On Sept. 1, first drafts of an EU Copyright Directive and an EU Copyright Regulation, along with accompanying documents, were leaked to the public. The drafts are part of the European Commission's strategy for a Digital Single Market, which was announced in May 2015 and first substantiated by an action plan for modernizing European copyright and a proposal for a regulation on cross-border portability of online content services in December 2015. In May 2016, the Commission proposed an update of the Audiovisual Media Services Directive and released its proposal for a Geoblocking Regulation. While audiovisual content is outside the scope of the proposed Geoblocking Regulation, and is expressly exempt from the geoblocking ban laid out therein, it was excluded only because questions of licensing were reserved for the legislative package on copyright, which was announced for the fall.

The leaked draft Copyright Directive, among other things, contains new and mandatory limitations to copyright (for text and data mining, cross-border teaching and preservation of cultural heritage); a new neighboring right for publishers of news publications; provisions concerning the use of out-of-commerce works; and disclosure obligations for exploiters of protected works in order for authors and performers to claim adequate remuneration.

Regarding the regulation of audiovisual works and relevant licensing practices, the Commission’s draft Copyright Directive contains only a rather surprising provision which is solely applicable to VOD platforms: Article 10 of the draft Directive obliges Member States to implement a "negotiation mechanism" to provide "assistance of an impartial body with relevant experience" to parties wishing to conclude an agreement for the making available of content via VOD platforms, and facing difficulties relating to the licensing of rights. In the recitals of the draft, the Commission emphasizes that the participation in the negotiation mechanism should be voluntary, and that the Member States may decide on the conditions and functioning of such mechanism. In the accompanying communication "Promoting a fair and efficient European copyright-based economy in the Digital Single Market", the Commission announces that it will further "lead a structured multiparty stakeholder dialogue to examine licensing issues and related legal and contractual obstacles hindering the exploitation of European audiovisual works on VOD services". The Commission also acknowledges that existing models of financing, production, and distribution of audiovisual content are based on minimum guarantees in exchange for exclusive territorial rights. While the development of alternative models "based notably on a greater collaboration along the value chain" will be encouraged, there is no mention of a ban on geoblocking or territorial licensing practices for any form of distribution of audiovisual content.
 
The leaked draft Copyright Regulation aims (i) to promote the cross-border provision of “online services ancillary to broadcasts”, i.e., essentially, broadcasters' simulcasting and catch-up services; and (ii) facilitate digital retransmissions of TV and radio programs provided by means of IPTV and other "closed" electronic communications networks. To this end, the Regulation provides for the application of the Country of Origin principle with regard to simultaneous streaming and catch-up services. VOD services not linked to a broadcast are expressly outside the scope of the draft Regulation, and would not be governed by the Country of Origin principle. Furthermore, rules on mandatory collective management are introduced to facilitate the clearance of rights for digital retransmission services provided over closed networks.

It remains to be seen whether the leaked documents are the ones actually being discussed by the EU bodies. In any case they are subject to further amendments before their official publication.