ETNO response to the Public Consultation on the Review of the EU Satellite and Cable Directive

Please find the full questionnaire here.

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II. Assessment of the current provisions of the Satellite and Cable Directive

2. The management of cable retransmission rights

The Directive provides a double track copyright clearing process for the simultaneous retransmission by a cable operator of an initial transmission from another Member State (by wire or over the air, including by satellite) of TV or radio programmes (Article 1.3). Broadcasters can license to cable operators the rights exercised by them in respect of their own  ransmission, irrespective of whether the rights concerned are broadcasters' own or have been transferred to them by other copyright owners and/or holders of related rights (Article 10). However, according to Article 9, all other rights (of authors and neighbouring right holders) necessary for the cable retransmission of a specific programme can only be exercised through a collecting society. Finally, Articles 11 and 12 introduce negotiation and mediation mechanisms for dispute resolution concerning the licensing of the cable retransmission rights.

10. Has the system of management of rights under the Directive facilitated the clearance of copyright and related rights for the simultaneous retransmission by cable of programmes broadcast from other Member States?

To a large extent.

10.1. Please explain. If you consider that problems remain, please describe them (e.g. if there are problems related to the concept of “cable”; to the different manner of managing rights held by broadcasters and rights held by other right holders; to the lack of clarity as to whether rights are held by broadcasters or collective management organisations).

ETNO members and their affiliates provide linear TV and on demand services (such as catch up TV). Hence, as a distributor of TV services, the provisions on cable retransmission are of major importance for us. In our view, the current scope for cable retransmissions is outdated and needs to be reviewed, taking into account the technological developments. Indeed, since 1993, new (re-)transmission technologies have appeared in the EU as well as globally, such as IPTV or mobile. As regards the Directive’s provisions on retransmission over cable or multi-wave distribution systems, we consider a technologically-neutral approach as highly important as it would reflect better today’s technological and market realities and facilitate the clearance of rights and ensure greater legal safety for companies. Hence, for ETNO, it should be clarified that the relevant provisions cover all types of retransmissions no matter the technology used.

11. Has the system of management of rights under the Directive resulted in consumers having more access to broadcasting services across borders?

To a large extent.

11.1. Please explain. If you consider that problems remain, please describe them and indicate, if relevant, whether they relate to specific types of content (e.g. audiovisual, music, sports, news) or to specific types of services (e.g. public services broadcasters', commercial broadcasters', subscription based, advertising based, content specific channels) or other reasons.

The Satellite and Cable Directive has been a first step in facilitating the consumer’s access to broadcasting services across borders. This is particularly the case for Free To Air channels but remains more limited for encrypted transmissions. Particularly with regard to PayTV channels and premium content, the current Satellite and Cable Directive’s mechanism is faced with economic models based on geographically-determined licensing and exclusivity provisions granted by rights holders. Such contracts are signed on an exclusive basis to
protect European content industry. Those may foresee the use of conditional access systems for some TV programs as well as geo-location in order to comply with respective requirements. These characteristics remain today key factors to sustain investment on premium content and as a matter of fact the cable and satellite mechanism does not appear as a solution.

12. Have you used the negotiation and mediation mechanisms established under the Directive?

12.1. If yes, please describe your experience (e.g. whether you managed to reach a satisfactory outcome) and your assessment of the functioning of these mechanisms.

For ETNO, the current mechanisms should ensure a resolution under reasonable delays, which are fit for meeting current business requirements for the launch of new services and, thereby, aim at adding to the available scope of attractive legally-sound offers to consumers.

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13. Has the application of the system of management of cable retransmission rights under the Directive resulted in any specific costs (e.g. administrative)?

Yes.

13.1. Please explain your answer.

ETNO members currently operate as TV service distributors on several national markets in the EU and bear the administrative costs related to the system of collective rights management. In addition, the fees ETNO members have to pay as a distributor to collecting societies and, often more importantly, to broadcasters as holders of related or derived rights are relevant.

14. With regard to the relevance, coherence and EU added value, please provide your views on the following:

14.1. Relevance: is EU action in this area still necessary?

Yes.

14.2. Coherence: is this action coherent with other EU actions?

Yes.

14.3. EU added value: did EU action provide clear added value when compared to an action taken at Member State level?

Yes.

14.4. Please explain your answers.

For ETNO, EU action has provided a clear added value in the coordination of national legislations and in facilitating the clearance of rights for cable retransmissions. Such an action should be maintained and extended to cover all retransmissions independently of the technology used. Rules on retransmission should be technological neutral.

III. Assessment of the need for the extension of the Directive

The principles set out in the Directive are applicable only with respect to satellite broadcasting and cable retransmissions^[2]. They do not apply to transmissions of TV and radio programmes by other means than satellite or to retransmissions by other means than cable. Notably these principles do not apply to online transmissions or retransmissions. 

Until relatively recently, broadcasters' activities mainly consisted of non-interactive transmissions over the air, satellite or cable and broadcasters needed to clear the broadcasting/communication to the public rights of authors, performers and producers. However, the availability of broadcasters' programmes on an on-demand basis after the initial
broadcast (e.g. catch-up TV services) is on the increase. Providing such services requires broadcasters to clear a different set of rights than those required for the initial broadcast, namely the reproduction right and the making available right. Forms of transmission such as direct injection in cable networks or transmissions over the internet (e.g. webcasting) are also increasing. Digital platforms also enable programmes to be retransmitted simultaneously across networks other than cable (e.g. IPTV, DTT, simulcasting).

^[2] The concept of retransmission is generally understood as the simultaneous transmission of a broadcast by a different entity such as a cable operator.

1. The extension of the principle of country of origin

15. Please explain what would be the impact of extending the "country of origin" principle, as applied to satellite broadcasting under the Directive, to the rights of authors and neighbouring right holders relevant for:

15.1. TV and radio transmissions by other means than satellite (e.g. by IPTV, webcasting).

For ETNO, any extension of the “country of origin” principle should be carefully assessed for several reasons.

The benefit of extending this principle to online transmissions can be very low for EU companies. Indeed, only a few EU companies have or aim at having, in accordance with their business models, a portfolio of multi-national rights. In this framework, the extension of the “country-of-origin” principle to other means of transmission would imply a complete review of the current system of exclusivity. Indeed, the investment of a small national operator to buy an exclusive content on its territory would be jeopardized by the possibility of the clients
based in that territory to buy that same content from another Member State (for example, before or at different conditions).

The need to maintain fair conditions for competition should also be taken into consideration. The “country of origin” principle was introduced into the Satellite and Cable Directive for satellite transmissions for which the country of origin had to be identified. These transmissions imply the use of heavy infrastructures in the form of satellites positioned in space. The legal definition introduced into the Directive aimed at clearly allocating the character of “country-of-origin” to a certain Member State. As regards online service providers, the situation is very different. On the one side, unlike satellite transmissions, it is easy to move servers. On the other side, harmonization is missing in the audiovisual market. Seen together, there is therefore a considerable risk that some online service providers (re-)locate their servers to a Member State where there are better conditions to clear the rights or where a less stringent legislation applies. This effect would be amplified in the case of non-European companies which could more easily decide where to locate and then offering their services several in national markets.

Indeed, should a country-of-origin approach be suggested for online provision, it must be secured that affiliation to a certain Member State is based on criteria which are highly plausible, reflecting stability in assessment and are not “volatile”, inviting for arbitrary changes as regards the factual background. It must be avoided that the applicable rules are being circumvented - covering inter alia the regulation on audiovisual media, copyright and related rights, and taxes. For instance,, companies which are established in Member States with a high level of intellectual property protection would be at a disadvantage, which would create the risk of competition distortion in the EU market.

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15.3. Any online services provided by broadcasters (e.g. video on demand services).

For ETNO, any extension of the country-of-origin principle to any online services provided by broadcasters should be carefully assessed. As mentioned previously, there is currently a lack of regulatory harmonization on the EU audiovisual market. Combined with the country-of-origin principle, this could favor non-EU companies with high financial capacities to establish in the Member States with the least stringent copyright protection regime and further rules, and where the collecting societies impose the lowest fees, in order to provide their
services on a large footprint in the EU. 

In addition, EU companies may suffer from such regulatory imbalance. This is particularly the case for VOD services operated locally and submitted to a high level of regulation which limits their attractiveness outside national boundaries such as with rules on financing quotas or the promotion of European works, as ETNO has also highlighted in its reply to the consultation on the review of the AVMS Directive. In addition, these services do not have the same business models and capacities as non EU companies to clear rights on a pan-
European level, or to operate services at EU level due to operating costs such as sub titles, marketing investments, etc.

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Please find the full questionnaire here.