The European Commission has published a Green Paper on the online distribution of audiovisual works in the European Union: opportunities and challenges towards a digital single market. The Green Paper launches a debate on how best to tackle the challenges the internet revolution poses whilst seizing the opportunities a move towards a digital single market will offer creators, industry and consumers.

The Digital Single Market for Audiovisual Media Services

Digital technology and the internet, as compared to traditional distribution networks, are rapidly changing the way audiovisual works are produced, marketed, and distributed. As a result, the Commission considers that the issue of territorial licensing practices needs to be addressed.

The Commission also asks for further thoughts on the main legal obstacles that impede the development of the digital single market for the cross-border distribution of audiovisual works. It also asks for ideas on what conditions should be in place to stimulate a dynamic digital single market and facilitate multi-territorial licensing.

Rights Clearance

Until recently, broadcasters’ activities consisted mainly of linear broadcasting, involving the clearance only of rights reproduction and broadcasting to the public. However, the advent of video-on-demand services means that a different set of rights—the reproduction right and the making available right—also need to be cleared.

There are also additional rights clearance processes involved in the retransmission of broadcasts. Furthermore, retransmission may involve multiple transactions with different representative organisations, leading to uncertainty as to who has the mandate to license which rights.

Accordingly, the Commission asks: i) what are the practical problems arising for audiovisual media services providers in clearing rights either in a single territory or across multiple territories, ii) whether clearance problems can be solved by improving the licensing framework, and iii) whether a copyright system based on territoriality in the European Union is appropriate for the online environment.

Policy Approaches

The Green Paper notes the Commission’s commitment to creating a European framework for online copyright licensing of multi-territorial and pan-European services, including the creation of a comprehensive unitary European copyright code, as set out in the Commission Communication, A Single Market for Intellectual Property Rights (IPR Strategy). Essentially, the Commission will be presenting a legislative proposal in early 2012 to improve the collective management of copyright, including better governance of collecting societies to facilitate multi-territorial licensing.

The Paper also considers that the exceptions and limitations of copyright under the Copyright Directive are worth examining. The feasibility of creating an optional unitary copyright title, available on a voluntary basis, which would co-exist with national copyrights, should also be considered.

The Paper asks for views on the possible advantages and disadvantages of harmonising copyright in the European Union via a comprehensive copyright code.

Rights Holders’ Remuneration for Online Exploitation of Audiovisual Works

The Paper asks whether additional measures should be taken at EU level to ensure the adequate remuneration of authors and performers and whether such measures should be managed collectively.

The majority of Member States do not provide a framework for audiovisual authors to receive a “per use” payment for the online exploitation of their works. To remedy this, one option could be the introduction of a right to remuneration for their “making available” right. Arguably, the Paper says, audiovisual performers should also be entitled to a harmonised right to remuneration, even after they have transferred their exclusive rights to a producer by law or under contract. Again, this right could be collected compulsorily by collective management societies.

However, the creation of another layer of remuneration rights might increase uncertainty concerning which licences need to be cleared and require users to administer and reconcile multiple remuneration claims for each audiovisual work, which in turn may lead to an increase in transaction costs and legal ambiguity.

Special Uses and Beneficiaries

Film heritage institutions that hold archives of audiovisual works in digital format have expressed concern that clearing the rights for these works is time-consuming and costly. As for accessibility of online audiovisual works, arguably there are too few subtitles and audio-described programmes available.

The Paper asks whether legislative changes are required to help film heritage institutions fulfil their public interest role.

Comment

Increasingly familiar themes feature in the Paper, not least the suggestion that the licensing framework may need revising, as discussed in the Hargreaves Review.

The Commission also notably promises a formal legislative proposal on collective licensing once the consultation process finishes on 18 November 2011. The comments should make for interesting reading considering the lack of consensus over the viability of a one-stop-shop model for pan-European music rights clearance involving agency relationships between national collecting societies.