over-the-top services, but also the legal concepts developed at European level, including the Council of Europe Recommendation on a New Notion of Media.

The second section of this report goes deeper into the international and European legal framework, which relates to on-demand services. One of the underlying intentions behind the European approach to international and also European legislation is clearly the protection and promotion of the cultural industries within Europe. Indeed linear broadcasting services have been legally obliged to promote European works since the Television without Frontiers Directive of 1989. The more recent Audiovisual Media Services Directive – the principal European legal instrument which deals with audiovisual content supply – revamped the TVWFD in order to take into account the new on demand, non-linear services. Not surprisingly, the new-look text includes the obligation for on demand services to promote European works but leaves a considerable margin of freedom as to how each country imposes this.

The third section therefore provides an extremely thorough country-by-country analysis of EU-28 different national legal frameworks in Europe. The panoply of measures available to promote European works on demand includes obliging the on-demand services to contribute financially to film funds, the imposition of quotas of European content and prominence given in catalogues on line for example.

The fourth section looks at the role of self and co-regulation as a flexible and pragmatic approach to standard setting in the on-demand environment. For example, the AVMSD, currently under revision, favors the adoption of codes of conduct at national level in the fields coordinated by the Directive. The Council of Europe has also carried out significant work in the field of Internet governance, bringing all the stakeholders around the table in order to prevent hate speech, protect from harmful content while at the same time ensuring freedom of access.

The fifth section walks us through recent European case law in this field. The report highlights the practice of jurisdiction shopping where operators choose to set up in a country according to the legal rules applicable and beneficial to them. To counteract this practice, France and Germany have recently announced that they will apply certain taxes aimed at promoting European works to VoD distributors located outside their national territory.

The authors round up with a state-of-play chapter concerning the current revamp of the AVMSD. The new-look Directive is more stringent than the current version for non-linear services such as VOD in terms of promoting European works. Under discussion at the moment are measures such as a minimum share of 20 percent of European works and prominence in catalogues. Member states may also impose financial contribution obligations and the obligation to invest directly in content. The new AVMSD may also allow member states to impose these conditions on on-demand services available on a domestic basis but located in another EU member state.

European Audiovisual Observatory