Netflix has just reported another record quarter on the books: the popular streaming service added over 8.3 million new streaming subscribers in the fourth quarter of 2017 alone, posting around $3.29 billion in quarterly revenue and pledging to spend $7.5 billion-$8 billion in 2018 on new content.
At Netflix emerges as a content creator and encourages more and more users to “cut the cord”, broadcasters in Europe are trying their hardest to keep up, investing an estimated 17 billion euros in new video content each year.
And that’s not to mention that they’re moving more and more of their content online. The BBC, for example, is helping fans of Downton Abbey, The Great British Bake Off, and Peep Show to watch programming all from the convenience of their home or mobile thanks to iPlayer, the BBC’s streaming service that handles an estimated 8 million streaming requests daily.
But there’s a catch: if you want to use the BBC’s wildly popular iPlayer, the service must record your IP address as a UK original. According to some, this Europe-wide phenomenon is holding the continent’s media back as the digital age reinvents the business of making television.
What is geoblocking?
Geoblocking, or the limitation of access to digital content based on geographic location, is widespread in Europe, closing users’ access to certain products on Amazon and films on Netflix by virtue of a user’s IP address.
“In the offline world, to limit customers’ choice according to their nationality would be called discrimination. But in the online world, it happens everyday. It is the equivalent of walking into a shop in another country and being charged more to buy a product because you have the ‘wrong’ passport,” said Andrus Ansip, European Commissioner for the Digital Single Market, in a November speech.
Video streaming is no exception: online access to licensed video content currently follows the territory-by-territory framework spelled out in the Rome II Regulation, requiring that copyright be granted in each and every EU member state where video content can be watched by consumers.
Often, handling 28 separate copyright regimes proves too large and too expensive of a headache for streaming services and broadcasters, who opt instead to restrict its content offering to one or a handful of jurisdictions.
The European Commission, which argues that geoblocking harms the EU’s single market and European cultural unity more generally, set out to dismantle geoblocking and open up cross-border access to online video content in late 2016.
However, a series of recent setbacks in the European Parliament saw these provisions largely erased in the interest of film and television producers, who have a strong financial stake in a system of Balkanized copyright across Europe.
Based on the original proposals from the European Commission, cross-border access to online video content would be facilitated through the introduction of the country of origin (CoO) principle, first enshrined in the EU’s 1993 Satellite and Cable Directive.
Here, the application of CoO would mandate that after copyright for online content is granted by a rightsholder to a broadcaster, the latter would not be required to clear separate copyright agreements to provide that content elsewhere in Europe.
It is also somewhat analogous to publishers having the right to sell books and CDs across the EU once the creators grant them the rights to publish and distribute their work from their home jurisdiction.
For example, under the CoO regime the BBC would be able to offer video streaming online to a person in the Netherlands or Spain, so long as the BBC had cleared the original rights to transmit the content in the UK.
However, back in December the European Parliament voted to dismantle online geoblocking only for news and current affairs programming, keeping in tact the principle of territorial licensing for films and TV shows.
Tiemo Wölken, a German MEP from the Social Democrats responsible for the dossier, removed his name from the final report in protest.
“I have worked for nearly a year in the JURI Committee in the attempt to make Europe increasingly digital and to bring persons closer together. But I intend to withdraw my name from the final report,” he said after the vote in plenary.
“A digital Europe deserves better. We cannot surrender our audiovisual media to large American corporations. ”
ANICA, the Italian motion picture association, thanked “the European Parliament, and in particular, all Italian MEPs” for the result and for protecting “a strong and competitive creative industry” in Europe.
Europe of nations prevails on copyright
While geoblocking creates obvious cultural barriers across Europe, the European Commission has long highlighted that it is one of the many reasons why Europe is a fragmented market for digital services, discouraging investment into the continent’s media sectors given the lack of effective scale.
However, this is hardly the first time that the Commission’s battles to simplify European copyright have been lost to the benefit of large publishers and copyright holders.
As tech.eu covered last year, European data miners have been put at a significant disadvantage to their American counterparts thanks to inflexible copyright rules that give primacy to publishers’ rights over startups’ value-adding analysis of their content.
Furthermore, news aggregators like Google News have been asked to pay an effective tax to press publishers in Europe for the right to hyperlink to copyrighted content, following the model currently pursued in Germany and Spain.
It presents a continuing paradox in Europe, that that the explosive power of the internet and decades of copyright law harmonization in Europe cannot break the grip of publishers and territorial copyright, encouraging piracy in the absence of reform.
“In the European Union, despite almost twenty-five years of harmonization of copyright, copyright has remained essentially national law, with each of the Union’s 28 Member States having its own national law on copyright and neighboring rights,” said Dr. Bernt Hugenholtz of the University of Amsterdam in a 2015 paper for BEUC.
The amended Satellite and Cable Directive is currently under final negotiation between the European Commission, Parliament and Council in trilogues, after which point the amendments will pass into law.
Featured image credit: Charles Deluvio on Unsplash