On 2 October 2018, the European Parliament overwhelmingly voted to update the rules on audiovisual media services, the Audiovisual Media Services Directive (“AVMSD”), to apply the rules to both traditional broadcasters as well as Video-on-Demand (“VOD”) providers such as Netflix, YouTube or Facebook, and live streaming on video-sharing platforms. The revised AVMSD makes a number of key changes:
(1) ‘Country of Origin’ Principle and Jurisdiction Issues
The ‘country of origin principle’ (which states that broadcasters / providers can broadcast throughout the EU and only need to abide by the rules of one Member State rather than in each of the Member States that it broadcasts to) is further clarified to ensure there is no confusion as to which Member State’s rules apply. These rules apply to both TV broadcasters and VOD service providers.
For example, the new rules clarify that a broadcaster / provider will be considered to operate in the Member State in which “a significant part of the workforce involved in the pursuit of the programme related audiovisual media service activity operates” (previously this was not limited to programme related activity but the workforce as a whole which could include sales or other back office staff). Additionally the new rules outline that broadcasters / providers must inform the national regulator of any changes that may affect its jurisdiction and Member States will be required to maintain an up to date list of the broadcasters / providers under their jurisdiction and indicate the criteria for accepting jurisdiction (which will be publicly available).
Broadcasters / providers currently operating in the UK and regulated by OFCOM will need to closely examine the revised AVMSD jurisdictional criteria in a post-Brexit scenario as it is not clear if such broadcasters / providers will be able to avail of these ‘freedom of reception’ rules in the absence of this being agreed as part of the Brexit negotiations.
(2) Financial Contributions
The new rules clarify that Member States may impose financial contributions (direct investments or levies payable to a fund) on broadcasters / providers who are targeting their national audiences from other Member States. This is a decision for each Member State to consider and there is no obligation to impose contributions.
The rules outline that any contribution should be proportionate and non-discriminatory and based on the revenues earned in the targeted Member State. Should a Member State where the broadcaster / provider is established decide to impose a financial contribution, it must also take into account any financial contributions imposed by other Member States that are also being targeted by the broadcaster / provider.
(3) Redefined limits of advertising
The new rules enhance flexibility for broadcasters as to when advertising can be shown – the maximum 20% limit of broadcasting time is maintained between 06:00 to 18:00, however, the current maximum of 12 minutes per hour has been amended and broadcasters can choose more freely when to advertise throughout the day.
(4) Further Promotion of European works / content
Broadcasters will continue to be obliged to ensure their catalogues comprise of at least 50% of European works (including national content), however, VOD service providers will be obliged to ensure at least 30% share of European content in their catalogues (subject to certain exceptions such as companies with low turnover / audiences).
(5) Enhanced protection of minors from violence, hatred, terrorism and harmful advertising
The new rules enhance the existing protection of minors against harmful content whether on TV or video-on-demand services. Appropriate measures will need to be put in place by video-sharing platforms to protect minors.
The deal still needs to be formally approved by the Council of EU ministers before the revised law can enter into force. Member States have 21 months after its entry into force to transpose the new rules into national legislation.
The revised changes will be welcomed by broadcasters who will have greater flexibility as regards their advertising targeting and who have traditionally borne the brunt of EU regulation (with VOD / streaming services falling outside previous EU legislation). VOD providers and video-sharing platforms will now be subject to greater regulation and will need to carefully assess how their services are provided in the EU going forward.
It remains to be seen whether the Broadcasting Authority of Ireland (“BAI”) will impose financial contributions on broadcasters / VOD providers who broadcast content targeted at Irish audiences (currently only nine Member States impose financial obligations on VOD providers) but this is something the BAI will actively consider as such levies / funds will lead to enhanced funding which could be used to invest in Irish and EU works and productions.