Creativity Works stands for imagination, innovation, freedom of expression and cultural diversity. Europe thrives on these values. Creativity is a vital component of future recovery and growth across the European Union. Artists, their business partners and the creative process itself are at the centre of everything we do.
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Portability: Plenary vote finds a proportionate solution for cross-border access
Today, the European Parliament adopted the Portability Regulation which aims to ensure the cross-border portability of online content services within the EU. These new measures will address cross-border access by offering an appropriate and proportionate solution for European audiences while upholding the economic drivers behind Europe’s creative ecosystem.
The Portability Regulation is a significant pillar in the DSM Strategy. The European Commission’s Impact Assessment underlined that consumer demand for cross-border access arises primarily when consumers travel within Europe for business, leisure or education. Now, the Portability Regulation will enable EU citizens, who meet the requirements of the Regulation, to access services and content from home when travelling in other Member States. As a result, Europe will have addressed the vast majority of the demand for cross-border access to audiovisual and creative content from its citizens. They will be able to listen to their music, play their video games, and watch their films or sports broadcasts when travelling for business or leisure to another country within the EU.
Nevertheless, we continue to question the justification for additional EU legislative initiatives that are currently on the table, in particular the Geo-blocking and Broadcasting Regulations. For copyright-protected content, the removal of geo-blocking practices risks a reduction in consumer choice, cultural diversity and can lead to increased prices. Similarly, the proposed Broadcasting Regulation would considerably undermine the value of audiovisual rights. This unprecedented market intervention leads to an erosion of territorial exclusivity – the foundation for financing, production, marketing and distribution of culturally diverse audiovisual works and creative content.
Our creative sectors underline that these parallel legislative initiatives threaten a European industry that tailors content to European consumer demand.
Mathieu Moreuil, the Chairman of Creativity Works! said: “This is good news for European consumers keen to enjoy creative content from their paid subscriptions while travelling. Yet, policymakers need to be cautious of additional legislative initiatives that will erode territorial exclusivity and could therefore affect the diversity of European creative content cherished by Europeans.
STATEMENT: Creativity Works! reaction to the EC’s DSM Strategy mid-term review
Press Statement from Creativity Works! on the European Commission’s mid-term review of the Digital Single Market (DSM) Strategy
Today the European Commission has published its mid-term review on the Digital Single Market (DSM) Strategy. As representatives of the 11 million individuals in Europe’s creative and cultural sectors, who work and contribute approximately €914 billion to the EU’s GDP, we are deeply troubled how important revenue streams used to create high quality European content are now in jeopardy.
When the DSM Strategy was released in May 2015, Creativity Works! – Europe’ leading coalition for the cultural and creative sectors – was rather optimistic that the European Commission would find ways to contribute to job creation and economic growth.
Rather, the focus has been placed on dismantling underlying economies on a territory-by-territory basis to the detriment of SMEs that are dependent on territorial exclusivity and the ability to produce the content consumers want to access. The strategy, and particularly its snowball effects, are wrongfully targeting Europe’s creative content sectors.
The nearly completed Portability Regulation is a significant pillar in the DSM Strategy and we are committed to make this initiative a success for the benefit of European audiences. Once this new measure is fully in place, the EU will have addressed the vast majority of the demand for cross-border access to digital services from its citizens. It will allow consumers to access their subscription-based online content services during their travels to other EU countries.
Laura Vilches, Head of European Public Affairs, La Liga:
“The Portability Regulation is great news for consumers who will have the ability to enjoy paid subscription-based content when travelling across Europe for leisure or business. Adjustments have already been made in contracts or are ongoing. What goes in the opposite direction is the application of the country of origin principle to ancillary online services. Such an approach would diminish consumers’ choice of sports offers, increase prices as well as drastically reduce cultural diversity. Local sports competitions would most probably not be distributed to consumers.“
We believe in the intangible value of creativity, and we expect that platforms play fair too. Closing the widening “Value Gap” by clarifying that those who distribute or intervene in the distribution of creative works are therefore active and responsible for obtaining copyright licences is an important objective. We welcome the European Commission’s bid to address this concern. This proposal is a once in a generation opportunity to strike the right balance between the interest of users, our cultural and creative ecosystem and the platforms giving access to creative works.
Anne Bergman-Tahon, Director, Federation of European Publishers (FEP):
“Access to content should follow the licensing first approach. The current exceptions together with a wide variety of available licenses and agreed access for specific user groups provide flexibility to innovate and find new ways to meet the different needs of different user groups. Broadening exceptions will challenge the opportunities to publish new innovative works.”
When preparing the proposal, the Commission rightfully excluded copyright-protected content such as books, music, video-games as well as audiovisual services from the public consultation. For copyright-protected content, the removal of geo-blocking practices risks reductions in consumer choice and cultural diversity as well as increased prices – the opposite of what policymakers want to want to achieve. The content Polish consumers want will vary greatly from the content Italian consumers will seek – this applies to music, sports, books and video games. The future of Europe’s ability to create depends on being able to use flexible business models that can meet consumers’ different needs and means.
Fran Dubruille, Director, European and International Booksellers Federation (EIBF):
“For our industry, the direction of the Geo-blocking Regulation is worrying. E-books is a data driven business – there are download fees, upload fees, cybersecurity costs, among others. Those European booksellers who sell e-books do so at a loss for the time being. Many do invest because they want to have a foot in the e-book market. This is a business decision. Having that decision imposed on all booksellers would mean that many would opt out of the e-book market: in practice less choice for consumers to the benefit of non-European Internet platforms.
Helen Smith, Executive Chair, the Independent Music Companies Association (IMPALA):
“The Commission’s approach on geo-blocking to not include video games, e-books or music services was correct. Things have taken a different turn, and unless corrected, European consumers will face higher prices and less tailor-made content.”
Simon Little, Managing Director, the Interactive Software Federation of Europe (ISFE):
“At a time in politics when many want to see European integration slowed down, video games are now the primary means by which many Europeans interact and engage with other European citizens on an ongoing basis. However, the Parliament’s decision to include video games within the scope of the Regulation – without a formal consultation with the creative industries on the impact – is troublesome. Consumers with lower incomes, who in the past paid for video games based on the purchasing power of their national market, will now face a unitary EU price based on prices found in the largest markets (DE, FR, UK, IT, SP).”
Broadcasting Regulation (“Country of Origin Principle”)
We find it confusing that when launching the DSM Strategy, the European Commission explicitly committed itself to “respect the value of rights in the audiovisual sector,” as this promise was not kept with the proposed Broadcasting Regulation which mandates the application of the country-of-origin principle to broadcasters’ online services. This proposal is simply not fit for purpose for today’s flexible and fast-technology-driven environment and would considerably undermine the value of audiovisual rights. The soon-to-be implemented Portability Regulation already offers an appropriate and proportionate solution for European audiences.
Territoriality is the foundation of Europe’s audiovisual industry. Film making and audiovisual content production are a risky business. Costs are shared between different players – producers, co-producers and distributors – which decide how best to promote and value a film in a given territory. This “co-financing” and co-production model allows Europe’s audiovisual sector to craft, finance, produce, market and distribute culturally diverse content tailored to the specific demands and tastes for each market.
In this spirit, 411 European content creators from all 28 Member States are calling on EU policymakers to reject and withdraw the proposal (click for letter) as it runs contrary to the Commission’s Digital Single Market agenda, which is to create growth and jobs.
Benoit Ginisty, Executive Director, International Federation of Film Producers Associations (FIAPF):
“The diversity of European film and TV production as we know it is under threat. Selling rights on an exclusive basis, including by territory, is key to attracting co-producers, local film distributors and broadcasters to participate in the financing, marketing and distribution of films and TV programmes. The proposed Territoriality Regulation is a complete disincentive for future private investments in film and TV production to the detriment of the most risky national audiovisual projects – artistically and financially speaking – these are simply unlikely to be made in the future.”
Grégoire Polad, Director General, Association of Commercial Television in Europe (ACT):
“Today we as broadcasters constantly reinvest half of our revenues into original content. This will be lost with pan-European licensing as foreseen by the Broadcasting proposal. Smaller broadcasters will have a tough time purchasing content, opening the doors for the dominance of a few over the diversity of many. This is not a small adjustment as it undermines a model that ensures almost one million jobs and creative content to thrive across Europe.”
Coco Carmona, Director General, International Confederation of Music Publishers (ICMP):
“The proposed Broadcasting Regulation ignores fundamental commercial realities about the market and lead to distortions; as a result it is also highly detrimental to the music sector. Besides having a race to the bottom effect in terms of value, the country of origin principle has a harmful impact on rightsholders’ remuneration and protection. National and local cultures, as well as languages and tastes require specific offers. One size fits all doesn’t work.”
Note to the Editors:
Today, European audiences can access more creative works online than ever before: they can enjoy over 30 million licensed songs, over 3,000 Video-on-Demand Services (VOD), and over two million e-book titles, as well as countless images that help make the internet the vibrant and engaging place it is. Additionally, video games are played by approximately 340,000,000 Europeans.
At the end of last year, the European Parliament Resolution “A coherent EU policy for cultural and creative industries” recognised the key role the creative and cultural sectors play in Europe’s economy and society: more than 11 million people with a wide range of skills and talents work in the creative industries in Europe.
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411 audiovisual sector leaders from 28 Member States urge the EU to “reject and abandon” a proposal that “undermines the entire audiovisual eco-system in Europe”
Absolute territorial exclusivity is the cornerstone of creativity and investment in European audiovisual works and other protected content – Communication from AV sector representatives across Europe regarding the proposed Regulation on country-of-origin licensing of certain online services by broadcasters.
Dear President Tajani, Dear President Tusk, Dear Prime Minister Muscat, Dear Prime Minister Ratas, Dear Ministers,
As representatives of Europe’s world-leading audiovisual sector, we write to highlight our concerns about the impact of erosion of territorial exclusivity on the creativity and investment in original content, which are the foundation of Europe’s leadership in cultural diversity and digital content services.
The nearly completed Portability Regulation is a significant pillar in the European Commission’s Digital Single Market Strategy. Once this new measure is in place, Europe will have addressed the vast majority of the demand for cross-border access to audiovisual content from its citizens – demand which according to the Commission’s Impact Assessment arises primarily when consumers travel within Europe for business, leisure or education.
The process leading to this development is in sharp contrast with the proposed Regulation on country-of-origin licensing of certain online services by broadcasters, where the Commission is persistently moving ahead despite significant concerns raised by organisations and individuals representing screen writers, film authors/directors, film and television producers, publishers on physical media and online, distributors, cinema operators, broadcasters, platforms, sport right owners and media and entertainment trade unions. These concerns are shared by several Member States.
Indeed, last year, more than 100 organisations and individuals across Europe urged President Juncker to preserve the integrity of absolute territorial exclusivity and maintain the indispensable market incentives for the film, TV, and sports sectors to create, finance, produce, market and distribute audiovisual content across Europe. The concerns raised in 2016 remain unaddressed by the European Commission. The proposal referenced above leaves considerable uncertainty with regard to the sustainability of financing the development and production of content, distribution business models and the commercial freedom to license of many European content producers, creators and investors to the detriment of cultural diversity, industry growth and, ultimately, European consumers’ choice.
It is worth recalling that in its Digital Single Market Strategy communication adopted on 6 May 2015, the European Commission expressly committed itself to “respect the value of rights in the audiovisual sector”. We commend the French and Spanish Governments in coming together in their communication of 20 February 2017 to uphold the critical value of territorial exclusivity.
The proposed Regulation on country-of-origin licensing of certain online services by broadcasters – based on legacy legislation devised more than two decades ago for a specific technology (satellite) – does not preserve territorial exclusivity with respect to the licensing of audiovisual content. Rather, it will severely erode territorial exclusivity as it would artificially allow certain online TV services such as catch-up TV and simulcasting to become accessible in all Member States on the basis of a single copyright license agreed between a producer and a TV broadcaster in one Member State. The default rule set out in the proposed Regulation amounts to “buy a license for one Member State, get the rest of the EU for free.” This has a negative impact on the value of rights in the various distribution channels and territories.
The Commission’s assertion, despite the shortcomings of its Impact Assessment, that the proposed Regulation will only provide for a default rule which private parties would be free to contract around is unfortunately an empty promise. It is highly questionable whether right holders will have the necessary bargaining power to obtain an opt-out from the application of country-of origin licensing. In addition, there is a fundamental interaction between this proposal and the ongoing DG Competition investigation into absolute territorial exclusivity provisions in contracts for the distribution of audiovisual content, as well as DG Competition’s e-commerce sector enquiry. The Commission itself has recently publicly acknowledged this link in several instances, while denying it in other fora. Our concern is that the proposed Regulation’s assurances of commercial freedom to license content is a hollow assertion, especially when DG Competition appears determined to erode this very commercial freedom to license.
Our sector’s concerns are now exacerbated by amendments from some Members of the European Parliament that would further broaden the scope and deepen the severe harm that the proposed Regulation would cause to the film and audiovisual sector in Europe.
Our industry continues to embrace opportunities provided by new technology and improved connectivity in the digital age to meet consumer demand for choice, quality and diversity. As a result, there are a growing number of online audiovisual services available in Europe delivering high quality content to millions of viewers in a manner that caters for culturally and linguistically distinct local audiences. Put simply, consumers have more access to more content, in more ways and on more devices than ever before and this growth will continue. At the same time, the ability to recoup development, production, marketing and distribution costs are challenged both as a result of changes in consumption patterns and ongoing illegal access and services.
We would like to recall that our collective sectors employ more than 1,000,000 people across the EU, generate more than €97bn a year and offer culturally diverse, high-quality content and entertainment on more than 3,000 VOD services available to European citizens.
We strongly advise against measures that further threaten cultural diversity, growth and sustainable jobs for creative talent and skilled workers, as well as future investments in the audiovisual sector in Europe.
At this critical stage of the legislative process, and in light of the requirements of the Better Legislation Guidelines, we therefore respectfully urge the European Parliament and the Council of the European Union to reject and abandon the Commission’s proposed application of country-of-origin licensing which undermines the entire audiovisual eco-system in Europe.
We thank you for your consideration.
CC: President Juncker, President of the European Commission
CC: Permanent and Deputy Permanent Representatives of the Members States to the EU
CC: Chairs of political groups in the European Parliament
CC: Rapporteurs and shadow rapporteurs in the JURI, IMCO, CULT, and ITRE committees in the European Parliament
CC: Participants to the Competitiveness Council
 Joint Declaration of the French Republic and Kingdom of Spain on: A European Strategy for Culture in the Digital Age and in the context of the reform of Intellectual Property, 20 February 2017 (Malaga).