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Audiovisual Services – Keeping Up with New Video Content Distribution Models

The 2018 Audio Visual Services Directive[1] (the “AVMS Directive” or the “Directive”) has brought important changes, especially for broadcasters and on-demand service providers. The deadline for transposing the Directive, set for September 19th, 2020, has passed with only four Member States successfully implementing the provisions on time (i.e. Denmark, Hungary, the Netherlands and Sweden). This failure has prompted the Commission to launch the infringement procedures against the other 23 Members States and the UK. On November 23rd, 2020, the Commission has sent letters of formal notice to the respective Members States, who now have two months to provide the Commission further information.

In Romania, the Ministry of Culture has submitted a draft law for public consultation in April last year, which was withdrawn shortly after, due to the stark criticism received online from the public. Since then, there have not been any new developments in this regard, despite the transposition deadline being exceeded.

In the following, we shall cover the main amendments of the AVMS Directive, which we believe will reshape the media landscape in 2021.

Services that fall under the Directive

Besides the addition of video-sharing platforms, the general scope of the AVMS Directive remains mostly unchanged. Audiovisual media services continue to be defined in the Directive, covering both linear (television broadcasts) and non-linear (on-demand) services.

Nevertheless, the Directive now outlines that a catalogue of programmes incorporated in a distinct service may also be classified as an audiovisual media service. This change is not surprising, considering the previous judgement of the CJEU[2], where the Court ruled that a catalogue of videos displayed on a newspaper publisher’s website (e.g. short videos consisting of local news bulletins, sports and entertainment clips) may also be subject to the provisions of the AVMS Directive, as long as the other requirements are also observed. Another important change is the removal from the definition of “programme” of the requirement that programmes need to be comparable to the form and content of television broadcasting.

These changes will inevitably expand the scope of the Directive to new services (e.g. channels with video content on social media or pages featuring video catalogues). At the same time, such an extension in scope would appear to have been already toned down by the CJEU’s recent judgement[3], where the Court ruled that the AVMS Directive may not cover a channel featuring promotional audiovisual content (e.g. a YouTube channel). Therefore not every video service provider will be subject to these provisions. However, the merits of the aforementioned case were analysed by the Court prior to the publication of the final draft of the 2018 AVMS Directive and to its subsequent transposition by the Member States (which is yet to be completed). Whilst the conclusions on whether such a video constitutes an audiovisual media service should remain applicable under the new Directive, not the same can be said about the audiovisual commercial communication, which now refers to user-generated videos as well, in addition to programmes. Time will tell how these issues will be construed by the Court in future cases.

Video-sharing platforms

Probably the most important addition of the AVMS Directive is the inclusion of online video-sharing platforms in the scope of the Directive. Simply speaking, these platforms allow users to share video content without any operator having an editorial control or responsibility over the respective content. From now on, video sharing platforms will be required to introduce suitable measures to protect minors from harmful content and defend all audiences against incitement to hatred or violence.

The new requirements also target the advertisement that takes place on these platforms, which previously were not subject to the AVMS Directive. Hence, all providers will need to comply with the provisions set out in the Directive regarding the advertising content shown on their video sharing platforms. What’s more, they will also have to take proper measures in order to make sure that users comply with these requirements as well. The ambitious scope of the Directive also stems from the detailed manner in which the video-sharing platforms have been regulated, the regulation providing for no less than ten instruments that the platforms could use to meet the new requirements, e.g. adding certain clauses in the terms and conditions of service that specifically aim to protect the minors and the general public; enabling users to declare whether commercial content exists in the clips they post; age verification; allowing users to rate the video content; parental control, amongst many others.

Although at first glance, these requirements may seem burdensome for the video-sharing platforms, it is important to note that most of them have already implemented appropriate measures, as laid down in the Directive. That being said, the key takeaway here is that the providers of such services will be subject to the media regulator, as well as be obligated to register as a video sharing platform. On top of that, the AVMS Directive will be applicable to the video-sharing platform providers even if they are located outside the EU, should another legal entity from their corporate group be located within the EU.

Different points of view, same confines

The country-of-origin principle is still present in the AVMS Directive; therefore, there is a very low risk of conflict of jurisdiction between the Member States. The criteria for determining the jurisdiction are largely the same, i.e. the location where the media service provider has its head office, as well as the place where the editorial decisions about the service are taken. In case these locations are set in the different Member States or in a third country, other criteria shall be considered, such as the location of a significant part of the service provider’s workforce.

Notedly, the Directive now clearly defines the meaning of both “editorial decision” and “significant part of the workforce”. The former is a decision taken on a regular basis in order to exercise editorial responsibility and which is related to the everyday operation of the media service, whilst the latter pertains to the staff which is engaged in services concerning the programme.

Other important additions

Another novelty that the AVMS Directive brings relates to the financial contributions for the production of European works. Member States may now oblige media providers to make such financial contributions, should the providers’ service be addressed to the respective national audiences. The initial intention was for this to apply only to on-demand service providers, although now it seems to encompass most audiovisual media service providers. Nonetheless, it is worthwhile to note that these requirements are not applicable to non-EU service providers, nor to video platform providers, irrespective of where their head offices are.

On the topic of European works, the Directive introduces more stringent requirements regarding the promotion of such works for on-demand service providers. These providers must ensure that at least 30% of the catalogues on their platforms comprise actual European content. The Directive gives some examples of how to do this: using European works in advertising campaigns, emphasising them in banners or having a distinct catalogue for European works which is available on the main page.

Moving on to advertising, the AVMS Directive specifies that the amount of television commercial and teleshopping spots, broadcasted between 6.00 and 18.00, and between 18.00 and 24.00, cannot exceed 20% of the total broadcasting time in the respective time frame. This will definitely benefit broadcasters since now they can schedule their advertising more freely[4]. Furthermore, product placement is now generally allowed, with the exception of programmes covering news, current affairs, consumer affairs, or of programmes targeting religion and children[5].

Lastly, the new Directive aims to strengthen the cooperation between the national audiovisual authorities, by consolidating the European Regulatory Group for Audiovisual Media Services (ERGA) and clarifying its prerogatives in the regulation[6].

“Closing credits”

The AVMS Directive, as showcased above, represents a crucial milestone in the EU audiovisual landscape. Although having yet to be transposed by most of the Member States (including Romania), the AVMS Directive is of paramount importance to virtually (pun intended) all stakeholders, ranging from TV broadcasters, on-demand service providers and social media platforms, to the end consumer. This is why we believe that the AVMS Directive is one of the new EU regulations that shall profoundly impact the European digital market in 2021.

 

[1] The Directive (EU) 2018/1808 amending Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation or administrative action in the Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive) in view of changing market realities (“AVMSD”).

[2] CJEU, Case C-347/14, New Media Online GmbH v Bundeskommunikationssenat, October 21st, 2015.

[3] CJEU, Case C-132/17, Peugeot Deutschland GmbH v Deutsche Umwelthilfe eV, February 21st, 2018. In a nutshell, the defendant (Peugeot Deutschland GmbH) posted a short video on YouTube, advertising a new vehicle. The claimant then filed a lawsuit against Peugeot, claiming that it failed to provide information regarding the official fuel consumption and CO2 emissions of the said vehicle, thus infringing the German laws. The matter was eventually brought before the CJEU, which concluded that neither a video channel on which users can view short promotional videos for new cars nor a single such video by itself, can be regarded as being an audiovisual media service or audiovisual commercial communication. Simply put, the AVMS Directive did not apply in this case.

[4] Under the previous version of the Directive, the 20% limit applied to TV advertising and teleshopping spots per clock hour, i.e. 12 minutes per hour, whilst now it covers a much broader spectrum, resulting in either 144 minutes or 72 minutes of advertising, based on the specific time frame. Thus, a broadcaster may now use the entire hour of transmission without running any commercials, since they may be carried forward in the following broadcasts.

[5] Similarly, the former Directive expressly prohibited product placement, with only a few exceptions. The new Directive makes a rather odd U-turn and now gives a green-light to product placement, leaving out some of the more sensitive types of programmes.

[6] ERGA was first established by the Commission on February 3rd, 2014.

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