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SWD Impact assessment on the modernisation of EU copyright rules – options to achieve the objectives (option 3 and discarded options)

Option 3 – Application of country of origin to the clearing of rights for the services covered by Option 2 and for TV and radio-like linear online transmissions (and services ancillary to such transmissions)

This option would cover, in addition to the services covered under Option 2, TV and radio-like linear online transmissions which are not linked to a broadcast but are online only transmissions (webcasting) and services ancillary to the webcast (such as catch-up and previews of the webcasts). The “country of origin” (CoO) rule would apply to such services.

TV and radio-like linear online transmissions would be defined as (i) linear services; (ii) which are provided on the basis of a schedule; (iii) and under the editorial responsibility of the service provider. The other main elements of this option would be the same as under Option 2.

Public service broadcasters support the CoO rule for broadcasters’ transmissions however do not ask for the application of the CoO rule beyond that, underlying a special situation of broadcasters. Commercial TV broadcasters do not support this option for the same reasons as Option 2. Majority of service providers other than broadcasters underline the importance of a level playing field and some of them call for a technology-neutral approach.

Rightholders and CMOs would oppose this option for similar reasons as commercial TV broadcasters and underline that, as a result, this option may decrease incentives to invest into AV content. Also, they are concerned that extending the CoO rule to webcasting services would entail an even higher risk of establishment shopping by online service providers and encourage “race to the bottom”: search of the lowest copyright fees. This, in turn, may lead to disaggregation of repertoires licensed by CMOs. Consumer representatives support the application of the CoO rule to all online transmissions.

Discarded options

The identified objectives could be achieved also by applying the “country of origin” rule to all communication to the public and making available acts online in which case the rule would apply also to services such as VoD services, on demand music streaming services, etc. The Copyright Communication acknowledges the necessity of a gradual approach, in order to allow the market to adapt to policy and legal changes.

As a first step, the initiative will focus on TV and radio programmes which are a main way to access content in the EU, in particular as regards news and cultural programmes. Linear transmissions offer to consumers the ability to consume content as it happens which is extremely important for event driven programming. The Commission will continue monitoring the situation in the market, following its long-term vision.

Options which, in addition to establishing the CoO rule, would prohibit contractual arrangements concerning territorial exploitation of content were discarded. Such options could de facto result in pan-European licences. Many operators, including SMEs, may not have financial means to acquire pan-European licences. If the market does not have a possibility to adapt to changes gradually such options could push smaller operators out of this segment of the market. Also, such options may impact the way how the creative, especially AV, content is financed and distributed.