Posted on 15/Jun/2016
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The proposed revision of the the audiovisual media services directive (AVMSD) is expected to be opposed by online service providers and kindred spirits. Here’s why.

As part of the digital single market strategy (which is just over a year old now), The European Commission published six proposals on 25 May. A keenly awaited file among these, is a revision of the audiovisual media services directive (AVMSD).

This is the legislation that governs national rules on all audiovisual media content. This is not just about television, it also includes online portals and on-demand services.

The AVMSD has taken various forms over the years whilst adapting to the ongoing changes to the technological environment. Since the initial adoption of the Television without Frontiers Directive back in the 1980s the idea has been to create a harmonised single market for audiovisual content whilst ensuring some key principles.

These include technological neutrality, freedom of reception and retransmission and flexibility for Member States to provide more detailed and stricter rules than specified in the AVMSD.

Market developments, notably the rise of the online world, made it necessary to revisit the rules and amend the framework. With the last revision, the Directive was renamed and extended to include not only the traditional television content but also non-linear services (such as “on-demand” and internet services) providing television-like audiovisual content. This would now include providers like Netflix.

The proposal adopted on 25 May by the Commission has proposed several controversial changes such as the rules of prominence, advertising time limits and protection of minors.

The changes to the scope indicate video-hosting portals, such as YouTube, will be included as it proposes adding the following:

–  a definition for ‘video-sharing platform services’ to the scope
(Article 1 a bis in the draft),

–  the wording ‘videos of short duration’ to what constitutes a programme
(Article 1 b in the draft),

–  a definition of a video-sharing platform provider as a media service provider
(Article 1 d bis in the draft),

–  a provision specific to video-sharing platforms.

This is something that has previously not happened due to editorial responsibility not being part of the remit.  However, this proposal does seem to be in line with comments from the Juncker Commission about tackling the barriers between online and offline providers.

The EU is aiming to create a single, pan-European market encompassing all digital services and thus it is unsurprising that the rules for online services are to be reinforced.

For instance, the Commission proposes a common quota at EU level, taking account of the fact that many member states have already been implementing their own national quotas for European works. For instance, in Spain and Austria, there is an obligation to reserve 30% and 50% (respectively) of their “on-demand” services catalogues for European works.

In the current AVMSD, a 10% share of the content broadcast must be European works. According to the leaked document, this has now changed so linear (television) and non-linear services providers must ensure that 20 % of their catalogues are European works. A report by the Commission from 2010 demonstrated a high share of European works in catalogues across Europe.  For instance, Denmark reported in 2009, 88.9% of its on-demand catalogues consisted of European works.

In addition, the proposal sees a provision where Member States will be able to impose financial contributions to “on-demand” services for local content – a sort of European content tax.

The providers will be required to contribute financially to the production of European works, including direct investment in content or contributions to national funds. What this means in practice remains to be seen.

However, it begs the question of whether this will be an alternative to offering a specific share of European works in catalogues. Will the documented approach by Czech Republic and Italy  become the ‘get out of jail free card’ for some providers?

The proposed Directive also allows Member States to oblige “on-demand” service providers to target audiences in their territories, but established in another Member State, to make such financial contributions on the revenues made in the targeted Member State.

Albeit in this case, the provider would only be required to contribute if it was not subject to an equivalent contribution in the Member State it is established in.  For example, if Netflix maintains its headquarters in the Netherlands but is not obliged by the Dutch government to offer a financial contribution for the production of European works, and at the same time also targets a Belgian audience, Belgium could potentially seek a fiscal contribution from Netflix.

Netflix and other internet services captured in the scope, fear this proposal will damage their business model. Many platforms and portals pride themselves on having algorithms which tailor content according to the consumer’s taste. If a company has to financially invest in the production of European works and make these readily available on its platform, a personalized service will no longer work.

Additional requirements which may cause a stir include:

– stricter rules on protection of minors for television and on-demand services and specifically measures for on-demand services to put in place age-verification tools such as encryption and PIN codes,

– a possible daily limit of advertising between the hours of 7.00 – 23.00 and  Member States are recommended to develop co- and self- regulation codes with regard to advertising certain foods and drinks.

A clear focus from the Commission is the protection of vulnerable people, this can be seen by the provision in the draft which calls for stricter rules for programmes to ensure the physical, mental and moral development of minors is not impaired.

In addition, the Commission has reinforced the current provision to protect minors from unsuitable marketing communications of food high in fat, salt/sodium and sugars as well alcohol beverages.

This has in the past placed the onus on Member States to take measures, but with the continued emphasis on health and ensuring the safety of vulnerable groups, is the Commission setting up a framework to provide European rules?

Brussels should prepare to expect a stream of online service providers and kindred spirits to rally against this new proposal. Stormy audio-visual waves are ahead!


photo credits: Jonas Smith