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We, as Creativity Works!, the leading coalition of the cultural and creative sectors in Europe, all stand united in requiring justified and legitimate commercial, contractual and licensing freedom, including territorial exclusivity for how we produce, fund, and deliver Europe’s digital creative content in the Single Market. These precedents are underpinned by previous decisions by EU co-legislators to continue to exclude electronically delivered non-audiovisual copyright-protected content and audiovisual services from the scope of the EU Geo-Blocking Regulation. Together with copyright, commercial freedom is a driving force behind the creative and cultural sectors which account for 6,9% of the European Union’s GDP and 8,2% of total employment, translating into 17 million (direct and indirect) jobs in Europe. Creativity Works! continues to stress that:

• Contractual freedom, including territorial exclusivity is a founding principle of creativity and economic sustainability in the creative and cultural sectors and enables our sectors to undertake high creative and financial risks, raise the necessary funding for development, production, publishing, distribution, and exhibiting, including tailoring our content and services to audiences’ language and cultural preferences. The commercial freedom to agree on a territorially exclusive basis has a positive effect on the value of rights and is a key driver for securing the capital needed to produce new content. , which is increasingly important given the fast-evolving consumer preferences and growing competition for attention from other areas (including social media and video-sharing platforms). It is particularly important for Europe’s SMEs and start-ups so that they can compete based on respect for their property rights and maximising of It also enables distributors to off-set the investment in acquisition of rights, marketing and building consumer demand for specific content.
• The current system has resulted in unprecedented historical access to diverse content and services as well as high levels of consumer welfare¹. Europeans benefit from more than 150 million musical tracks, on several thousand licensed digital streaming services; over 3 million e-books and audiobooks in addition to a vast print book selection, available in European bookshops; a vast array of sports content; countless images; more than 12,000 audiovisual media services, counting linear TV channels as well as non-linear services such as SVOD, TVOD, AVOD and other forms of online video services, beyond the experience offered by over 10,000 European cinemas on more than 27,000 screens; and a vast array of video games enjoyed by over half of the EU’s This would be jeopardised if the Geo-Blocking Regulation were to be extended to electronically delivered non-audiovisual copyright protected content and audiovisual services as it would force the abandonment of legitimate and fundamental business practices which protect consumer choice and cultural diversity and the ability to offer purchasing power-based prices, and add unjustified administrative burdens.

Examples of how an extension of the scope would jeopardise the financial sustainability of creative content production 

Ending legitimate and territorial licensing for the creative and cultural sectors would translate into higher prices for consumers and fewer distribution channels - leading to a lose-lose situation for both consumers and our industries. 

In practice, this would mean:

• The ability to set prices as a function of local purchasing powers would be lost;
• Prices would be established at the level of higher-income Member States;
• Meanwhile, VAT would continue to vary between Member

No longer having the commercial freedom to conclude territorial distribution arrangements would mean that rights to some types of content would have to be bought for the entire European territory. Only a handful of players would be able to afford and actually exploit such operations, leading to a concentration in the distribution segment of European markets. As a result, citizens would likely face higher prices for content and only well-off audience groups would readily be able to access content services. In addition, it is unlikely that a single sale of rights for all of Europe would generate the same amount of production funding as several individual distribution deals. Overall, if  services offering copyrighted content were included in the scope of the Geo-blocking Regulation, consumers would eventually end up paying more to access the same works, and there would also be a negative impact on the ability of creators, publishers, producers and services to adapt to local market conditions, which would translate into less diversity. ¹ See Oxera study on The Impact of cross border access to audiovisual content on EU consumers.

Less culturally diverse content, less cultural diversity

In some sectors, pan-European licences would likely lead to a monoculture of predominantly English-language content or content that is in the major languages (English, French, German, etc.) in an attempt to maximize audience reach. This would predominantly serve high-volume markets while leaving the rest of the EU countries and language groups underserved, with a resulting loss of cultural and linguistic diversity. The ability to adapt offers to local market conditions, language preferences and cultural tastes (thanks to geo-blocking) contributes to Europe’s rich content and service diversity in the cultural and creative sectors.

Upholding competitiveness

Territorial distribution arrangements uphold the competitiveness of players of all sizes; the localisation of consumers is far from a natural element from an economic and legal point of view. The location of a customer matters to a vendor, and it does in a way that is completely independent from whether a sale is active or passive and from the scope of rights. It matters for technical, economic, and legal reasons, all of which means that it is not cost-neutral to sell into more territories, and in some cases, it is even not advisable from a legal point of view. A blanket obligation to avoid restrictions at this stage would very likely achieve the opposite of the desired effect, forcing a large number of smaller operators to withdraw from online sales altogether, and reinforcing the already dominant position of a few large players..

• The Commission’s thorough evaluation report on the implementation of the Regulation on unjustified geo-blocking (November 2020) recognised “different market dynamics” in our sectors and noted that the “beneficial effects, in particular for consumers” of an extension of the Regulation’s scope are not clearly demonstrated. It concluded that licensing and legitimate geo-enabling practices which underpin Europe’s Digital Single Market continue to be fully justified. The European Commission has long acknowledged that “the financing of new European productions in the audiovisual sector is, to a large extent, based on territorial licensing combined with territorial exclusivity granted to individual distributors or service providers.” We believe that this continues to be the case.
• The Council has reiterated its support to the business models driving our industries several times. In 2018, the Council stated that “the content-producing and content-distributing sectors, which include content and works from the media (with audiovisual, print and online content) as well as other cultural and creative sectors, are essential pillars of Europe’s social and economic development" and that “in order to increase Europe’s competitiveness and to stimulate innovation, Europe must build on its creative and cultural assets”. In 2021, the Council recognised that “it is important to boost…the circulation of content, and promote its various expressions, innovation and talents, while at the same time preserve our (the EU’s) strategic cultural assets”. In the same Conclusions, the Council also acknowledged that “co-productions, as well as international collaboration among professionals (...) at all levels of the value chain (creation, training, development, production, promotion,distribution), facilitate cross-border distribution of audiovisual works”.

• The European Parliament has also warned against the extension of the Geo-blocking Regulation’s scope to the creative and cultural sectors in its December 2023 resolution, stressing that “the inclusion of audiovisual services in the scope of the Geo-blocking Regulation would result in a significant loss of revenue, putting investment in new content at risk, while eroding contractual freedom and reducing cultural diversity in content production, distribution, promotion and exhibition; emphasises that such an inclusion would result in fewer distribution channels, ultimately driving up prices for consumers;” and “whereas maintaining geo-blocking for copyrighted works and protected subject matter is one of the major tools for guaranteeing cultural diversity;” amongst others.

Upholding commercial and contractual freedom, including territorial exclusivity, is critical for creating, financing, producing, distributing and showcasing creative works, which reflects Europe’s rich cultural landscape. Far from creating regulatory or administrative barriers for the industries and consumers, it enhances cultural diversity, protects consumer choice and allows for purchasing power-driven prices. Culture and sports are among Europe’s biggest economic and cultural assets. It is essential that the Geo-blocking Regulation continues to exclude the EU’s cultural, creative and sports sectors from its scope.