On Monday (28 November), the European Council announced that it has agreed a general approach to a draft regulation to prohibit “unjustified geoblocking” between member states, including confirmation that the regulation should not apply to sports broadcasts. The draft regulation formed part of the proposals adopted by the Commission earlier this year on the Digital Single Market (DSM) strategy (which Sports Shorts has previously discussed here). The Council’s general approach will form the basis of the its negotiations with Parliament under the EU’s ordinary legislative procedure following the draft regulation originally proposed by the Commission in May 2016.
The stated aim of the geoblocking regulation is to boost e-commerce and remove discrimination based on customers’ nationality or place of residence. Broadly speaking, geoblocking is any measure which blocks cross-border access to a website, or compulsorily reroutes the user to their ‘home country’ website so that they can only purchase from there, or permits cross-border access to a website but denies the user the ability to make a purchase (for the Commission’s full definition of geoblocking and more detail on proposals to curtail it, see here).
Why does this matter for sport?
As Sports Shorts has discussed previously, sports rightsholders have been understandably concerned by the possible impact of the DSM on their ability to maximise revenue by selling media rights on a territory-by-territory basis. Traditional licensing models, which have generated a huge proportion of rightsholders income, rely on the ability to sell in this way. In the online environment, a key tool in doing so is geoblocking. Thus, from a rightsholder’s perspective, the broad application of concepts like digital portability and the potential prohibition on geoblocking presents a real threat and, for this reason, they have been somewhat wary of the DSM initiative, particularly in light of comments such as those of EU Digital Single Market Commissioner, Andrus Ansip (commenting in May this year):
“Today’s situation is lose-lose: people are ready to pay, but we do not accept their money. There are two logics – geoblocking or the internal market. Those two cannot coexist… Deep in my heart, I hate geoblocking. It is old-fashioned and it is not fair. We do not have to use these instruments in the 21st century.”
Fortunately for rightsholders, the Council confirmed (paragraph 6 of the agreed general approach) that “certain activities” including “Audio-visual services, including services the principle purpose of which is the provision of access to broadcasts of sports events and which are provided on the basis of exclusive territorial licenses, are excluded from the scope of the Regulation.”
Whilst the exclusion of this type of audio-visual content was not unexpected (the Commission confirmed last December that it would be focussing on cross-border digital portability but made no mention of banning geoblocking in relation to sales of content), sports rightsholders will nonetheless welcome the confirmation. However, whilst they may be breathing a small sigh of relief, they will still need to be prepared to adapt to the other aspects of the DSM initiative, such as digital portability which may still affect current licensing models.