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EC copyright reforms: Industry reaction

September 15, 2016

By Colin Mann

Following the EC’s publication of its copyright reforms, a number of industry observers and trade bodies have reacted to the proposed changes, with many expressing concern at the ramifications for the content industry.

According to John Enser, partner at media law firm Olswang, the proposed reforms show the European Commission’s desire for cross-border harmonisation, but do not appear to have been fully thought through. “While the Commission claims to seek opportunities for rights holders, there could be cause for concern for content owners – if broadcasters only have to clear catch-up content rights in one home market, it cuts across the ability for producers and other underlying rights holders to monetise content on a territorial basis. The Commission has recognised previously (via the Portability Regulation and the Impact Assessments that accompany the legislation) the importance of territorial licensing to the financing and production of high-quality content, but it continues to press ahead with measures that ultimately may undermine these factors,” he warns.

Enser says the other proposal which is “totally alien” to the market-led approach of the audio-visual industries is the one-way only right for creators to rewrite contracts and demand more money from producers where the ‘remuneration originally agreed is disproportionately low compared to the subsequent relevant revenues’. Enser says this fails to take account of the risks undertaken by producers and investors. What about when creators are over-paid for content which subsequently fails in the market,” he asks.

An open letter from a grouping of organisations representing the film, TV and sports sectors in Europe, has warned that despite unanimous alerts from the film, TV and sports sectors in Europe of the unintended and negative consequences of the EC’s approach, the proposal will erode the cultural diversity underpinning the European film, TV and sports sectors. “The capacity to continue to create, finance, produce and distribute content in Europe under the proposed rules will be severely reduced to the detriment of European audiences who will be deprived of a diverse offer of content and platforms online going forward. This is also evidenced by recent independent economic research,” it says.

“Earlier this summer, we, the undersigned organisations representing the film, TV and sports sectors in Europe, were part of a wider industry initiative in which 101 organisations and individuals representing creators and businesses in the film, TV and sports sectors throughout Europe and across the world wrote a letter on this topic to President Juncker. The letter urged him not to proceed with a proposal that would erode the territoriality of audiovisual rights and the ability to license on an exclusive territorial basis. The application to online services of the principles enshrined in the Satellite and Cable Directive, especially its Country of Origin Principle, will force the application of a legal regime established for satellite and cable to an entirely different environment, thereby attempting to impose cross border access in ways that will inevitably erode cultural diversity to the detriment of existing financing practices and real consumer taste and demand,” it warns.

“The Commission’s new proposal goes against its political commitment to foster economic growth and jobs in Europe and the obligation to respect cultural diversity in Europe under the Lisbon Treaty. The proposed Regulation does not ‘respect the value of rights in the audiovisual sector’ as territoriality without full exclusivity has no meaning: offering less than full exclusivity will generate less income with a negative impact both on raising financing and on recoupment,” it contends.

“We will work with the European Parliament and the European Council to preserve the integrity of territorial exclusivity in the audiovisual sector and maintain the indispensable market incentives for the film, TV and sports industries to finance, produce and distribute audiovisual content in Europe for the benefit of all audiences. We will work to preserve Europe’s cultural and linguistic diversity as a strategic asset underpinning our European identities and citizens’ trust in the EU,” say the letter’s signatories.

UK grass roots digital rights organisation Open Rights Group has criticised the proposals, with Executive Director Jim Killock noting that thousands of EU citizens responded to the consultation on copyright, only for the Commission to ignore their concerns in favour of industry. “The Commission’s proposals would fail to harmonise copyright law and create a fair system for Internet users, creators and rights holders. Instead we could see new regressive rights that compel private companies to police the Internet on behalf of rights holders,” he suggests.

According to Killock, the failure to introduce a harmonised exception for freedom of panorama is both a lost opportunity and a direct snub to the thousands of people who responded to the Commission’s consultation on this. “It appears that the Commission has simply ignored their opinions and made no mention of freedom of panorama in its proposals. Freedom of panorama is a copyright exception that allows members of the public to share pictures they’ve taken of public buildings and art. While this right exists in the UK, many European countries do not have this exception, which means that innocuous holiday snaps can infringe copyright,” he notes.

“The proposals aim to compel intermediaries, such as YouTube, to prevent works that infringe copyright from appearing on their services through content identification technologies. This is effect would force sites to police their platforms on behalf of rights holders through filters and other technologies that are a blunt instrument. Such proposals could place unreasonable burdens on smaller operators and reduce innovation among EU tech companies. They will certainly lead to a greater number of incorrect takedowns, as ‘Robocopy’ takedowns cannot take account of fair quotation, parody, or even use of public domain material. These plans could undermine the UK’s hard-won right to parody copyright works. Folk songs and classical performances by amateurs are often misidentified and removed as infringing ‘copies’ of performances of professional musicians,” he suggests.

Cable Europe, the Association representing broadband cable operators, has expressed disappointment at opportunities missed in the.

It notes tht the draft Regulation dealing with the transmission and retransmission of television broadcasts is designed to augment the existing 1993 Satellite and Cable Directive, embracing new types of content distribution.

“Cable operators are at the forefront of innovation, offering ever more flexibility in how and where its customers consume content. Responding to our customers’ demand, we have the technology to offer viewing from a cable subscription outside the home and abroad. The viewer appetite for new types of consumption such as catch-up TV (watching a programme after broadcast) and restart TV (restarting a programme already in progress) is increasing, and our innovative technologies have kept pace with expectation,” it declares.

“Yet in updating copyright legislation to accommodate new technologies and behaviours, the Commission has failed to improve the legal framework for cable customers. It has ignored situations when cable operators clear rights needed to offer these new services. The current licensing regime for cable retransmission – mandatory collective licensing in the country where the cable operates – works effectively for the services of 1993; the regime should simply be updated to embrace today’s reality,” it suggests.

“It’s disappointing that in the context of regulatory change designed to stimulate innovation and investment, the Commission has failed to put in place at the legal basis for simple licensing mechanisms. This is needed for us to shorten the time to market when offering our 64 million European cable customers the viewing options they want,” concluded Caroline van Weede, Managing Director of Cable Europe.


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