Views are divided (de) as concerns the need of an extension of the country of origin principle to online transmissions. Consumers representatives call for a broad extension of the country of origin principle to cover all online services. In addition, certain argue that introducing this principle with regard to online transmissions would not be sufficient on its own – such an intervention would need to be accompanied by a rule explicitly prohibiting technical or contractual restrictions on “passive sales” across EU borders (restrictions on responding to unsolicited requests from consumers residing in other Member States).
While a number of Member States/public authorities are open for discussions with the view of enabling more cross-border access to content, there is a strong call for caution. In their view, any reform should not undermine contractual freedom, a high level of protection of intellectual property and the exclusivity of rights and should ensure a level playing field. Certain Member States submit that they are against any extension of the application of the country of origin principle because of risks of unintended negative consequences, especially for the audiovisual sector.
Right holders are, in general, against any extension of the application of the country of origin principle. They consider that any such extension would de facto lead to pan-European licences and would restrict their ability to license rights on a territorial basis. They are in particular concerned about an extension which would cover broadcasters’ VOD services and, even more so, any online services by any service providers. The main reasons given against it are:
- negative consequences for the value chain of the production (e.g. financing of AV works) and the distribution of creative content (notably for AV works, as producers would no longer be able to rely on pre-sales of distribution rights with territorial exclusivity);
- right holders would be no longer able to decide for which territories in the EU they license their rights;
- not needed, as voluntary multi-territorial licensing schemes already exist;
- the application of the principle to online services and the consequential focus of the licensing system on the country of origin could have a negative impact on creators’ revenues;
- risk of forum shopping by service providers and more complicated enforcement by right holders;
- risk that rights in musical works may be withdrawn from CMOs if right holders come to the conclusion that CMOs cannot ensure the effective collective management of rights across the entire EU.
CMOs do not favour any extension of the principle. They raise the same arguments against it as right holders.
Broadcasters’ views on the extension are split along the public service versus commercial broadcaster line. However, all broadcasters share the view that in all cases full contractual freedom should be maintained, enabling them to limit the exploitation of rights by territories. The majority of commercial broadcasters argue that an extension of the principle would amount to pan-European licences. They raise the same arguments against the extension as right holders. By contrast, all public service broadcasters as well as commercial radios call for the application of the principle to EU broadcasters’ transmissions by any technological means as well as to all broadcast-related online services. The main reasons given by those in favour of such an extension are:
- it would enable broadcasters to expand their services to other Member States;
- it would provide broadcasters with legal certainty;
- it would reduce significant administrative burden and costs associated with clearance of rights;
- it would provide for additional revenues for right holders by ensuring a wider dissemination of TV and radio programmes and, therefore, of their works and other protected subject matter.
Views of other service providers vary, though most of them call for a careful and measured approach. ISPs express most favourable views: they argue that it would enable digital content providers to offer services EU-wide. Telecommunications network operators, cable operators, IPTV operators, DTT providers and VOD operators are more cautious, even though some of them indicate that they favour technology-neutral approach. All of service providers other than broadcasters underline the importance of a level playing field. Also, many of them argue that contractual freedom should be maintained. They claim that if the extension of the application of the principle were to lead to pan-European licencing, it would put European and local market players at a competitive disadvantage in relation to multinational operators as they would not have the means to acquire pan-European licences.