In November 2018, the European Parliament adopted Directive 2018/1808 amending Directive 2010/13 concerning audiovisual media services (“AVMS Directive”). In April 2019, the European Parliament adopted Directive 2019/790 on copyright and related rights in the Digital Single Market (“DSM Directive”). The (belated) implementation of these directives in Belgian law in 2021 and 2022 respectively led to important changes in media and copyright law which have significantly impacted the Belgian audiovisual sector. As a result, audiovisual media service providers and contracting parties of authors and performers need to review their current practices and align them with this changed legal landscape.
New obligations for on-demand audiovisual media service providers
The AVMS Directive introduced many different provisions affecting the audiovisual landscape. Chiefly, the directive broadened the scope of its application for video-sharing platforms and introduced, amongst others, stricter rules regarding the protection of minors, discrimination and the promotion of terrorist offences and more flexibility regarding television advertising.
Arguably one of the more impactful provisions of the AVMS Directive for audiovisual media service providers was the new Article 13, which contains a two-fold obligation to providers of on-demand audiovisual media services: (i) the promotion obligation, which requires Member States to secure and promote at least 30% of European work in their catalogues, and (ii) the financial contribution obligation, also known as the “Netflix tax”, according to which audiovisual media service providers must contribute financially to the production of European works (either by direct investment in content or by contribution to a national fund). As opposed to the promotion obligation, Member States are however not obliged to implement the financial contribution obligation for on-demand media service providers.
These provisions have been implemented into Belgian media law, which consists of four pieces of legislation, being three Community decrees (a Flemish decree, a decree of the French-speaking community and a decree of the German-speaking community) and a federal act. In principle, the Community decrees will only apply to the audiovisual media service providers established within that particular Community. The federal state is a contrario competent in the bilingual area of Brussels-Capital for the entities that are established there and whose activities cannot be considered to belong exclusively to the French-speaking Community or the Flemish Community. Thus, depending on where the provider of the on-demand audiovisual media services is established within Belgium, only one of the four Belgian media laws will apply (so-called ‘country of origin’ principle).
As an important exception to this principle, however, there are a handful of provisions in the Belgian media laws which also apply to audiovisual media providers which are not established in Belgium in case they provide services aimed at a particular community within Belgium. Both the financial contribution obligation and the promotion obligation are examples of such extraterritorial provisions (albeit upon fulfilment of certain conditions). External on-demand audiovisual media services providers will thus not always be able to escape these provisions simply being established in another jurisdiction (!). Following their fragmented legal framework, the Belgian media laws are further not always consistent. The promotion obligation, for instance, has been implemented more strictly in the French-speaking Community, by imposing audiovisual media services to promote at least 40% of European works after five years as from entry into force of the decree of the French-speaking Communities. With regards to the financial contribution obligation, the Flemish and French-speaking Community have both implemented a similar mechanism, which provides the option to choose between (i) co-producing or pre-purchasing a Dutch-respectively French speaking work or (ii) a payment to a local fund. At the federal level, however, the financial contribution obligation was not implemented and at the level of the German-speaking Community, audiovisual media service providers can (but are not obliged to) fulfil the promotion obligation by making a financial contribution.
The Belgian media laws further also provide for an exception to the promotion and financial contribution obligations for on-demand audiovisual media services providers with a low turnover or a small audience. There is, however, again no consistency as regards the threshold to determine such “small audience” or “low turnover”.
In conclusion, the Belgian media landscape is more than ever characterised by strong fragmentation. Given the important legal changes following the implementation of the AVMS Directive, it is therefore crucial that (i) on-demand audiovisual media service providers established in Belgium check which of the four Belgian media laws is applicable to them and that (ii) external on-demand audiovisual media service providers check which extraterritorial provisions they must comply with in order to render their current practices fully compliant with the new provisions.
New remuneration rights for authors and performers
Equally important for the audiovisual sector is the implementation of the DSM Directive, particularly as regards the new rights of authors of performers on their remuneration and the rights related therewith, being (i) the right to proportionate and appropriate remuneration, (ii) the right to transparency, (iii) the right to contract adjustment (so-called “best-seller right”) and (iv) the right to revocation.
All four rights (which we already partly set out in this blog post) have been implemented rather literally into Belgian law, unfortunately lacking any additional guidance on e.g. the calculation of a “proportionate and appropriate” remuneration, the condition of “disproportionality” relating to the best-seller right or the notion of “exploitation” under the right to revocation. Important to note, however, is that Belgian copyright law states that all four rights are of mandatory nature and are therefore non-transferable and non-waivable.
Lastly, and arguably one of the most important provisions of the new copyright law in Belgium are the provisions on the use of sound and/or audiovisual works by streaming services such as Disney+, Netflix and Spotify (embedded in Chapter 4/2 of the new copyright law). Chapter 4/2 is not based on provisions of the DSM Directive and is thus the result of a high degree of gold-plating by the Belgian legislator.
Chiefly stating, Chapter 4/2 states that authors and performers of a sound or audiovisual work will at all times retain their right to remuneration vis-à-vis streaming services (albeit through management organisations), even where such author or performer has transferred to his/her contractual counterpart his/her exclusive right to authorise or prohibit communication to the public. Whereas the bargaining power as regards remuneration from streaming services thus rested with such contractual counterpart (being producers or labels), this has now shifted to the management organisations representing authors and performers.
It is clear that with the introduction of Chapter 4/2, the Belgian legislator intended to make a parallel with the provisions implementing Article 17 of the DSM Directive, which introduced a new liability regime for providers of online content sharing services (such as YouTube, Instagram, Twitter, TikTok…). The rationale behind both Article 17 of the DSM Directive and Chapter 4/2 is to restore the balance between online content-sharing platforms and streaming platforms on the one hand, and individual authors and performers on the other hand (also referred to as the so-called “value gap”).
Not entirely unexpected, Chapter 4/2 has just recently been challenged before the Belgian Constitutional Court by producers and streaming services through an application for annulment. Indeed, this new chapter received heavy criticism stating that the addition of another stakeholder will be disadvantageous towards the position of labels or producers vis-à-vis the streaming services, derail the streaming landscape and encourage streaming services to reconsider their priorities in Belgium, which may eventually dry up the Belgian music ecosystem. The application for annulment is however to be officially published in the Belgian Official Gazette.
The abovementioned new remuneration rights and rights related therewith as implemented into Belgian copyright law apply to all ongoing contracts that have been concluded on or after 7 June 2021. Rights and licenses that were already acquired prior to 7 June 2021 remain unaffected. Hence, ongoing contracts concluded before 7 June 2021 do not fall within the scope of the new provisions, unless such ongoing contracts are amended after that date and provide for new rights or licenses.
Over the last few years, media and copyright law introduced new important rights and obligations for many stakeholders in the audiovisual sector (such as on-demand (streaming) services, management organisations, authors and performers, producers and labels…). Given the degree of fragmentation and the lack of substantial guidance, it is not always straightforward for stakeholders to align their current practices and contracts with these new requirements.