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In the past month, news about Audiovisual Media Services Directive (AVMSD) and the latest changes that will affect all Broadcasters and User-generated content providers in the EU, have spread throughout media. The idea of the Directive is to achieve a balance between competitiveness and consumer protection, on and off the Internet.

In this blog, we have summed up the most important accepted rules and decisions, which will have an effect on service providers all over the EU.

There is nothing new in viewers moving from traditional TV to the online world, but the problem that the regulatory burden doesn’t follow the “new wave”, remains.

Evolution of the audiovisual market is challenging for traditional players, who need to adapt to the ongoing transformation to secure their market positions. Broadcasters are extending their activities online, and new players offering audiovisual content via the internet (e.g. VOD providers and video-sharing platforms) are stepping up in the competition for the same audiences. TV broadcasting, VOD and user-generated content (UGC) are currently subject to different rules and varying levels of consumer protection. To address these discrepancies and achieve a level playing field, the European Commission proposed an update of EU audiovisual rules.

Goals of the AVMSD for all players:

  • providing rules to shape technological developments
  • creating a level playing field for emerging audiovisual media
  • preserving cultural diversity
  • protecting children and consumers
  • safeguarding media pluralism
  • combating racial and religious hatred
  • guaranteeing the independence of national media regulators

The proposal aims to promote European films, protect minors and tackle hate speech more efficiently, and at the same time reflects a new approach to online platforms. Although the directive’s increased protection for vulnerable viewers in VOD platforms has been greeted with satisfaction, the new rules have received mixed views.


Industry Experts Opinions

The industry experts are rallying behind Europe’s commercial broadcasters who claim that changes to the EU’s regulatory framework could threaten growth and investment. The key changes include a requirement for broadcasters to dedicate at least 20% of their library to European content. On the advertising front, an hourly limit on ads has been replaced by a daily limit of 20% of ads between 7 a.m. and 11 p.m. (Source: S&P Global: EU under fire for uneven playing field between linear, online players )

The situation for broadcasters in Europe is “difficult,” agreed Clemens Schwaiger, global head of media at consulting firm Arthur D. Little. “I don’t think the directive or any of the measures will actually improve the performance and global reach of [European] audiovisual players,” he said in an interview.  On the contrary, it will merely add another layer of regulation on top of an industry “that is already quite regulated,” he added. Schwaiger is convinced that the directive will do little to improve the livelihood of the content industry in Europe, particularly when it comes to advertising. “Online platforms have virtually no restrictions on what kind of ads they can show… they have totally unregulated, unlimited inventory of advertising [while] broadcasters face heavily regulated and limited inventory,” he explained.

John Enser, the partner at the technology, media and communications practice of law firm CMS Cameron McKenna Nabarro Olswang LLP, also called broadcasters’ concerns “valid.” “What we see is a distortion between traditional broadcasters, which are still subject to very detailed, micro-regulation, [while] at the other end of the spectrum you have platforms such as YouTube Inc. that are a free-for-all,” Enser said in an interview.

As a result, the value of the linear segments has been gradually eroded by digital rivals that are not subject to the same standards. This places a limit on the extent to which traditional broadcasters can innovate to meet competition from new and emerging business models, according to Enser.

What is the quota for Netflix and YouTube?

The extension of the scope of the AVMSD — namely to cover the likes of YouTube and Netflix Inc. — means video-sharing platform services will be required to meet similar investment and content quotas under the revised protocol, such as platforms to dedicating at least 30% of their library to European content, as well as allowing EU countries to ask such platforms to invest in European productions, among other things. (Source: S&P Global: EU under fire for uneven playing field between linear, online players )

The 30% quota is not thought to be a major issue for Netflix or Amazon, which both offer that level of European content on their services already. Netflix previously hit out at the plan but has been ramping up its originals across Europe over the past year, with shows including its first French drama, Marseille, and a recent debut commission from Germany. European Union rules already oblige TV broadcasters to devote airtime to local works, including material made in their own country. (Source: C21Media: Netflix, Amazon face 30% Euro quota )

What are your thoughts on the new Audiovisual Media Services Directive? Do you believe the new regulative will bring changes to the way TV is consumed today?

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