Download PDF file: Cable Europe Position Paper on the share of European works in VOD
The revised Audio Visual Media Services Directive (AVMSD) requires Video-On-Demand services “to secure at least a 30% share of European works in their catalogues and to ensure the prominence of those works” – with the exception of companies with a low turnover or low audiences. The Commission will now issue guidelines regarding the calculation of the share of European works and the definition of low audience and low turnover, after consulting the Contact Committee.
Cable Europe’s comments below aim to contribute to the Commission’s thinking in view of the upcoming guidelines.
Difficulties in qualifying a work as a “European work”
The definition of “European works” is complex which makes it difficult to determine the origin of a work. Distributors of third-party content, such as cable operators, aren’t in a position to determine whether the programmes they distribute qualify as European works (as defined under the AVMSD) because they are not directly involved in the production of such programmes. It is therefore essential that licensors of on-demand content set out where the works they are licensing originate from, in their licence agreements and in any programme metadata, as distributors rely on this information in order to be able to calculate the share of European works in their on-demand catalogues.
During the negotiation of the revised AVMSD, we highlighted the importance of establishing an obligation for licensors of on-demand content to identify the origins of the content they are licensing in the programme metadata itself, using the criteria set out in the AVMSD. Whilst the AVMSD, in its final form, falls short of imposing such a requirement on licensors, it does encourage them to do so (in recital 35). We would like to see the Commission reflect and, to the extent possible, strengthen this provision in its forthcoming guidelines, as a mere encouragement to provide the requisite information may not be sufficient to resolve the issue outlined above.
Where licensors of on-line content fail to provide the requisite information to their licensees, distributors of third-party content, such as cable operators, should be permitted to (directly) self-certify the origins of the works they have licensed, by relying on other relevant information contained within the programme metadata (for example the country of production). Distributors acting in good faith should not be held liable for any errors resulting from the lack of information available to them on the origins of a work.
Calculation of the share of European works in on-demand catalogues
Cable Europe considers that the calculation of the share of “European Works” should be based on the number of European titles (for films) or episodes (for series or documentaries) available in a given VOD catalogue compared to the number of non-European titles or episodes available in the same catalogue. Where a VOD provider offers multiple types of on-demand services (each with their respective catalogue), the share of “European works” should be calculated separately for each catalogue (e.g. TVOD, SVOD).
Furthermore, the Commission should clarify in its forthcoming guidance that where a stand-alone provider of on-demand services (like Netflix or Maxdome for example) distributes its service via cable (or any other type of third-party platform), the requirement to comply with the AVMSD’s on-demand quota obligation lies with the stand-alone provider (who has editorial responsibility for its service), not the third-party platform.
The Commission’s forthcoming guidance should also provide that stand-alone VOD providers are responsible for the reporting obligation relating to their own offerings. Furthermore, reporting obligations should be proportionate to the aims pursued, and not create undue administrative burdens on providers. This can be inter alia achieved by keeping the frequency of reporting at national level to a minimum (for example once a year).
Finally, our members will need a transitional period of at least six months to be able to implement new calculation systems and reporting requirements. We would like the Commission to clarify in the guidelines that Member States should provide for such a transitional period in their implementing laws.
Providers with low turnover and low audience – exemption
According to the AVMSD, the quotas/prominence obligation will not apply to media service providers with a low turnover or a low audience. It is important that the Commission defines, in its guidelines, the notions of “low audience” and “low turnover”. In order to determine the audience share of VOD providers, Cable Europe considers that in case of SVOD, the criteria should be the number of subscribers and in case of TVOD, the criteria should be based on the number of rentals/transactions (not downloads). Both audience and turnover should be calculated in relation to all VOD services with similar business models. For example, SVOD and TVOD are different types of services, and should therefore be calculated separately.
Furthermore, the total number of households with a broadband connection should not be used to determine the audience share, as the broadband market is completely independent from the content market, and VOD usage is also possible via mobile, satellite etc.
About Cable Europe
Cable Europe is the trade association that connects leading broadband cable TV operators and their national trade associations throughout the European Union. The regulatory and public policy activities of Cable Europe aim to promote and defend the industry’s policies and business interests at European and international level. The European cable industry provides high speed broadband internet, TV services, and telephony into the home of 65.8 million customers the European Union.
This paper represents the views of the full members of Cable Europe, and not necessarily those of our associate members, partners or affiliates