13/07/2016 - We sat down with Christine Eloy to discuss the impact of the Brexit and the Digital Single Market for distributors

Cineuropa had a chance to sit down with Christine Eloy, the managing director of Europa Distribution at the recent Karlovy Vary International Film Festival to discuss the impact that Britain’s departure from the EU will have on its place within the Creative Europe programme as well as that of the European Commission’s proposed Digital Single Market on the audiovisual industry.

Cineuropa: What impact will the Brexit have on film distribution?
Christine Eloy: It is really important that the UK negotiates to stay in Creative Europe with the European Commission, as is the case for Norway. Even if you are not a member of the EU, you may negotiate agreements for certain programmes. In distribution, we have two important schemes for the circulation of European films, the selective and the automatic schemes. These schemes support non-national films, so that the distribution of British films is supported in Europe, and European films are supported when they are released in the UK. If the UK is not part of this programme any more, then British films won’t be supported any more when released by a European distributor. That will impact the production of these films. Of course, certain movies won’t be affected, but the smaller and more fragile ones certainly will, because it will make it very risky to release a film.

How will British distributors be affected?
Many of our members release European movies. If there is no support for the release of those movies in the UK, it will be really difficult for them, too. This goes far beyond distribution because Creative Europe supports a lot of initiatives like festivals, markets and organisations. As an association, we are also supported by Creative Europe. The audiovisual industry is a very fragile eco-system, and the support is really needed. If there is a Brexit, it is extremely important to negotiate to remain a part of Creative Europe, because that would have a big impact on the circulation of films in general. If you release an English-language film that generates high box-office revenue, it also lowers the risk of having a smaller film. You need to have bigger movies to be able to release the smaller ones. If you don’t have this ability any more, it will also impact the other films. 

Is there the possibility of an agreement for the UK to stay in Creative Europe?
Absolutely; there are already agreements with Norway, Iceland and some smaller countries. And there was also an agreement with Switzerland. It is really important that the UK negotiates something like Norway has done. The British industry is really active now. In Creative Europe, you have not only the audiovisual industry, but also the education through culture. That means that the British can’t participate in the Erasmus programme any more.

What do you expect from the European Commission’s proposal for the Digital Single Market that it will present in September?
We don’t know the specific plans, but besides the copyright directive, other directives may also have an impact. The satellite and cable directive regulates transmission via satellite and cable. One of the principles in that directive is that, when you have a transmission via satellite, you only have to pay for the rights in the country from where the signal is being emitted. The amount you pay is supposed to take into account all the audience targeted - including in other territories. They’re calling it the “country of origin principle”. Now, they could extend this directive to online. That would mean that you only have to pay the rights in the country where the signal originates. If you have a VoD platform based in Luxembourg that is actually covering the whole continent, they would only have to pay the rights for one country. It’s actually pan-European licensing in practice, because if you are a distributor in another country, you will be affected by it. Of course, there are some languages that will cross less, but for major languages, such as English and French, it will be a race to be the first one to show the film because you will have all of Europe on one site.

Does it actually come down to pan-European licensing?
It is just another way it could go. The European Commission doesn’t want exclusive territoriality, but a single common market through copyright and this directive. The industry is very active and presented the Oxera study in Cannes, which demonstrates that it won’t bring more films to the consumers and it will badly impact the whole industry. At Europa Distribution, we are in contact with 140 companies all over Europe and can see what the consequences might be.

What might be the consequences?
If a film that was presented at Cannes is accessible via VoD after four months, there wouldn’t be many exhibitors who would be eager to show a film in their cinemas that is already legally available on an internet platform across Europe. We’re not only talking about the online world; it also impacts the theatrical world because of distribution windows. We lose our exclusivity and our ability to negotiate and sell rights. If we can’t do that, we can’t release a film as a distributor any more. Independent distributors need support to release the more difficult movies, because that is very risky and difficult. We don’t have DVD any more, and TV hasn’t been buying independent films for quite some time. If we don’t have the possibility to exploit our rights on VoD and we lose the theatres because of the distribution windows, we can’t release films any more.