24/11/2016 - According to EFADs, the measure could lead to the elimination of territorial-exclusive licensing, higher prices, fewer choices and less investment in European co-productions

Article 2 in the Proposal for a Regulation on certain online transmissions of broadcasting organisations and retransmissions of television and radio programmes introduces a Country of Origin principle extension that, according to the European Film Agency Directors (EFADs), will endanger the sustainability of the audiovisual sector and cultural diversity in Europe.

The EFADs strongly opposes this and warns that the negotiating positions of producers, sales agents and distributors could be weakened by this regulation, making it difficult for them to resist demands for pan-European catch-up rights, for which rights holders are rarely remunerated.

For European independent companies, territorial exclusivity is a precondition for the financing, distribution and marketing of European works; it is therefore absolutely crucial that territoriality and contractual freedom are not undermined by any of the Digital Single Market (DSM) proposals which could undermine the bargaining power of producers, sales agents and distributors. Current copyright law does not prevent right holders from selling multi-territorial licenses, and transaction costs in the case of an audiovisual work are low, as the exclusive exploitation rights are usually held by the producer or licensee.

This measure could mean a concentration of power in the hands of dominant players, which would not strengthen, but rather weaken, competition and would be translated into less content available online and less access to culturally diverse content, which would then lead to less choice and higher prices in some territories, affecting the e-commerce sector and cross-border access to pay-TV content.

Peter Dinges, president of the EFADs, and representing directors of film agencies in 31 countries in Europe, explained: “Without territorial licences, we would see less investment in European films, fewer co-productions, less competition, and finally less access for the European audiences to a diversity of cultural works. The impact of this regulation could be devastating for European theatrical works and audiovisual series. Therefore, the European film agencies call on the European institutions to change this approach.”