MPAA's Chris Dodd Decries European Union's 'Digital Single Market' Strategy22 Jun, 2016 By: Erik Gruenwedel
The European Union is attempting to rewrite how movies and TV shows are distributed throughout its 28-member countries — citing greater consumer choice and stronger cultural diversity with the elimination of territorial licensing and exclusive agreements.
Speaking June 21 at the 25th CineEurope confab in Barcelona, Chris Dodd, CEO of the Motion Picture Association of America, said incorporating a homogenous policy — dubbed “digital single market strategy” — regarding how movies and TV shows are distributed would threaten cultural diversity both in production and distribution, and thus, reduce the volume and quality of original content offered.
Citing a report from Oliver & Ohlbaum — created for a consortium of content holders, including the British Association for Screen Entertainment (BASE), Digital Entertainment Group Europe (DEGE), British satellite operator Sky, 21st Century Fox, Viacom, NBC Universal International and Entertainment One, among others — Dodd said rather than improving consumer choice, eliminating territorial licensing would lead to an enormous cost to audiences and harm European creative economy.
Indeed, the British Film Institute claims that only 6% of independent films produced between 2003 and 2011 made a profit — arguably due to territory licensing and other distribution windows.
The report estimates that with elimination of territorial licensing and exclusives, Europe could see nearly 50% fewer movies and TV shows made, resulting in near-term annual losses up to €8.2 billion ($9.2 billion) and €9.3 billion ($10.5 billion) in lost consumer spending. It says spending losses would slow to €4.5 billion ($5 billion) annually over time.
“Territorial licensing and exclusivity agreements are part of what gives investors the confidence to take a chance on a production. Taking away territoriality and exclusivity agreements means less investment and, in turn, far fewer productions,” Dodd said.
Yet, European Union VP Andrus Ansip said change is needed. He said existing commission rules regarding distribution of physical and digital media date back to 2007, which he characterized as an eternity in a rapidly evolving digital age.
“Today, TV broadcasting, video-on-demand and [subscription streaming] platforms fall under different [distribution] rules. It is time to update them to reflect new online realities and the changing digital world. This is also about creating a level playing field,” Ansip said in May.