European Commission Seeks End to Impasse over Online Content Distribution
Regulatory fragmentation, lack of clear rules for accessing copyrighted content and ongoing feuding over private copying are stalling Europe’s online content market, the European Commission (EC) said Thursday in a communique on creative content in the single market. The plan is to make it easier for Europeans to access a richer range of music, TV programs, films and games on the Internet, mobile phones and other devices while safeguarding intellectual property rights, the EC said. It also wants to ease cross-border copyright licensing.
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A study of the 25 EU countries showed that revenue from Internet content will more than quadruple from 1.8 billion euros in 2005 to 8.3 billion euros in 2010, the EC said. Online content will make up about 20 percent of total revenue for the music sector, 33 percent for video games, it said.
The EC communique is the first step toward addressing several key problems thwarting the rollout of online content, it said. There are four key challenges meriting action at the EU level, the EC said -- availability of content, multi- territory licensing, interoperability and transparency of digital rights management (DRM) systems, and legal offers and piracy.
Piracy remains a “central concern,” the EC said. The most controversial part of its communique is likely to be its possible promotion of “cooperation procedures” between access/service providers, rights owners and consumers -- akin to the agreement recently reached by French ISPs and music labels (WID Dec 28 p1) -- that could require ISPs to filter infringing content.
But following the French initiative is premature because the parties only agreed to work toward something, an ISP industry source said. A “huge amount” of work is needed before the pact leads to anything happening, the source said. Moreover, there appears to be growing recognition that ISP filtering isn’t as easy as some make it out to be, the source added.
Most of the problems related to availability of content are considered inherent to emerging markets, and interested parties are expected to find collaborative solutions to exploit content and prevent bundling, exclusivity or non-use of media rights, the EC said. In response to the affected sectors’ demand, the EC said it intends to boost its role in facilitating such agreements.
Another major issue is multi-territorial licensing. The EC issued a recommendation in October 2005 on online management of music rights, and in January 2007 sought feedback on whether it should propose a binding regulation. Most respondents, however, said they saw no need for regulatory action, preferring the various parties to agree on a model, said Jorgen Holmquist, director-general of the Internal Market and Services Directorate. The EC recently asked for comment on how the non-binding recommendation is working.
Multiterritorial licensing has also become relevant for other creative content sectors such as the audiovisual (AV) sector, the EC said. The newly effective AV directive, which replaced the TV Without Frontiers directive, will help cross- border development of on-demand services, but won’t resolve the problem caused by rightsholders choosing to grant licenses for only a few national territories, the EC said.
Making DRMs interoperable would increase the level of competition and consumer acceptance needed for uptake of online distribution of online content, the communique said. Although “lengthy discussions” among interested sectors have so far failed to reach agreement on interoperable systems, there should be rules ensuring that consumers are given adequate information about usage restrictions and interoperability, it said.
The EC wants answers to several policy and regulatory questions related to DRM, licensing and piracy. Comments are due February 29 -- avpolicy@ec.europa.eu. Information Society and Media Commissioner Viviane Reding doesn’t exclude the need for regulatory intervention if it’s needed, but believes the best way is for all affected sectors to work together on solutions, her spokesman said Thursday. The recommendation to be proposed by mid-2008 will further support this approach, he said.