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Removing Restrictions to e-Commerce.

Territorial restrictions and geo-blocking: digital content (copyright) (official)

Barriers to cross-border access to online content are often based on the territoriality of copyright and on licencing practices. In the audiovisual sector for example, copyright licences are generally awarded for national territories on an exclusive basis. As a result, an online content service in one member state may not be able to legally deliver the content to a consumer in another member state. Even when right holders hold the rights for all territories or when service providers are granted multi-territorial licences, they can decide to distribute the content on a territorial basis, thus segmenting the market. Therefore, business decisions also play a significant role in the limited availability of content across borders.

The territorial selling of media rights is explained by the primarily national character of the material. For example national sports competitions. Market outcomes therefore reflect the varying degrees of interest and demand for products that are by nature of national character. For sports programmes, the price of the rights usually vary according to the level of interest and demand in a specific territory and the variation between the national market and non-national one is often very substantial. The possibility of multi-territorial selling of media rights – which already exists under the current framework – is not exploited more broadly due to the nature of the demand. In the specific case of audiovisual content, different release windows may increase differences in the availability of content between different Member States. A film may be available online for consumers residing in one Member State, while it would not have been released yet in another Member State.

Restrictions to cross-border use often originate from practices aimed at exclusive territorial protection (based on absolute exclusivity in one territory) and are more prevalent for films, TV series and sports programmes. Indeed, producers of audiovisual programmes typically grant an exclusive licence to a single distributor within a given territory. For European films and TV programmes, such an exclusive licence is commonly granted to distributors in order to obtain upfront investments that contribute to the financing of production. For sports programmes, there is an important difference between the value of media rights on the main market, where the level of interest and demand is highest, and the value of those rights in other markets. This variation is often very substantial.

In the music sector, multi-territorial selling of rights is more widespread, especially with regard to Anglo-Saxon music and less so for other national music repertoires, which distributors chose to acquire only for certain territories for cultural and linguistic reasons. As regards the book sector, publishers generally acquire rights for a book in a given language on a global or pan-European basis and are therefore able to grant a licence to a distributor for multiple territories. However, there are still some access restrictions to e-books, which may be linked to business decisions made by the online distributors. This applies to other sectors as well, where service providers may prefer to organise the distribution of online content on a territorial basis, even when they have a multi-territorial licence.

Finally, the cross-border accessibility of digital content is also affected by a range of other factors. Some of these hindering factors are common to all online commercial activities, regardless of the type of good or service offered (e.g. VAT regime, varying national rules regarding protection of minors and consumer policy, lack of a convincing business case or unilateral business decisions of content-delivery platforms not to operate in certain countries or to allocate customers to a specific national store). Others are more specific to the distribution of online content and may possibly include divergences in national rules or practices on release windows (i.e. media chronology) or the lack of incentives for right holders to make their content available online due to fear of illegal exploitation (e.g. piracy).