The European Commission (the “Commission”) has launched a consultation on the Satellite and Cable Directive (the “Directive”) to assess whether European rules outlining where and how satellite broadcasters and cable companies should clear copyright are still fit for purpose and whether they should be extended to cover broadcasters’ online services and other forms of distribution. The consultation forms part of the Commission’s Digital Single Market Strategy, launched in May 2015 which, among other things, aims to enhance cross border access to broadcasting and related services in the EU. The review of the Directive is also part of the Commission’s plans to modernise EU copyright rules – another element of the Digital Single Market Strategy – to foster better access to digital content. In particular the Commission has indicated it will make “legislative proposals…to reduce the differences between national copyright regimes and allow for wider online access to works by users across the EU.”
Satellite and Cable Directive: Current position
The Satellite and Cable Directive (Directive 93/83/EEC on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission) came into force back in 1993, and outlines how and where copyright and related rights in satellite and cable transmission content should be cleared in the EU. Different rules apply to satellite and cable retransmission broadcasts.
The Directive sets out the “country of origin” principle in respect of satellite transmissions, meaning that rights need only be cleared in respect of the EU Member State where, under the control and responsibility of the broadcasting organisation, the satellite uplink takes place. In theory, rights cleared in the “country of origin” allow satellite broadcasts to the entire EU with consents not being required in every EU Member State where the signal is received. Of course, the availability of these services is subject to technical (ie satellite footprint) and other restrictions.
In relation to cable retransmission rights, the Directive states that if operators wish to include broadcasts from multiple EU countries in their packages to consumers, they are required to obtain these rights through collective management organisations or broadcasters. To enable this, the Directive obliges authors, producers and performers (ie rights holders) to manage their cable retransmission rights through a collective management organisation. Note that broadcasters may license both rights to their own transmissions and rights transferred to them by other rights holders, to cable operators directly.
The Directive was introduced in a pre-broadband world, when audio-visual content was not consumed via the internet to any material extent. No surprises, therefore, that this delivery mechanism was not catered for.
Proposed changes and impact
The Commission’s consultation aims to modernise the Directive, to bring it in line with modern consumer viewing patterns. As the Commission states in its press release on the consultation, since the Directive came into force, “Europe’s broadcasting landscape has changed dramatically” with the rise of digital technologies and the internet, meaning consumers have access to more content and channels including on-demand services. As such, the focus of the consultation is whether the “country of origin” principle, which applies to satellite broadcasts, should be extended to other forms of distribution, including online transmissions.
What would this mean in theory?
The Commission’s proposed extension of the “country of origin” principle to online services and other forms of distribution would in theory enable broader distribution: clearing rights in one EU Member State would enable content to be distributed throughout the EU, without the need to clear those rights in each of the other EU territories.
What would this mean in practice?
In practice, broader distribution resulting from the extension of the “country of origin” principle may be true of certain copyright works. For example, an online operator wanting to distribute an advert which includes music across multiple EU Member States, may be able to clear the relevant communication to the public rights in one EU Member State and then distribute the advert across all EU Member States without having to clear those same rights in each individual territory.
However, any extension of the “country of origin” principle to the online world seems unlikely, in and of itself, to have material impact on the distribution of high value/premium content such as sport, TV series and movies.
This content is of course largely exploited on a territorial (rather than pan-European) basis, with such territoriality being achieved not only by limiting the extent of the territory in respect of which the relevant rights are granted/cleared, but also via the more “physical” control mechanism of geo-blocking.
So even if the “country of origin” principle is extended to online, it wouldn’t in and of itself impact on the use of geo-blocking; the fact that content on a service is cleared for use throughout Europe is somewhat irrelevant if in fact the service itself is only available in specific territories.
Of course, the use of geo-blocking mechanisms themselves is the subject of various current Commission inquiries and investigations.
In May the Commission launched a competition inquiry into the e-commerce sector to consider, amongst other things, contractual restrictions such as geo-blocking provisions in distribution agreements. In June, the Commission sent a Statement of Objections (a list of formal charges) to Sky UK and various US studios regarding clauses in licensing agreements requiring Sky UK to restrict consumers outside its licensed territory from accessing films via satellite services or its online services. The Commission has acknowledged in its Digital Single Market Strategy that it is seeking to prevent only “unjustified” geo-blocking – recognising that “the financing of the audio-visual sector widely relies on a system based on territorial exclusivity, which as such cannot be considered as unjustified geo-blocking” – but there is currently no clear indication of what will and will not be caught by the term “unjustified geo-blocking.” These processes will take several years to run their course.
Next steps for the consultation on the cable and satellite directive
The Consultation is open until 16 November 2015 and can be found here. In conjunction with this review, the Commission is conducting a study (which will feed into the review) to assess the functioning and relevance of the Directive and the legal and economic aspects of the evolving broadcasting landscape. The results of the study will be made public in spring 2016.
By Patrick Mitchell, legal director; Sam Churney, associate; and Katie Mullally, trainee solicitor, DLA Piper