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Europe preps for DSM

As SCREENZ reported back in 2015, the European Commission has had its sights set on extending the concept of freedom of movement to cover digital services – especially entertainment product such as film and TV shows – for some time.

The slow progress of the proposals, counter-proposals, discussions, lobbying, scratching of heads and starting over, is now coming closer to fruition – at least as far as European Commissioners are concerned. D-Day is coming.

The European Union has done some good work reining in some of the less acceptable behaviour of major global companies like Google, Facebook, and Apple – such as forcing them to pay fair taxes on their earnings in various territories – and is a long way ahead of NZ in that respect. However, when it comes to entertainment, the old school territory by territory approach to licensing content serves the new arrivals as well as it does the 100 year-old studios.

Major digital players such as Netflix and Amazon find themselves – unusually – on the same side of an argument as the major traditional purveyors of screen content, the US studios’ film and television arms.

So, to revisit the question posed in the title of our 2015 article, Will the European Commission can Cannes?, it seems the answer is that it might well do just that. It will certainly alter the Market.

By Cannes’ next edition (in May next year) the legislation will making it illegal to restrict the use of content to any European country will – barring a complete cock-up – be in place. So, no need to go to Cannes to do 20 deals for 20 territories – every deal with a European distributor will make the content available across the whole of the EU, which is only going to drive down the price exhibitors or broadcasters are prepared to pay.

The legislation covers all forms of digital distribution of entertainment content, such as VOD and SVOD services including those operated by broadcasters, plus aggregators. What’s unclear at present is how existing deals will be treated, whether they’ll be allowed to run their course (albeit in a different environment to when enacted) or whether there’ll be a set date on which any such deals will be consigned to the midden of screen history.

Ironically, although the UK government has got little but flak from UK-based content creators over Brexit, large and small content creators and/or rights owners will be better off outside of the European Union than in it. The British, or UK-based distributors, will be able to sell into Britin and Europe as separate territories.

There’s also some benefit for content heading to Weurope from this part of the world. The bulk of (non-festival) business is done with UK companies, and that can continue. Europe becomes a single territory, which will see prices fall but, luckily, there isn’t a huge amount of money coming back to NZ companies from those countries anyway.

Expect further consolidation in the distribution business over the next couple of years and a stronger presence of distributors – European and otherwise – at markets catering to parts of the world beyond the EU’s reach.