Post by The Ultimate Nullifier on May 15, 2016 18:07:37 GMT -6
variety.com/2016/film/global/digital-single-market-report-1201775441-1201775441/
Cannes: E.U. Digital Plans Make European Consumers ‘Worse Off Over All,’ New Report Suggests
Industry commissioned report on collateral damage of cross-border access presented at Cannes Festival
Not just Europe’s film and TV industries but E.U. consumers would suffer substantially if the European Commission presses ahead with plans to push for a unified digital market across Europe, a new report, presented Sunday at the Cannes Festival, argues forcibly.
The 99-page, densely-argued study comes after a year of wrangling between most of the world’s content industry players in Hollywood and Europe and the European Commission over the E.U.’s plans to push for a unified digital market.
Announced May 8, 2015, the E.U.’s Digital Single Market strategy aimed to facilitate cross-border access of online content in one E.U. country by citizens in another. One underlying assumption was that broader access would benefit consumers.
But a new study, “The Impact of Cross-Border Access To Audiovisual Content on E.U. Consumers,” made by economic consultancy Oxera and media consultancy Oliver & Ohlbaum, suggest the result would be quite the contrary.
The report is groundbreaking. “The Commission says good things about evidence-based policy making, but they haven’t had the benefit of a solid economic analysis of consumer welfare until now,” said the MPA’s Stan McCoy.
Now one exists, in most of the content industry’s eyes. Online cross-border access throughout the E.U.’s 28 member states would expose the industry to, the study suggests:
*Producer revenue losses up to €8.2 billion ($9.3 billion);
*Output reduction of up to 48% for TV content and up to 37% for films;
*Consumer welfare losses of up to €9.3 billion ($10.5 billion) – consumer welfare being defined as a measure of individual benefits derived by people consuming particular goods or services.
“This [unfettered cross-border access] sounds like a great idea….[However,] less content will get made, and consumers will be worse off overall,” Felipe Florez Duncan, of Oxera, said at the report’s presentation at Cannes.
“The problem is that cross-border access undermines the economic model the industry is built on,” in other words, territory-by-territory licensing, added another of the reports authors, Sean McGuire, at Oliver & Ohlbaum.
One problem with cross-border access, as multiple industry players pointed out from May, is that, as the study puts it, “if buyers believe that the audience will have already seen the content on other service (such as international VOD providers, or the original broadcaster’s catch-up service), they will be unwilling to invest or will substantially reduce any investment.”
To this, the study adds another: “Also, consumers will switch their premium film pay-TV to cheaper services abroad offering much of same content, again draining revenues from the industry.”
The net result: “Uncertainty around future revenues would weaken established funding mechanisms such as output deals, co-production agreements or pre-sale agreements.”
Is the report, and the industry kerfuffle about cross-border access, a storm in a tea-cup? At Cannes, Sunday, Andrus Ansip, European Commission V.P., Digital Single Market, certainly has suggested so, insisted to Variety on Sunday that “the principle of territoriality has to stay.” “We never said that we will destroy this system.” he went on. That said, cross-border access has to be made “easier” for E.U. consumers,” he added.
How territoriality is preserved, while cross-border access is made easier is a moot question.
The report itself cites the Commission’s words as last December it launched a Copyright Communication, a gameplay to update copyright across Europe, of its aim to facilitate “the ultimate objective of full-border cross-border access” to film and TV content.
Such phrasing, despite Ansip’s assurances, is one reason the report has been commissioned.
In a second half, the study rehearses a range of possible industry responses to full E.U. digital cross-border access. One could be a move towards a pan-European licensing model in order to preserve exclusivity. Another ,rights holders’ limiting sales to satellite and cable platforms, so restricting cross-border access of content via catch-up or OTT services; Two more potential reactions: Adjusting content pricing across Europe; or enforced dubbing, so content would only be attractive to consumers who understood the dubbed language, creating linguistic markets.
None are very satisfactory solutions, however, the study argues. With a pan-European licensing model, “the concentration of key rights in the hands of a few large operators would place many local players at risk” the study argues.
“The Commission, on one hand, says the Internet is a new thing and we must adjust But what it is doing is applying old rules from the old economy: The idea that you can buy any good within the E.U. from any other country, which is the DNA of the European Union, that’s the old system,” said Constantin’s Martin Moszkowicz.
He added: “It does not translate as well to the digital world. That’s the point that’s been made by this exceptionally well-written report.”
Or, as Mike Ryan, at the Independent Film & Television Alliance, put it at the presentation, talking about Europe’s film and TV copyright system, “If it ain’t broke, don’t fix it.”
The report’s research was funded by the serried ranks of major movie and TV companies – 21st Century Fox, Entertainment One, Constantin, the U.K.’s Sky and ITV – plus industry orgs such as the Motion Picture Assn. of America and the Intl. Federation of Film Producers Assns, whose members include the MPAA and IFTA.
Cannes: E.U. Digital Plans Make European Consumers ‘Worse Off Over All,’ New Report Suggests
Industry commissioned report on collateral damage of cross-border access presented at Cannes Festival
Not just Europe’s film and TV industries but E.U. consumers would suffer substantially if the European Commission presses ahead with plans to push for a unified digital market across Europe, a new report, presented Sunday at the Cannes Festival, argues forcibly.
The 99-page, densely-argued study comes after a year of wrangling between most of the world’s content industry players in Hollywood and Europe and the European Commission over the E.U.’s plans to push for a unified digital market.
Announced May 8, 2015, the E.U.’s Digital Single Market strategy aimed to facilitate cross-border access of online content in one E.U. country by citizens in another. One underlying assumption was that broader access would benefit consumers.
But a new study, “The Impact of Cross-Border Access To Audiovisual Content on E.U. Consumers,” made by economic consultancy Oxera and media consultancy Oliver & Ohlbaum, suggest the result would be quite the contrary.
The report is groundbreaking. “The Commission says good things about evidence-based policy making, but they haven’t had the benefit of a solid economic analysis of consumer welfare until now,” said the MPA’s Stan McCoy.
Now one exists, in most of the content industry’s eyes. Online cross-border access throughout the E.U.’s 28 member states would expose the industry to, the study suggests:
*Producer revenue losses up to €8.2 billion ($9.3 billion);
*Output reduction of up to 48% for TV content and up to 37% for films;
*Consumer welfare losses of up to €9.3 billion ($10.5 billion) – consumer welfare being defined as a measure of individual benefits derived by people consuming particular goods or services.
“This [unfettered cross-border access] sounds like a great idea….[However,] less content will get made, and consumers will be worse off overall,” Felipe Florez Duncan, of Oxera, said at the report’s presentation at Cannes.
“The problem is that cross-border access undermines the economic model the industry is built on,” in other words, territory-by-territory licensing, added another of the reports authors, Sean McGuire, at Oliver & Ohlbaum.
One problem with cross-border access, as multiple industry players pointed out from May, is that, as the study puts it, “if buyers believe that the audience will have already seen the content on other service (such as international VOD providers, or the original broadcaster’s catch-up service), they will be unwilling to invest or will substantially reduce any investment.”
To this, the study adds another: “Also, consumers will switch their premium film pay-TV to cheaper services abroad offering much of same content, again draining revenues from the industry.”
The net result: “Uncertainty around future revenues would weaken established funding mechanisms such as output deals, co-production agreements or pre-sale agreements.”
Is the report, and the industry kerfuffle about cross-border access, a storm in a tea-cup? At Cannes, Sunday, Andrus Ansip, European Commission V.P., Digital Single Market, certainly has suggested so, insisted to Variety on Sunday that “the principle of territoriality has to stay.” “We never said that we will destroy this system.” he went on. That said, cross-border access has to be made “easier” for E.U. consumers,” he added.
How territoriality is preserved, while cross-border access is made easier is a moot question.
The report itself cites the Commission’s words as last December it launched a Copyright Communication, a gameplay to update copyright across Europe, of its aim to facilitate “the ultimate objective of full-border cross-border access” to film and TV content.
Such phrasing, despite Ansip’s assurances, is one reason the report has been commissioned.
In a second half, the study rehearses a range of possible industry responses to full E.U. digital cross-border access. One could be a move towards a pan-European licensing model in order to preserve exclusivity. Another ,rights holders’ limiting sales to satellite and cable platforms, so restricting cross-border access of content via catch-up or OTT services; Two more potential reactions: Adjusting content pricing across Europe; or enforced dubbing, so content would only be attractive to consumers who understood the dubbed language, creating linguistic markets.
None are very satisfactory solutions, however, the study argues. With a pan-European licensing model, “the concentration of key rights in the hands of a few large operators would place many local players at risk” the study argues.
“The Commission, on one hand, says the Internet is a new thing and we must adjust But what it is doing is applying old rules from the old economy: The idea that you can buy any good within the E.U. from any other country, which is the DNA of the European Union, that’s the old system,” said Constantin’s Martin Moszkowicz.
He added: “It does not translate as well to the digital world. That’s the point that’s been made by this exceptionally well-written report.”
Or, as Mike Ryan, at the Independent Film & Television Alliance, put it at the presentation, talking about Europe’s film and TV copyright system, “If it ain’t broke, don’t fix it.”
The report’s research was funded by the serried ranks of major movie and TV companies – 21st Century Fox, Entertainment One, Constantin, the U.K.’s Sky and ITV – plus industry orgs such as the Motion Picture Assn. of America and the Intl. Federation of Film Producers Assns, whose members include the MPAA and IFTA.