European Media Governance: The Brussels Dimension

TERZIS European Media Governance: The Brussels Dimension Edited by Georgios Terzis Commercialisation, concentration, co...

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TERZIS

European Media Governance: The Brussels Dimension Edited by Georgios Terzis Commercialisation, concentration, convergence and globalisation have changed the way media is governed in Europe today. Media rules and regulations have shifted from national government policies to local, regional, national, multinational and international ones and away from exclusively governmental domains. Terzis analyzes how European governments slowly but steadily concede media control to international organisations such as the EU and pan European civil society associations, and delves into the media lobby efforts in Brussels.

EUROPEAN MEDIA GOVERNANCE THE BRUSSELS DIMENSION

This fascinating volume investigates how and why the print, broadcast, film and advertising industries and journalists, scriptwriters and consumers unions are lobbying in Brussels. Terzis provides detailed knowledge of the roles of ten mediarelated organizations including the European Broadcasting Union, the Association of European Radios, and the Federation of European Film directors. He examines their influence and their participation in media related debates, as well as presenting relevant work of the European Commission and European Parliament. European Media Governance: The Brussels Dimension is the first book of its kind, presenting a comprehensive study of media governance at a European level. Dr. Georgios Terzis is Associate Professor at Vesalius College, Vrije Universiteit Brussel in Belgium and chair of the journalism studies section of the European Communication Research and Education Association.

Supported by the Dutch Ministry of Education, Culture and Science ISBN 978-1-84150-198-7

9 781841 501987

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www.intellectbooks.com

Edited by Georgios Terzis

European Media Governance: The Brussels Dimension


European Media Governance: The Brussels Dimension


First Published in the UK in 2008 by Intellect Books, The Mill, Parnall Road, Fishponds, Bristol BS16 3JG, UK First published in the USA in 2008 by Intellect Books, The University of Chicago Press, 1427 E. 60th Street, Chicago, IL 60637, USA Copyright © 2008 Intellect Ltd All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission. A catalogue record for this book is available from the British Library. Cover Design: Gabriel Solomons Copy Editor: Holly Spradling Typesetting: Mac Style, Nafferton, E. Yorkshire ISBN 978-1-84150-198-7/EISBN 978-1-84150-220-2 Printed and bound by Gutenberg Press, Malta.

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CONTENTS Foreword European Journalism Centre: 1992–2007 Giuseppe Zaffuto

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Editor’s Preface Georgios Terzis

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Introduction Alison Harcourt

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EU Institutions European Media Governance and the Role of the European Commission Jean-Eric De Cockborne and Harald Trettenbrein The European Union’s Media Policy: The Role of the European Parliament Nikolaos Sifunakis Broadcasting European Broadcasting Union Jacques Briquemont European Media Governance and the Private Radio Industry Vincent Sneed Film Film Directors and European Media Governance Cécile Despringre

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Print European Media Governance and the Newspaper Industry Valtteri Niiranen European Media Governance and the Magazine Industry David Mahon Books and the European Union, Mutual Understanding? Celine D’Ambrosio, Olga Martin Sancho & Anne Bergman-tahon Advertising The Digital Revolution – What Does It Mean For Advertising? Dominic Lyle Advertising, the Audio-visual Industry and European Media Governance Michel Grégoire Journalism & Scriptwriting European Journalists Press Case for Media Rights for All Aidan White Screenwriters and European Media Governance Christina Kallas Consumers Television Without Frontiers – Advertising Without Limits Cornelia Kutterer Conclusions: Media Policy of the European Union – Trends and Developments Bettina Peters Annex A Inventory of EU Measures Affecting the Media

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FOREWORD

EUROPEAN JOURNALISM CENTRE: 1992–2007

For fifteen years now, the European Journalism Centre has monitored, researched, reflected and conducted trainings on the present and future challenges facing the media in Europe. The EJC celebrates its 15th birthday at the service of the media community with this new publication: European Media Governance: The Brussels Dimension. The publication would not have been possible without the support of the Dutch Ministry of Education, Culture & Science (OCenW), to which the EJC would like to express its gratitude for the fruitful cooperation. I would also like to thank the EJC Executive Committee: Ove Joanson (President), Vicent Partal (Vice-President), Hugh Stephenson (Founder) and Wilfried Ruetten (Director) for their invaluable guidance and constant input to our intellectual endeavours. A final note of appreciation goes to Professor Georgios Terzis, EJC’s dedicated and knowledgeable publications editor, for his tireless efforts in the last two years and for his overall conception of this project. Giuseppe Zaffuto Director of Programmes, European Journalism Centre (EJC)

EDITOR’S PREFACE Georgios Terzis

Associate Professor, Vesalius College-Vrije Universiteit Brussel Chair, Journalism Studies Section, European Communication Research and Education Association

Governance is the effort of human communities to try to control, direct, shape or regulate certain kinds of activities (Fukuyama and Wagner 2000: 12), while European governance according to the White Paper of the European Commission means rules, processes and behaviour that affect the way in which powers are exercised at European level, particularly as regards to openness, participation, accountability, effectiveness and coherence. Media governance in Europe today is shifting media rules and regulations from national government policies to local, regional, national, multinational and international ones and away from exclusively governmental domains to others, such as market, professional and public interest/pressure groups (McQuail 1997 and 2005; Bardoel & d’Haenens 2004); or according to the same EC White Paper to civil society which includes exactly those organizations: “trade unions and employers’ organisations; nongovernmental organisations; professional associations; charities; grass-roots organisations; organisations that involve citizens in local and municipal life with a particular contribution from churches and religious communities”. Today approximately twenty such media-related civil society organizations are based in Brussels, operate at a European level and influence exactly the part of media governance that has escaped the national shackles of the Member States. But which are those organizations and who do they represent? Which are the relevant EU regulations for the different media industries that they try to influence? How do they participate in the media related debates in the different EU institutions? What are their major position

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papers? Why is the current state of affairs in the European media governance relevant to their industry and what are the future issues that they are trying to tackle early enough at a European level? Finally, how are their lobbying efforts coordinated with other political, professional and public interest groups? In this book we are presenting the work of ten of these European organizations from a variety of media sectors, as well as the relevant work of the European Commission, the European Parliament and the European Consumers Association. [The remaining organizations were invited to contribute but they were unable to due to the time restrictions of this publication. We are hoping to host them in the second edition]. As an editor, I would like to thank all the contributors for the generous provision of time and energy in order to make this book a reality, as well as the Director of Programmes of the European Journalism Centre, Giuseppe Zaffuto, for trusting me with the responsibility of editing it. References Bardoel, J. & d’Haenens, L. (2004), Media responsibility and accountability: New conceptualizations and practices, Communications: The European Journal of Communication Research 29(1): 5–25. European Commission (2001), European Governance, a white paper, Brussels, 25.7.2001, COM (2001) 428 final, p. 8 and 14, Available from: http://eur-lex. europa.eu/LexUriServ/site/en/com/2001/com2001_0428en01.pdf . Fukuyama, F., & Wagner C. (2000), Information and Biological Revolutions: Global Governance Challenges, RAND Corporation. Available from http://www.rand.org/publications/MR/ MR1139. McQuail, D. (2005), McQuail’s Mass Communication Theory, Sage. McQuail, D. (1997), Accountability of Media to Society: Principles and Means, European Journal of Communication, vol. 12, no. 4, 511–529 (1997).

INTRODUCTION Alison Harcourt

Senior Lecturer in Politics, University of Exeter

What can be termed as European media governance comprises of both the national and European policy domains and the interaction between the two. European policy is coordinated by European countries through the membership of the European Union (EU) and the Council of Europe. This book shall overview Europe’s role in media governance with particular reference to the European Union policy framework. The volume gathers together statements from European Union institutions and associations, the latter representing both industry and unions. Contributors will provide an overview of the role of their organizations in Brussels. Those representing industry provide discussion of members’ industry figures, position papers on European regulation and statements on recent European initiatives and the current state of affairs. This introduction will contextualize these contributions by outlining the market status quo and the EU regulatory framework.

1. European media groups in a global market European Union policy documents have concentrated on the importance of competitiveness of “European” firms in global markets. However, European groups are transforming themselves into multinational corporations. Ownership structures have changed dramatically in over the last twenty years. Since capital is global in nature, it is becoming increasingly difficult to distinguish companies as “French”, “German”, etc. or even as ‘European’. Although many firms were established by a single entrepreneur (e.g. Black, Burda, Dassault, Hersant, Lagardère, Maxwell, Murdoch, O’Reilly) or as family firms (e.g. Agnelli, Aller, Berlusconi, Bonnier, De Benedetti, Fellner, Hersant, Holtzbrinck, Kirch, Mohn, Mondadori, Springer), most European media companies have now evolved into corporations listed on stock market exchanges. It is estimated

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that the ‘French’ group Vivendi is 90 per cent owned by US “registered” shareholders, Kirch is controlled by the American businessman Haim Saban, and the British BSkyB and Italian Sky Italia are controlled by the US-based Rupert Murdoch. Even for many European companies still based at “home”, profits are greater abroad than they are in Europe. Hence, one has to question how ‘European’ these groups actually are and whether this should matter for regulators. Most of the largest European media companies are in fact subsidiaries of large multinational conglomerates which draw the bulk of their income from activities other than the media. Many of these companies have been around for 100 years or longer. In most European countries, investment in audio-visual broadcasting came either from existing ‘national champions’, namely, large press conglomerates, industrial groups or privatized utilities companies. For example, the major publishing groups invested in broadcasting in Germany. In Greece, Ireland and Italy, investment came from established industrial families. In France, investment came from state utilities companies, mostly water and public works companies. By contrast, investment in newer markets, e.g., cable and satellite, came from established US corporations such as AOL/Time Warner, Liberty, News Corporation, NTL, UPC and Viacom. Of the 50 largest European media companies (by turnover), over 90 per cent are located in just seven Member States: France, Germany, Italy, Luxembourg, the Netherlands, Spain and the UK. The largest of these groups are listed in the table below.

Summary of the largest European media firms Country

Press

Audiovisual

France Germany

Havas, Hachette (Lagardère), Socpresse Bertelsmann, Heinrich Bauer Verlag, Alex Springer Verlag Rizzoli, Mondadori, L’Espresso Group, Rusconi, Monti-Riffeser

Bouygues, Vivendi Kirch, Bertelsmann

Italy

Luxembourg Netherlands Reed Elsevier, PCM Uitgevers, Wolters Kluwer, VNU Spain Grupo Prisa, Grupo Recoletos, Grupo Correo UK Trinity Mirror Group, Northern and Shell, and Daily Mail and General Trust, United News & Media, News International Source: compiled by author

Mediaset, Cecchi Gori Communications CLT, SES NetHold, Polygram Grupo Priso, Telefónica, Spaincom ITV, News International

INTRODUCTION |

All the large French multimedia groups have extensive international holdings and derive the majority of their turnover from international income. France’s largest media groups are Lagardère and Havas in publishing and Bouygues and Vivendi in broadcasting. Vivendi and Havas are based in New York. Vivendi1 is no longer ‘French’ as such as the majority of its stockholders are U.S. citizens since it was listed on the New York exchange in 2000. Lagardère and Havas are also shareholder owned. Vivendi ranks amongst the top ten global communications companies with a turnover of $24.2 billion in 2005. Lagardère is also amongst the top ten with a turnover over of $16.1 billion in 2005. Havas2 had a turnover of 14.6 billion euro in 2005 and is active in 91 countries. Hachette (of the Lagardère group) is active in most EU countries, most notably in France (Hachette publishing group), Italy (Rusconi Editore) and (Spain) Filipacchi Presse. In France, the television stations TF1 and M6 command the largest audience share. TF1 is controlled by the group Bouygues3 which owned 41.1 per cent of the company in 2006. M6 is solely controlled by the German multimedia group Bertelsmann. In advertising, the French group Publicis is a leading European player but also fourth largest advertising group in the world with a turnover of EUR 3.8 billion in 2004. Germany represents the largest media market in Europe. Germany is home to three of Europe’s largest publishing companies: Bertelsmann, Bauer and Springer. Bertelsmann is by far the largest company with a turnover of EUR 17.8 billion in the year ending March 2006. The company is represented in the world’s top ten multi-media firms. All major German media groups have invested in broadcasting and have substantial interests abroad. The publishing groups Bertelsmann, Axel Springer, Bauer, Holtzbrink and WAZ have television and radio interests both nationally and internationally. Axel Springer expanded substantially into central and eastern Europe in recent years. The smaller publisher Burda also holds shares in broadcasting companies. Controlling interests in the majority of commercial channels have until the present day been held by either by the Kirch Group or by Bertelsmann. ProSieben, Germany’s largest broadcaster, was sold by Kirch to the US businessman Haim Saban in 2003. In 2007, the group is to be sold off to ProSiebenSat 1 to international investment companies KKR/Permira4 and Goldman Sachs/Apax/Cinven pending regulatory approval. Italy has provided a base for one of Europe’s largest broadcasting companies, Mediaset, which had a turnover of $4.5 billion in 2005. The company Mediaset continues to be controlled by the Berlusconi family through Fininvest, however, the group is experiencing increasing capitalization. Fininvest floated its media interests with the creation of Mediaset back in 1996 with the sale of 20 per cent of stock. By 2002, Fininvest had decreased its interest to 48.6 per cent. In 2005, it decreased its interest in Mediaset to 34 per cent. The broadcasting market in Italy remains dominated by the private company Mediaset, and the public broadcaster RAI, with the new entrant, namely, Murdoch’s Sky Italia, gaining ground. The publishing market in Italy has for a long time dominated by familyowned industrial groups. Prominent industrialist families owning newspapers included: Agnelli (Fiat), Berlusconi (construction), De Benedetti (Olivetti computers), Caltagirone (construction), De Agostini, Feruzzi (chemicals, sugar, agricultural products) and Monti

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(oil). In 2003, the newspapers with the largest national circulation were owned by the family groups: Agnelli5, De Benedetti6, Berlusconi7, Monti-Riffeser8 and Rusconi, Italy’s largest publishing company. The newspapers holding the largest market share are owned by Agnelli and Rusconi. Rusconi has since been bought by the French group Lagardère. Mondadori is controlled by Fininvest and managed by Berlusconi’s daughter, Marina Berlusconi. Compagnie Luxembourgoise de Telediffusion (CLT) and Européenne des Satellites (SES) are the two largest players seated in Luxembourg. CLT is a large multinational company which has been controlled by Bertelsmann since it was merged with the Bertelsmann subsidiary Ufa in 1997. CLT is active in most European television markets with a majority shareholding in channels in Belgium, France, Germany, Hungary, Luxembourg, the Netherlands, Poland, Spain and the United Kingdom. In radio, it is active in Belgium, France, Germany, Luxembourg, the Netherlands, Spain, Sweden and Romania. It also owns a number of production companies in Germany, the UK and the US. The Astra satellite company created SES in 1983 as Europe’s first partly privately owned satellite television system (the Luxembourg government still retains a stake).9 The Netherlands has provided the European market with a number of large media companies with NetHold (Network Holdings), Polygram, Reed Elsevier, PCM Uitgevers, Philips, Wolters Kluwer and VNU. Most of these companies have extensive international interests. Reed Elsevier ranked amongst the top twenty global communications companies in 2005 with a turnover of $9.2 billion. Since 1996, NetHold has been owned by Vivendi through Canal Plus. The film production and music company Polygram was also bought by Vivendi in 1996.10 As in many small markets, nationally, the Dutch newspaper market is highly concentrated with PCM Uitgevers dominating ownership in national dailies and Wegener dominating the regional press market. The largest UK media groups are the British BSkyB Broadcasting Group and Pearson plc. BSkyB is controlled by the newspaper group News International, which is controlled by Rupert Murdoch’s News Corporation. BSkyB netted $ 7.3 billion in turnover in 2005, ranking amongst the global top twenty communications groups. Pearson, which owns the Financial Times in the UK, also ranked in the top twenty with a turnover of $7 billion. Comparatively, remaining UK groups are small. The national newspaper groups are News International, Trinity Mirror, the Daily Mail and General Trust group. The terrestrial market is dominated by ITV plc, which was formed by the merger of Carlton Communications and Granada plc in 2004. Sky dominates the satellite market. The cable company NTL Incorporated, result of the merged NTL and Telewest companies, dominates the UK cable business.

2. European Union policy framework The premise underlying EU policy is to increase European competitiveness on the global market and employment at the domestic level. Under its i2010 initiative, the European Union is presently revising its TVWF Directive resulting in the Audiovisual Media

INTRODUCTION | 17

Services Directive; privatizing spectrum management services; creating a framework for digital rights management; increasing data security; and updating its regulatory framework for electronic communications. The latter is being reviewed in a market climate which is undergoing dramatic technological change and is highly competitive in both advertising and broadcasting. In the late 1980s, two landmark directives, the Television Without Frontiers and Open Network Provision, established the backbone of the EU communications policy frame. The 1989 Television Without Frontiers Directive (TWF) provided for capital mobility within Europe for services previously confined to national markets – television and radio signals. The aim was to encourage the exploitation of new technologies (at that time, cable and satellite) through deregulation. By defining television signals as services entitled to free movement within the internal market, TVWF paved the way for crossborder transmission via satellite and cable. According to TVWF, a broadcaster could only be regulated by the country of origin and not by the country of reception. TVWF required the following: a majority proportion of transmission time be reserved for European works; 10 per cent of transmission time or 10 per cent of programming budget for European works created by independent producers; interruption of films by advertising limited to once every 45 minutes; exclusion of advertising during news, current affairs programmes, documentaries, religious programmes and children’s programmes; prohibition of advertising cigarettes, prescription medicines and medical treatment; a limit of advertising time to 20 per cent of the daily transmission time and 20 per cent within a given clock hour; the protection of minors; and prohibition of incitement to hatred on grounds of race, sex, religion or nationality. When the 1989 directive passed, Member States annexed 21 protocols to the directive which opted them out of specific rules. For example, Italy exempted the Fininvest channels from European quota requirements. In addition, many provisions were simply never implemented by Member States. For example, France and Germany continued to advertise prescription medicines and medical treatment, the UK permitted single advertising spots and Italy continued advertising breaks in religious broadcasts. The 1990 Open Network Provision (ONP) Directive provided open access to telecommunications services and networks based upon the principle of nondiscrimination and the elimination of exclusive rights. Two streams of directives were adopted in parallel: the liberalization directives under Article 86 (competition law) and the ONP directives under Article 95 (internal market). The TVWF and ONP directives together paved the way for a series of subsequent directives in the field. In 1997 the TVWF was revised. The new directive chiefly lifted existing limits on advertising. The distinction between advertising and teleshopping was abolished and daily and hourly time allowed for advertising was raised and flexibility was allowed for interruptions. The limit for advertising, rather than being based upon the hourly limit, is based upon 20 per cent of an estimated programme length. The number of interruptions

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allowed also depends upon the length of the programme. With a programme lasting up to 45 minutes, one advertising break is allowed. With a programme lasting up to 90 minutes, two interruptions are allowed. A programme lasting up to 110 minutes can have three interruptions. In each case, advertising is limited to 20 per cent of the total viewing time (depending upon whether a programme reaches 45 minutes, 90 minutes or 110 minutes). But there must be a minimum of 20 minutes of programming in a row. Sport events can only be interrupted during pauses. News, religious programmes, documentaries and children’s programmes of less than 30 minutes duration cannot be interrupted. Religious services should not be interrupted. Flexibility was introduced to the European quota provision. The ‘Listed Events’ was introduced in the 1997 Television Without Frontiers Directive which allows Member States to isolate certain events from exclusive rights contracts if they are considered to be of major importance for society. The legal basis for the Television Without Frontiers Directive has been brought into question by the Court of Justice. In its rulings, the Court found that many provisions set out in the TVWF Directive were not tenable under European law. The only provision within TVWF that the Court has thus far found of any relevance is that on cross-border broadcasting. The provisions set out in the directive which were negated by the Court mostly related to advertising; such as the advertising of alcohol, tobacco, teleshopping, infomercials or advertising to children. For example, the Court legitimized the use of telepromozione by Italian broadcasters in the RTI case.11 At the time, telepromozione overstepped the legal advertising limits in Italy as they were conducted within a television programme by the television announcers. The Court ruled that this was legitimate advertising. In its decision on two joint cases,12 the Court overruled Sweden’s capacity to prohibit teleshopping and the targeting of advertising to children under the age of 12. In 1998, the Court annulled the Tobacco Advertising Directive which, compatible with TVWF rules, was adopted to prevent the advertising and sponsorship of tobacco products within the EU. The European Court of Justice, ECJ, ruled in a similar case in favour of alcohol advertising in 2000.13 The TVWF provisions brought into challenge by the ECJ were designed to permit national regulators to provide minimum protection for public viewing, such as the protection of minors and advertising restrictions. It could be argued that the Court of Justice overruled public interest regulation in favour of market growth. All of these rulings have consequence for the AVSD. In the late 1990s and early 2000s, the EU expanded its policy framework for communications. This came firstly with the public service broadcasting protocol in the 1997 Amsterdam Treaty. Then in 1999, DG Information Society was successful in requiring divestment by incumbent cable operators at national levels with the Cable Ownership Directive. This was followed significantly by the 2000 Charter of Fundamental Rights of the European Union, Article 11(2) of which states ‘The freedom and pluralism of the media shall be respected.’ In 2001, DG Competition gave special recognition to public service broadcasters with its Communication on the application of State aid rules to public service broadcasting14 in which it states PSB importance for maintaining pluralism. The

INTRODUCTION |

Communication quotes the ‘public service’ Protocol of the 1997 Treaty of Amsterdam and the 2000 EC Communication on Services of General Interest in Europe (2001) as its basis. Then in 2002 came the new regulatory framework for communications. During the 1990s, technological innovation began to blur the boundaries between the traditional telecommunications and media sectors. Digital technology suddenly made it possible to compress data, visual image and sound into digital bytes, which can be sent down fixed lines (e.g. telephone, cable, Asymmetric Digital Subscriber (ADSL) lines, powerline systems, broadband cable) or wireless systems (e.g. satellite, mobile telephony) to television sets, mobile television, home computers and new generation mobile telephones. Digital compression put an end to spectrum scarcity. Broadband cable, which is copper or fibre-optic, can carry so much capacity that it facilitates the broadcast of digital television and radio. This makes it possible for even national terrestrial broadcasters to broadcast abroad. Broadband can carry two-way communication which facilitates interactive television and interactive advertising. Digital technology enables television channels to be received in many languages simultaneously. New services such as video-on-demand, near video-on-demand, multi-angle broadcasting, interactive television, telebanking, gaming (including interactive game shows) and computer telephony are becoming or have already become possible. New technology also led to a proliferation in new advertising techniques: split-screen advertising, virtual advertising, T-commerce (television-commerce), e-commerce (electronic commerce), self-promotion, teleshopping, infomercials, telepromotions, etc. Companies that traditionally operated in separate markets (e.g. terrestrial broadcasters, satellite broadcasters, cable operators, long distance telephone companies, local exchange carriers, personal computer manufacturers, software developers, content producers, Internet service providers) are able to cross over to adjacent markets. This presented a challenge to existing regulatory frameworks. This is particularly the case for the various stages of transmission: bundling, decoder technology, delivery system technology, scrambling, conditional access systems, common interfaces, application programming interface (APIs), electronic programming guides (EPGs), smart cards, etc. A new regulatory framework was needed to encompass both the regulation of both the traditional media and telecommunications networks together. In 2002, the European Union passed its 2002 Regulatory Framework for Electronic Communications and Services. The regulatory framework consists of six directives: a ‘framework’ directive and five accompanying directives (‘Authorisation Directive’, ‘Access Directive’, ‘Universal Service Directive’, ‘Data Protection Directive’ and the ‘Liberalisation Directive’). Also included in the package was a Commission Decision on Radio Spectrum (the ‘Spectrum Decision’), a Market Recommendation and Guidelines for SMP.15 The plan was to ‘roll back’ regulation as competition becomes effective in relevant markets. The European Commission mandated assurances in national law that national legal systems allow for appeals on national regulatory decisions. The Authorisation Directive in particular has a number of implications for traditional broadcasting markets. Specifically, ‘networks and services used

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for the transmission of radio and television broadcast content, such as satellite broadcasting networks, terrestrial broadcasting networks or cable television networks, will be subject to the general authorisation regime provided in the Authorisation Directive’ (CEC 2002a: 8). According to Article 3(2), communications operators (including television and radio) ‘can no longer be subject to an individual licence’. It adds that Member States may be permitted ‘to attach conditions’ to communications operators outlined in Part A of the Annex of the Authorisation Directive and ‘additional conditions relating to content’ found in national broadcasting law and TWF. Significantly, the directive states “The separation between the regulation of transmission and the regulation of content does not prejudice the taking into account of the links existing between them, in particular in order to guarantee media pluralism, cultural diversity and consumer protection”. Presently, a number of changes are proposals are being made to change the existing regulatory framework. The Commission is updating its Television Without Frontiers Directive with the Audiovisual Media Services Directive. Within this framework, it is engaging increasingly in self-regulation by industry and committee governance. The AVMS and the communications directives are inexplicitly linked. The Commission has pursued two streams of liberalization: networks on the one hand and content on the other. The ‘regulatory framework for communications’ liberalizes networks whereas the AVMS loosens requirements for content carried on those networks. Hence, the revision of the Audiovisual Media Services Directive (AVMS) can be seen as a part of a general framework of market liberalization in operation by DG Information Society. The Audiovisual Media Services Directive on 13 December 2005 is expected to be approved in the first half of 2007 under the German presidency. The most significant modification of the new directive is the liberalization cross-border broadcast of ondemand services (such as the downloading of films and programming via satellite, cable and the Internet). AVMS extends the country of origin principle to on-demand services (labelled “non-linear services”). At the same time, it extends existing TVWF requirements on content and advertising to new service providers. These requirements have been loosened. The directive allows for more advertising breaks within: films made for television (excluding series, serials, light entertainment programmes and documentaries), cinematographic works, children’s programmes and news programmes (every 35 minutes); it liberalizes new forms of advertising (allowing for split-screen, virtual and interactive advertising and product placement); abolishes the daily limit on television advertising; and drops all restrictions on teleshopping. Hence, new service providers will be subject to stricter regulation than before, but a service provider need only apply for authorization in one Member State – in order to gain access to the whole of the EU market. The European Parliament made a member of amendments to the AMS Directive proposal requesting stricter rules on content. But it also proposed a further loosening of the advertising limit to 30 minutes (for films made for television; cinematographic

INTRODUCTION |

works, children’s programmes and news programmes) rather than every 35 minutes proposed by the Commission.

3. Conclusion The Commission’s goal with this overall framework is to provide a stable regulatory environment for companies based upon a more American model of liberalization, access and self-regulation. However, the EU approach is distinctive in that it is overly reliant on a soft governance approach to policy-making. There has been a dramatic increase in soft governance since the 2001 Lisbon Summit. At Lisbon, the European Council addressed the impasses presented to the traditional “community method” (formal directives/ regulations, etc.) and proposed the use of soft governance in application to policy areas not covered by the acquis communitaire, which would include communications policy. The Commission’s DG for Information Society responded to this call with the inclusion of the Council’s suggestions in its eEurope Action Plan. As a result, DG Information Society is increasing reliance on soft governance. Soft governance refers to policy-making established through NRA coordination or co-regulatory fora and internal committees of the European Union. These fora agree internally on regulatory practice which is then adopted by Member States or selfregulatory bodies. DG Information Society operates an increasing number of committees. This author counted 72 such committees operating in 2006 within this policy area alone. In addition there are other soft policy fora which formally converse with the Commission comprising of OMC committees, high-level groups, regulatory authority platforms and industrial fora. Committees can make great strides in forwarding EU-level policy consensus. To give but one example, the Radio Spectrum Committee (RSC) was established under the Radio Spectrum Decision 676/2002/EC as part of the new regulatory framework for electronic communications. The RSC is a comitology committee of the Council of Ministers operating through the through advisory and regulatory procedures in accordance with the Council Comitology Decision. The Radio Spectrum Committee interacts with the Radio Spectrum Policy Group of the European Commission. The Radio Spectrum Policy Group was also created under 2002/622/EC. It operates internationally to the Commission and is comprised of Member State representatives, Commission and European Parliament functionnaires, the European Conference of Postal and Telecommunications Administrations (CEPT) and the European Telecommunications Standardisation Institute (ETSI). The RSPG advises the Commission on radio spectrum policy. Through this committee, the Commission proposed in 2006 that one-third of the spectrum below 3 GHz (that suited for terrestrial communication) should be privatized and managed by the market. Operators would be given the right to trade frequency rights in a given spectrum band for terrestrial services and to use those frequencies in a flexible manner. This proposal is being considered as part of the revision of the EU’s regulatory framework for electronic communications services which began in 2006. The model of spectrum privatization is based upon the UK model of a spectrum trading

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system. However, by comparison, the UK privatized radio spectrum in a parliamentary act, namely, the 2003 Communications Act, following extensive public consultation built upon an independent review. Europe’s path towards soft governance in ‘information society’ policy seems to be set. This is disconcerting, particularly in a policy area which claims to attribute to the promotion of European integration and building of civil society in Europe. Key variables missing from the soft governance model are transparency, legitimacy and democratic input to policy-making processes. Since the 2005 European Transparency Initiative, the European Commission has taken some steps towards greater transparency of committee governance, however, processes remain very much opaque and lack consultation requirements. Transparency is particularly important considering that the EU is already suffering from a democratic deficit. In addition, soft governance and selfregulation are essentially weak instruments of control as they are neither binding nor legally legitimate and cannot hold up in Court. Notes 1. Vivendi is a global leader in water, waste management, energy and construction. 2. Havas was nominated as a state news agency in 1835. It since has grown into a large multinational company active in publishing, telecommunications, travel, energy and construction industries. The French government sold off its last stake in Havas in 1987. Vivendi bought 100 per cent of Havas in 1997 and 1998 but began selling off group assets from 2000 onwards. It is mostly French stockholder owned but based in New York. 3. Bouygues is a family-owned firm active in public works, telecommunications, utilities and construction markets (roads and property). 4. The companies Kohlberg Kravis Roberts and Permira. 5. The Agnelli family controls the national papers Corriere della Sera, La Stampa and La Gazzetta dello Sport through its controlling stakes in the publishing groups Rizzoli and FABBRI. Rizzoli is owned by the Holding di Partecipazioni Industriali (Hdp) in which the Agnelli family have a controlling stake. The Agnelli family is active in aerospace, car and energy markets. 6. De Benedetti retained control of the Espresso Group which is a subsidiary of the Berlusconicontrolled Mondadori Group. The Espresso Group owns the national newspaper La Repubblica and the regional newspapers, Il Tirreno, La Nuova Sardegna, Messaggero Veneto, Il Piccolo, Alto Adige, Corriere delle Alpi, Bolzano, Gazzetta di Mantova, Il Mattino di Padova, La Provincia Pavese, Il Centro, La Tribuna di Treviso, Gazzetta di Reggio, La Sentinella del Canavese, La Nuova Ferrara, Nuova Gazzetta di Modena, La Nuova Venezia and La Città. 7. Fininvest owns 50 per cent of the Mondadori publishing group. The share was awarded to Fininvest in a Roman court decision following a battle for a controlling stake between De Benedetti and Berlusconi. 8. The Monrif Group owns the newspapers Il Resto del Carlino, La Nazione and Il Giorno, which are prominent in Bologna, Florence and Milan respectively.

INTRODUCTION |

9. SES is owned by a number of shareholders. The Luxembourg State, the Luxembourg bank, Banque et Caisse d’Epargne de l’Etat (BCEE) and Société Nationale de Crédit et d’Investissement (SNCI) each hold one-third of the voting shares. 10. Polygram was bought from Royal Philips Electronics by Seagram in 1998, which was acquired by Vivendi in 2000. 11. Joined cases Radio Torre, Rete A Srl, Vallau Italiana Promomarket Srl, Radio Italia Solo Musica Srl and Others, and GETE Srl. (Appendix 3). 12. Joined cases Konsumentombudsmannen (KO) v De Agostini (Svenska) Förlag AB (C-34/95) and TV-Shop i Sverige AB. 13. Konsumentombudsmannen (KO) (Consumer Ombudsman) v. Gourmet International Products Aktiebolag (GIP). 14. Communication from the Commission on the application of State aid rules to Public Service Broadcasting. (Annex 2) and Commission clarifies application of State aid rules to Public Service Broadcasting Press Release – IP/01/1429 – 17.10.2001. 15. The guidelines are on market analysis and the calculation of ‘significant market power’ (SMP), which set out (in Article 13 of the Directive) the principles for use by NRAs in analysing effective competition. Market players designated as having SMP may be subject to obligations under other Directives in the regulatory package. The draft Guidelines are based on the relevant jurisprudence of the Court of First Instance and the Court of Justice cases in addition to EC competition policy in defining relevant market and collective dominant position. The draft Guidelines are available at http://europa.eu.int/ispo/infosoc/telecompolicy.

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EU INSTITUTIONS

EUROPEAN MEDIA GOVERNANCE AND THE ROLE OF THE EUROPEAN COMMISSION1 Jean-Eric de Cockborne

European Commission, Head of Unit, Audiovisual and Media Policies; Digital rights; Task force on coordination of media affairs

Harald Trettenbrein

Head of Sector, European Commission, DG Information Society and Media2

1. Introduction This paper responds to the editor’s request to describe the impact the work of the European Commission has on the European media with a focus on the audiovisual industry where the Communities activities have most direct effect. Media governance possibly could cover a wide range of issues: everything from the selling of a book to the download of a music video to a portable telephone is somehow affected by Community Law. This is the reason why the Barroso Commission established a Media Task Force (see point 2). However, this contribution will focus on the audiovisual sector and its regulation and market and technological conditions. Watching TV or surfing the Internet on your mobile phone, downloading the latest episode of your favourite TV soap to the desktop of your PC – technological convergence is a fast evolving reality. European policies are leading to concrete results: Traditionally separate Information and Communication Technology markets – such as telephony, television and Internet – are converging. Today a single network infrastructure can deliver the full range of multimedia content to both fixed and mobile devices. The regulatory framework has to respond to changed technological and market conditions:

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• Telecom and cable operators are moving into each other’s markets offering ‘triple-play’ services (data, voice and video) – sometimes even extended to mobile services. Such trends lead to new partnerships between network operators, Internet service providers and content distributors. Audio-visual content is distributed on any of these platforms. • The device market has seen a sharp rise in sales of consumer electronics products that bridge the gaps between IT equipment on the one hand and consumer electronics on the other. MP3 player sales almost tripled in the past year with over 25 million units sold in 2005 in Western Europe alone.3 Sales of game consoles, now increasingly driven by online multi-user games, increased from 11.8 million units in 2004 to 16.3 million units in 2005. • There is evidence of both product convergence and the convergence of industries: IT companies and mobile phone producers both sell portable music devices and digital cameras on a large scale. Radio broadcasts received via Wi-Fi Internet, media centre PCs, home cinema and hi-fi systems in the living room can all now be connected to the Internet. Mobile phones are using Voice over IP (VoIP) and are becoming integrated with home networks and wireless Internet hotspots. • The online content market is estimated to be worth 1.4bn – an amount expected to double by 2009.4 The largest segments of the market are games (26 per cent of the total), music (19 per cent) and publishing (19 per cent). Newly emerging markets for online film would give a further massive boost to growth in such services. Convergence is increasing competition and leading to rapid growth of the broadband market.5

EUROPEAN MEDIA GOVERNANCE AND THE ROLE OF THE EUROPEAN COMMISSION |

• Broadband now reaches 12.8 per cent of the EU25 population (almost 59 million lines), a 21 per cent increase since 1 July 2005 (see chart above). In some Member States, more than half of fixed Internet access connections in households are broadband.6 • In October 2005, Europe overtook the USA in terms of the number of broadband lines. Broadband penetration rates in Europe are still behind the world’s leader (Korea) but take-up is growing fast and the gap is narrowing. • Broadband growth is driven by increasing competition, with new entrants gaining just over 50 per cent of the broadband market in the EU25. Competition is driven by both facility-based competition and effective regulation.7 • Persons who have broadband Internet access at home are more likely to be regular Internet users: 81 per cent of residents in household with broadband use the Internet at least once per week compared to 63 per cent of narrowband household residents.8

2. The role of the European Commission The role assigned to the European Commission by the Treaties is to propose and implement Community Legislation; the Commission acts as ‘guardian of the treaties’. The European Commission is the only institution of the European Union with the right to propose legislative initiatives which then have to be adopted in most cases in co-decision procedure. It is Directorate General Information Society and Media which is within the Commission responsible in the area of media and audio-visual policies. The development of new technologies, in particular satellite broadcasting, prompted initiatives to shape a Community audio-visual policy on the part of the Community institutions starting in 1984. The Commission presented then a Green Paper on the establishment of a Common market in broadcasting9 which finally led to the adoption of the Television Without Frontiers Directive (see 3.1). This was followed by the Green Paper on the Convergence of the Telecommunications, Media and Information Technology Sectors10 in 1997 and the Communication on Principles and Guidelines for the Community’s Audiovisual Policy in the Digital Age11 in 1999. The 1999 Communication outlined the five principles for regulatory intervention in the sector. Regulatory intervention should be the minimum necessary to achieve a clearly defined policy goal, guaranteeing legal certainty and technological neutrality, and enforced as closely as possible to the operators concerned. The Communication on the future of European regulatory audiovisual policy (COM (2003)784 final) is the result of the 2003 consultation process on revision of the “Television Without Frontiers Directive”. Two series of public hearings were organized and interested parties were invited to transmit their written contributions. Most contributions in the consultation agreed that the directive has provided a flexible and adequate framework for regulation by Member States and supported the Commission’s pragmatic approach.

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Overall, the directive has made a positive contribution to enabling free movement of broadcasting services within the EU. But the contributions also highlighted where further thinking is needed, which the Commission decided to address in a two-step approach: • To provide more legal certainty in the short-term an interpretative Communication on television advertising was adopted by the Commission on 23 April 2004: Commission interpretative Communication on certain Aspects of the Provisions on televised Advertising in the “Television Without Frontiers” Directive (COM (2004)1450). The Communication explains under which conditions new forms of advertising, like split-screen advertising or virtual advertising, would be admissible in the current framework. • With regard to a review of the directive, the Commission identified a number of issues that needed further thought and discussion. For these issues the advice of experts was sought in focus groups on regulation of audio-visual content, advertising and the right to information and through independent studies (on the impact of advertising regulation, the impact of measures concerning the promotion of the distribution and production of TV programmes and on co-regulation in the media). The results of the focus groups were published in issues papers that were submitted to a second public consultation in the run up to the major stakeholder conference in Liverpool12 that preceded the adoption on the directive by the Commission. Within Directorate General Information Society and Media the Media Task Force acts as a sounding board for other Commission services by pre-screening policy proposals at the conception stage. This helps to establish whether they will affect the editorial freedom of the media or have unintended or policy initiatives affecting the economy of the media industry. The Media Task Force is also committed to observing and protecting Media Pluralism in the EU as an essential pillar of the rights to information and freedom of press. At the Liverpool Audiovisual Conference,13 it was agreed that the Commission should step up its monitoring effort on media pluralism. A three-step plan was launched on 16 January 2007 with the publication of a Commission Staff Working Paper on Media Pluralism in the Member States of the EU.14 In this plan, the notion of media pluralism is much broader than media ownership; it covers access to varied information so that citizens can form opinions without being influenced by one dominant source. A study will be tendered in order to establish concrete and objective indicators for assessing Media Pluralism. The Media Task Force is also developing an economic research role in order to prime media policy. The first priority is to develop the Commission’s understanding of publishing to the same level as for audio-visual media. A Commission Staff Working Paper on “Strengthening the competitiveness of the EU Publishing Sector – The role of media policy” was published in September 2005 and followed by a Consultation on future policy orientations for publishing to gather reactions from the various stakeholders. In addition, the Media Task Force is engaged in a fruitful dialogue with the Publishing Industries in order to reflect on the


adaptation of this industry to the digital age and especially the shaping of new business models.15 Besides the regulatory activities the Commission also runs a support program for the audio-visual sector. The MEDIA Programme aims at strengthening the competitiveness of the European audio-visual industry with a series of support measures. MEDIA cofinances training initiatives for audio-visual industry professionals, the development of production projects (feature films, television drama, documentaries, animation and new media), as well as the distribution and promotion of European audio-visual works.16 Directorate General Information Society and Media supports the development and use of Information and Communication Technologies (ICTs) for the benefit of all citizens. Its mission is to develop the competitiveness of European audio-visual services by promoting national frameworks that ensure the comparable and effective protection of minors and respect of human dignity. It ensures a good functioning and development of a common market for television and other audio-visual services while ensuring the protection of general interests and cultural diversity. The role of DG Information Society and Media as a whole is to: • Support innovation and competitiveness in Europe through excellence in ICT research and development. • Define and implement a regulatory environment that enables rapid development of services based on information, communication and audio-visual technologies, so fostering competition that supports investment, growth and jobs. • Encourage the widespread availability and accessibility of ICT-based services, especially those that have the greatest impact on the quality of life of the citizens. • Foster the growth of content industries drawing on Europe’s cultural diversity. • Represent the European Commission in international dialogue and negotiations in these fields, and promote international cooperation in ICT research and development. A comprehensive strategy for the Information Society 2005–2010 The “i2010 – A European Information Society for growth and employment” initiative was launched by the Commission on 1 June 2005 as a framework for addressing the main challenges and developments in the Information Society and media sectors up to 2010. It promotes an open and competitive digital economy and emphasizes ICT as a driver of inclusion and quality of life. The initiative contains a range of EU policy instruments to encourage the development of the digital economy such as regulatory instruments, research and partnerships with stakeholders. i2010 – the first substantial initiative taken under the renewed Lisbon Agenda – seeks to boost efficiency throughout the economy through wider use of ICTs. i2010 rests on three pillars:

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1. Creating the single European Information Space, which promotes an open and competitive internal market for information society and media services. This pillar combines regulatory and other instruments at the Commission’s disposal to create a modern, market-oriented regulatory framework for the digital economy. 2. Increasing investment in innovation and research in ICT. This pillar focuses on the EU’s research and development instruments and sets priorities for cooperation with the private sector to promote innovation and technological leadership. The objective is to reach world class performance in research and innovation in ICT by closing the gap with Europe’s leading competitors (see graphic below). i2010 calls for Europe to increase investment in ICT research by 80 per cent.

3. Fostering inclusion, better public services and quality of life through the use of ICT. The third pillar seeks to promote, with the tools available to the Commission, an inclusive European Information Society, supported by efficient and user-friendly ICT enabled public services.

3. EU regulations relevant to the audio-visual industry The European Information Society sector has grown partly due to European initiatives such as the creation of the Single Market, the Television Without Frontiers Directive, the adoption of harmonized standards such as GSM, and the liberalization of the telecommunications sector. Today, there are two main areas of regulation in the Information Society sector: transmission and content. Theses areas of “hard law” regulation are complemented by soft law initiatives, a support programme for the


audio-visual industry – the MEDIA Programme – and the Community’s activities in intentional fora. Regarding transmission, a new electronic communications regulatory framework, launched in July 2003, provides a world-class legal framework for continuing the development of the industry, stimulating competition, creating growth and safeguarding public and user interests (see, for example, the spotlight on spam). The new framework covers, among other things, the management of scarce resources essential to communications. One particularly important resource is radio spectrum, through which all wireless communications travel, so the EU’s new radio spectrum policy was launched as part of the new framework. While the framework focuses on communications networks and services, radio spectrum policy covers all areas where spectrum is an issue, from mobile telephony to television broadcasting, from satellite positioning systems to scientific research, and much more. These regulatory areas are also coordinated with the Radio Equipment and Telecommunications Terminal Equipment (RTTE) Directive, which regulates the telecommunications equipment market. By replacing over 1000 national approval regulations, the directive has created a framework for regulating what is now a European single market worth 30 billion Euro. In the field of content, European audio-visual regulation aims to ensure the free provision of services and to fulfil objectives of public interest such as access to information and protection of users in areas such as commercial communication, protection of minors and human dignity. The main instrument here is the “Television Without Frontiers Directive”, which promotes the European broadcasting industry by ensuring the free movement of television broadcasting services throughout the EU. This “hard law” instrument is supplemented by a number of soft law instruments; the most important of which is the Recommendation on the Protection of Minors and Human Dignity and on the Right of Reply.17

3.1 The “Television Without Frontiers Directive” Community policy in the area of the regulation of media content is essentially internal market policy and is governed and limited by the internal market objective of freedom of movement for goods (including newspapers and magazines, for example) and services (including radio and television broadcasts). Adopted in 1989, the “Television Without Frontiers” Directive18 (TVWF) provides the country of origin principle for television services. The directive was revised in 1997 to take account of technological and market developments. As confirmed by the review in 200319 the directive has provided a stable and secure legal framework for broadcasting services in the Community ever since. The “Television Without Frontiers” Directive lays down the minimum standards that regulation of the content of television broadcasts by the Member States must guarantee.

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Television broadcasts of broadcasters that are subject to the jurisdiction of a Member State and that meet the legal requirements that apply in that Member State may be freely received and rebroadcast throughout the Community. In accordance with the initial focus on the importance of the media and communication for a free, democratic and social society, this minimum standard essentially comprises the obligation to adopt measures: • to ensure that events of major importance for society are not broadcast on the basis of exclusivity in such a way that significant sections of the public in the relevant Member State are prevented from following the event in a freely accessible television broadcast; • to promote the production and dissemination of European television programmes; • to protect consumers as regards advertising, sponsoring and teleshopping; • to protect minors and public order; • to protect the right of reply. Community law at present distinguishes between “television broadcasting services” subject to the TVWF Directive, and “information society services”, subject to the “E-commerce” Directive. The regulatory approach of the “Television Without Frontiers” Directive is more detailed than the regulatory approach of the “E-commerce” Directive. This is due to paramount importance and the impact of television broadcasting on society. Digital technologies and convergence will increasingly involve new forms of content, new means of providing it and new business models to finance it. Regulatory policy in the sector has to safeguard certain public interests, such as cultural diversity, the protection of minors and consumer protection now and in future. The wide-ranging consultation that the Commission conducted in 2003 confirmed that these objectives are not called into question by technological or market developments. What is questioned are the means by which these objectives can be achieved in a changed environment. The Commission regularly publishes reports on the application of the directive. Two application reports were adopted in 2006:20 • The Fifth Report from the Commission (COM (2006)49 final) relating to the application of the “Television Without Frontiers” Directive for the period 2003–2004, adopted on 10.2.2006; • The seventh Communication on the application of Articles 4 and 5 of the directive, adopted on [14 August 2006 (COM (2006)459]. 2005: Modernization A new legislative proposal for a modernized audio-visual services directive was adopted in 200521 (see point 5 infra).


The new directive is based on the distinction between linear (TV broadcast) and nonlinear (on-demand) services. Because of the fact that the user/consumer has a greater control and choice in the case of non-linear services – he can decide at what moment in time a specific programme chosen in a catalogue is transmitted – the rules for these services are lighter. The rules for on-demand services therefore contain mainly the following elements: • • • •

Protection of minors Prohibition of incitement to hatred Identification of the media service provider Basic rules for commercial communication such as identification of commercial communication, prohibition of surreptitious advertising, clear rules on product placement and sponsoring as well as some qualitative restrictions on advertising

Linear services (TV broadcast) have to comply with more specific rules. This is mainly due to the paramount importance and the unparalleled impact of television broadcasting on our societies through the effect it has on the way people form their opinions. The new directive will furthermore modernize the existing rules on television advertising and create a flexible framework for European audio-visual services.

3.2 Recommendation on the Protection of Minors and Human Dignity and on the Right of Reply On 20 December 2006 the European Parliament and the Council adopted a Recommendation on the Protection of Minors and Human Dignity and on the Right of Reply.22 The Recommendation builds upon the earlier 1998 Council Recommendation,23 which will remain in force. It extends the scope to include media literacy, the cooperation and sharing of experience and good practices between self-, co- and regulatory bodies, action against discrimination in all media, and the right of reply concerning online media. Amongst other things, Member States should consider: the introduction of measures regarding online right of reply or equivalent remedies; actions to enable minors’ responsible use of audio-visual and online information services, in particular through media literacy; encouraging the audio-visual and online information services industry to avoid and combat all discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation, without infringing freedom of expression or of the press; drawing up codes of conduct in cooperation with professionals and regulatory authorities at national and Community level; promoting measures to combat all illegal activities harmful to minors on the Internet. The audio-visual and online information services industry should develop positive measures, such as harmonization through cooperation and the exchange of best practices between the regulatory, self-regulatory and co-regulatory bodies of the Member States;

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also the possibility of creating filters which would prevent illegal pornography from passing through the Internet; and measures to increase the use of content labelling systems for material distributed over the Internet.

3.3 Other interventions The European Charter for the Development and the Take-up of Film Online was initiated in May 2005 by Commissioner Viviane Reding and agreed by business leaders on 23 May 2006 at the Europe Day of the 59th Cannes Film Festival. The Charter represents the joint accomplishment of representatives of the three groups of key players: film and content industry, Internet service providers and telecom operators. The European Commission acted as honest broker during the Film Online Talks which led to the adoption of the Charter. The objective of the European Film Online Charter is to encourage the development and take-up of Film Online in Europe. The parties endorsing the European Film Online Charter believe that Film Online services, due to their economic and cultural potential, offer a tremendous opportunity for a wider circulation of European films, can create a more vibrant and competitive film sector and will become a powerful driver for broadband in Europe.24 The Commission intends to further encourage the development of innovative business models and to promote the cross-border delivery of diverse online content services in a CONTENT ONLINE initiative. A Public Consultation on Content Online in the Single Market was held from 28 July 2006 until 13 October 2006. Input to this consultation will help shape a Commission Communication on Content Online, which will deal with ways to stimulate the growth of a true EU single market for online digital content. This Communication is due to be adopted during the second half of 2007.

4. Current state of affairs The most important policy development concerns the revision of the “Television Without Frontiers Directive” (TVWF) which should become an “Audiovisual Media Services Directive”. On 13 December 2005, the Commission adopted the proposal for the revision of the TVWF Directive to address the significant technological and market developments in the field of the regulation of audio-visual services. This legislative proposal is now in co-decision procedure with Parliament and Council. After a first discussion in May 2006 on the Commission proposal, the Council reached a general approach on 13 November 2006. The Parliament, in its first reading on 13 December, largely confirmed the Commission’s proposal with a clear consensus on scope, co- and self-regulation, European works and the two-tier approach. The amendments adopted are largely consistent with the Council’s general approach. The Parliament strengthened the country of origin principle as compared to the provision they agreed upon in the general approach. Product placement is forbidden


in principle in both Council’s and Parliament’s texts. But the Parliament establishes automatic derogations when product placement should be allowed for certain types of programmes (e.g. films) unless Member States specifically decide otherwise (“opt-out”). The Council text, on the contrary stipulates specific “opting-in”, which would require Member State to legislate for the derogations to apply. The Parliament added some new provisions, such as those on media pluralism (rejected by the Commission) and access for people with disabilities (accepted by the Commission). Under the German Presidency a political agreement on a Common Position was reached at the May 2007 Council. From television to audio-visual media services: A future-proof definition Discussions in Council and Parliament confirmed the approach taken by the Commission to make non-linear (on-demand) audio-visual media services benefit from the principle of the country of establishment, in particular video on-demand services. They have also brought additional legal certainty by emphasizing the audio-visual service provider’s editorial responsibility and by introducing the definition of “programmes”. Both institutions also support a moderate liberalization of television advertising rules.

5. Future issues The Single European Information Space The review of the EU regulatory framework for electronic communications, which aims to make markets more competitive, stimulate investment and innovation and hence enhance consumer benefits, will be concluded in 2007. As part of this overhaul, the Commission will review its recommendation on the eighteen wholesale and retail markets for electronic communications products and services that under EU rules can be regulated, ex ante, to promote competition. It is also preparing a regulation to reduce charges for using a mobile phone abroad. The Commission will also present proposals for a reform of spectrum management to facilitate access to radio frequencies for new technologies and applications and will assess developments with regard to mobile TV. The convergence of digital content, networks and devices offers a wide range of opportunities to businesses and benefits to consumers. However, many people are still reluctant to use information society and media services, due to security and privacy concerns. In 2006, the Commission looked at ways to address these concerns. In 2006/2007, the Commission plans to: • make proposals for the review of the eCommunications regulatory framework and promote an efficient management of spectrum • assess developments in standardization and interoperability with regard to mobile TV services • extend the Film Online initiative to Content Online and present proposals in a communication (mid-2007) • address trust, privacy and security issues in the forthcoming EU security strategy (mid-2006)

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6. Cooperation with other EU DGs/institutions Directorate General Information Society and Media – as integral part of the Commission Services – is the lead service for audio-visual and media policy including the Media Task Force. As a consequence of the nature of the Commission as a collegiate body, however, every DG is associated to a number of files. Some examples where DG INFSO is working together with other services with regard to media issues include: • DG Education and Culture: UNESCO Convention on cultural diversity; • DG Competition: support for European audio-visual industry, the financing of public broadcasting; • DG Enterprise: standardization; • DG External Relations: regulatory dialogue with partner countries, World Summit on the Information Society, EC participation in international organizations such as UN, OESCE, World Bank and Council of Europe; • DG Trade: EC participation in OCDE, WTO and bilateral and regional trade negotiations; • DG Health and Consumer Protection: distance selling, TV-advertising, spam, consumer protection related to electronic communications, eHealth and electromagnetic fields; • DG Internal Market: intellectual property rights, privacy and data protection, must carry rules, E-commerce Directive, media pluralism; • DG Consumer Protection: advertising rules; • DG Justice and Home Affairs: protection of minors. Finally, the DG works with the Legal Service and the Secretariat General, which have a central coordination task. These range from complaints and infringements of EU rules to strategic programming and financial perspectives. Relations with other EU institutions Most of the DG’s legislative files are adopted by the Council and the European Parliament under the co-decision procedure. The European Economic and Social Committee and the Committee of the Regions are regularly consulted. The Council formations involved are Telecoms, Transport and Energy, Competitiveness and Education, Youth and Culture (matters concerning audiovisual and media). Other policy areas are treated in other Councils, like Health for health issues. Relations with multilateral institutions • The Council of Europe The “Television Without Frontiers” Directive has established the framework for the free movement of television broadcasting services in the European Union, in order to promote the development of a European market in broadcasting and related activities.


In parallel a number of Member States which are at the same time signatories to the Council of Europe have signed the European Convention of Transfrontier Television. The Convention largely covers the same subject matters as the directive, but is of a completely different legal nature. A disconnection clause ensures that with regard to the relations between Member States to the EU only the directive applies. The rules in both instruments are largely harmonized, which creates a European audio-visual space which is larger than the Union, where television services can be freely received and redistributed. The Commission and the Member States are participating actively in the work of the Council of Europe in this field notably with the aim to exchange best practices. Where possible, the EC fosters the adoption of a common approach to policies in this field, in order to render harmonious and coherent the distinct policies existing in the Member Parties to the Council of Europe, thus creating a wider level playing field for the audiovisual sector. As a concrete example the European Commission pursues a strategy of convergence of the audio-visual policies of the western Balkan countries with European standards on media, in cooperation with the Council of Europe. • The World Intellectual Property Organization Copyright legislations and values in Europe date back more than 200 years. They have notably their origin in cultural and human rights traditions, as they represent the fundamental right for individual who create intellectual and artistic works; a right that makes the product of their creative effort their property under the law. Copyright and neighbouring rights have served the development of cultural wealth in Europe. Copyright and neighbouring rights also constitute the currency of the audio-visual sector, i.e. the protective elements of the products and services (CDs, films, CDROMs…). They provide the creators, the artists and the content industry with the basic intellectual property rights allowing them to be remunerated and to invest into more creation and more revenues. Copyright and neighbouring rights also contribute to ensure the existence of reliable and secure conditions, which is the basis for any investment in this field, thus for creation and innovation. The emergence of the new digital age must constitute an opportunity for the artists and creators in order to provide the rich content which is the sine qua non condition for the Information Society to exist and develop. In terms of legal framework, two dimensions are relevant for the European audiovisual sector: the European Community and the international fora such as WIPO and TRIPS. At EC level, the Community has developed a legal framework based on the Internal Market, constituted of EC directives which harmonize the level of protection for copyright and related rights with a view to create a favourable environment for protection and stimulation of creativity and innovation. The most recent initiative in the field is

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the copyright and related rights in the Information Society Directive, which is still in negotiation. It addresses the transposition into EC law of recently adopted WIPO Treaties in the field and the adaptation of the EC legal framework to the new services and technologies of the Information Society. At international level, the World Intellectual Property Organization (WIPO) is one of the relevant fora for copyright and related rights, together with the TRIPS Agreement in the WTO. Recently, two WIPO Treaties have been signed and are being ratified by the Parties, addressing copyright in the digital age. The last developments in WIPO concern databases as well as the protection of audio-visual performers. On the latter, the Diplomatic Conference which took place in Geneva in December 2000 did not lead to the agreement on a treaty. • OECD The OECD (Organisation for Economic Co-operation and Development) has a twofold activity of administrator of legal instruments, notably in the field of investment and movement of capitals and “think tank” or discussion forum on emerging issues which are of relevance to its members. It has developed initiatives and discussions on specific topics that are of direct relevance to the audio-visual sector, such as multilateral rules on investment, invisible transactions and electronic commerce. Within the OECD, the Committee for Information, Computer and Communication Policy (ICCP Committee) addresses policy issues involved in maximizing economic growth and social benefits derived from the development and application of information and communication technologies. In this context, a notable development in recent times has been represented by the prominence of the activities of OECD working groups,25 who have been increasingly involved with the study and assessment of the regulation and economics of media content. The Commission closely monitors the OECD activities with the aim of “mainstreaming” EU policies and regulations to create an enabling environment favourable to EU positions in other bilateral and multilateral fora as well as to ensure that the “legal protections” characterizing the EU audio-visual sector are reflected in such activities. • WTO The WTO (World Trade Organization) framework is relevant to the audio-visual sector in many respects. Among the WTO-managed agreements, the TRIPS (trade-related intellectual property rights) agreement and to a lesser extent the ITA (Information Technology Agreement) have implications for the audiovisual sector. However, it is primarily within the GATS (General Agreement on Trade in Services), which sets the multilateral framework regarding trade in services, that the EU and its Member States have preserved a room for manoeuvre in relation to the WTO general principles governing trade as far as their policies and measures in this sector are concerned on the basis of cultural objectives. The so-called “GATS Community acquis” refers to the freedom for action in the field of audio-visual policy which is part of a policy of active preservation and promotion of cultural diversity. This is ensured through the introduction of exceptions to the Most Favoured nation (MFN) treatment principle


(under which measures implying for instance discriminatory systems of trade preferences such as local content requirements, would not otherwise be allowed) and the absence of liberalization commitments concerning national treatment and market access for audiovisual services. The European Community has been committed to this defence of the preservation of current and future policies and measures in the audio-visual field since the beginning (in 1999) of the rounds of negotiations under the GATS framework for the progressive liberalization of services and this position is still valid in the present round of the Doha Development Agenda (DDA) negotiations. The major recent developments are related, on the one hand, to the on-going DDA negotiations round and, on the other hand, to the successful conclusion in 2006 of the complex “compensation” negotiations the EU had to conduct with seventeen other Members of the WTO. The latter negotiations arise from the need to align with the liberalization commitments of the EC12 those commitments originally offered by EU Member States that have joined the EU since 1995 so as to ensure consistency of commitments for the whole EU. The result of these negotiations represents a positive outcome for cultural diversity in that the “GATS Community acquis” for audio-visual services is now ensured for the 25 Member States as far as commitments are concerned (further negotiations are expected to integrate Bulgaria and Romania and to deal with the consolidation of MFN exceptions) and a number of safeguards are secured regarding the identification of certain sectors committed so that these commitments cannot be invoked to limit the scope of the room for action of the EC in the audio-visual area. • UNESCO The activity of the United Nations Educational, Scientific and Cultural Organization (UNESCO) is particularly relevant for the audio-visual sector in relation to the affirmation of cultural diversity at international level. Since the adoption of the Universal Declaration on Cultural Diversity and the supporting Action plan adopted unanimously by UNESCO in November 2001, the Organization has worked successfully and with the full support of the Community and its Member States to the adoption of the international Convention on the protection of the diversity of cultural content and artistic expressions at the UNESCO General Conference of 20 October 2005. The adoption of such an instrument represents a major achievement since it is the first legally binding instrument at international level, recognizing the specific nature of cultural expressions in line with the EU position and policy recognizing the dual nature – cultural and economic – of cultural goods and services (including audio-visual). The Convention will enter into force in March 2007, the minimum number of ratifications required having been reached in December 2006 with the decisive contribution of the Community and its Member States, and the full participation of the EC and its Member States in its implementation will contribute, inter alia, to establishing a new pillar of world governance for the protection and promotion of cultural diversity, emphasizing the specific and dual (cultural and economic) nature of audio-visual services, recognizing and further legitimizing public policies supporting cultural diversity and promoting international cooperation to respond to cultural vulnerabilities (notably with regard to developing countries).

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Notes 1.

2.

3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22.

23.

24. 25.

For a complete inventory of all the European Commission measures affecting the media, you can see Annex A at the end of this book and for an update you can visit http://ec.europa. eu/information_society/media_taskforce/doc/grid_inventory.pdf. This paper expresses the personal views of the authors and in no way constitutes a formal position of the European Commission. The authors are especially grateful to Olivier Schaub who contributed to this work. EITO 2006; data for Western Europe including Austria, Belgium, France, Germany, Italy, Netherlands, Spain, Switzerland and UK. EITO 2006. Market data are for January 2006, supplied by the Communications Committee (COCOM) supplemented by 3rd country data supplied by the Broadband Subscriber Database. Source: Commission services based on data from COCOM. Information Society and Media DG: May 2006 Information sheet 7.1. Ibid. http://aei.pitt.edu/1155/01/TV_frontiers_annex.pdf (eur-lex link for this document is down). http://europa.eu/scadplus/leg/en/lvb/l24165.htm. http://europa.eu/scadplus/leg/en/lvb/l24223.htm. http://ec.europa.eu/comm/avpolicy/reg/tvwf/modernisation/liverpool_2005/index_en.htm. http://ec.europa.eu/comm/avpolicy/reg/tvwf/modernisation/liverpool_2005/index_en.htm. http://ec.europa.eu/information_society/media_taskforce/pluralism/index_en.htm. http://europa.eu.int/information_society/media_taskforce/index_en.htm. http://ec.europa.eu/information_society/media/overview/index_en.htm. http://ec.europa.eu/comm/avpolicy/reg/minors/index_en.htm. Council Directive 89/552/EEC as amended by Directive 97/36/EC of the European Parliament and of the Council. See point 4 of this Communication in detail. http://ec.europa.eu/comm/avpolicy/info_centre/library/legal/index_en.htm#COM. http://ec.europa.eu/comm/avpolicy/reg/tvwf/modernisation/proposal_2005/index_en.htm. Recommendation of the European Parliament and of the Council of 20 December 2006 on the protection of minors and human dignity and on the right of reply in relation to the competitiveness of the European audio-visual and online information services industry, OJ L 378, 27.12.2006, p. 72–77, http://eur-lex.europa.eu/LexUriServ/LexUriServ. do?uri=CELEX:32006H0952:EN:NOT. 98/560/EC: Council Recommendation of 24 September 1998 on the development of the competitiveness of the European audio-visual and information services industry by promoting national frameworks aimed at achieving a comparable and effective level of protection of minors and human dignity http://europa.eu.int/eur-lex/lex/LexUriServ/LexUriServ. do?uri=CELEX:31998H0560:EN:NOT. http://ec.europa.eu/comm/avpolicy/other_actions/content_online/index_en.htm. In particular, the WPIE (Working Party of the Information Economy) and the CISP (Working Party on Communication Infrastructure and Services Policy).

THE EUROPEAN UNION’S MEDIA POLICY: THE ROLE OF THE EUROPEAN PARLIAMENT Nikolaos Sifunakis

Chairman of the Committee on Culture and Education, European Parliament

Introduction The EU policy on media is part of its wider policy on the audio-visual sector and focuses, amongst others, on the support of the production and distribution of European audiovisual works and the creation of a safe and stable regulatory framework ensuring the freedom to provide audio-visual services. This policy aims to boost the competitiveness of the European audio-visual industry in order to achieve the production of audio-visual content of high quality and, at the same time, ensure the respect of fundamental principles, such as pluralism, linguistic and cultural diversity, the freedom of expression, the right of reply, the protection of the producers and their work, the protection of minors and of human dignity and the protection of the consumer. This chapter does not aim to present an overall picture the European Union’s media and audio-visual policy. Its purpose is to describe the work and activities of the European Parliament, and more specifically, of its Committee on Culture and Education, which is also responsible for the media and audio-visual policy of the European Union. The chapter will cover its activities during the period 2004 and 2006. The possibility for the European Parliament to participate in the legislative process and the adoption of new Community legislation depends to a large extent on the legislative proposals of the European Commission which is the EU institution that holds the exclusive right of presenting legislative initiatives.

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In this context, the Committee on Culture and Education, during the first part of the parliamentary term 2004–2009, participated in the legislative process of four new Community actions on the above matters. At the same time, through a series of owninitiative reports and public hearings, it had the opportunity to express its opinion on various aspects of the Community policy on media and the audio-visual sector.

1. MEDIA 2007 programme The beginning of the parliamentary term 2004–2009 coincided with the presentation by the European Commission of five new Community programmes for the support of culture, education, youth, European citizenship and the audio-visual sector. These programmes, which cover the period 2007 to 2013, will provide the continuation of existing EU programmes in these fields. The legislative process for the shaping of these five programmes was a fundamental priority for the Committee on Culture and Education. One of these programmes was MEDIA 2007, whose aim is the support of the European film industry. The procedure for the approval of MEDIA 2007 was completed in November 2006 following a legislative process that lasted two years due to the delay of an agreement on the financial perspectives for the period 2007 to 2013. The conception of the MEDIA 2007 programme, which is the continuation of the previous MEDIA I (1991–1995), MEDIA II (1996–2000) and the MEDIA Plus and MEDIA Training (2001–2006) programmes, began from the acknowledgment that the European cinema, which flourished in previous decades, is today under substantial threat from the domination of the American cinematographic industry both in Europe and worldwide. Linguistic and cultural diversity are possibly the greatest wealth of Europe. However, at the same time, they are the reason for the fragmentation of the European audio-visual market into a large number of national markets. This fragmentation results in the lack of transnational circulation of European works and the regular undercapitalization of the small and very small enterprises. This probably explains why American films have an absolutely dominant position on the European audio-visual market with about 70 per cent, with the remaining percentages being held by 20 per cent by national films and only 10 per cent by cross-border European films. At the same time, the corresponding European percentage of the American market rises to only 1–2 per cent. As a result the domination of American cinema brings about an annual trade deficit of the EU against the USA of approximately 8 billion dollars. This fact does not pose only a serious economic concern, but primarily a cultural one, since cinematographic films are also media for the dissemination of culture. The MEDIA 2007 programme is based on the experience of the previous MEDIA programmes and has three major objectives:

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1. Preserving and enhancing European cultural diversity and its cinematographic heritage through support for intercultural dialogue; 2. Improving the distribution of European works both within and outside the Union; 3. Strengthening the competitiveness of the European film industry. The Committee on Culture and Education, together with the Council and the European Commission, contributed substantially to the improvement of the new MEDIA 2007 programme by integrating the creative and cultural aspects within the proposed economic actions, strengthening the access of small- and medium-size enterprises to funding and greater cooperation, reducing imbalances between countries with high- and low-production capacities and supporting digitization at all stages of the development, production and distribution chain. The success of the MEDIA programme has led other European countries to sign agreements with the European Community in order to participate in the programme. Therefore, in February 2005, following a report of the Committee on Culture and Education, the European Parliament approved an agreement between the Community and the Swiss Confederation, for the participation of Switzerland in the MEDIA Plus and MEDIA Training programmes for 2001–2006.

2. Preservation of the European film heritage At the beginning of 2005, the European Parliament, following a report of the Committee on Culture and Education, participated in the drafting of a new EU Recommendation addressed to the Member States aiming at the preservation of film heritage and the competitiveness of related industrial activities. The goal of this Recommendation was more specifically to foster better exploitation of the industrial and cultural potential of European film heritage by encouraging policies of innovation, research and technological development in the field of conservation and restoration of cinematographic works. The recommended actions aimed to ensure the creation of the necessary conditions for the competitiveness of Europe’s film industry. The development of the European film industry is of vital importance for Europe in view of its significant potential in the fields of access to culture, economic development and job creation. The film industry in Europe has a great potential for creating employment and contributing to economic growth. This refers not only to the production and showing of films, but also to the collection, cataloguing, preservation and restoration of cinematographic works. The conditions for the competitiveness of these industrial activities related to film heritage need to be improved, especially as regards better use of technological developments, such as digitization. The national film archives have an important role in preserving our film heritage. If a film is properly archived, its message will be saved for the future. If not, if the owners of the rolls do not give a copy to the national archive, the film and its content will be

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ultimately lost. This is the reason why the European Parliament recommended the compulsory depositing with the designated national archives of one copy of each and every European film made for public distribution. In addition, because of wars and other tragedies, the copies of many films are missing in the country where they were made, whereas, in many cases copies (or sequences of them) can be found in foreign archives. The national film institutes and archives of Europe should cooperate in order to help researchers from other Member States. In so doing, we can ensure that our film heritage will really become our common and public heritage.

3. Protection of minors and human dignity in audio-visual and information services Internet has become the most popular means of communication, particularly among young people. The latest statistics show that time spent on the Internet by young people is now greater than that spent watching television. At the same time, it has been established that there are around 260 million pages with pornographic content circulating on the Internet. It is therefore a matter of urgency for the European Union to propose a comprehensive set of measures at European level seeking to provide at least a minimum degree of protection for the most vulnerable and for minors, who are more and more frequently exposed to harmful (violent or pornographic) images. This was the purpose of an EU Recommendation that was adopted by the Council and the European Parliament in December 2006 following a report of the Culture committee. This Recommendation aims to ensure an effective level of protection of minors and human dignity and to enable the right of reply to be exercised in all audiovisual and information services. The Recommendation advises, amongst others, Member States to launch information campaigns to increase public awareness of the potential dangers of Internet and distribute information packs containing tips on ‘safe surfing’, protective filter systems and the use of hotlines to be introduced in each Member State for registering complaints or reporting harmful content. They should also provide ongoing training for teachers and educators concerning the use of Internet and the dangers of online discussion groups such as forums and chat lines. The information thus provided should enable Internet users (parents, teachers, minors, etc.) to determine the content and services which are totally safe to access. The text also stresses the need to instil a greater sense of responsibility into those working in this sector, who should do everything possible to avoid any form of discrimination, prevent the circulation of illegal or harmful content, ensuring that it can be reported where it occurs and introduce a quality label for service providers. For this purpose, they are called upon to facilitate Internet access while avoiding harmful content, for example by means of filters, common designations and warning banners.


Finally, the Recommendation seeks to facilitate exercise of a right of reply in all online media. This already works satisfactorily in the written press and audio-visual services in all the Member States. Minimum guidelines should therefore be established at European level concerning the exercise of the right of reply in respect of all new electronic communications media (Internet, mobile phones). This proposal seeks to ensure a right of reply adapted to technological progress. This Recommendation should ensure that Internet remains an attractive means of communication which is, at the same time, safer for the younger and more vulnerable members of society. In a world of constantly developing technology and a completely open communications landscape, it is necessary to protect the fundamental freedoms of users, in particular minors, by ensuring that the relevant measures and standards are constantly updated, implemented on a mutual basis and very regularly evaluated. This is the condition which must be met so that people feel safe when they use new technologies.

4. The revision of the Television Without Frontiers Directive (Audiovisual Media Services Directive) The Television Without Frontiers (TVWF) Directive forms, since its adoption in 1989, the most important legal act of the European Union regarding the regulation of media, and more specifically European television. This directive enshrines all the objectives that the EU wishes to achieve in relation to European television. It is based on two primary principles: the free movement of television broadcasts within the internal market and the obligation of broadcasters to reserve for European works a majority proportion of their transmission time, as well as at least 10 per cent of their transmission time, or their programming budget, for European independent productions. In addition to the promotion of European and independent productions, the aim of the TVWF Directive is the safeguarding of certain important public interest objectives, such as cultural diversity, protection of the consumer, quantitative and qualitative conditions for television advertising and sponsorship, protection of minors, right of reply, free access to the broadcasting of events which are considered of major importance to the society (e.g. sports events), etc. The free movement of television broadcasts is achieved through a minimum harmonization of the Member Sates’ legislation in these fields. The European Parliament did not have the opportunity to participate in an influential way in the drafting of the initial TVWF Directive of 1989 since at that time the codecision procedure had not yet been introduced.1 The European Parliament participated, however, actively in its first review in 1997. Today, ten years after the first revision of the directive, it has become evident that the regulatory framework of the 1980s and 1990s no longer corresponds to the technological changes that have reshaped the television sector in the last years. The discussions for a new revision commenced officially in 2003 when the European Commission initiated

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a wide public consultation on the matter. The main concern was to deal with the technological advances in the audio-visual industry, which have resulted in the creation of new types of services not currently covered by the directive. In order to broaden the current EU legislation to cover new technological developments, the Commission proposal distinguishes between ‘linear’ services, i.e. broadcasts via traditional television, the Internet or mobile phone networks, which provide the viewer with content running on a fixed-programme schedule, and ‘non-linear services’, i.e. TV-like services called up by the viewer from the network on demand. For linear services the current basic rules governing TV are to continue in force. For non-linear services, on the other hand, only minimum basic rules are laid down, e.g. for the protection of minors, against incitement to racial hatred and for the prevention of surreptitious advertising. These common rules mean that in future the providers of audio-visual services should be subject only to the legislation of the Member State in which they are established, and no longer to the diverse media legislation of all the Member States in which their services can be received. For linear services, the proposal of the European Commission does not change the fundamental principles of the directive which is currently in force. For example, the quotas for broadcasting of European and independent productions stay in place. However, the Commission suggested the loosening of the regulation in regard to television advertising, which was not positively seen by all the political groups in the European Parliament. In addition, the Commission’s proposal attempts to regulate at EU level a very controversial matter: ‘product placement’. Product placement is any form of audio-visual commercial communication consisting of the inclusion of or reference to a product, a service or the trademark thereof so that it is featured within audio-visual media services, normally in return for payment. Products can be placed, for example, in cinematographic works, films and series made for television, as it is usually the case in American productions. This practice, which is widespread in the United States since many years, contributes to the financial support of the productions, but it is also criticized for influencing the independence of the screenplay writers and, in general, of the media service providers. Since there is not for the moment a common legislative framework on this matter in Europe, the Commission suggested authorizing it, with exceptions for news and current affairs programmes, children’s programmes, documentaries and programmes of advice. Although many members of the European Parliament were against the authorization of product placement, its plenary voted in December 2006 in favour of its use in films,


TV series, sports programmes and entertainment, provided that programmes containing product placement are appropriately identified at the start and the end of the programme and by a signal at least every twenty minutes in order to avoid any confusion on the part of the viewer. It was also stressed that even when it was allowed, product placement must not affect the ‘’responsibility and editorial independence’’ of broadcasters, ‘’directly encourage the purchases or rental of goods or services’’ or ‘’give undue prominence to the product in question’’. The primary role of the Committee on Culture and Education in the drafting of the new Television Without Frontiers Directive, which due to the extension of its scope to new services, should more appropriately be called “audiovisual media services directive”, was to ensure that the new European legislative framework for television and other audiovisual media respects cultural diversity, the quality of the audio-visual content and the social and educational role of TV in European societies. The final text of the directive, which will be the outcome of negotiations between the European Parliament and the Council, will form the basis for a European television landscape respecting the necessary balance between quality and audience ratings while guaranteeing the principles of cultural diversity, pluralism and the promotion of European works. The revision of the directive should be the greatest opportunity to re-define audiovisual policy in new times. European culture and creativity should be at the heart of this policy. Such a policy cannot be based only on the directive, but also on other active instruments such as the reinforcement of the MEDIA programme, support to media literacy, European co-operations, benchmarking and exchange of best practices in particular for financial schemes, for the use of new technologies or for the distribution and programming of non-national films.

5. Public hearings and own-initiative reports The work of the Committee on Culture and Education in the media and audio-visual sector is not limited to its participation in the drafting of new European legislation following legislative proposals of the European Commission. Since the start of the parliamentary term 2004–2009, the Committee has organized three public hearings and has drafted two own-initiative reports related to media and audio-visual matters. Public hearings The first public hearing, titled The Directive on Services and the Audiovisual Media, took place in March 2005, during the preparation by the Committee on Culture and Education of its opinion to the European Parliament’s report (drafted by the Committee on Internal Market) on the Directive on Services in the Internal Market (Bolkenstein Directive). The position of the Culture committee, as expressed in its opinion, was that the audio-visual

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sector should be exempted from the scope of the directive. This position was confirmed by the plenary of the European Parliament. The Committee on Culture and Education organized two further public hearings on the Television Without Frontiers Directive. The first one, entitled Only in pluralism is there freedom – The revision of the Directive “Television Without Frontiers”, was held in September 2005 pending the proposal of the European Commission for the revision of the directive. The second one, entitled ‘Audiovisual media services directive’, was held jointly with five other parliamentary committees in June 2006 when the Commission had already submitted its legislative proposal and while the report of the Culture committee was under preparation. The objective of these two public hearings was to listen to the concerns of the stakeholders on the most important aspects of the new directive (scope of the directive, advertisement rules, product placement, copyrights, protection of minors and human dignity, cultural diversity and pluralism etc.) and help the members of the European Parliament have a clear and balanced picture of all these matters. Own-initiative reports • The first own-initiative report (Weber report) focused on the implementation by the Member States of articles 4 and 5 of the Television Without Frontiers Directive on the promotion of European works and independent productions. The main conclusion was that the quotas of the directive are in general terms respected although most of the quotas for “European works” are filled by national works. While this is positive as far as the implementation of the directive is concerned, it is not sufficient for creating a European audio-visual space. The Weber report extended also to other matters. Firstly, in view of the proposal of the European Commission for the revision of the directive, it put forward certain suggestions. The main observation was that the revision must not dispute the fundamental principles of the current directive of 1989 (freedom of movement of European programmes, freedom of access to news, promotion of recent European works and recent European independent productions, protection of minors and public order, protection of the consumer, right of reply), but it should apply them to the new challenges, without ignoring the need to ensure quality and the financial viability of the industry. The Weber report further dealt with the fundamental issue of pluralism and media concentration, by expressing a concern over the trend for concentration – horizontal and vertical – of the media in Europe, which poses a threat to democracy and a risk to cultural diversity and which could accentuate tendencies towards the extreme commercialization of the audio-visual sector and the hegemony of certain national products over those with narrower linguistic areas and smaller production. The report concludes by reminding the European Commission of its request to draw up a Green Paper on the degree of media concentration in Europe, which would allow a broad debate on the subject to be opened.

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A second own-initiative report, drafted also by Henri Weber, dealt with the transition from analogue to digital broadcasting. Taking into consideration the complete abolition of analogue broadcasting and its replacement by digital in all Member States by 2012, the report suggested the steps that need to be taken in order to ensure pluralism, the offer of high-quality audio-visual content and equal access to people with disabilities and to the least privileged members of the society. It concluded that the transition will prove successful if the technical and legislative choices reflect a balance between the economic, social, cultural and political priorities.

Conclusion The European Parliament has for many years contributed to the shaping of the European Union’s audio-visual and media policy taking into consideration linguistic and cultural diversity, freedom of expression and pluralism, support of European and independent productions, the needs of people with disabilities, the quality of the audio-visual content, while ensuring in parallel the important role of public television. It is of utmost importance that in the current, constantly developing technological environment, the wider balances and functioning of the European audio-visual model are preserved. Television should remain in the service of all the citizens. It is important, therefore, for public television, which is now forced to compete with the big telecommunications groups, to receive appropriate funding. In the absence of such funding, it will not be able to remain strong and independent. Nor will it be able to continue attracting a large audience, and hence generate sufficient resources to allow it to carry out the tasks entrusted to it. New information technologies offer important opportunities for culture and cultural diversity. However, in a globalized world which is governed by the laws of the market, we ought to ensure that the offered possibilities do not end up benefiting only a small part of the consumers, thus leaving the largest majority of viewers being victims of lowquality commercial television. Taking into consideration the very important socio-political effects of television, care should also be taken as to preserve pluralism and the independence of all audio-visual media services. The European audio-visual model, which is based on the balance between a strong and independent public sector and a dynamic commercial sector, must be protected. Finally, taking into account the unequal competition which exists today between Europe and the USA, developing European audio-visual works is of crucial importance for both the future of cultural diversity and for economic growth and employment in the EU. Note 1.

The co-decision procedure, that gives the same powers to the Council and the European Parliament in regard to the drafting of new legislation, was introduced in 1993 with the Maastricht treaty.

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BROADCASTING

EUROPEAN BROADCASTING UNION Jacques Briquemont

Head of Public Affairs, European Broadcasting Union

1. Introduction The EBU is the largest professional organization of national broadcasters in the world. It coordinates technical cooperation, stimulates co-productions and runs the two Eurovision and Euroradio networks that transmit tens of thousands of news items, programmes and concerts every single year. The EBU also provides its members with legal advice, conducts lobbying activities among international bodies, researches new developments in the media sector and acquires radio and television broadcasting rights on behalf of its members, notably for the major sports events. The EBU was founded on 12 February 1950. In 1993 it merged with the OIRT, the counterpart of the EBU in Eastern Europe, a move that gave it new momentum. Currently the EBU has members throughout Europe and the neighbouring countries. The European Broadcasting Area, according to the definition of the International Telecommunications Union, stretches from the Atlantic to Vladivostok and from the northern tip of Scandinavia to the Sahara. Associate members are scattered all over the world. Under its statutes, the EBU exists “to contribute to the reinforcement of the identity of the peoples of active Members’ states, in accordance with human rights and in particular freedom of conscience, opinion and expression, while safeguarding fundamental values such as tolerance and solidarity”.

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In more practical terms, the EBU’s objectives are “to serve the interests of its members in the programme, legal, technical and other fields, and in particular to support its active members in their mission to serve the interests of the general public in the best possible manner”. The policies of the European Union have a growing impact on the activities of EBU members, whether they are in EU countries or elsewhere. The EBU’s lobbying activities are mostly entrusted to its Brussels office which has been based since 1997 in premises that it shares with several member organizations.

2. A few figures The following are a few figures that illustrate the significance of the EBU’s role: • 74 active members in 55 countries in Europe and 43 associate members in the rest of the world. • The Eurovision network has just under 50 satellite channels, 30 of which are in Europe, and a fibre-optic network; it carries 105,000 transmissions per year (including 30,000 news items and 13,800 hours of sports and cultural programming). • The Euroradio network comprises two satellite channels used by members to exchange 2,400 concerts and operas and 140 major news events each year. In the European Union alone, almost 400 million viewers and listeners follow our members’ programmes, and we invest more than 12 billion euros each year in radio and television productions. More detailed figures on the audio-visual sector in Europe can be found in the publications of the European Audiovisual Observatory in Strasbourg.

3. The EBU’s role in Brussels Among the objectives defined by its statutes, the EBU must “act as a professional interlocutor with European institutions and international organizations and, where appropriate, … contribute to the drafting of legal instruments and the establishment of standards and norms relating to broadcasting, with a view to safeguarding and furthering the interests of its members”. To achieve its mission, the EBU closely monitors the activities of the European Union and other European and international organizations whose competence also covers audio-visual media (Council of Europe, WIPO, WTO, ITU, UNESCO, United Nations). It often attends these organizations’ working sessions as an observer. With regard to the European Union in particular, the EBU Brussels office, working in close cooperation with representatives of a certain number of its members, plays a highly active role in monitoring EU initiatives. The EBU Permanent Services in Geneva take an active part in fulfilling this mission. The Legal Department, by drafting analyses and

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amendment proposals, and the Technical Department both have a major contribution to make to the EBU’s lobbying activities. All our position papers are drawn up in close consultation with all our members and are the result of a general consensus. Like all representative offices in Brussels, the EBU’s has regular contacts with all European Commission services that handle issues likely to have an impact on the work of broadcasting corporations. It also represents the EBU at hearings, seminars and conferences on audio-visual media. It works closely with MEPs and provides input whenever reports are being drawn up that relate to our activities. While the work of the European Council is essentially prepared, at national level, by our members, the Brussels Office provides constant information for the permanent representations to the European Union. Finally, and this is not the least of our activities, we collaborate with the representatives of other branches of the audio-visual industry and related sectors (see paragraph 6). In this article, I refer to the European Union. It is also important to note that the Council of Europe is also very active in the media sector. The EBU regularly attends its meetings as an observer. • The EBU’s main objectives in its contacts with the European Union are as follows: Public service broadcasting is the cornerstone of the media in every Member State of the European Union. The dual public service–commercial broadcasting model is a European success story. Everywhere in Europe the coexistence of both public and commercial media benefits television viewers, radio listeners and users of new media as it delivers a fruitful balance between thriving competition, leading to a rich choice of content and services and sustained investment in national and local production, inclusiveness and innovation. Change in technology, user behaviour and the competitive environment is swift and farreaching. Convergence is testing the ability of the communications industry to adapt, and public service broadcasters are no exception. In every European country they are undergoing reviews and reform, each according to their specific context, tradition and structures. Reform often requires difficult decisions. They are necessary to ensure that public service broadcasting remains successful in fulfilling its social, cultural, economic and democratic role within a changing media. Widespread public support is crucial to the success of public service broadcasters. Crucially, the public expects public service broadcasters to deliver an increased dividend on its investment, through the licence fee and other public funding mechanisms, in the

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form of enhanced access to content through new technologies and new media services. Public service broadcasters are committed, in line with the expectations of the public and governments alike, to innovate and pioneer, to drive the take-up of new media services, to accelerate progress towards the digital world, and to ensure that no one is left behind. Throughout Europe public service broadcasters are making an irreplaceable contribution to audio-visual production. Successful public service broadcasting is one of Europe’s most valuable resources in the pursuit of the main objective of the Lisbon Strategy: accelerating progress towards a competitive, inclusive and culturally diverse knowledge society.

4. European regulations that affect our sector. State of the issue and prospects for 2007 As the audio-visual sector is broad and varied a large number of European regulations affect our work. These are the main ones: • Competition law Both branches of competition law affect the EBU and its members. The EBU itself, as an association, is most especially targeted by the anti-trust law. On behalf and in the name of our members, we acquire sports rights from European or world sports federations. The European Commission considered that these joint acquisitions were a breach of Article 81 of the Treaty establishing the European Community. However, in application of paragraph 3 of that article, the Commission has granted us an exemption, as it considers that these acquisitions of sports rights ultimately benefit the viewers. After two annulments by the Court of First Instance in Luxembourg, this case is still being investigated by the European Commission and is therefore still pending. With regard to state aid, several complaints have been made to the Commission since the early 1990s about funding and the remits of public broadcasting services. The decisions taken by the European Commission show that the funding of public service broadcasters does not infringe European competition law, in particular with regard to the provision of new services. These decisions are based fundamentally on Protocol 32 on the system of public broadcasting in Member States which was adopted by the European summit in Amsterdam in 1997, the Council resolution on public service broadcasting dated 25 January 1999, and the 2001 Commission communication on applying the rules on state aid to public service broadcasters. We will be carefully monitoring the revision of this communication, which is due to be published in 2007. • Audio-visual law The Television Without Frontiers Directive, passed in 1989 and amended in 1997, is the base of Eurovision audio-visual policy. This directive has enabled the sector to undergo


remarkable development in Europe. The EBU welcomes the proposed amendment of this directive into a directive on audio-visual media services. Extending the field of application as proposed by the Commission and as specified, in the first reading, by the European Parliament will enable us to cover all audio-visual media services, regardless of the technology or the distribution platforms used. We are of the opinion that to improve the regulation of the audio-visual sector the new environment must be taken into account and that certain rules must be introduced in a technologically neutral way for all audio-visual media services. This comprehensive approach ensures that when consumers access publicly available audio-visual content they can be sure that there is a minimum level of protection of public interest objectives, especially the protection of minors and human dignity. One key advantage of the current Television Without Frontiers Directive and the proposed Audiovisual Media Services Directive is that they balance internal market and cultural policy objectives, creating a bridge between culture and trade which the other instruments (such as the E-commerce Directive or a future Services Directive) are not able to do. The gradual approach in the proposed directive is at the same time in line with the proportionality principle and avoids the risk of over-regulating new services. • Telecommunications law The EBU considers that the current regulatory framework known as the ‘telecom package’ is a fair balance between channels and content, resulting in a level playing field for all operators. It is, therefore, important to push forward or preserve a whole series of specific regulatory instruments during the next revision of the telecom package. It is important in particular that the specific nature of the audio-visual sector is recognized in the management of the frequency spectrum. Must-carry rules must be maintained and extended to include the new digital platforms. Access rules must also be maintained and work must continue to find solutions to ensure interoperability for digital television services. It is of prime importance that audiences should have access to a broad range of highquality content and services from any network or platform of their choice that can be practically arranged. Furthermore, users – as consumers and citizens – can only embrace new services and new technical devices if they allow them easy access to interesting quality content. In the context of spectrum management, we advocate a cautious approach towards trading in the broadcasting bands as a new spectrum management tool, in particular when it comes to estimating any spectrum dividend derived from digital switchover. We cannot expect that a large part of the spectrum will become available for nonbroadcast services after analogue switch-off. In the digital environment the public has new expectations of broadcasters. It will demand a greater choice of services adapted to a wide range of qualities and receivers, from hand-held devices to large flat-panel HD displays (HDTV).

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• Copyright Copyright in a digitized and globalized environment The EBU believes that public service broadcasters should be able to acquire and exploit rights in a simple and efficient manner to be able to ensure that their viewers and listeners have access to their programmes on all transmission platforms both simultaneously and on demand. Being both rights holders and the users of protected material owned by others gives EBU members a unique perspective. This explains why broadcasters have balanced views with regard to copyright issues, which may affect them as owners (for instance, with regard to piracy) and/or as users of rights. When modernizing the copyright system in order to adapt it to the digital environment, it is essential to base it, in particular, on the following principles: 1. one-stop-shop licences from one collecting society for the whole world musical repertoire for both offline and online use must continue to be possible; 2. confirmation that the “country of origin of the transmission rule” principle as expressly recognized in the Satellite/Cable Directive also applies to online services (Internet streaming/simulcasting/on-demand); 3. a European approach by providing for a simplified legal mechanism (subject to payment of equitable remuneration, if appropriate), so as to guarantee that broadcasters in all Member States are in a position to open up their own archives to their viewers and listeners; 4. Digital Rights Management (DRM) systems must keep digital reception technology attractive for all viewers and listeners, via open and interoperable standards, and provide broadcasters with equal access to all media platforms. • Other subjects on the agenda for 2007 “The future of our Union hinges on culture.” This is what Commission President Barroso recently said. It shows that he has high hopes for the impact that culture has on the European project. For public service broadcasting the ‘mainstreaming of culture’, i.e. effectively taking account of cultural diversity in all relevant European policies, is certainly the most important element of the Commission’s new Culture for Europe – Europe for Culture initiative. A communication on this issue is expected in May. In May we also expect the publication of the Content Online communication. Since making content available online is only possible if the right copyright rules are in place, stakeholders have put a clear focus on this. An evaluation of the 2001 Copyright in the


Information Society Directive will be issued this year, possibly followed by a revision proposal. This would be an opportunity to address problems with regard not only to online use of content but more generally to copyright and new audio-visual services. A Commission White Paper on sports has been announced for June. Public service broadcasters should take this opportunity to demonstrate the significant role of sport in their programmes and their commitment to showing a broad range of different sports. Last but not least, the EBU will monitor the discussions on the Constitutional Treaty that the German Presidency has put back on the European political agenda. A timetable of European activities in 2007 that affect us is provided as an annexe.

5. EBU position papers This is the list of EBU position papers published on our website, www.ebu.ch, since 2005: 2007 CISAC 10.07.2007

Preliminary EBU observations - Case COMP/38.698 “CISAC” Online Music Services

22.06.2007

EBU comments on the EC Recommendation of 18 October 2005 on the cross-border collective management of copyright and related rights for legitimate online music services Draft Audiovisual Media Services Directive

05.04.2007

25.01.2007

2006 26.10.2006

26.10.2006

EBU Briefing Paper after submission of the Amended Commission Proposal Draft Audiovisual Media Services Directive EBU briefing paper further to the first reading in the European Parliament Review of the Telecommunications Package EBU contribution to the EC public consultation on the review of the EU Regulatory Framework for Electronic Communications Networks and Services Relevant Markets EBU contribution to the EC public consultation on a draft Recommendation on Relevant Product and Service Markets within the electronic communications sector susceptible to ex ante regulation

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23.10.2006

Content Online in the Single Market EBU comments on the EC Commission’s public consultation paper on Content Online in the Single Market

14.07.2006

Copyright Levies EBU comments on the EC Commission’s stakeholder consultation on copyright levies in a converging world

03.04.2006

24.03.2006

20.03.2006

30.01.2006

17.01.2006

2005 05.09.2005

19.08.2005

01.07.2005

Draft Audiovisual Media Services Directive Initial EBU contribution to the first reading Article 82 of the EU Treaty EBU comments on the EC Commission’s (DG Competition) discussion paper on the application of Article 82 of the EU Treaty to exclusionary abuses Collective Licensing of Cross-border Music Services Reaction to EC Commission Recommendation on collective crossborder management of copyright and related rights for legitimate online music services Revision of the Telecommunications Package EBU contribution to the revision of the Telecommunications Package i2010 Digital Libraries Initial EBU comments on the Commission staff working document, annexe to the communication from the Commission on ‘i2010 Digital Libraries’ Revision of the Television Without Frontiers Directive EBU position on issues papers for the Liverpool Audiovisual Conference Cross-border Collective Management of Copyright Initial EBU comments on a Commission staff working document – study on a Community initiative on the cross-border collective management of copyright Sector Inquiry into New Media (3G) EBU comments on the issues paper on the preliminary findings of the sector inquiry into new media (3G)


18.05.2005

11.5.2005

UNESCO – Convention on Cultural Diversity Position paper on draft UNESCO convention on cultural diversity European Convention on Transfrontier Television Contribution to the Council of Europe consultation on scope and jurisdiction

6. Cooperation with other European & international organizations • European organizations As part of its lobbying activities in Brussels, the EBU works either occasionally or regularly with many different organizations. The EBU is a member of several very different legal structures, for example: – CEEP (European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest) – European Internet Foundation – European Services Forum – World DAB We also collaborate as required with the following: – – – –

ACT (Association of Commercial Television) AER (Association of European Radios) IFJ (International Federation of Journalists) and also with associations representing writers, cinema producers and distributors, telecommunications, the electronics industry, newspaper publishers, etc.

• Cooperation with other associations outside of Europe The EBU also contributes to the work of the INDC (International Network for Cultural Diversity) and the CCD (Coalition for Cultural Diversity). It also collaborates with the other broadcasting unions within the World Broadcasting Union.

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Annex 2007 Timetable Audiovisual Media Services Directive • Informal Culture Council: 12 February • Council common position: 24 & 25 May • Second reading (EP and Council): second half of 2007 Telecom package • Commission communication on legislative proposals: November 2007 • First reading (EP): second half of 2007 Report on spectrum management • Vote by EP in plenary session: February Mobile broadcasting • EMBC road map: late January 2007 • Commission communication: July 2007 Digital dividend • Commission communication on EU policy on the digital dividend: second quarter of 2007 • RSPG opinion on the implications of the digital dividend for EU spectrum policy: first half of 2007 Application to RSP of rules on state aid • Possible Commission consultation on the review of the 2001 communication: second half of 2007 • Possible revised communication by the end of 2008 Content online • Commission communication: November 2007 Commission recommendation on the collective cross-border management of online music • Vote by the EP commission: February • Vote by EP in plenary session: March Copyright levies • Follow-up to the consultation by the Commission Term of copyright protection • EU impact assessment: 2007 • Possible public consultation: 2007 or 2008


2001 Copyright in the Information Society Directive • Evaluation of the directive: December 2007 • Possible review: 2008 Sport • Informal sports ministers meeting Stuttgart: 12 & 13 March • Commission White Paper: June 2007 • World Conference on Doping in Sport, in Madrid: 15 to 17 November 2007 Culture for Europe – Europe for Culture • Commission communication: 2007 Rome II • Approval by Consultation Committee: May 2007 Media literacy • Commission communication: first half of 2007 Media pluralism • Commission staff working paper: January 2007

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EUROPEAN MEDIA GOVERNANCE AND THE PRIVATE RADIO INDUSTRY Vincent Sneed

Association Coordinator, Association of European Radios (AER)

1. Introduction Created in 1992, AER is a trade association representing the interests of private and commercial radio broadcasters to the EU institutions. AER brings together thirteen national private radio associations from eleven EU Member States plus Switzerland. Combined membership is over 4,500 radio stations (most of them SMEs) broadcasting free-to-air to millions of listeners across Europe. From its office in the heart of Brussels’ European district, AER monitors, lobbies and contributes to the working process of the European Institutions (the European Commission and European Parliament in particular). The association’s main objective is to develop and improve the most suitable framework for commercially funded radio activity. In order to achieve this goal, AER closely follows and engages itself in all relevant EU initiatives and actions in the fields of media, telecommunications and private radio transmission. A further task of the association is to provide its Members with information about policy developments affecting the commercial radio sector. AER plays an essential role in encouraging cooperation among its Members. It defends fundamental values such as the preservation of the freedom of speech, enterprise, private initiative and the protection of listeners.

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Furthermore, AER promotes the development and use of new technologies in radio transmission, i.e. the digitization process.

2. EU policies affecting the interests of AER defends and the means used to defend these interests The EU does not legislate directly on commercially funded radio. Nevertheless, there are a number of policy areas falling within the EU remit which have a direct consequence on the activities of our members and the continued health of the commercial radio sector. The policy areas of major concern to the AER are spectrum management, copyright, advertising and audio-visual policy, consumer protection, content online, convergence, electronic communications, as well as sectorial issues related to the internal market, to the relationship between public and private broadcasters, to the services or to the cultural sector. In order to defend its interests, express its opinion and contribute to the Europe-wide debate on vital issues for the commercially funded radio broadcasters, AER answers to consultations published by the European Commission, by related agencies, such as the Radio Spectrum Policy Group, or participates to the European Parliament hearings. AER takes also part in common industry-led actions; e.g., it was one of the lobbies to sign the letter defending the “Country of Origin” principle in December 2006 (at the end of the first reading of the draft for the Audiovisual Media Services Directive). This letter was circulated to all MEPs. In the present section, we are going to concentrate and elaborate on the policy areas amongst the most recently monitored by AER. These relate to sponsorship, to consumer protection, to services, to services of general interest, to copyright and to spectrum policy.1 Sponsorship/Advertising In its contribution to the Commission’s consultation on sponsorship (20th December 2002), AER defines the latter, points out its advantages and answers the Commission’s questions on the subject. AER makes a clear point on the fact that advertising and sponsorship are in most cases the only source of revenue for European commercial radio stations. They are thus a matter of great importance for AER as a representative of commercial radio operators. “While advertising is an intrusive medium interrupting programmes, sponsorship is tightly bound to the programme and is part of its output”, the position paper states. In AER’s view, sponsorship is advantageous to both listeners and advertisers. Firstly, as radio is a very trusted medium, the effectiveness of sponsorship is enhanced. Secondly, advertisers can thus enhance the listening experience. Thirdly, they can connect powerfully in a way advertising does not allow. To sum up, sponsorship can be seen as adding value to programmes instead of detracting them.

EUROPEAN MEDIA GOVERNANCE AND THE PRIVATE RADIO INDUSTRY |

But how do we define sponsorship? In market terms, sponsorship for radio is defined as a “mutual exchange of brand values”. In legal terms, sponsorship comes to mean “any contribution made by public or private undertaking to the financing of radio programmes with a view of to promoting its name, its trade mark, its image, its activities or its products.” The Commission questions whether AER Members experience actual or specific crossborder sponsorship-related problems, AER answers in the negative. The response is based on the evaluation of an extensive consultation among members, carried out by the AER Secretariat. Commission enquires also whether the organization is aware of the existence of specific national codes that apply to those services. AER reports on the existence of specific sponsorship codes for alcoholic beverages in most European countries. Finally, the Commission is asking for the organization’s opinion as to whether the application of mutual recognition either directly or through harmonization is required in that field. In the absence of cross-border problems, AER believes that further legal harmonization is not needed. In the association’s view, the country of origin principle should continue to be the most appropriate measure. It proposes also that in case of cross-border problem occurrence, problems should be tackled on an ad hoc basis. Consumer Protection In its submission (15th January 2002) to the Commission’s Green Paper on EU Consumer Protection, AER expresses its opinion on the Commission regulatory proposals. The two options are further harmonization addressing specific issues (specific approach) or a new framework directive (mixed approach). AER criticizes the Commission for not offering definition of key terms such as “fair trade”, “self-regulation” and “co-regulation”. The association is also surprised by the fact that the Commission gives two options, but it develops only the second one (the mixed approach). AER favours the mixed approach for several reasons. It recalls the Commission that broadcasting is a highly regulated sector at national level. Therefore, it doubts that a framework directive could add value to what is already in place at national level. Furthermore, it is important that regulation be kept to the minimum in order to allow flexibility. AER considers the principles of the “country of origin” and “mutual recognition” to be vital for a true internal market and would not like to see them undermined by legislation. For that reason a full regulatory impact assessment is needed before proceeding with legal action.

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When it comes to self-regulation, AER believes that self-regulation should remain nationally based in order to reflect the characteristics of each country. Indeed, AER shares the Commission’s view that some important features should be common to all national systems but it does not support the idea of a single code of conduct for the whole European Union. Its Members believe that this matter should be left entirely in the hands of the industry. AER disagrees with the Commission’s suggestion for “legal consequences to codes” because it undermines the very idea of self-regulation. Services The AER position paper (11th March 2005) on the European Commission’s proposal for a directive on Services in the internal market casts a light on the question why the majority of public and private broadcasters oppose the inclusion of their services in the mentioned directive. Private and commercial radio broadcasters are concerned that this directive will profoundly alter Member States’ prerogatives in terms of regulating the sector in particular for licensing. AER underlies the fact that radio faces the complex process of “going digital”. This socalled “second revolution” is expected to have a huge effect on listeners, broadcasters and regulatory frameworks. AER naturally disagrees with the draft directive’s provisions on authorizations (ban on automatic renewal of licences), which could simply jeopardize digital switchover. AER believes, furthermore, that the inclusion of radio services into the scope of the directive will be counterproductive for a large majority of local and regional radio stations across the EU and for the future development of the industry. Services of general interest The AER submission (15th September 2003) to the European Commission’s Green Paper on Services of General interest makes it clear that AER opposes the development of a legal framework instrument at European level. In AER’s view, a directive setting out common objectives and principles would be an impediment to the liberalization process in the radio sector in Europe. It should be noted that the broadcasting industry is mostly of a national and regional nature with high levels of regulation at national and/or regional level. Further legislation would therefore not add value to the already existing one. When it comes to legislation at the European level, AER firmly believes that radio broadcasting should continue falling under the current version of the Telecom-Package. EC Competition law, in addition, should be applicable to both public and private broadcasters. AER underlines the necessity of clear definitions and responsibilities as to the remit of public service broadcasters.


With regard to the role of the National Regulatory Authorities (NRAs), AER believes that they are the ones to play a major role in the provision of services of general interests and in setting the conditions for fair competition. Similarly, media pluralism should also be a foremost responsibility of the Member States. Therefore, AER is not in favour of a Community instrument aimed at protecting media pluralism. Finally, AER views the existing EC Competition rules as appropriate in as much they are adequately enforced. Copyright The EU has previously stated that the enforcement of intellectual property rights is “of paramount importance for the success of the Internal Market”. A vast number of consultations and projects in this field, such as the EU Recommendation on collective cross-border management of copyrights and related rights for online music services (18th October 2005), are being closely monitored by our organization. On 15th June 2006, AER submitted an answer to the Commission public consultation on the future of the internal market, in which it reaffirmed and extended its position on copyright. The policy paper elaborates on the specific question (Q7) whether the current Intellectual Property Regimes (IPR) foster growth and innovation and recommends areas where more focus or action is needed. AER clearly points out the areas it considers problematic for the positive developments in this sector of the internal market and proposes some necessary improvements. First of all, when it comes to transparency and efficiency of collective management of rights, there should be, in AER’s opinion, similar transparency and organizational level required from Collecting Societies across the EU. Secondly, clear competition rules should be in place, so that a user is able to purchase whatever rights for whatever purpose and wherever he/she wishes from any Collecting Societies against clear, published tariffs. Thirdly, dispute resolution mechanisms should be enabled as appropriate in every Member State in order to avoid abuse of a dominant position by a Collecting Society. And last but not least, there should be a technologically neutral one-stop-shop for all music rights – whether digital or analogue, online or offline. Content Online AER sent a position paper to respond to a public consultation on “Content Online in the Single Market”. Open until 13th October 2006, this consultation was organized by the Directorate-General for Information Society and Media of the European Commission.

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The positions expressed in the paper are on behalf of commercially funded radio services; it is important to note, since these operators offer services of general interest and do not enjoy any form of subsidy. Following the European Commission’s questions, AER gives its opinion on a number of issues related to the types of creative content and online services that its Members provide; on consumption, creation and diversity of online content; on competitiveness of European online content industry; on possible new business models and transition of traditional ones into the digital world; on payment and price systems; on licensing, rights clearance, rights holders remuneration; on legal barriers, networks as well as on piracy, digital rights management systems and completion of offers with non-commercial services. To sum up, AER Members provide online content in the form of podcasts, “listen again” opportunities, music retail of the “hear it, buy it, burn it” kind, simulcasts and informational and entertainment-led websites – services which are, save for simulcast, substantially different from the service offered offline. In terms of consumption, creation and diversity of online content, AER believes that the key to success is reliable, reasonably priced, user-friendly technology and appealing content. The major weakness of the content industry in Europe, however, is the distorted competitiveness due to public intervention, which has led to the expectation that new media is available free of charge. There are also technological barriers to be overcome, but, this issue, save for the fair allocation of spectrum, should be left entirely to the market. AER sees the role of public authorities mainly in making spectrum available. When it comes to legal barriers, there are no such that cannot be overcome with good sense. With regard to licensing and rights holders’ remuneration, AER recommends the creation of competing one-stop-shops for all music rights whether analogue or digital, online or offline platforms. In relation to the network neutrality of the Internet, AER Members, in their capacity of content providers, insist that this principle is preserved. Radio spectrum management The EU has been quite active in that field in the past five years through, inter alia, the Radio Spectrum Committee (RSC), the Radio Spectrum Policy Group (RSPG) and through regulation; the EU thus seems to favour the introduction of spectrum trading, with the Commission proposing to introduce spectrum markets in the EU. Spectrum being essential for radio broadcasting, AER is strongly involved in all debates on this topic. A good illustration of AER’s vital interest in spectrum management is the association’s reaction to the opinion of the Radio Spectrum Policy Group (RSPG) on the introduction of multimedia services in the frequency bands allocated to the broadcasting services. The paper (15th March 2004) states that access to spectrum for digital broadcasting is “the most crucial roadblock for private and commercial radio broadcasters”. Therefore, AER firmly requests that Band III and L-Band not be allocated to services other than


broadcasting. Notwithstanding its opinion that solutions for private and commercial radio broadcasting should be sought predominantly on the national level, AER believes that the EU can help in guaranteeing spectrum availability, fair access to spectrum for digital broadcasting, balanced EU and national policies and more generally in ensuring the respectable place the “radio medium” deserves in its spectrum and Information Society policies.

3. Current state of affairs The most recent outcomes that AER has reached were its exclusion from the scope of two directives: the Services Directive and the Audiovisual Media Services Directive. One of the main issues of concern for commercially funded radio broadcasters in the coming months should be the discussions on the spectrum management. The review of the regulatory framework for electronic communications is indeed underway. The European Commission should publish a draft during the first half of 2007. This was preceded by a public consultation in 2006, which was based on a communication presenting the points considered to be reviewed. Amongst these points is the management of spectrum. Needless to say: without radio spectrum, no radio broadcasting. Moreover, the role of radio is changing, and the role of the traditional broadcasters is becoming less sharply defined. The current “digital revolution” means that technology is converging and radio must strive to adapt to this new reality. In order to safeguard the future of radio, AER is aiming to ensure that it does not get a poor relation to other (digital) media. Radio must develop a ubiquitous presence across all broadcasting platforms, all the while remaining “free to air”. While radio is potentially under threat from digitization, the sector could also benefit immensely from the convergence of technology, provided the “added value” of radio broadcasters is recognized in the form of legislation promoting the sufficient allocation of newly available spectrum (known as the “digital dividend”) and providing that the ongoing development of digital rights management doesn’t result in significantly higher prices or a per track per stream payment model, either of which would be unsustainable. AER wants to see legislative measures introduced that will reflect the important role radio plays in informing and entertaining Europeans of all ages and ensure that the industry benefits, rather than becomes marginalized following the forthcoming “digital dividend”. It is with this end that AER will be (and is already) lobbying to ensure that provisions for the future development of digital radio are taken into account during the ongoing review process of the EU regulatory framework for electronic communications networks and services.

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4. Cooperation with other EU lobbies/associations or outside Europe As with the vast majority of industry associations and NGOs present in Brussels, AER does not exist within a vacuum. Issues such as advertising and reform of copyright affect a large number of stakeholders, and AER is committed to working in partnership with other industry associations. We have developed close links with egta (Association of European Television and Radio Sales Houses), ACT, our counterparts in commercial television, the EPC (European Publishers Council) and EBU (the European Broadcasting Union, defending the interests of the Public Services Broadcasters). In addition, AER is a member of several industry associations such as the World DMB Forum, AIG (Advertising Information Group), EASA (European Advertising Standards Alliance) and is currently an observer in the WIPO (World Intellectual Property Organization). AER is also part of the CUP (Copyrights Users’ Platform), the platform representing and highlighting the interests of copyright users. AER sees membership of these industry associations as key to our lobbying and communications strategy. In pooling our resources with other stakeholders, AER is able to present a united front on many issues. A number of our association’s policy papers and lobbying activities have come as the result of close cooperation with partner organizations, and we aim to build on this cooperation to ensure the interests of commercially funded radio continue to be taken into account in future consultations.

5. Conclusion Thanks to its small office in Brussels, AER has managed so far to ensure the interests of commercially funded radio broadcasters are preserved. The existence of commercially funded radio broadcasters is indeed relatively recent: they have mainly appeared in Europe in the 1980s. Nonetheless, their mere existence permits pluralism and freedom of expression. This was one of the reasons justifying the creation of AER and the outcomes it has reached. Note 1.

The AER position papers, addressed to all the mentioned institutions, can be found on the Association’s official website: www.aereuruope.org (heading “Policy Statement”).

FILM

FILM DIRECTORS AND EUROPEAN MEDIA GOVERNANCE Cécile Despringre

CEO of FERA (Federation of European Film Directors)

1. Introduction: The role of FERA in Brussels FERA is the European Federation of national associations of television and cinema directors. It was established in Venice in 1980 and now represents more than 30 associations in 28 European countries. FERA’s mission is to enhance the recognition of the cultural significance of audio-visual works and to defend their integrity and the economic and creative rights of directors. FERA’s activities are primarily focused on fostering exchanges and common actions within its active network of associations of directors and relaying onto the European political scene the concerns, expectations and recommendations of directors, and on a wider scale those of creators in the field of cinema and culture in general, in order to promote a European environment that fosters the creation and circulation of European works. As a matter of fact, Europe has a role to play in maintaining the integrity and the creative potential of audio-visual works on a global level. The fact that FERA represents and unites directors, organized nationally across Europe, gives it a strong legitimate position to present and defend the hopes and aspirations of the cinema in the European cultural environment. Furthermore, the recognition and prestige of European directors strengthen the visibility and popularity of FERA’s actions and proposals aimed at media, professionals and politics in Europe and internationally.

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FERA has been fighting for a European regulatory framework in the film sector (The Television Without Frontier Directive adopted in 1989 and revised in 1997, the Media programmes and the legacy of national film funds). It also conducted intense lobbying to preserve and enhance the status and rights of authors of audio-visual works and recognition of directors’ rights through the directives on copyright adopted in the 90s. FERA’s present focus on a European level is mainly targeted at films online.

2. Main facts and figures of the European audio-visual sector The audio-visual sector (cinema, television and all other distribution channels for audiovisual works) in which directors evolve in Europe is a puzzle of national markets that the EU tries to integrate into a single market in spite of lots of differences between one country to another, not only linguistic. For directors, the audio-visual sector is fully part of the cultural sector and the EU approach should take into account this cultural dimension. Films are creative works which require a specific treatment and often need support to exist and travel. Due to the importance of films for the identity and the culture of societies, the European audio-visual industry and the governments have special responsibility in maintaining an audio-visual cultural diversity. Europe produced nearly 800 films in the 25 Member States in 2005.1 Admissions fell back under the 1 billion milestone in 2005, with a total of 892 million admissions registered (1.007 billion in 2004). European films achieved a market share of 24.6 per cent in 2005. Films produced in Europe and benefiting from incoming US investment obtained a market share of 13.3 per cent (examples of films in this category are Harry Potter and the Globet of Fire, Charlie and the Chocolate Factory and Un long dimanche de fiançailles). US films totalled 59.9 per cent of market share and others only 2.2 per cent. At national level, markets are dominated by US films, complemented by national films and there is barely any space left for European non-national films. On TV, national programmes are more present but US films and series are the only alternative admitted and European non-national programmes are practically absent. That is why the development of new audio-visual media services in Europe and especially video-on-demand services must be a fresh chance for European cinema. FERA recognizes the new opportunities it can offer to European film-makers and to the circulation of European films. Nevertheless, contrary to the common belief that “cultural diversity is automatic online”, FERA believes that if the VOD market is to develop to the benefit of European cinema and is to avoid the polarizing aspects of the traditional markets – i.e. with a majority of Hollywood films and a token complement of national or independent films and barely no space for European non-national films – then a regulatory intervention is required. 3. The EU regulations which are relevant to the audio-visual sector Considering the dual aspects of its nature, both cultural and economical, there are many EU regulations relevant to the audio-visual sector:

FILM DIRECTORS AND EUROPEAN MEDIA GOVERNANCE |

The Television Without Frontiers Directive (soon to be the Audiovisual Media Services Directive) Adopted in 1989 and revised in 1997 for the first time, this directive is the cornerstone of the EU audio-visual regulation. Based on the principle of the country of origin, it provides for an important chapter on the promotion of European works that requires broadcasters to reserve a majority proportion of their transmission time for European works (article 4) and a minimum proportion of European works produced by independent producers or of their programme budget to independent productions (article 5). Flexibility is allowed in the implementation of both provisions by the “where practicable” approach, Article 6 provides a definition of European works for the directive and article 7 preserves agreements between broadcasters and rights holders on the chronology of film broadcasting. This chapter is a fundamental recognition of the specificity of audio-visual works which cannot be totally left to the market otherwise their production could disappear in certain countries. EU needs to encourage exchanges and to make films circulate in order to foster a European identity or at least a European knowledge and familiarity. In the past, FERA pushed for the strengthening of these provisions (stricter definition of the programmes concerned by quotas, deletion of the flexibility) and for some focus on the circulation of European non-national works, but broadcasters opposed. Today, the revision engaged in December 2005 pursues another important objective due to the technological and market evolutions: the extension of the scope of the directive to on-demand audio-visual services (see following chapters of FERA position in the revision). The Media Programme The Media Programme aims at strengthening the competitiveness of the European audiovisual industry with a series of support measures dealing with: training of professionals, the development of production projects and companies, distribution of cinematographic works and audio-visual programmes, promotion of cinematographic works and audiovisual programmes and support for cinematographic festivals. It has been operating since January 1991 and the Media 2007 Programme (2007–2013) is the fourth multi-annual programme which benefits from a budget of 755 million euros. FERA believes that, because the European audio-visual industry is of major cultural as well as economic significance, the Media programme has a public duty to encourage original work that might not otherwise be produced by the mainstream industry. This means creatively driven and innovative work of high quality which holds a mirror up to contemporary society and reflects the level of freedom of expression, cultural diversity, sophistication and civilization that Europe so often claims to represent. In October 2006, FERA wrote an open letter to the European Commission and the Contact Committee to question the adequacy and appropriateness of the Media Programme’s response to

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the needs of the European screen director and to encourage them to take practical steps to ensure equal opportunities for the director, as the primary creator and very often the initiator of the audio-visual work. The copyright directives The “acquis communautaire” in the copyright field is rich of seven directives adopted between 1991 and 2001. Some of them are particularly relevant to directors because they have recognized them the status of authors of the audio-visual work and granted them rights (especially the satellite broadcasting and cable retransmission directive of 1993, the directive on the term of protection of 1993 and the directive of 2001 on the harmonization of certain aspects of copyright and related rights in the information society). The Directive 93/98/EEC of October 1993 harmonizing the term of protection of copyright and certain related rights provides in Article 2§1 that “The principal director of a cinematographic or audiovisual work shall be considered as its author or one of its authors”. This provision was very important at that time because authorship was sometimes denied to directors in some countries. Today in Europe, the following authors’ rights are generally recognized to directors: Economic rights As the author or co-author of the cinematographic or audio-visual work, the European director is vested with all the author’s rights recognized in Europe: the right of reproduction, the right of communication to the public and the right of distribution, subject to certain exceptions, during all his/her life and 70 years after his/her death. Moral rights The international Berne convention for the Protection of Literary and Artistic Works provides in article 6bis that independently of the author’s economic rights and even after the transfer of the said rights, the author shall have the right to claim authorship of the work and to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, the said work, which would be prejudicial to his honour or reputation. The Information Society Directive of 2001 adapted copyright to the digital era and confirmed the necessity of protecting rights on new platforms of exploitation. In spite of all these directives, in the audio-visual sector, authors like directors still lack a guarantee of remuneration when their works are used. In many countries, directors are only paid with a buyout remuneration (a lump sum payment) at the production stage and no further remuneration is linked to the success of their works.


Article 151 of the Treaty “The Community shall contribute to the flowering of the cultures of the Member States, while respecting their national and regional diversity and at the same time bringing the common cultural heritage to the fore”. This article of the treaty is not a legal basis for EU regulation (only a Culture programme with a budget of ? 408 millions for 2007–2013) as the competence in the field of culture remains with Member States. Nevertheless, paragraph four of this article provides that “The Community shall take cultural aspects into account in its action under other provisions of this treaty, in particular in order to respect and to promote the diversity of its cultures”. With the EU ratification of the 2005 UNESCO convention on the protection and promotion of the diversity of cultural expressions that also gave momentum to culture at EU level, FERA hopes that this provision will be effectively implemented in the near future (see FERA contribution to the public consultation on Culture and Europe, November 2006). Competition rules (article 87 on aids granted by states) In the current treaty, competition is a difficult policy to deal with for the cultural sector, especially in the film area as in principle state aids are not considered as compatible with the European objectives and rules. This negative scrutiny towards state aids in the film sector forces Member States to negotiate their support schemes on a case-by-case basis. In 2001, the Commission issued a Cinema Communication which laid down the cultural criteria for state aids schemes in the film sector. These criteria have been renewed in the Cinema Communication in 2004 and the European Commission is now working on their extension until 2009. Nevertheless, the EC is reluctant to admit a high degree of territorialization of the support schemes. FERA and other cultural organizations have proposed during the Convention on the future of Europe which prepared the draft treaty establishing a constitution for Europe in 2003 to change the rules of the treaty on this issue in order to adopt a more positive approach to support schemes in culture. Trade negotiations The specific situation of the audio-visual sector in trade negotiations is neither embodied in the treaty nor in a strong legally binding EU instrument but in a political consensus supported by the professional organizations and the industry. In the 1990s, the audio-visual sector started to be one of the stakes in trade negotiations because of diverging approaches between Europe and the United States. Due to its conception of the audio-visual sector as a pure economic sector, the United States is looking for trade liberalization of the audio-visual services in all negotiations of trade agreements, whether multilateral, regional or bilateral. In Europe, some Member States

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and audio-visual professional organizations fought for the recognition of the cultural value and specificity of the audio-visual sector and its exclusion from trade liberalization. This was achieved in the GATS negotiations in WTO in 1994 in which the European Union didn’t make any commitment in the audio-visual sector and also preserved its preferential agreements in the audio-visual sector with Most Favoured Nation (MFN) exemptions. On October 1999, in the run-up to the Third WTO Ministerial Conference in Seattle, the Member States of the European Union authorized a negotiating mandate for the European Commission. Since a round was not launched in Seattle, the mandate could not be implemented, but was confirmed by the Member States for the Fourth Ministerial Conference in Doha, which launched a new round of negotiations. For the first time in the history of this type of commercial negotiation, the mandate granted by the Member States to the European Commission stated: “The Union will take care to guarantee during the next WTO negotiations, as in the Uruguay round, the possibility for the Community and its Member States to preserve and develop their cultural and audiovisual policies for the preservation of their cultural diversity”. In operational terms, this mandate supported a status quo in the European position i.e., maintaining the exemptions to the Most Favoured Nation clause and making no European offer to liberalize the audio-visual sector. In the course of the trade negotiations of the Doha round, which is still running, the EU continues to regularly receive requests for liberalization of its audio-visual sector but sticks to its 1999 mandate. This attitude is now backed by the 2005 UNESCO convention on the protection and the promotion of the diversity of cultural expressions which emphasizes the cultural dimension of the audio-visual sector at the international level and provides in article 20.1 b): “When interpreting and applying the other treaties to which they are parties or when entering into other international obligations, Parties shall take into account the relevant provisions of this Convention”.

4. FERA position papers in 2006 In 2006, FERA has made several written contributions, including some analysis and proposals on the following subjects: • Action program and priorities for 2006 After the changes in the management of FERA of March 2006, the newly elected Executive Committee and the new CEO prepared an action plan and priorities for 2006 that were made public during the International Film Festival in May 2006 in Cannes. • Position on the review of the Television Without Frontiers Directive to the attention of the European Parliament In July 2006, FERA wrote to the members of the culture committee of the European Parliament in charge of the preparation of the position of the EP on the EC proposed


revision of the Television Without Frontiers Directive. In this paper, FERA supported the extension of the scope of the directive to non-linear audio-visual media services and the promotion of European audio-visual films and programmes by all audio-visual media services, whether linear or not. FERA was also supportive of better criteria for territorial jurisdiction, a clear and strict regulation of product placement and the maintaining of current rules that limit the interruptions of films by advertising at intervals of 45 minutes. • Open Letter to the Contact Committee for the Media Programme In October 2006, FERA wrote to the contact committee of the Media Programme to share with them its analysis of the programme from the point of view of the directors’ needs. • Contribution to the public consultation on Content Online DG Information Society and Media organized in October 2006 a public consultation on Content Online, to which FERA participated by sending its comments, especially concerning the film sector. The objective of DG Information Society and Media is to prepare a communication on Content Online for the second semester of 2007. In summary, FERA supports the development of video-on-demand services in order to achieve a sustainable business online for films that is able to offer a credible alternative to piracy for the audience. The condition of the support of directors to this business is that it integrates intellectual property rights and develops revenue-sharing mechanisms for all rights holders, especially audio-visual authors. At the European level, directors would like to see five types of encouragement for creative online content: 1. Protection of the level of investment in audio-visual production, along with the artistic and cultural integrity of the work, from the new players in the audio-visual online services. Much of the current investment is provided by terrestrial broadcasters. Reduced budgets would lead to reduced quality; 2. A guaranty of remuneration for authors when their works are used in order to associate them to the success of these new media; 3. Mechanisms that promote European works on those services through the Audiovisual Media Services Directive in order to guarantee the presence and the continued production of European works online. 4. An enhanced respect for authors’ rights through awareness and education campaigns throughout Europe and support for more cooperation between all stakeholders online to fight against piracy. 5. Development of digital standards for embedding rights payments in digital distribution.

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• Contribution to the public consultation on private copying levies and campaign of protest of European directors against the draft recommendation on private copying In July 2006, FERA submitted a written contribution to the public consultation on private copying levies organized by DG Internal Market in order to participate to the demonstration that private copying levies are legal and legitimate under article 5.2b of the Copyright Directive of 2001 and represent a part of the income of rights holders which absolutely need to be preserved. In addition, the maintaining and the development of levies on electronic devices that allow copies is not an obstacle to the development of Digital Rights Management (DRM). Without taking into account rights holders’ comments, DG Internal Market prepared a draft recommendation on private copying levies which aimed at limiting and, ultimately, abolishing private copying levies. FERA and other cultural organizations launched a campaign of protest that started with a press conference on 18 October 2006 in Brussels with famous European directors and artists who explained the benefits of private copying levies both as remuneration for authors, performers and producers and as funds for cultural activities in Member States. The press conference was followed by individual letters of protest sent by numerous prominent directors and artists to President Barroso and the main commissioners involved. This campaign and the reluctance of the European Parliament and the Member States that had not been consulted at any stage on this initiative convinced President Barroso to stop the draft recommendation mid-December. • Contribution to the public consultation on Culture and Europe FERA sent a written contribution to DG Education and Culture public consultation on Culture and Europe in October 2006 in order to underline the positive contribution of art and culture to the process of European integration and the need to enhance the taking into account of cultural aspects in any EU policy action.

5. The current state of affairs FERA supported extending the scope of the revised Television Without Frontiers Directive to non-linear audio-visual medias services and fought for the introduction of actual means of promotion of European works on these non-linear services as opposed to the mere statement of a possible promotion by Member States proposed by the EC. Today, FERA is delighted to see the common support of the Council and of the European Parliament on both issues. The development of online services also relates to the special status of films and of the creative community. With the proliferation of so-called “online content”, including usergenerated content, the interest and the protection of the creative content of such films is


declining. The Council and the European Parliament (with only a bare majority of one at the Parliament) agreed to authorize Members States to increase commercial breaks in films (from interval of 45 minutes to 30), contrary to the FERA Recommendation. This negative evolution has to be linked to the increasing difficulty for directors and other creative talent, and their representatives, to negotiate remunerations for the exploitation of their works. In this context, the European Commission sometimes lacks global understanding of the issues at stake and of the importance of safeguarding the income of the European creative output in order for it to be able to compete on the international stage. This was the case with the draft recommendation on private copying levies prepared by DG Internal Market and Commissioner McCreevy in the autumn 2006, which intended to axe the levies without providing any alternative for rights holders and this to the sole benefit of the ICT industry which already profits extensively from the capacity of their technology for copying protected works. The creative community campaigned against this proposed abolition of private copying levies and convinced Commissioner Figel in charge of Culture and President Barroso of the need to continue supporting European creative professionals through this system. Generally, the economic and cultural benefits to society as a whole are poorly understood in the European spheres. That is why FERA encourages European institutions to take into account cultural aspects and cultural diversity and all its wealth when developing any policy. This implementation of article 151.4 of the treaty in the EU would be the matching counterpart of the demand for recognition at an international level of the special nature of cultural and audio-visual goods and services in both trade negotiations in WTO and in the new UNESCO convention on the protection and promotion of the diversity of cultural expressions adopted in October 2005.

6. The future issues that FERA is preparing to address Now that the UNESCO convention is about to enter into force, FERA will work on the implementation of its principles at European and national levels wherever it is necessary. At an international level, FERA will follow with great attention the bilateral trade negotiations that EC is starting with third countries, especially regarding the status of the audio-visual sector. At a European level, FERA will continue to work with the Member States and the European Parliament on the revision of the Television without Frontiers which should be finalized by the end of the year and then on the implementation of this new regulation at national level, especially regarding the promotion of European works on non-linear audio-visual media services. In parallel, FERA will work with DG Information Society and Media on the preparation of the communication on Content Online to push for its proposals and generally

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speaking for a guaranty of remuneration for authors whenever their works are used and an enhanced respect for authors’ rights online.

7. Cooperation of FERA with EU lobbies/associations or outside Europe In each of its fields of activities, FERA maintains close cooperation with other professional organizations active in Brussels and often participates to common positions in order to strengthen its voice and proposals. On copyright issues for example, FERA is working with other rights holders’ organizations in all creative sectors. That was the case during the negotiation of the 2001 Information Society Directive when a coalition of rights holders was set up. On the specific question of private copying, the “Culture First!” platform of fifteen organizations of rights holders was built and is still active. For the revision of the Television Without Frontiers Directive, initial common positions were made with other organizations active in the creation, production and distribution of programmes in the audio-visual sector. Ultimately the specificities of each organization’s position may lead to separate lobbying but some cooperation still remains. On cultural diversity issues, FERA works closely with the Coalitions for Cultural Diversity which associate at national level all interested professional organizations in the field of culture. A coordination of the European Coalitions for Cultural Diversity is active in Brussels. Note 1. All figures come from Focus 2006, World Film Market Trends of the European Audiovisual Observatory, May 2006.

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EUROPEAN MEDIA GOVERNANCE AND THE NEWSPAPER INDUSTRY Valtteri Niiranen

Director, European Newspaper Publisher's Association

1. Introduction and some of the main industry facts and figures ENPA – the European Newspaper Publishers’ Association – is a non-profit association currently representing 5100 national, regional and local newspapers. These daily, weekly and Sunday titles are published in 26 European countries where ENPA’s members are operating in their national markets. ENPA members are the national newspaper publishers’ associations which are representing the interests of the newspapers in their respective countries. Every day more than 120 million copies of newspapers are sold and read by over 235 million citizens in Europe. Circulation of the smallest local newspapers is less than 1000 copies while the biggest national title has a circulation of almost 4 million copies. Newspapers online are visited millions of times every day. Newspapers’ trusted brands, pluralistic and diverse content and quality journalism make the online editions the most visited sites in many countries. The impact of revenue streams from advertising of online newspapers and other online services will most likely become even more important in the coming years. Of the newspaper publishing companies, 97 per cent of the newspaper publishing companies are small- and medium-size companies (SMEs). However, 0.8 per cent of newspaper companies employing more than 250 people account for more than half of the turnover of the sector.

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Newspaper publishing is the most important sub-sector within the different publishing sectors: newspapers represents 36.8 per cent compared to the share of journals and periodicals (31.9 per cent), books (24. per cent) and other publications (6.7 per cent). Publishing industries as a whole constitute an important economic sector in the EU employing more than 750,000 people in 64,000 companies.

2. The role of ENPA – the European Newspaper Publishers’ Association ENPA is an international, non-profit association working on a number of key areas of European policy and legislation which have a fundamental effect on the day-to-day running of the operations for local, regional and national newspaper publishers. ENPA was established in the 1960s to be a forum for newspaper publishers from different European countries. Most of the publishers were from the Member States of the three European Communities - the European Coal and Steel Community (ECSC), the European Atomic Energy Community (Euratom) and the European Economic Community (EEC). The activities and functions of ENPA became more professional at the beginning of the 1990s when it got its first Director and Office Manager. Enlargement of the European Communities with several new Member States also made it necessary to get new newspaper publishers’ associations on board. Being the main advocate of European newspaper publishers, ENPA has the following objectives which are also reflected in the official statutes: 1. To enable the European press to speak with one voice towards the European Union and its institutions. 2. To act as the central point of contact and dialogue between the representatives of the European Union institutions and ENPA’s members. 3. To promote the exchange, between ENPA’s member countries and associations therein, of all information relating to newspaper publishing. 4. To collect and share information pertaining to newspapers and publishing companies in Europe, and to circulate this information to its members, to the EU institutions and to the general public when necessary. 5. To preserve and promote fundamental rights and in particular freedom of the press as a cornerstone of democracy, as well as commercial freedom as the precondition for economic viability. 6. To present and defend the interests of the press industry as far as any legislative or policy issue might have an influence on the role, the freedom or the economic role of newspapers in Europe. 7. To work towards a publisher-friendly legislative and economic environment without undue restrictions or obligations. 8. To support access to information as well as pluralism and diversity of media. 9. To serve as a service-oriented and comprehensive information network for its members from which officials of the EU institutions and of Member States can also benefit.

EUROPEAN MEDIA GOVERNANCE AND THE NEWSPAPER INDUSTRY |

ENPA is a transparent association which receives all of its financial resources from its members, i.e. national newspaper publishers’ associations which in turn are funded by the newspaper companies. ENPA does not receive any contributions from any other sources (e.g. the EU institutions) to finance its operations and activities.

3. Relevant EU legislation affecting the newspaper industry One of our first questions to policy-makers is always whether a new piece of legislation is needed in order to secure and enhance competitiveness of our sector. Unnecessary advertising restrictions and unjustified data retention obligations are some examples of legislation that is not in line with the objective of a competitive European publishing industry. In general, ENPA supports the move of the Barroso Commission (2004–2009) towards a more coherent and transparent regulation policy framework based on full impact assessment procedures, being carried out before any proposal is presented. More specifically, some of the major policy areas that ENPA is following and which also have major significance in terms of economic impact are... Freedom of the press Newspapers play a vital role in upholding true freedom of expression in Europe because of their editorial independence from governmental or other influences. Freedom of expression which is statutorily guaranteed by the European Convention on Human Rights should always be taken into account in the development of all policies at the European level. Freedom of the press should, for example, be fully considered in all policies related to the development of law on defamation or combating of terrorism. ENPA has repeatedly called on the European Union and the Council of Europe to consult newspaper publishers on all draft policies which may have an impact on the freedom of the press. Media pluralism including cultural diversity and cross-media ownership A distinction must be made by policy-makers, both at EU and national level, between media pluralism, media concentration and changes in ownership structures of newspaper publishing and other media companies. The Member States of the EU have not given a mandate to the EU to regulate either media concentration or changes in media companies’ ownership – these remains solely within national competencies. What is noteworthy is that most of the EU Member States already have a legislation dealing with these issues. ENPA has adopted a proactive approach in highlighting the positive aspects for newspapers of media concentration at both national and transnational levels. Press concentration effects may be increasing but do so without damaging the diversity of the content of

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press products. Changes in ownership and investments from foreign media companies are also bringing along many positive things. The influence of the media on individuals can no longer be evaluated from a monomedia perspective in today’s media landscape. Newspapers are best equipped with providing diverse and pluralistic content to their readers with their printed newspapers as well as with their online editions. Publishers need to be able to develop their business to remain innovative and competitive without unnecessary ownership restrictions that would not take into account national and cultural differences in the Member States of the European Union. For these reasons ENPA and its members are not in favour of pan-European media ownership regulation(s). VAT (value added tax) and newspaper sales ENPA has continuously reiterated the importance of zero VAT rated on newspaper sales (subscriptions and single-copy sales). It is important that European governments have the possibility to maintain or introduce zero VAT rates for newspapers’ sales or as low reduced VAT rates as possible. Zero, reduced or super reduced rates represent a powerful cultural policy tool to encourage reading and improve knowledge. Higher VAT rates would mean more expensive newspapers which in turn would mean fewer readers. Higher sales taxes would also mean advertising losses to newspaper publishers and decreases in revenues of taxes for the Member States. Moreover, it is important to ensure equal treatment between the different media (paper and online) within the newspaper industry. This is not the case today since sales of online content of newspapers are still subject to normal VAT rates in all of the EU Member States. Intellectual property rights with an emphasis on copyright and related rights Publishers need certainty and clarity from legislation. A presumption of transfer of economic rights of copyrighted works from employees to publishers as employers would act as a simple method through which legal certainty can be achieved. Effective use of newspapers’ content (articles, photos etc.) through digital and other similar means needs a mechanism for identifying who has ownership of content and who is able to manage the use of this material. ENPA, therefore, has called on the policy-makers to recognize that in the Member States, publishers need a presumption of copyright transfer legislation in order to meet the demands of the contemporary media landscape and hence remain competitive in the knowledge-based economy. As far as collective administration of copyrights and related rights is concerned, publishers should retain the option to manage the rights pertaining to their own content. Collective administration of rights should therefore always remain voluntary and not compulsory,


i.e. compulsory collective management provisions in copyright legislation is not the way forward in publishers’ view. Newspapers as collections of individual works and other material should be recognized as either copyrighted or sui generis databases under the Database Directive, to prevent “free rider” companies from taking newspapers’ material, e.g. digital classified adverts and placing these ads into their own websites without making the initial investment themselves. Commercial communications including rules on advertising Publishers are extremely sensitive to the fluctuations in their advertising volumes and revenues – after all, these revenues from advertisement often account for more than half of newspapers’ incomes. However, there is also a question of principle in play. In this regard, ENPA has insisted on the need to preserve freedom of commercial expression as being one part of the concept of freedom of expression. Advertisement is a form of freedom of expression: communicating commercial messages without undue restrictions. However, guaranteeing commercial freedom of expression should not be at the expense of editorial independence. These go hand in hand. ENPA is a member of the European Advertising Standards Alliance (EASA) and fully supports genuine self-regulation which is driven by the industry itself. ENPA and its members are strongly of the view that any statutory restrictions to advertise products or services that can be legally sold or offered are not acceptable. Limitations would have a detrimental effect on newspapers’ revenues and, hence, on competitiveness. Distribution of newspapers Liberalization and reform of postal services is currently underway. ENPA supports further liberalization of the postal sector. Daily and weekly newspapers need an efficient and transparent universal service which is capable of ensuring newspapers timely and reliable delivery to readers, whatever the distance is to a delivery depot or to a remote subscriber address. In the sectors where competition will be limited, universal service operators must be allowed to operate in order to fulfil the above role. Nonetheless, publishers want to be guaranteed freedom of choice with regard to the distribution systems that they use in order to be able to provide reliable and overall the best possible service to their readers. Environment and newspapers As active participants in society, newspaper publishers are aware of the role that their newspapers play in enhancing awareness of environmental problems. Newspapers have themselves already used a high level of recycled newsprint or paper sourced from sustainably managed forests for a long time.

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ENPA has urged manufacturers of paper and inks to continue research for more environmentally sustainable alternative models. At the same time, ENPA has rejected any attempts by European policy-makers to regulate the rate of collection of newspapers for recycling or the percentage of recycled paper used in newsprint. Social policy and newspaper companies as employers The special character of any newspaper publisher company’s organization relies on high levels of professionalism, availability and also on flexibility of qualified staff. Publishers are employing in-house staff as well as freelancers, graphical designers, printers, logistical experts and marketing and administrative staff to meet the daily expectations of their newspapers’ readers. The regulatory framework must support and recognize publishers’ needs for flexibility in managing their labour force. Furthermore, social dialogue is an issue that should remain at the national level.

4. Some of the positions prepared and taken by ENPA in 2006 to address legislative and policy issues The list below gives an overview of the legislative and policy areas that are being actively monitored and influenced by the ENPA Secretariat together with the ENPA members both at EU and national level. As everyone who follows legislative and policy developments at EU level easily realize, the list is neither exhaustive nor in priority order, and thus here gives only the name/title of the proposal. Under the tip of the iceberg there are many individual contacts, meetings, follow-ups and other actions where the ENPA Secretariat is acting proactively. 1. Value Added Tax in relation to the EU Commission’s revision of reduced rates in 2007. Main issue: maintaining zero, super reduced or reduced VAT rates for newspaper sales. 2. Applicable law in non-contractual situations, i.e. the so-called Rome II Regulation which has existed as a draft Regulation since 2001. Main issue: not including rules on defamation or privacy in the Regulation. 3. Transparency of publicly traded companies (directive; comitology procedure is underway). Main issue: using newspapers as reliable means of communication to distribute financial information to investors. 4. “Content Online” initiative (Commission’s public consultation in 2006; Communication from the Commission is expected in 2007). Main issues: copyright, taxation, freedom of expression and advertising restrictions. 5. Newspapers and search engines’ value-added services (industry-led task force called ACAP, legislation/policy issues as well as individual court cases). Main issue: respect of copyright rules and creating industry-led standards and means to control the use of online newspapers’ content by other industry actors. 6. Digital Libraries (Recommendation from the Commission was issued in 2006; High Level Group Working Group chaired by Commissioner Viviane Reding


7.

8.

9.

10.

11.

12.

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where ENPA has a representative). Main issue: respect of copyright rules and creating private-public partnerships on a voluntary basis. Exercise and management of copyright in the scope of employment “transfer of rights” (linkage to the legislative/policy issue of “Content Online”). Main issue: securing clear and efficient rules for the management of rights. DRM, i.e. Digital Rights Management and the question of copyright levies (Commission’s impact assessment in 2006–2007). Main issue: significance of levies to publishers and their associations. Collective management of copyright and related rights (Commission’s Recommendation on online music rights in 2006). Main issue: management of copyrights and the impact of online music rights’ rules on other fields of the content industries. Revision of the acquis communautaire on copyright and related rights (Commission’s consultation in 2007). Main issue: almost all copyright rules have an effect on publishers’ content creation processes. Media concentration including media pluralism and media diversity (Commission’s staff working paper published in early 2007; Council of Europe’s studies/draft proposal for an observatory). Main issue: no pan-European legislation in this area is needed. Revision of the Television Without Frontiers Directive (draft revised directive in end 2005; the revised proposal is also known as the Audiovisual Media Services Directive. First reading at the EU Parliament has ended in December 2006). Main issue: online newspapers to be left of the scope of the revised directive; advertising rules to reflect fair competition between the media; editorial/advertisement separation. Media Literacy policy initiative (Commission’s consultation in 2006; Commission staff working paper is expected in 2007). Main issue: no need to introduce legislation/ policy in this area. Competitiveness of the publishing industries (Studies and Commission’s reports in 2005 and 2006). Main issue: support all studies etc. which analyse the competitiveness of the publishing sectors. Press freedom in the context of media and terrorism (Commission Communication and Council of Europe preparatory texts in 2006). Main issue: guaranteeing freedom of expression and, thus, freedom of the press in all circumstances. Right of reply in online environment (Decision-making process on the Draft Recommendation by Commission completed by the end of 2006). Main issue: not to create obstacles to the developments of media companies operations online. Right to (Short) Reporting on Major Events (Council of Europe’s and Commission’s texts and studies in 2006 and 2007). Main issue: newspapers need to be able to report on, e.g., results of sports events and have access to venues. Postal services directive review (Draft Third Directive’s first reading is expected in 2007 full liberalization by 2009). Main issue: maintaining universal service with transparent pricing and reliable and timely delivery. Economically dependent workers (Green Paper from Commission is expected in 2007). Main issue: newspaper freelancers’ rights and obligations vs. publishers’ rights and obligations.

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20. Working time directive (Commission’s proposal for a directive is expected in 2007–2008). Main issue: working time of in-house employees with regard to the specificities of the newspaper publishing companies’ working hours and methods.

5. The current state of affairs As listed above, most of the issues are at an active stage in the preparatory or legislative process. ENPA operates on different activity levels at different stages: at the preparatory stage and during the legislative process at the EU institutions the ENPA Secretariat is very active whereas at the national implementation phase ENPA believes it is the better to let the national associations to be the main actors. This is reasonable since the national associations know the details of the national legislations much better than the ENPA Secretariat. For example, in the case of directives when they are being incorporated into national legislation, the experts at national level know how to deal with implementation and/or transposition. At EU level ENPA acts on behalf of its member associations and publishers at as early stage as possible. ENPA is considered to be a trusted partner to the EU institutions and it also tries to be as proactive as possible – not only reacting to proposed directives and other EU legal instruments. The list above should show reasonably well how many different types of EU instruments the ENPA Secretariat has to monitor and influence. On the one hand there are policy initiatives at their infancy, such as the “Content Online”, and on the other hand there are reviews and revisions of existing pieces of legislation. Fortunately, the current Commission has in its DG Information and Media a special “Media Task Force” which also screens initiatives and proposals on behalf of the publishing industry.

6. Some future issues that ENPA is preparing to address in 2007 and 2008 Some future issues are quite much the same as the ones listed above. However, in order to get a more detailed picture of some of the most important areas of legislation, the eight following issues are being explained below. All these individual issues will take up a lot of time of the ENPA Secretariat in 2007 and 2008. The issues are the following: • Legislation affecting freedom of expression and freedom of the press as well as protection of sources – especially in the field of fundamental rights in the context of the fight against global terrorism. Freedom of expression and the freedom of the press are fundamental rights which are not only reserved for the newspapers or for the press in general. Everyone has the right to express himself without being censored or controlled. In the context of the fight against terrorism it needs to be remembered that newspapers have a very important role to play in informing citizens on, e.g., planned regulations on how citizens’ personal data is being used by the governments.


• Value added tax (VAT) – possible revision of the Annex H of the Sixth VAT Directive and addressing the issue of VAT in relation to online newspapers and online services. The issue of VAT applied to newspapers’ sales is a major issue from an economical point of view. If VAT rates would be raised, higher sales and subscription prices would ultimately mean fewer readers and less revenue for newspapers. For example, for this reason ENPA is following closely what might be the content of the possible revision. • Copyright legislation and copyright policy issues (including exercise of rights attached to works created by employed journalists; databases and their recognition of protected collections of works of publishers as well as the recent discussion about collective/ individual management of rights). In addition to the above, ENPA will continue to participate in the joint publishers’ project ACAP (Automated Content Access Protocol). Copyright is one of the core issues in the value chain of content creation. In order to be able to manage and administer rights attached to copyrighted works, publishers need clear and predictable rules in the form of transfer of rights from employees to publishers as employers. In addition, legislation protecting publishers’ investments in databases is an essential tool to secure future investments. All different aspects of copyright legislation will be closely monitored by ENPA. • Revision of the Television Without Frontiers Directive (TVWF), also known as the Audiovisual Media Services Directive (AMS Directive) – in which the major details for the publishers are the scope of the revisited directive and advertising rules. Newspapers online are in the news business where quality of the message is the key component. Online newspapers’ are not in the television, “television-like” or other audio-visual content business to which the revision of the TVWF is aimed at. Therefore, ENPA will keep on explaining to the decision makers why newspapers online should not be covered by the revised rules of the TVWF. • Sports Rights is an area where there will be two paths in 2007: policy issues at the level of the EU (e.g. upcoming White Paper on Sport) and practical discussions with several sports’ organizations, e.g. on accreditation conditions. Sports Rights is an area of practical discussions and policy considerations for newspaper publishers. On the one hand, the question is the freedom of the press, i.e. newspapers should be able to report on sports events without undue restrictions, and on the other hand the question is that the event organizers have granted exclusive rights, for example, to commercial broadcasters. Newspaper publishers, led by a coalition and ENPA giving its active support, were able to secure good conditions, e.g. for the use of pictures on online newspapers from the World Cup Games 2006. ENPA will continue discussions

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with sports event organizers in the coming years as well as monitor and influence the policy considerations of, e.g., the European Union. • Advertising content restrictions concerning certain types of food, alcohol, nutritional claims linked to certain food products. Newspaper publishers are of the view that all products and services that can be legally sold and offered should be allowed to be advertised without restrictions. Commercial communications such as advertising is part of the basic freedom, i.e. freedom of expression. Publishers are, therefore, not in favour of new advertising or other similar content restrictions. More and more of the revenues of newspaper companies are derived from advertising and, thus, advertising restrictions would have a serious impact on their economic viability. • Media concentration policy considerations including pluralism in media and crossmedia ownership. Both printed and online newspapers offer a huge variety of diverse content every day. No more medium can claim to offer content which would be as pluralistic. Therefore, newspaper publishers do not see any particular reason why there should exist some pan-European or even national level legislation which would deal with newspapers’ content. In addition, newspaper publishing companies should be allowed to develop their businesses, e.g. through acquiring shares of other media companies. Legislation in force at national level (competition rules or special ownership rules) is enough to deal with any potential situation where there might be a question of abuse of a dominant market position. For these reason, among others, ENPA is not in favour of EU-wide legislation. This type of legislation would not be able to take differences in national newspaper markets into consideration.

7. Cooperation with other associations In almost all of the legislation/policy areas mentioned in this chapter, ENPA will continue to cooperate with other publishers’ and media associations (FAEP, FEP, EADP, EPC) as well as with other relevant stakeholders who are active at European level. Lobbying on some policy or legislative issues requires broad industry alliances to be success stories. Meanwhile, some issues can be tackled either by ENPA alone or together with other associations representing other fields of the media industries. An assessment of the most relevant and/or useful combination is made on case-by-case basis even though there are several other associations and organizations which are ENPA’s regular partners in lobbying and public relations work. When necessary, ENPA also cooperates with international associations. The most important one is the World Association of Newspapers (WAN) which is very active in the field of monitoring press freedom violations at the global level. Others include but are not limited to: International Press Institute (IPI), International Publishers’ Association (book publishers, IPA), Newspaper Association of America (NAA) and International Federation of Journalists (IFJ).

EUROPEAN MEDIA GOVERNANCE AND THE MAGAZINE INDUSTRY David Mahon

Director, European Federation of Magazine Publishers (FAEP)

Introduction: FAEP and the periodical press in society FAEP, the French acronym for the European Federation of Magazine Publishers, is the voice of Europe’s periodical press. FAEP exists in Brussels to defend the freedom of expression, including commercial communications, thus promoting pluralism and diversity, and ensuring that Europe’s periodical press industry remains competitive and vibrant. FAEP is a non-profit organization representing the interests of the national associations of periodical press publishers as well as individual publishing company members in Europe. FAEP’s mission is “to promote and protect the interests of publishers of the periodical press within the European Union thus ensuring the long-term survival and prosperity of a plural, diverse and economically successful magazine publishing industry in the EU”. In 2007, there were 26 national associations of magazine publishers from 17 countries and 21 corporate publishing companies in membership. The main task of FAEP is to represent, protect and promote the interests of European magazine publishers in front of the Institutions of the European Union: the European Council, the European Parliament and the European Commission. FAEP also coordinates national lobbying efforts on EU legal instruments as and when necessary.


The combined membership of FAEP is representative of over 15,000 publishing companies across Europe (the vast majority being small- and medium-sized enterprises), which publish over 50,000 magazine titles, printed into more than 20 billion magazine copies per year. Paper copies continue to remain important in spite of the increasing use of and content offer from digital media. The magazines represented within the FAEP membership reach on average 80 per cent of European adults: 360 million Europeans read magazines on a regular, consistent basis. With combined annual revenues in excess of ?40 billion, European magazine publishers employ more than 300,000 EU citizens and a multiple of that figure is involved in the related advertising, distribution, printing, design and paper manufacturing industries. A characteristic of the periodical press market is that it is by and large local, regional and national in nature. Few magazines cross borders in their original language, those few mainly being either English-, French- or German-language political/business titles. While certain well-known consumer magazine titles might be available internationally, they are mostly licensed to locally based publishers or published by local subsidiaries of the title owner. Each one is adapted to local interests and the majority of the content will be locally produced. While the economic model for the magazine industry is mainly based on subscription and copy sales and advertising revenues, the European market is very diverse and a common thread is difficult to identify. For example, in 2004 in Finland, magazines had a 16 per cent share of the overall advertising expenditure, representing an 8 per cent increase from 1995 to 2004. Subscription sales counted for 95 per cent and retail sales for 5 per cent of all sales. For the Czech Republic, the same figures were 20 per cent share, 43 per cent increase over ten years and 86 per cent subscription versus 14 per cent retail sales. For France, the same figures were a 31 per cent share of advertising expenditure representing a 28 per cent increase over ten years. Retail sales, at 60 per cent, outdid the subscription sales at 40 per cent. For the UK, the figures are 14 per cent of ad expenditure with a 4 per cent increase. Retail sales were 87 per cent to subscription sales of 13 per cent. While the magazine share of overall advertising expenditure varies greatly from country to country, it could be said that, in general, the people of northern Europe receive their magazines by subscription, while the people of southern Europe buy their magazines at the news kiosks. Since the day Gutenberg invented the printing press, Europe’s periodical press has been a key element of the European social, cultural and political heritage, as well as an essential part of the pluralistic mix of information, entertainment and academic advancement. Ever-improving printing techniques, electronic make-up and the digital age have allowed the magazine market to develop and flourish over the centuries.

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The media is called the fourth pillar of democracy. As central players in the media sector, magazine publishers offer a huge array of content, covering every conceivable sector and interest, thus playing a vital role in ensuring a diverse and plural society. The magazines available in shops and kiosks across Europe are only the tip of the iceberg to the full offer available to citizens. From chess-playing to stamp collecting, from world affairs to local affairs, from cycling to golf, from engineering to scientific research, from fashion to sport, from cars to boats, from knitting to hairdressing, there is a magazine title available for most human interests. Today’s market is extremely dynamic and new launches – as well as closures – are frequent. Magazine publishers operate on the cutting edge of societal, cultural, scientific and educational developments and address all facets of life. As such, the periodical press industry is a key player in the knowledge society and economy so loudly touted by Europe’s decision makers and so vital to achieving the Lisbon Agenda goals. As the digital society continues to expand apace, magazine publishers are heavily investing in online operations. While many online websites are complementary, value-added to the paper copies of magazines, there is a growing trend to launch purely online titles. Leveraging well-known brand names, as well as offering expert and/or journalistic content, magazines are so far holding their weight in the very competitive online world. FAEP in the European Union In representing the periodical press in front of the EU Institutions, FAEP’s basic, but central, position relates to the freedom of expression. The Press is a sector different from all others in society. It also has different traditions in the different EU Member States. This fact is reflected by the richness of diversity that exists in the European Union, based on so many historical, societal and cultural considerations. Given this importance, legislation impacting on the Press is not uniform within the EU and falls under the principle of subsidiarity. However, it can be said that the overriding feature of Press regulation in the different EU Member States is that it is based on democratic values and it enshrines editorial independence and the freedom of expression. FAEP is careful to remind EU decision makers that these are proud traditions, which have too often been threatened by unfortunate circumstances throughout the collective European history. Moreover, these are traditions which, in the ever-changing political landscape of the twenty-first century, need to be guaranteed and guarded as vigilantly as ever. The freedom of expression provides us with a diverse and pluralistic range of ideas and opinions, which go to create the free and open Europe that we live in today. FAEP, therefore, reiterates that the freedom of expression is a fundamental right, as recognized in various international and European-specific legal instruments. This right, however, is one that can be very easily eroded or destroyed: it is, thus, a right that requires vigilant safeguarding. In this respect, FAEP argues that first and foremost


decision makers must ensure that the basic principle of free expression forms the basis of all European legislation affecting the media sector. The media, and in particular publishers, accept that with this freedom comes responsibility and the industry will repay the legislators’ trust if the legislator respects the freedoms of the fourth pillar. FAEP supports wherever possible self-regulatory mechanisms, backed up by an equitable and balanced legal framework. FAEP also consistently points out that the freedom of commercial communication is an integral part of the overall principle of freedom of expression. Commercial communications are the lifeblood of the majority of periodical publications. Revenues gleaned from circulation are rarely enough to allow such publications to survive. It is very simple: without revenues coming from the freedom to communicate commercially, the print media would be forced to close less popular, as well as popular, titles or look for subsidies in order to continue. And it is surely not debatable that either of these choices is a good formula for safeguarding or promoting the freedom of expression. EU issues relevant to the periodical press Broadly, there are seven EU policy areas in which FAEP has interests and/or concerns, namely: 1. 2. 3. 4. 5. 6. 7.

content regulation; commercial communications; intellectual property; distribution/post; environment; taxation (VAT) and media pluralism/concentration.

FAEP does not yet involve itself in employment/social matters or other EU policy areas of general interest to the private sector. In 2007, there are nineteen different EU policy initiatives of interest and/or concern to FAEP. These range from threats to alcohol and food advertising, regulation of online content, regulation of content with respect to combating terrorism, crossborder defamation, media pluralism, digital rights management, ecolabelling for printed products, media literacy, postal liberalization and VAT for printed products. Not all of these initiatives are proposed legal instruments, but rather ongoing working dossiers and/or consultations and not all of them are threats: some provide good opportunities for the magazine industry, such as opening up the EU’s postal markets.


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For the purposes of this chapter, focus will be put on two main legislative proposals: the ROME II Regulation and the Audiovisual Media Services Directive. Rome II Dealing with the applicable law for non-contractual obligations, the proposed Rome II Regulation attempts to bring some legal order to a variety of different areas in the European Union. For example, in the event of a legal action, the law of which country should apply in the case where a Belgian tourist hires a car in France and has an accident in Spain? The proposal aimed to be ‘consumer friendly’ and to grant, as far as was possible, that the applicable law would be the law of the country of the ‘victim’. Among the areas covered by the proposal are the rights of personality and defamation. Concerning cross-border defamation and personality rights’ issues and which Member State law would be applicable in the event of conflicts, the Regulation would have posed serious problems for press operations as originally proposed by the European Commission. First proposed by the Commission in 2002, the Rome II Regulation – as regards defamation and personality rights – would have obliged publishers to understand the rights of personality legislation of 25 Member States before publishing articles. In effect, the Regulation would have allowed potential plaintiffs to sue publishers according to the law of any of the 25 Member States. Thus, a plaintiff living in Spain, but well known in Germany, for example, could have sued a Finnish magazine according to German law. Magazine publishers, through FAEP, united with a broad alliance of other media interests to argue that the issue of defamation should be considered entirely differently to road traffic accidents, for example. The media alliance argued because there are in fact very few cross-border defamation cases, and given that most media is locally consumed, there was no justification to even include defamation in the scope of Rome II. The media maintained that it does sometimes make mistakes and does not necessarily shy away from defamation actions. But it was also pointed out that, in the main, citizens who sue for defamation are not ‘normal’ consumers/victims, but rather they tend to be celebrities, politicians, businessmen, who normally have the means to launch legal actions in ways very complicated for the press to defend. The media further demanded that if defamation were to be included, and if legal certainty for the free operation of the press was to be ensured, the only acceptable outcome would be to provide for the applicable law to be the law of the country where the media was principally directed or, if that was not apparent, the law of the country where the editorial decision was taken.


With this solution, at least a publisher or other media operator would know that if they were to be sued, they would at least have some legal certainty as to the possible consequences. A very concerted and united media lobby effort was maintained between 2002 and 2007, with a favourable outcome from the European Parliament (supporting the country of destination/editorial decision solution). It is known that the Council of Ministers will not accept this wording from the parliament. The Rome II Regulation is, thus, subject to the conciliation procedure, the result of which will probably lead to defamation being excluded from the scope of the Regulation. An outcome that is at least acceptable to the media. Audiovisual Media Services Directive At the end of 2005, the European Commission proposed a revision of its Television Without Frontiers Directive, aiming to extend its provisions to all audio-visual services (linear and non-linear) and to liberalize advertising rules. FAEP opposes extending broadcast regulation to other free media. The former Television Without Frontiers (TVWF) Directive, refers to content regulation (e.g. licensing requirements, media authority responsibilities), rules on advertising, the protection of minors, the access to major events, discrimination, the right of reply and programming quotas for audio-visual media services. This directive is aimed at television broadcasting and is being proposed for revision in light of the technological changes that have taken place in the audio-visual sector. The points of concern regarding the proposed Audiovisual Media Services Directive (COM (2005) 646) for publishers are: 1. the proposed extension of the scope of the restrictive content regulation to non-linear audio-visual media services, 2. legalization of product placement and 3. the reference to co-regulation instead of self-regulation. Publishers believe that the Internet is a medium more akin to the print media rather than the broadcast media. It should follow, therefore, that broadcast regulation – traditionally more restrictive than regimes applied to print – is not appropriate for new media platforms online. Furthermore, publishers continue to invest in and experiment with online content. Introducing broadcast-like rules for the Internet at this early stage of its development is not considered appropriate by the FAEP constituency. In the process of revising the former Television Without Frontiers Directive the EU Parliament voted on a large number of amendments in December 2006. According to the will of the Members of the European Parliament, the competence


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of national regulatory authorities is extended from broadcast to websites containing predominantly audio-visual content, like video-on-demand. In addition to that MEPs are in favour of the idea to restrict freedom of expression in commercial communication according to a far-reaching set of criteria. FAEP seconds the big support of the Parliament for self-regulation as an acceptable regime to implement parts of this directive in the Member States and supports the clear vote against further bans of advertising, magazine publishers remain concerned about the extension of the scope to non-linear audio-visual media services. However, as regards regulation of online content, publishers continue to fear this directive as a further step in the creeping process of increasing governments’ influence on media content. Magazine publishers consider themselves as content providers. Today and in the future the printed magazine title is/will be complemented by its online version that – according to readers’ demands – will have to build increasingly on non-linear audio-visual services, to guarantee its prosperity. Therefore, the extension of the scope of the former Television Without Frontiers Directive will hinder the creativity and dynamics of any sector that is dependent on the latest Internet technology, with all its interactive and audio-visual potential. The common value of freedom of expression has enabled cultural diversity and economic progress. EU media policy should build on these values by reducing restrictions to content and advertising in media to support the future platform of user-driven information and communication. This will maintain the EU as a marketplace for the creative media industry and strengthen its competitive advantage on a global scale. It is now up to the EU Commission and the Council of the European Union to compensate the deficits of the Parliament’s vote. Future policy issues In the distant future, it is possible that environmental and distribution/postal concerns will wane as printed products give way to digital media. However, for the time being publishers see a bright future for their printed offer for the medium term. At a time where consumers are growing accustomed to getting information and entertainment immediately, and often free, from the Internet, FAEP believes that Intellectual Property protection will almost certainly be an issue of legal concern to European publishers. Legislative frameworks should be put in place to protect content-creators investment in content. At the same time, industry will need to coordinate efforts to bring about fair and user-friendly digital rights management technologies.


As long as decision makers focus blame for society’s ills on advertising, the freedom of commercial communication will also remain an area of importance for all media. Restrictions and bans applicable to television are being successively introduced in different European countries and the European Institutions will continue to have an interest in this domain. Publishers would be fearful that bans and restrictions for television are extended to other media, in particular online. Inevitably, the issue of content regulation and press freedoms will remain of concern. Counter-terrorism measures could impact on journalistic freedoms and protections. Licensing requirements and online controls could impact publishers’ freedoms. An EUwide media regulatory body could have serious effects on the ability of local, regional and national publishers to continue offering the content that their readers want. In this respect, FAEP will continue to point out that as long as there is such linguistic diversity in the EU, the European print media – whether digested online or on paper – will remain a local, regional national medium in the main. FAEP lobbying practices FAEP has four main ‘issue/lobby’ committees, which meet physically four times a year and by telephone conference as and when necessary. These committees are Legal Affairs, Publishing and Advertising, Post, Paper and Environment and Professional Media. Outside of these working Committees, FAEP is presided over by its Board and aided in its lobbying work by the Corporate Advisory Group. The four working committees are chaired by an expert from within the FAEP membership. Each committee analyses and discusses EU initiatives relevant to its subject area. Following this, FAEP position papers are drafted where necessary. In many cases, a fall-back position is also discussed, in the event that the decision-making process demonstrates no indication of reaching the original desired position. Due to the limited staff resources of the FAEP Secretariat, FAEP tries to utilize as much as possible the knowledge-base of experts from the national associations and companies. The sharing of knowledge takes place at the quarterly FAEP meetings, by more regular telephone conferences and by visits to Brussels or Strasbourg by the national experts. Once a position has been agreed, and depending on the decision-making stage of the EU initiative, different lobbying techniques are employed. In general, FAEP positioning will already have been made during the Commission’s public consultation phase. However, for some legal initiatives it is not immediately obvious that the magazine sector would be affected. In which case, FAEP will have not been consulted/missed the consultation invitation and can only voice its concerns directly to the Commission services concerned. As an example, the Market Abuse Directive was drafted following the Enron and other scandals in 2001. It aimed to tidy up insider dealing and how analysts report on financial


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markets. However, the definition of an ‘analyst’ in the proposal would have hooked in financial journalists, who would have been subject to all kinds of restrictions and reporting rules that were clearly designed purely for financial analysts in the business. After a long and combined media lobby, this potentially harmful directive was adopted without cause for alarm in the media. Following the public consultation phase, FAEP will also try to influence other Commission services about its concerns, so that during the Interservice Consultation phase of the Commission’s process, changes might be suggested to the draft proposal. Influencing this process involves a mix of personal contacts and formal letters/positioning to other Commissioners involved. For the European Parliament, the FAEP position is usually condensed to two pages maximum and sent to as many relevant MEPs as possible, including all MEPs already known to FAEP. As parliamentary committee discussions progress on the particular dossier, FAEP tries to set up individual meetings with relevant MEPs, including the responsible rapporteur, shadow rapporteurs and opinion rapporteurs. In cases where it poses problems to get access to certain relevant MEPs, FAEP utilizes its network of national associations and companies. If, for example, an Italian rapporteur does not want to grant FAEP an interview, FAEP will ask its Italian national association and company members to set up a meeting to get the magazine position across. As the decision-making process progresses, FAEP will also bring in national members on sweeping lobby visits to Brussels or, preferably, Strasbourg. Theses visits will typically combine six or so FAEP members, from different countries, representing both national associations and individual publishing companies. Apart from concrete lobbying on specific issues, FAEP organizes various profile-raising and informational events for EU decision makers. Such events range from discussiondebates, dinners and round-table discussions in Brussels to field trips for MEPs and EU officials to publishing companies in their country of origin. The main aims of such events are to inform the decision makers more about the details and complexities of the magazine publishing sector at the same time as to get across the main points of concern for magazine publishers. Cooperation with other trade associations In recent times, FAEP has both followed and fostered the increasing trend for trade associations from similar and related sectors to share information and carry out joint lobbying initiatives. At European level, FAEP participates in formal lobby alliances focusing on general areas of interest and concern as well as ad hoc groups, dealing with specific as-and-when issues. Formal alliances include the European Advertising Standards Alliance (EASA),


the Advertising Information Group (AIG), the Postal Users Group (PUG), the Creative and Media Business Alliance (CMBA). Informally, close cooperation on general and specific issues takes place through the Print Media Group, the Rome II Group etc. In the above respects, FAEP cooperates with a very broad range of trade associations and interest groups. Among these are the Confederation of European Paper Industries (CEPI), the International Confederation for Printing and Allied Industries (INTERGRAF), the Federation of European Direct Marketing (FEDMA), the Association of Commercial Television in Europe (ACT), the Association of Television and Radio Sales Houses (egta), the World Federation of Advertisers (WFA), the Confederation of European Spirits Industries (CEPS), the Brewers of Europe, the European Association of Directory Publishers (EADP), the Federation of European Publishers (FEP), the European Publishers Council (EPC), the European Newspaper Publishers’ Association (ENPA), the European Federation of Journalists (EFJ) to name a handful. Cooperation also takes place with individual companies from the publishing and related industries. At international level, FAEP and the International Federation of the Periodical Press (FIPP) are mutual members. FAEP shares experience and knowledge with the Magazine Publishers of America (MPA). FAEP also occasionally participates in the work of the Universal Postal Union, a United Nations body. FAEP does not, however, involve itself too closely in the work of other international organizations, such as the OECD or the Council of Europe. In the main, FAEP limits itself to representing the interests of European publishers in front of the European Institutions.

BOOKS AND THE EUROPEAN UNION, MUTUAL UNDERSTANDING? Anne Bergman-Tahon

Director, Federation of European Publishers

Olga Martin Sancho

Legal Adviser, Federation of European Publishers

Céline D’Ambrosio

Policy Advisor, Federation of European Publishers

1. Introduction The book industry is one of the oldest sectors to be represented at EU level. Indeed already in 1967, some European book publishers decided to create an organization to look after their interests. They had to convince their colleagues that it was worth devoting time and efforts to represent the values of European book publishing in the European Community at the time. They then established an organization called at the time GELC (Groupement des Editeurs de Livres de la Communauté). Forty years later under its new name, the Federation of European Publishers reckons that it is more important than ever to defend publishers of books in Brussels. The Voice of book publishers in Europe The Federation of European Publishers (FEP) has currently 26 member associations representing national associations of publishers of book and learned journals, in the European Union and in the European Economic Area. Educational, trade, children’s book publishers are associates of FEP members and in each of the Member States, they stand for a large majority of revenues of the sector. The main decision-making body, the General Assembly gathers twice per year offering a prime occasion for publishers all over Europe to meet and to share experiences over their business and legislation at

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EU level and in their respective countries. All over Europe and, indeed, the world, the experiences and challenges faced by publishers are fairly similar. FEP is there to help members know more about how their colleagues react to these challenges. It is also active in letting the people working in the European institutions better comprehend the societal and technological changes faced by publishers with the digital revolution and how it will affect publishing of books. If FEP is very present at EU level, publishing is not like manufacturing cars. Indeed, publishing, despite its obvious contribution to the European cohesion, is intrinsically national for clear linguistic reasons. It suffices to throw an eye to the bestsellers’ lists in the various EU countries; they rarely contain the same titles. All the same, a number of EU policies have a direct implication on publishers. And they cannot afford to only discuss these matters with their national legislators! Book publishing worth 22 billion euros The annual sales revenue of book publishers within the EU and the EEA is approximately €22.3 billion, according to a survey conducted by the Federation of European Publishers. Sales of educational books at all levels, including dictionaries, encyclopedia, reference and professional books amount to €9.589 million, or 43.3 per cent of the total. Sales of consumer (trade) books including books for children, amount to €12.558 million, or 56.7 per cent of the total. An estimated 78 per cent of all sales of European publishers were to bookshops and wholesalers; 8 per cent are sold through book clubs and 14 per cent directly to the customer. A total of 620,133 new books or new editions were issued by publishers. Seventeen members gave information on the number of titles in print, but as they represented all the major publishing nations, it can be assumed confidently that the number of titles available from publishers throughout the EU is not less than 3,959,000. Those countries reporting the largest title availability are: UK (1,125,000), Germany (1,000,000), France (498,000), Italy (491,000) and Spain (276,000). Publishing in the German language accounted for €4.914 million, followed by English at €4.685. French (€3.130 million) and Spanish (€2.881 million) were the next most published languages followed by Italian (€1.993 million). Approximately 123,000 people are employed full time in book publishing.

BOOKS AND THE EUROPEAN UNION, MUTUAL UNDERSTANDING? |

What is there to speak up for? First and foremost, copyright Whether it is scientific, trade or scholarly publishing, publishers’ business is based on copyright and, therefore, any policy on intellectual property rights will affect publishers. Several previous EU directives such as the 1992 Public Lending Right Directive or the 1996 Databases’ Directive have a direct effect on publishers. So has the 2001 ‘copyright in the information society’ Directive which has just been implemented in all Member States. Nowadays, the revisions of the EU copyright directives and of the 2001 legislation are of utmost concern to the publishing sector in Europe. Too many exceptions to intellectual property rights unbalance the delicate equilibrium between rights holders, the author and his/her publisher and the users, the readers. FEP wants a balanced discussion on levies In the Commission working programme for 2006 it was foreseen to undertake a reform of the copyright levies applied to equipment and media used for private copying by consumers and others. FEP has coordinated with other publishers associations (magazines, directories and STM publishers) to send a general common paper on the publishers’ position on levies and DRM in the digital world. As in other cases, FEP has strongly argued that it was crucial not to extend the findings from one specific sector, in this case music and audio-visual, to another one, publishing. For reprography (photocopy) which cannot be limited by DRM, levy systems, where in place, have their own merits which need to be carefully examined. For digital works, things are more-sided and publishers must be able to choose freely between individual and collective management, which can eventually also be complementary. Shall we review the 1993 Term Directive? Also of relevance for publishers, we know that the Copyright Unit is working on an impact assessment to review the Term Directive that harmonizes the terms of protection of copyright and neighbouring rights. The directive establishes a total harmonization of the period of protection for each type of work and each related right in the Member States – e.g. 70 years after the death of the author for works and 50 years after the event setting the time running for neighbouring rights. One of the focuses of attention might be whether it is necessary to harmonize the term of protection of co-written works. FEP is working closely on the issue to analyse the potential impact on the publishing industry. The revision is eventually planned for 2007. The European Digital Library – what is there for publishers? Two years ago, the European Commission has decided to make the European Digital Library, one of its flagship projects under the 2010 initiative. While understanding the rationale to work at Community level to promote a common approach, FEP has warned the institutions that it was necessary to do this cautiously.

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Indeed, while we are still envisaging the future ways citizens will read books in some years, on-screen or still on paper, by chapters or under any other format, publishers have to be vigilant. Yes, they are supportive of libraries giving access to books but this cannot become a substitute for selling books in bookshops. Otherwise, this would seriously undermine the entire book trade and inevitably lead to a diminution of the creative offer. FEP has been working closely with the European Commission and has started discussing with members of the European Parliament to make sure that content protected by copyright offered through the network of libraries will not unfairly compete with books proposed by high street and online retailers. At national level, publishers’ associations are negotiating with their relevant institutions to see how this initiative can take form in full respect of intellectual property rights. Evaluation of the Database Directive One of the biggest challenges for FEP during last years has been to avoid the withdrawal of the sui generis right, only legal protection for non-original databases contained in Directive 96/9/EC and of crucial importance to protect the investment of databases’ producers. FEP, together with other publishers’ associations, presented our arguments to the Commission services in view to make sure that makers of databases would not be left without the only right that protected unoriginal, yet highly valuable, databases as such and the investments and efforts put into it. We argued that some early ECJ decisions should not served as the sole basis for all situations concerning databases, especially taking into account the special nature of databases of sporting events on which the decisions were made. Furthermore, the Database Directive provides for the necessary means to help developing a strong database industry in Europe and achieving this way some the Lisbon Strategy’s objectives. Finally, thanks to the massive participation of publishers in the consultation undertaken by the Commission as well as the continuing argumentation, the final working paper accepted the relevance of publishers’ position and was more inclined towards the maintenance of the status quo of the directive. The Commission has not shown so far any will to draft a further document, it is therefore expected that the Database Directive will remain as it is until a new revision takes place. It should be taken into account that, even though the Commission is obliged by a provision of the directive to review it every three years, the first evaluation report has been done ten years after it was first published. Commission Recommendation on collective management The Copyright unit of DG Internal Market published at the end of July 2005 a study on how copyright for musical works was licensed for use on the Internet. It questioned the present structures for cross-border collective management of copyright concluding that the absence of EU-wide copyright licenses for online content services hinders the

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development of music services. The study considered three options: 1) do nothing, 2) improve cross-border cooperation of collective societies by eliminating territorial restrictions and discriminatory provisions, 3) give rights holders the choice to authorize a collecting society of their choice to manage the online use of their musical works EU- wide. The aim of the study was to consult stakeholders on the three options. FEP submitted a response to the Commission consultation on the study aiming to demonstrate that collective management dealing with written works is considerably different from the collective management of musical works and the effect of those recommendations would therefore have had a potential adverse effect on our sector which is based on linguistic zones rather than territories. FEP stressed that one of the main differences for the publishing industry is that especially in the digital world, right holders can and must make their own decision whether to manage reproduction rights on an individual or collective basis. Implementation of the 2001 Copyright in the Information Society Directive Six years after the directive has been adopted, all Member States have finally transposed the text into their national legislation. The directive was necessary to bring Community members in line with their obligations under the then newly approved WIPO Internet Treaties. The goal was to provide, as far as possible, a common European approach to the protection of copyright of works becoming increasingly intangible and transmitted through networks. In light of all the national transpositions, it is now clear that this objective of harmonization was not reached and is probably not reachable in a foreseeable future. Indeed, copyright has a strong link to national legal traditions and it is obviously mission impossible to bring in line 27 copyright legislations, coming from such a broad spectrum of legal dispositions. FEP and the national publishers associations are very vigilant to see that the national legislations do respect the necessary equilibrium, vital for the sound development of cultural industries. Unfortunately, some countries have decided to go much further than what was foreseen in the directive and it is now crucial that the currently disadvantageous situation faced by publishers in these countries is addressed by the European Commission and the national legislator, in view of correcting it. Implementation of the 1992 Rental and Lending Directive Ever since it was adopted this directive has proven somehow problematic to transpose at national level. When it went through the European legislative it was widely accepted that while libraries should carry on their role of bringing culture closer to the citizens, at the same time it was important that the creators were to be remunerated for the loans of their works through these public institutions. As with most legislation, the devil lies in the details and here the details were often of financial nature. The European Commission through a Communication and then a number of Court actions against infringing Member States has been most helpful in trying to straighten the situation. If books are lent through networks of libraries, there is no objective reason not to pay some form of remuneration to the rights holders. FEP is satisfied in the last years, the


situation has improved in a number of Member States, and is working with colleagues at national level, to find acceptable solutions. Implementation of the 2004 Enforcement Directive This directive, implemented just before the enlargement in 2004, requires from all European Union countries to apply effective, dissuasive and proportionate remedies and penalties against those engaged in counterfeiting and piracy and so create a level playing field for rights holders in the EU. Implementation was due in all Member States by 29 April 2006 and, yet, our national members report that they are still not yet fully transposed everywhere. As always when it comes to legislation or other European issues, FEP has kept its members informed of the various legislative procedures in the Member States. Book publishers as well other stakeholders in the creative sector need to be able to engage against those who are pillaging our efforts and investments. For these we need appropriate legal instruments, supporting fast and affordable actions. Other policies being scrutinized We also follow closely all EU initiatives which might affect, one way or another, book publishing. European Culture policy, because of the vital role played by books in making culture more accessible to citizens, needs to better apprehend the importance of our sector. When other policies are being discussed, it is important, if not crucial, that the cultural benefits of book publishing be bore in mind by the legislators. Reading is always one of the preoccupations of publishers all over Europe and, indeed, all over the world. Thus, FEP has been quite active, with other colleagues, to develop and implement a European-wide campaign to promote reading (get caught reading). To sustain (and hopefully one day substantially increase) EU funding of translation is also always on our agenda. We are very keen also to increase the visibility of our sector and as a logical consequence, to enhance the national and EU support for its leading creative industry: publishing. Taxation and other issues of concerns Publishers are also concerned by taxation files (the price elasticity of a book is such that any increase in its price affects its sales), competition issues and questions of data protection or of consumer credit. Our European federation monitors all these files on behalf of the publishing sector, making sure that the European institutions are kept abreast of the possible impact of all these policies of the industry. The importance of books to society is such that in all Member States, although through various forms, the State has decided to support its industry through reduced rates of VAT on printed books (except in Denmark and Slovakia) and other policies supporting the goals of making each of the European country’s economy an economy based on knowledge! The European Commission must make better use of books to communicate FEP suggested that the follow-up to the White Paper on better communicating the European Union, when focusing on media, recognizes and emphasizes the crucial role

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that books can play in developing a European spirit. Indeed, there are many ways how European book publishers can support European construction and promote European ideas. Each year, many books are published on European Union issues by publishers across Europe. Some of them are the result of the work undertaken by the European Union Publishers Forum (the Forum), a collaborative effort of private publishers and the Office of Official Publications of the European Communities (OPOCE). The Forum is extremely helpful to allow better comprehension of the needs of the European citizens in terms of publications with regard to the European construction. In addition, for the European Commission to pursue its support of the Forum activities through the financing of its secretariat and some promotional activities, it would be important to provide funding for translation costs as the linguistic markets in some Member States are very limited. On another topic where the White Paper suggests transforming the libraries into digitally connected European libraries that could work as information and learning centres, ensuring that all citizens have free access to information technologies and relevant information, publishers share the vision of widespread and easy access to cultural and other information. That is the raison d’être of the publishing business. Furthermore, European book publishers are already involved in a number of initiatives both individually and in partnership with other bodies, including libraries. New business models are constantly being created and publishers are increasingly digitizing their content and making it available online, including through searchable repositories with e-commerce technology to facilitate purchasing. European book publishers are very willing to contribute to the forward-looking agenda for better communication to enhance the public debate in Europe. How does FEP work? As you will have read, FEP is active on many fronts, in Brussels and Strasbourg, but also in the various capitals of EU countries. To achieve this we need to have an in-depth understanding of the European Union complicated procedures. We have regular, if not sometime daily, contacts with the European institutions’ representatives. But, as often, united we are stronger…. Including coalitions with other media associations in Brussels Therefore, we are working closely with other publishers’ associations, be they newspapers, magazines or directories, but also with other creative industries through our joint organization: the Creative and Media Business Alliance (CMBA). Crucially we work with the writers (the European Writers Congress) and the booksellers (the European Booksellers Federation) and the organizations managing photocopying rights (the International Federation of Reproduction Rights). We share intelligence with our American colleagues, whose issues are too often unfortunately very similar to ours and with the rest of the world, through the International Publishers Association.

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At the Commission’s level, we enjoy a very positive collaboration with the Media Task Force hosted by DG Information Society and meet regularly with civil servants and politicians. We also liaise with many of the stakeholders in the various EU debates which involve the publishers including librarians and agencies representing visually impaired persons. In fact, we believe that it is crucial to initiate discussions with all concerned to see whether it is possible to reach consensus which will represent a fair result for all parties involved. What lies in the future? Future issues will certainly deal with taxation of electronic books. In a society which increasingly becomes computerized, it is likely that more and more people will read on a screen, be it made of electronic ink (a promising new technique) or be it another device. Today, printed (paper) books are taxed at zero or reduced rates in all but two EU Member States, but in all European countries electronic books bear the standard Value Added Tax rate, i.e. from 15 to 25 per cent. This situation cannot remain for always if the European Union truly wants to become the knowledge society of the future. To tax education and information at the highest rate is in complete contradiction with the goals of the Lisbon Strategy and we hope that in the coming months and years, the finance ministers, sole masters of the destiny of taxation, will understand the importance to support the online development of a sector which has always been at the heart of the European construction. One question should haunt us for many years to come is what will be the impact of digitalization on books. Books are by essence both works of the mind and objects. Music and cinema have also been somehow immaterial for their users. But books, you can hold in your hands, you can shelve, you can lend the very object you will read from. So, although we all know that electronic readers or other devices will reach increasingly reach us in the coming months and year, what remain to be determined is to what extent this will affect the trade publishing sector. Is electronic publishing the sole future? For academic and education publishing, it is clear that electronic publishing is the obvious future. For scientific, technical and medical publishing, this has proven to increase the efficiency of research and of publishing output but as every coin has a reverse side, this has also created the open-access movement which tends to contest some of the value brought by publishing to science. Publishing is a creative industry. It has very strong elements of creativity with involvement for the publishers in supporting what their authors create to make it accessible to the widest possible audience. It is also an industry (‘commercial production and sale of goods’) and, therefore, it needs to be able to make some form of profits if it wants to sustain the investments.

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Open access means that publishers invests in peer-reviewing, editing and publishing, marketing and disseminating scientific articles, but that they might not be able to benefit from that investment as the articles published in journals would also be accessible for free on open repositories. How long will publishers invest if the return is null? And what will be the impact on science? We believe that much more research needs to be done before the authorities, in Brussels and elsewhere, should take any drastic measures. For other segments of the trade, like novels, children’s books or art books, it is more difficult to predict where the market will go and any prediction will be different from country to country, at least at a said moment. Indeed, today, audio books are increasingly popular in Germany but much less in France. Will a similar phenomenon apply to electronic books? Will people be reading on screens while the paper is handy and relatively cheap? Will technology produce multiple usage machines, on which you will listen to music, take notes, receive your e-mails and surf the Internet … and read a book? It is not very risky to believe that, yes, such a machine will be there soon, but the real question for book publishers is to which extent will people read on these and how will they acquire books? From their bookshops or other retailers? From the publishers’ own website? From other sources? Will you still be borrowing (or rather renting) intangible books? Will you buy chapters? So many questions and so few definitive answers. And despite these uncertainties, the book industry is now investing heavily in digital repositories and ecommerce solutions, in order to be prepared for the digital revolution, whether this is a large wave or a complete change in reading behaviours. Today as tomorrow, publishers will need to be active at European Union level to make sure that books, whether on paper or in digital formats, or more probably both, will stay at the cornerstone of our societies.

ADVERTISING

THE DIGITAL REVOLUTION – WHAT DOES IT MEAN FOR ADVERTISING? Dominic Lyle

Director General, European Association of Communications Agencies

The European Association of Communications Agencies (EACA) is a Brussels-based non-profit organization whose mission is to represent full-service advertising and media agencies and agency associations in Europe. EACA aims to promote honest, effective advertising, high professional standards and awareness of the contribution of advertising in a free market economy and to encourage close co-operation between agencies, advertisers and media in European advertising bodies. In a world where the average consumer in a developed country is bombarded by over 5,000 messages every day, where can advertising agencies turn next to ensure that their clients’ products continue to stand out from the crowd? Will digital media do for advertising what commercial TV has done over the last 50 years? EACA looks at the future of digital advertising. Ask anyone in an advertising agency what the single biggest factor in the growth of the advertising industry has been over the last 50 years and they’ll almost certainly answer, “commercial TV”. Indeed, commercial television became a reality almost exactly 50 years ago and ushered in a completely new era for the advertising world. In 2004, TV advertising in the EU-25 amounted to €28 billion and Internet advertising only €2 billion. The success and multiplication of European television channels is due in great part to the “Country of Origin principle” enshrined in the Television Without Frontiers (TVWF)


Directive. This principle allows broadcasters to transmit television programmes to all other European Member States, as long as they comply with the laws of the country where the broadcaster is established. In the current debate on the draft Audiovisual Media Services Directive, which updates the TVWF Directive, this principle has been considerably weakened. The European Parliament, which will be adopting its Report on the Directive on 12 December 2006, is proposing to weaken the principle even further. But legislation apart, opinions on the future of commercial TV are not unanimous – with the growth of technology-based, personalized, targeted communications beginning to sow the seeds of doubt in agencies’ minds. The concept of a limited number of TV channels through which advertisers could reach a phenomenal 80 per cent plus of the population meant that the cost of producing a commercial in terms of the total investment was relatively small. Now, however, the development of technology is beginning to impact on traditional advertising by creating a huge choice of different media and different viewing options. With them comes a challenge to the agencies to rethink the traditional 30-seconds TV spot to exploit the opportunities presented by new technologies. Greater availability of time and money is feeding the consumer appetite for media and the principal growth media include Internet, direct mail, e-mail, mobile, retail and personal or digital video recorders (PVRs), although TV looks set to remain dominant for some time to come. Despite the early hype, and the concerns of advertisers about the potential of the PVR to free viewers completely from the constraints of channel schedules and, in theory, make it possible for a PVR-viewer never to watch another advert, PVRs are currently a niche market in Europe. Some eight years after launch, PVR technology has been slow to take off, with only 20 per cent of UK households owning a PVR compared to a 70 per cent penetration of digital TVs. According to SKY, PVR adoption is set to increase exponentially over the next few years, with around 40 per cent of households owning a PVR in five years’ time. Datamonitor forecasts that the European digital TV market will grow from 27 million households at the end of 2002 to 76 million households at the end of 2007. Satellite platforms will remain dominant, but digital terrestrial TV and cable devices will mount a strong challenge. The extent to which this will happen will vary across Europe, due to different market conditions and varying technological contexts.

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Market watchers such as Datamonitor believe that, as analogue ‘switch off’ approaches throughout Europe, consumers will choose to purchase basic set-top boxes (adaptors) to decode digital signals, rather than more advanced (and more expensive) Personal Video Recorders. Nonetheless, there is a threat to the traditional commercial break: in the US, PVR users report spending nearly 60 per cent of their TV time watching recorded or delayed programs in which they skip 92 per cent of commercials. As a result, the average PVR user sees only 46 per cent of the ads in all the programmes they watch. The current and future growth of the “PVR experience”, therefore, with its inherent potential to allow viewers to edit out commercial breaks, has some important implications for advertisers. It will, over time, impact not only the form, length and content of the traditional TV spot, but also lead to an increase in the levels of programme sponsorship and product placement as advertisers and their agencies seek new ways to cut through promotional clutter and engage their target audiences in brand-relevant ways. It should be remembered that, while editing out commercial breaks is usually cited as the main consumer benefit of PVRs, the reality is somewhat different. Datamonitor estimates the decline in advertising impacts to be as low as 10 per cent, with higher loss of audience to end breaks than centre breaks. But, the research company also says that PVRs do not affect ad recall and that there is an overall rise in attentiveness to television, with more viewing of specially chosen programmes and higher overall engagement and enjoyment of TV (45 per cent of those who purchased a PVR watch more television, while 66 per cent report increased enjoyment of TV). In addition, some product categories such as cars and travel, where there is a high level of information need, actually benefit from downloaded advertising. So perhaps PVRs won’t impact advertising as seriously as initial data and early adopter claims suggested, but will require advertisers to review media strategies and to make adverts more compelling to compensate for the challenges resulting from non-linear viewing. Using the local storage capabilities of PVRs offers the possibility of more closely targeted advertising. By using intelligence to gain a better understanding of viewer preferences, it will be possible to provide advertising that is more relevant to specific consumers, significantly increasing the probability that viewers will choose to watch them – BMW’s short celebrity-directed movies are a good example of this genre.


PVRs also allow a much greater sophistication and extent of interactive features supporting a standard advert due to the greater storage and processing capabilities of the set-top box (STB) and the removal of time constraints. Additionally, it will be possible to provide more advanced interactive advertising, potentially providing incentives to reward viewers for watching adverts. Other potential developments include storyboard adverts, which are similar to long form adverts, where hard disk storage presents the opportunity to provide alternative versions of an advert in which the viewer is able to decide how the story progresses, substantially increasing their involvement with the brand. But many agencies sound a warning about the rapid development of technology-based commercial communications. While the increasing diversification of media creates new opportunities for advertisers, there is a very real danger that consumers will become overloaded. And there are those who see the Internet very much as a tool, complementing but certainly not replacing traditional media. The Internet has not been, and will not be, as influential as TV, they say. Greater convergence between the two, with TV providing the grab, is the most likely way forward. The advertising industry tends to worry that people don’t really want ads and puts them into programmes that they think people do want, but more and more consumers are saying, “I do want information, but I want it tailored to my needs and presented at a time and in a format of my own choosing”. One good example of this combination is in the automotive market, where branding (the badge on the car) is very central to consumer loyalty, but around 80 per cent of the information gathered on a new car comes from the Internet. Still others see new technology platforms as important in achieving short-term objectives such as delivering information, but far less critical in the creation of brands, except where the brands themselves are technology based. One area of general agreement is the ability of new technologies to enable the development of personalized, targeted messages, which in turn is seen as a solution to the increasing fragmentation of audiences caused by the proliferation of media channels. But there are sharply divided views on the effectiveness of this form of commercial communications. The opposite of mass communications is not necessarily personalized communications. What is needed on the part of advertisers is recognition that regular customers are a


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special group who need to be well-targeted, not personalized to death – with all the data protection questions which that brings. But EACA believes that, because technology enables personalized consumption, people will benefit from being able to consume media according to their preferences. The 2000 E-commerce Directive allows media a responsible freedom to propose new information and entertainment services on the Internet. The directive will be due for Review by 2008. In the mean time, the global media and advertising industry have developed an updated version of the International Chamber of Commerce (ICC) Code on Advertising and Marketing which includes the use of new digital media. This SelfRegulatory Code complements the rules of the directive and provides industry with clear guidelines to provide consumers with transparent information, programmes and commercial communications. Self-Regulation and Co-Regulation are being increasingly recognized by the European Commission and the Parliament as an acceptable alternative system to detailed legislation or even as a potential tool to implement directives (in the draft Audiovisual Media Services Directive). Self-Regulatory Codes are easy and simple to adapt to changing needs. The new draft Audiovisual Media Services Directive proposed by the Commission, covers all forms of audio-visual programmes, commercial communications, sponsorship and product placement on the Internet, in addition to traditional television broadcasts. Product placement, and other forms of so-called ‘surreptitious’ advertising, will grow in importance as advertisers seek ever more innovative and creative ways of promoting their brands. This is a positive trend, in that it represents a potential source of revenue to broadcasters – revenue that should lead to an improvement in the choice and variety of programmes available to viewers. But it is also in the best interests of all parties (advertisers, broadcasters and viewers) that such advertising is completely transparent – and, thus, not ‘surreptitious’. Clearly identified product placement could also be seen as a way to reduce the burden of Government spending on national film industries and to leverage the film industry in each European country and, therefore, across Europe and reduce the imbalance between European and US film production. This applies equally to other television content production, such as series or even TV movies. Within the scope of the current review of the Television Without Frontiers Directive, EACA has proposed the introduction of a system by which advertisers using these techniques are properly identified to the viewer by inclusion in the programmes’ credits.


This principle of transparency in any commercial relationship that might exist between the programme maker, broadcaster and advertiser is an important one, as by clarifying this issue, advertisers might be encouraged to use the TV medium in a way that is both innovative to them, financially advantageous to the broadcaster and clear to the viewer. The other area where ‘recognizable separation’ is an issue is interactive advertising. Currently (as this is a comparatively new phenomenon) interactive advertising is not specifically covered in the TVWF Directive. Although EACA supports a technology neutral approach, this is an area that does need some specific comment, in that consumers are exercising a degree of choice in entering an interactive environment, which is adequately covered by the E-commerce Directive. The issue is to clearly identify the crossover point, so that consumers are aware that they are leaving the TV environment and entering a new interactive area. For the future, there is general agreement that advertising has reached a point where change is essential to progress and where the development of new technology is adding an important new dimension to the brand-building process. Frances O’Neil, Chairman of EACA’s Media Agencies Council and Managing Director, Global Solutions London, for Mediaedge:cia identifies six key trends will significantly change marketing communications over the next few years: 1. Audience fragmentation Media platforms are proliferating with more TV channels, websites and mobile channels, but there is a limited increase in available hours to consume them, so the inevitable result will be smaller audiences for each medium. As a result, brands will have more opportunities to connect with consumers but high coverage is more costly, and consumers will be exposed to, and can engage with, a much broader range of connection points – for advertising, content, & point of purchase. For advertisers, the need to understand and evaluate all connection point opportunities in a holistic way – to enable like-for-like comparison – will be paramount and brands must employ an integrated communications planning process, based on genuine consumer insights and a central theme. 2. Advertising clutter People are exposed to increasing numbers of messages, due to more commercial opportunities and more innovative uses of available inventory (e.g. sponsorships, product placements, etc.). This leads to consumers ignoring or missing messages and finding clutter annoying.


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As a result, a high proportion of advertising may have little impact on consumers, so just adding to the existing wallpaper of advertising messages will not help brands meet marketing objectives. The solution is not just creative-led, but a combination of message, brand and connection point. To be effective, every communication will need to incorporate an element of active engagement – getting people to ‘do’ something as a result 3. Digitalization The rate of growth in ownership and usage of new technologies & connectivity will increase, due to a continued rise in PC & Internet penetration in Europe as prices fall, rapid uptake of broadband, which is predicted to be in use in 66 per cent of households in Western Europe by 2011 and increasing penetration and functionality of mobile phones. As a result, consumers will be online for more hours every day. Elements of all traditional media will continue to evolve digitally – even posters; enabling more opportunities to interact with consumers. Information (news, reviews, product info, etc.) will increasingly be sourced online by both early adopters of technology and mainstream consumers. As a result, digital media strategy will be central to the planning process, but consumer insight remains the key – to understand the target segments and the role that digital media plays in their lives. 4. Interactivity/user-generated content As the Internet becoming more participatory, collaborative and interactive new social networking sites are emerging, such as Myspace, Facebook, Bebo & many others. Myspace.com is the no. 1 website in the US in share of traffic, above established portals such as MSN, Google, Yahoo and Myspace users grew from 1.2m in 2004 to 47m in 2005 – and are still growing by 1 million per week! User-generated content, created by these social networking sites, is a huge growth area in terms of time spent and is already an influential touchpoint for building brand preference. 5. Consumers in control Technology allows content to be available in a wide range of formats and devices: videoon-demand, IPTV, podcasts and PVRs are increasingly mainstream. Consumers will become their own programming head or news editor – to get the choice, convenience and relevance they want. By customizing their media consumption through blogs, chat rooms, social networks, product info/reviews, RSS or ad blockers/filters, consumers will increasingly control their media consumption.


As a result, consumers will be less tolerant of interruptive TV advertising – an approach that is gradually losing its former effectiveness. The ‘one size fits all’ model will be less effective as consumers expect to opt-in to a deeper experience as and when it suits them, so an increased understanding of how brand communications work – all the way through to point of sale – will maximize effectiveness. Interactive and experiential channels, which tap into consumers’ passion points should be pursued. 6. New business models for media owners The old model of advertiser-funded free-to-air broadcasting isn’t sustainable any longer, because profitability declines as fragmentation increases – some TV networks already get more income from consumer subscriptions than advertising. New broadcasting models work along service lines so that, according to Deloitte (television networks in the twenty-first century), “a TV network’s content provides the basis for both products and services. In a services model, the TV network delivers content-driven services for a wide range of devices, media and consumer groups.” Technology may offer greater focus, better measurement, more precise targeting. Agencies also acknowledge that it is becoming increasingly difficult to build brands slowly over a period of time and that new media lends itself very well to an explosive launch. However, advertising is always driven back to the power of creative ideas. The message for agencies is clear – technology has its role to play, but great creative ideas are what build brands, so do whatever it takes to rekindle the creative excellence which has characterized so much advertising in the last 50 years. That, above all, is what will ensure a thriving commercial communications industry in 2054.

ADVERTISING, THE AUDIO-VISUAL INDUSTRY AND EUROPEAN MEDIA GOVERNANCE Michel Grégoire

Secretary General, Association of Television and Radio Sales Houses (egta)

Citizens’ free access to a variety of television and radio channels is a fundamental component of the European audio-visual media landscape. Advertising revenues are the essential means to finance such ‘free-to-air’ broadcasters and yet the European audiovisual landscape is not flooded by advertising breaks. Regulators impose limitations on available advertising time, possible ad breaks and acceptable ad formats at EU and national level. This fact is neither questioned by, nor is it in the interest of, broadcasters, which are concerned with viewer/listener satisfaction. Furthermore, advertisers themselves are more interested in being able to use new advertising formats to further reach and interact with potential consumers. Sales houses are the bodies responsible for selling the advertising space that finances ‘freeto-air’ broadcasting – both on television and radio. This broadcasting model depends on the possibility for sales houses to collect enough advertising revenues to finance the programming policies of broadcasters. However, the future of ‘free-to-air’ broadcasting is challenged by different factors such as media and audience fragmentation, a change in advertisers’ expectations, sluggish economy growth and technological changes. These factors present challenges for sales houses to maintain adequate levels of financing. Alongside these challenges, EU regulations are increasingly impacting and reshaping ‘free-to-air’ broadcasting, and the European audio-visual media landscape as a whole. Various EU regulations directly and indirectly affect the business of sales houses, such as the “Television Without Frontiers” Directive, while wider advertising debates currently underway at European level could impact future law-making in Europe. For egta,

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the only way forward to secure the future of ‘free-to-air’ broadcasting is: first, good regulation that allows room for creativity in developing new sources of audio-visual commercial revenues; second, proportionate advertising regulations when dealing with larger health and societal concerns; and last, the recognition of and investment in industry self-regulation. The reference centre for television and radio advertising Egta is the association of television and radio sales houses, a non-profit trade association based in Brussels. The egta membership is composed of 60 television members (public service and commercial channels) and 25 radio members, who are based in 27 European countries as well as 7 non-European countries. Sales houses are responsible for raising the commercial revenue that guarantees free-to-air broadcasting by financing television and radio channels through the sale of advertising space and connected services. The objectives of egta are focused on assisting its members to maintain and increase their commercial revenue. Given that the commercial activity of a television channel or sales house has become increasingly linked to international practices and trade, an association of sales houses is necessary at international level. Egta expresses with a unique voice the interests of companies involved in selling television and radio advertising space. Along with having a clear regulatory mission which entails representing and defending the interests of egta members at international (European) level, the association also plays other roles, acting in turn as a trade union, a training centre, a documentation centre, a designer of databases, a facilitator for making contacts and an event organizer on advertising-related themes. As a result, egta has become the European reference source for information in the field of television and radio advertising over the past 30 years. Egta’s regulatory mission in Brussels has increased in importance as EU competences grow deeper and wider. This consists in anticipating and in monitoring all legislation discussed at European level that may have an impact on the business of sales houses. In doing so, egta aims to carry sales houses’ messages to decision makers when legislations are being designed and implemented so that the realities of the business are taken into consideration. Egta also works closely with other associations whose members are involved in the advertising and/or broadcasting industries including the World Federation of Advertisers, the European Association of Creative Agencies, the Association of Commercial Televisions, the European Broadcasting Union, the European Advertising Standards Alliance and others. Beyond these advocacy activities, egta assists its members both at EU and national level, by providing detailed and comprehensive answers to the regulatory concerns of member sales houses. In this way, members enjoy the support of an international association, which constantly informs them of the latest developments in European legislation all the while assisting them on their concrete business concerns.

ADVERTISING, THE AUDIO-VISUAL INDUSTRY AND EUROPEAN GOVERNANCE |

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Fast-changing advertising demands in a new audio-visual world A vibrant audio-visual sector is currently operating in Europe. In 2003, television companies in the 25 Member States of the European Union employed directly more than 196,000 people.1 These jobs are partially funded thanks to revenues deriving from commercial communications: 90 per cent of private channels’ income in Europe and 29 per cent of those of public channels come from advertising and sponsorship.2 Together, egta members represent close to 70 per cent of all TV advertising investment in Europe, collecting 22.5 billion euro (consolidated turnover) through more than 100 mainstream TV channels (in addition to a number of local and regional channels) and over 150 radio stations. Though this source of financing is crucial for free-to-air television channels it should not be taken for granted, as more and more challenges are presenting themselves in today’s fast-changing media environment. The advertising market is vulnerable and is characterized by periodic crises, perhaps worsened by underperforming European economies.3 Following the deep advertising crises of 2001 and 2002, the advertising market is again undergoing sluggish growth. Television and sales houses are among the first operators to suffer from economic downturns due to cuts in advertising budgets. Against this economic background, the European audio-visual landscape is facing huge challenges and pressures: • First, advertisers themselves are demanding from sales houses an ever better return on investments. There is a growing disaffection among advertisers with traditional forms of advertising that, they say, no longer meet their expectations. Advertisers are looking for new ways to engage target audiences and are, therefore, ready to invest in new forms of advertising rendered possible by new audio-visual commercial communication platforms. A shift away from traditional television advertising could affect the resources of broadcasters as a result. • Second, the recent advent of media diversification means more competition for traditional media – radio and television. The “pay-TV” model is growing steadily but, also, technology is throwing up new media platforms such as “mobile TV” and the possibilities provided by the Internet. The combination of personal video recorders (PVRs) and electronic programme guides (EPGs) may cause particular problems in the near future for the television advertising industry, eventually making it possible for viewers to fast-forward commercial breaks. Digitalization is introducing a broader television choice, inevitably leading to audience fragmentation. The viewer is more than ever before in control of the media it consumes, making it more challenging for advertisers to engage effectively with large audiences and therefore imposing on broadcasters to adjust their commercial offer so as to maintain sources of incomes. • Finally, the financing of the broadcasting business is becoming more expensive as the cost of producing television programmes rises alongside broadcasters’ need for new and attractive programmes. In addition, broadcasters are not necessarily in favourable

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economic positions when negotiating rights of programmes and events, sports or otherwise. Against this background of a fast-changing media environment, sales houses are charged with maintaining levels of financing for the broadcasters. The solution lies in engaging new and creative forms of advertising that are suitable to viewers, broadcasters and also attractive to the advertisers. Creativity in advertising depends greatly on sales houses and broadcasters’ abilities to develop new advertising patterns within legislation both at national and EU level. This is easier said than done, as certain EU regulations have the effect of restraining advertising creativity. The main EU regulation in the field dates back to 1989 when viewers, deprived from a large choice of channels, needed protection from over-advertising. But with all of the above-mentioned changes in the industry, the power has shifted and is now in the hands of the viewers and some rules are no longer relevant. Will regulation accompany or obstruct the media revolution? The case of the “Audiovisual Media Services” Directive The EU regulation most directly linked with the sale of advertising space on television, the core activity of sales houses, is the “Television Without Frontiers” Directive (1989). This piece of European law sets minimum rules governing all the aspects of the television business. Central to the operation of sales houses, TVWF sets advertising time limitations, outlines rules on the insertion of advertising breaks and provides legal clarity on emerging forms of advertising. As for any other EU directive, Member States have to adapt their national legislations accordingly and can and do take more restrictive measures than the European ones. Although revised in 1998, it became increasingly evident in recent years that a complete modernization was necessary to encompass new innovations in the audio-visual landscape. The European Commission began talking about a possible revision of the “Television Without Frontiers” Directive back in 2003. Certain parties within the institutions and externally felt the need for a directive that would address all audio-visual media services in a technologically neutral way and not just television. Egta welcomed the decision to revise TVWF as an opportunity to design the future European audio-visual landscape with a view to strengthening its financing. An interpretative communication from the Commission had, when published in 2004, illustrated the need and willingness on the Commission’s part to modernize the advertising rules set out in the directive. To egta, many of the rules on advertising set down by the TVWF Directive have disruptive effects on viewers. For instance, advertising breaks must be planned according to regulatory considerations rather than adapting to natural breaks in programmes. This often leads to long advertising tunnels, instead of shorter more viewer-friendly breaks. As a result, sales houses are prevented from engaging in new and creative forms of advertising. Egta thus decided to advance the agenda of advertising creativity.


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Egta has therefore been involved in each step of the revision process, participating in hearings and in meetings and contributing to the consultations on the issue. Early in 2005, the Commission convened “focus groups” comprised of experts to provide input into the future regulatory framework. Egta belonged to three of these expert groups and thus presented its members’ interests all along the consultation process. Following the publication of its proposal for an “Audiovisual Media Services” Directive (AMS) in December 2005, egta was able to support the European Commission’s proposal in many areas, comments on which can be seen below. However, further progress on advertising rules was, in egta’s view, required for the proposed directive to meet the challenges of the next decade and beyond. During the entire year of parliamentary debates, egta conveyed the message of modernized advertising rules to the MEPs who were the most involved and interested. Whereas advertising details were among the most highly contentious, egta was able to make its message heard to the extent that major improvements to the proposal were adopted by the European Parliament. At this current stage in the process, egta is in the position to support the European Commission’s proposal as amended by the European Parliament in most areas: • the technology-neutral approach meaning that similar types of services shall be treated in a similar way, regardless of their delivery platforms, while establishing two tiers of regulation for the different types of audio-visual services; • the upholding of qualitative standards on the content of advertising and the call on Member States to encourage to the development of industry codes of conducts for the advertising of HFSS food to children; • the balanced approach to insertion rules in which qualitative standards are upheld and quantitative limitations most detrimental to viewing comfort are rationalized, e.g. the deletion of the general 20-minute rule and the establishment of a 30-minute scheduled duration rule for all protected formats; • the adjustment to the “separation principle” so that new advertising formats develop in a transparent way for viewers; • the definition of product placement which distinguishes it from production props, prizes and gifts; • the legalization of product placement that would bring to an end today’s grey areas. The list of programmes remains, nevertheless, too limited & the identification requirement would ruin viewers’ enjoyment of programming. As the decision-making continues, egta will be extremely vigilant on a few major elements which ought to be part of a sensible compromise package on advertising for the upcoming inter-institutional dialogue. Softening the insertion of advertising breaks Insertion rules have many disruptive effects. First of all, they affect viewing comfort since advertising breaks are slotted according to regulatory considerations rather than

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natural breaks in programmes. In addition, they directly limit broadcaster’s returns on investments and they lock advertising in unattractive formats and long-cluttered tunnels. Egta, however, understands the political motivation to maintain some rules and regrets that there is no majority for lifting restrictions on TV films and single spots. In this context, egta welcomes the Parliament’s vote for a 30-minute scheduled duration rule applying to all protected formats and calls on the Commission and the Council to back this amendment. If such measure is more restrictive than today’s “Television Without Frontiers” Directive for news and children’s programmes, it provides improvements for other protected formats, by bringing the rule into coherence with TV programming realities of 30-minute time slots. Securing the development of new forms of advertising The development of new forms of advertising is sometimes hindered by rigid implementations of the separation principle in some Member States. The Commission itself acknowledged this problem and tried to address it in recital 40 of its proposal. Now that viewers have become more mature about media and that there are more technological means to guarantee the highest level of transparency for viewers, egta believes that this principle should be reviewed not to obstruct the development of new forms of advertising. For this reason, egta strongly supports the adjustment voted by the European Parliament to article 10 paragraph 1. Fine-tuning regulatory conditions for product placement Clearly recognizing that product placement can take place in TV programmes is a move welcome by egta but putting in place a workable framework will require some finetuning. For instance, the definition of product placement should only cover placement made in return for payment or similar consideration. Additionally, a clarification that prizes, merchandising products and production props are not subject to most stringent rules on product placement is essential and can be achieved either via an exclusion from the definition (Parliament’s option) or via a mention in the relevant article. According to egta, the set of rules applicable to product placement also needs redrafting. A “ban in principle” should be complemented by an explicit derogation to secure the legality of product placement. Complementarily, egta believes that light entertainment programmes should be added to the positive list of programmes as there is no valid reason for discriminating against these types of programmes. At last the one-size-fits-all every 20-minute identification rule would not only disrupt viewing comfort but would also run counterproductive to its objective by affecting the integrity of programmes and putting undue prominence on placed products. Taking full benefits of self-regulation’s added-value – recital 25 & article 3 As actors of advertising self-regulation in Europe, sales houses welcome the recognition of its added-value and the encouragement of these mechanisms and of industry codes of conduct. On the complex multi-factorial issue of the rise of obesity, self-regulation can play its part in making sure that advertising for HFSS food become even more


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responsible. Egta supports the Parliament’s approach which will provide the appropriate framework for self-regulation to deliver its full benefits. In a decision-making process that can last up to three years, the European Parliament has just completed its first reading of the proposal while the Council of Ministers should announce a common position in late spring. Advertising has been one of the most contentious issues in both institutions. Egta remains very cautious for the next steps of the decision-making process as uncertainties remain on some of the crucial advertising provisions discussed above. Has advertising become the alpha and omega of any policy action? Beyond the TV advertising rules set out in the TVWF, the business of television and radio advertising sales houses is impacted by other EU regulations. This is not surprising as advertising is central to the single market helping citizens make informed decisions on the vast array of products and services available to them across the European market. Regulations exist that enforce bans or restrictions on the advertising of certain types of products: advertising for alcoholic beverages; information to patients on prescriptiononly medicines; advertising of tobacco products. European sales houses take such rules very seriously. Advertising of alcoholic beverages The advertising of alcoholic beverages in Europe has been regulated for the last fifteen years by the TVWF Directive. In addition, the advertising industry themselves impose self-regulatory qualitative standards, which eliminate inappropriate advertising, and they regularly initiate a range of socially responsible messages preventing any abuse of alcohol. Recently, an EU Strategy on reducing alcohol related harm in Europe was presented, which foresees the setting up of an Alcohol and Health Forum by June 2007 and envisages “a code of commercial communication implemented at national and EU level.” Though the Commission announced that it will not introduce further European legislation on the alcohol industry, the impetus seems to be towards further regulation with this strategy.4 Egta is thus vigilant that additional restrictions are not introduced whereas there is little evidence that these have an impact on levels of consumption. Advertising for medicinal products The advertisement of prescription medicines is prohibited while advertising “Over the Counter” medicines (OTC) is legal but must comply with a set of very specific criteria set down by EU directive relating to “medicinal products for human use”. As regards prescription-only medicines, egta understands the motivation for maintaining a prohibition on advertising. However, whereas patients are more and more eager to be informed about available treatments and to become actors of their own health, egta believes that new technology could help address this will and that branded information to patients could be discussed. Television and radio sales houses are keen on contributing to this debate with practical examples of possibilities offered by new technologies and

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on developing a specific European code of conduct relating to on-screen information on medicines. Despite the fact that these regulations on product-specific advertising are already in force at EU level, egta is concerned that there is current drive among European legislators toward further regulation in this area. It is, however, important to place advertising within the appropriate context and not make it the scapegoat of more complex problems. Egta is vigilant that disproportionate restrictions that would have considerable implications for the TV or radio advertising business as a whole are avoided. As well as the existing regulations governing advertising discussed thus far, debates on advertising qualitative standards are commonplace. Decision makers often perceive advertising as a way to address specific issues: the current debate on obesity, for instance, throws attention on the way certain food products are advertised. As an alternative to excessive and often ill-adapted regulation, egta promotes constructive and pragmatic approaches based on advertising self-regulation and the enforcement of reviewed codes of conduct. After all, advertising is highly beneficial to our modern societies as long as it is legal, decent, honest and truthful. As a member of the European Advertising Standards Alliance (EASA), egta actively supports advertising self-regulation in all European circles, such as in the framework of the Advertising Roundtable organized by the European Commission. Advertising for food products In the context of the EU-wide rise in obesity levels, attention has been thrown on the advertisement of certain foods. Sales houses take their role in ensuring that unhealthy lifestyles are not encouraged in commercial communications very seriously, believing both in responsible advertising and in the added value of self-regulation as a means of delivering a high level of consumer protection. Egta is a member of the EU platform for actions on Diet, Physical Activity and Health which was set up as a response to the growing public health concerns about the rising prevalence of obesity across Europe, notably among children. Egta is currently implementing commitments centred on the facilitation of media marketing campaigns aiming at promoting healthy lifestyles. Egta closely follows developments of ongoing EU initiatives such as the EU Green Paper on nutrition and physical activity, on which it took part in a public consultation, and the “Nutrition and Health Claims” Regulation adopted recently. Advertising and children Sales houses understand that adequate protection for consumers and minors is essential. However, the issue of the protection of children often leads to very emotional debates that start out with legitimate intentions, but often result in impractical and disproportionate measures being placed on television advertising. Two recent studies ordered by the European Commission conclude that the current regulatory framework already offers a high level of legislative protection within EU Member States, which is complemented by an extensive use of self-regulation.5 Furthermore, revenues gained from advertising


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around children programmes are generally reinvested in children’s programmes according to a study conducted by egta.6 The positive role of self-regulation and the responsible attitude of sales houses must be highlighted and recognized. Egta member sales houses already apply more stringent standards than required to advertising around children’s programmes as reflected in the common set of rules applied by all egta member sales houses. Lastly, egta participates in the Responsible Advertising to Children Programme (RAC Programme), which seeks to promote responsible behaviour in regard to advertising and marketing practices aimed at children and supports the development of media literacy programmes, such as “MediaSmart”. Egta follows all debates relevant to the advertising industry vigilantly so that they do not lead to the implementation of unnecessary bans and over-regulation. This entails following the shaping of EU Regulations, ranging from the TVWF Directive and product-specific advertising rules to wider debates that may impact the advertising industry, such as regulations relating to the proper functioning of the single market. It is evident that the future of ‘free-to-air’ broadcasting is facing challenges, be it economic or technological, and egta member sales houses are under pressure to maintain the levels of financing required for the operation of the TV and radio channels for which they work. Evidence of increasing legislative pressure on advertising can be seen when examining the revision of the TVWF Directive and the wider debates that affect advertising regulation. Egta understands the political reasoning behind enforcing advertising rules for audio-visual media services in general or for certain products. With this in mind, egta advocates good regulation instead of over-regulation that allows a greater flexibility for the financing of audio-visual content. Instead of making advertising a scapegoat to societal problems, egta promotes self-regulation as a way to address regulators’ concerns about qualitative standards in advertising. Egta will continue to anticipate and monitor EU-level debates so that citizens can continue accessing ‘freeto-air’ broadcasting across Europe in the years to come. Notes 1. European Audiovisual Observatory – Yearbook online services – August 2005. 2. The situation for public channels is more complex with advertising and sponsorship representing nearly no income for certain broadcasters, e.g. the BBC, and up to 87 per cent of revenues for RTVE (Spain) in 2002. Sources: European Audiovisual Observatory. 3. 2001 and 2002 were marked by a deep advertising crisis. In 2002, private broadcasters net revenues fell by 4.6 per cent as compared to 2001. Net revenues of public broadcasters fell by 2.7 per cent that same year. Extensive data available: European Audiovisual Observatory – Yearbook 2004, volume 1. 4. The EU Strategy on alcohol-related harm can be found on the European Commission (http:// ec.europa.eu/health/ph_determinants/life_style/alcohol/documents/alcohol_com_625_en.pdf) along with press release (http://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/ 1455&format=HTML&aged=0&language=EN&guiLanguage=en).

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5. A Study on the impact of television advertising and teleshopping on minors (March 2001) and a comparative study on the impact of control measures on the televisual advertising markets (July 2005) can be found on European Commission website. http://ec.europa.eu/comm/ avpolicy/info_centre/library/studies/index_en.htm. 6. A study conducted by egta revealed that 94 per cent of net revenues coming from advertising around children’s programmes are reinvested in the acquisition of children’s programmes and that 66.5 per cent of these revenues are reinvested in content produced within the European Union (http://www.egta.com).

JOURNALISM & SCRIPTWRITING

EUROPEAN JOURNALISTS PRESS CASE FOR MEDIA RIGHTS FOR ALL Aidan White

General Secretary, European Federation of Journalists

Introduction From its Brussels base the European Federation of Journalists (EFJ), which represents some 260,000 journalists in more than 30 countries, is well placed to see the European Union at work; at its front door is the Commission, at the side is the Council building, and the European Parliament is in its backyard. However, proximity and presence does not make the heart grow fonder. The European project and its well-orchestrated political vision of a finely tuned commitment to social, democratic and cultural values does not ring true for many journalists’ organizations within the European Union or in the wider Europe beyond. Journalists’ leaders increasingly feel frustrated by the European Union’s failure to deliver policies and actions that will enhance and deliver effectively on its declared commitment to pluralism, public service values and decent work in media. For almost twenty years the EFJ, which is a regional section of the International Federation of Journalists, has been campaigning for social and professional rights of journalists working in all sectors of mass media. It is recognized by the European Union, the Council of Europe and the European Trade Union Confederation as the representative voice of journalists in Europe.


EFJ work is focused on social and professional conditions of journalists. It is no easy task in an age when the media market is being buffeted by heavy turbulence. Enormous changes in the industry, driven my technological change and market restructuring, are putting new pressures on quality, pluralism and standards across European media. Journalists’ groups work to foster strong and independent trade unions, arguing that this collective voice is essential to create environments in which quality and journalistic independence can be maintained. In a number of key areas of policy, the European Union can play a significant role in defining rules that contribute to building a culture of press freedom. These include employment and working conditions, particularly affecting freelance and casual labour; authors’ rights; regulation of traditional media markets, including public broadcasting; protection of pluralism, media ownership and the threat posed by media concentration; and the establishment of social dialogue through European Works Councils. However, the EU scope for action is limited with most responsibility for cultural issues, and regulation of media largely remaining at national level. Journalists have lamented the failure of the European Union to act to limit the growth of monopolies in the face of ever-increasing media concentration. In some states single companies owning large chunks of the national media market raise fears about pluralism in media and undue political influence. In Italy, for instance, at the height of the Silvio Berlusconi era, when his ownership of the country’s leading private broadcaster, plus holdings in advertising and the press, meant his company dominated more than 50 per cent of the national media market the European Commission remained silent. When, as prime minister, his influence over the public broadcaster Rai meant his stranglehold over the country’s media was almost complete, it still remained silent. Meanwhile, the problem of concentration intensified as new and powerful media players have moved into the new markets in the enlargement countries. Journalists have seen a lack of conviction on the part of the Commission on this question and despite the occasional voice of concern raised within the European Parliament; they are not all convinced about European Union attachment to the values of media pluralism. At the same time, globalization with its shareholder-driven imperatives and flexible labour markets has proved a challenge to the workforce in journalism. Media staffs are under pressure as their companies, increasingly working across national borders, adopt harsh cost-cutting measures to meet stringent financial objectives and fierce competitive pressures. They have imposed heavy cuts in editorial budgets, reduced the number of full-time jobs and created a vast pool of unprotected freelance labour. The result has created weakness, both in newsroom performance and in trade union organization.

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In the post-war era Europe embraced a set of market values that defined a particular model of democracy, based upon social and cultural imperatives. These were designed to minimize social conflict, to strengthen public engagement in democratic institutions, to set minimum standards of welfare, and to provide the public with guaranteed and universal access to essential services covering utilities, health, education and information. In media, too, these values found a place in the emergence of public broadcasting systems that are unequalled anywhere else in the world. This European social model was at the heart of the European project during its formative years, but in recent times it has come under sustained pressure. To counter these developments the EFJ seeks to preserve trade union rights, promotes cross-border solidarity and encourages industrial relations at European level. But preservation of the European social model has grown more difficult with enlargements of the European Union, bringing in twelve new members, mostly from central and eastern Europe, with no tradition of genuine social dialogue. Even if there were such a tradition it would not be easy. Although the EFJ is promoting European Works Councils in the media sector, there is little enthusiasm from media employers – although there are dozens of potentially viable works councils that could be created under the European Union Directive, only a handful exists in media and even within these there is concern about the level of participation of colleagues working for subsidiaries of media companies in newly admitted members states. The European Union sees the importance of the media sector – it is a key element in the rapidly expanding information economy, driven by changing technologies and the Internet – but there is not enough effort from union institutions to promote social dialogue within media, say unions. Without it, they say, there is little hope of developing a convincing European media strategy for the future. Freelances and the changing media labour force A new strategy is certainly needed given the dramatic changes in the way that journalists work and the way they are employed. Freelance journalism is no longer an “atypical” form of work. In many countries the majority of journalists are freelances. Many of them would prefer traditional employment but they have been forced into what the EFJ calls “fake freelance” positions by employers who break local rules on employment by using freelances to fill full-time posts in order to avoid state welfare and social charges. Many journalists, though, appreciate the freedom, variety and flexibility of independent employment and feel it is increasingly the natural mode of work for journalists. The challenge of a freelance future is a test for journalists’ unions in Europe.


The way they work is changing too. Journalists are expected to be multi-skilled and able to work in a number of different environments simultaneously. They can expect to change jobs often before they are able to specialize. And they are expected to join this process sometimes at minimal rates of pay and, in and increasing number of cases, without any formal contract at all. Although the schools of journalism are bulging and there is an abundance of opportunity, the consequences of developing a media landscape with an untrained, poorly resourced labour force will be felt in the quality of media products, and that has become a major concern for all journalists’ groups at national and European level. Major campaigns to highlight the need for quality media have been launched in Germany, the United Kingdom and in Italy. Questions of employment contracts and service agreements, training, authors’ rights and professional standards are all key issues for journalists. The EFJ, striving to defend and promote freelance rights, has developed a charter of freelance rights and is demanding that, as a minimum standard, the rights of atypical workers should figure in all collective agreements. This is not made easier when the European Union agenda puts an emphasis on a “flexible” workforce, and at national level governments are reluctant to enforce regulations that provide some minimal protection for media workers and journalists. This means media employers do not feel under any pressure to change their ways. European Union indifference to the increasingly unequal relationship between media staff and their employers is regarded by some as encouragement to the continuation of abusive employment polices that are emerging across the industry. This view was reinforced in the autumn of 2006 with the release of a European Commission Green Paper on labour law, a document that embraces the “flexible labour” philosophy in full and reveals how the European Union has become detached from its original attachment to decent work based upon sound and secure employment rights. Now there is apparent acceptance of fragmentation of the labour force, of shifting responsibility for social and welfare provision from the employer to the employee, and encouragement for the emergence of an outsourced jobs market whereby, even in traditional media, certain well-established editorial activities, such as photography, finance reporting and other regular features of news and current affairs reporting, are to be contracted out of the newsroom to people not working for specific titles but for employment agencies. The Green Paper, which reveals how power in the workplace is now heavily tilted in favour of employers, reads like a funeral oration for the European social model, but it does open the door to a public debate about employment policy. This lack of debate as labour standards have been steadily whittled away in recent years has suited owners. It may also explain why European employer groups resisted the release of the document, even though it appears to suit their interests.


Authors’ rights: An area of confrontation There is no policy area where this sense of inequality is felt stronger than that covering author’s rights – the rights of journalists to ownership of what they write, design, film and otherwise create for public consumption through an ever-expanding set of media platforms. In Europe there are two competing systems of authors’ rights protection. The European tradition ensures that journalists are properly recognized as authors of the work they create, they have control on further use of their work and they are entitled to receive an equitable remuneration for it. On the other hand some countries – Ireland, the UK and the Netherlands apply an Anglo-American copyright system, which denies these rights to fully employed staff and does not adequately ensure that these rights, most of which are covered by international law, are made available to freelances. The EFJ authors’ rights activities aims to strengthen the rights of authors and raise awareness worldwide amongst journalists, photographers and media professionals on the necessity to protect their authors’ rights. They argue that journalists, photographers and media professionals need strong legal protection of their moral rights (the right to be named the author, and the right to protect their journalistic material from being used in a detrimental way or context). The rights of individuals to exercise control over their work is the benchmark for maintaining ethical standards which define and guarantee quality journalism. It is difficult to live up to these standards without rights. This is one more reason to oppose the Anglo-American copyright system, through which authors can be, and are, coerced into signing away their moral rights. This is one area where the European Union legal departments have been busy over the years. No less than seven European Union directives on various aspects of changing law to cover copyright and related rights issues have been handed down in recent years, the most important of which to journalists has been the Copyright and Neighbouring Rights in the Information Society Directive (1996) which set out the obligations of Member States to change national laws to accommodate new media including online services in their copyright laws. However, the hostility of European publishers and media organizations to continued rights holding by journalists – particularly in an age when they can massively increase their income by free re-use and distribution through new media opportunities – means that the traditional authors’ rights system is still under siege. In the heartland of the area where these rights are well protected – the Nordic countries, France and Germany – journalists’ unions are preparing for national battles over future ownership of rights. The European Union says that it believes the future of the quality media market depends upon high levels of rights protection. Journalists couldn’t agree


more, but the signs are that it’s not the view of major players in the industry whose bottom lines take precedence over such high-minded notions. Public services values in broadcasting When it comes to words, not actions, few areas of media activity suffer more than the public broadcasting sector, which for ten years has been under fire from private broadcasters and new media operators all looking to rewrite the long-established principle of publicly funded broadcasting in the public interest. In 2001 the International Federation of Journalists launched a worldwide campaign to defend public broadcasting, which aims to promote public service values, editorial independence, quality programmes and democratic and accountable systems of administration. The defenders of public broadcasting argue strongly that without public support minority programming and quality in depth will be lost. The world will become overwhelmed by cheaply produced programming, feeding sensation and tasteless trivia to an increasingly disinterested audience. As in the print sector, journalists’ unions have witnessed how in developed countries lowcost, low-quality programming, cuts in editorial budgets and a reduction in employment rights have taken their toll. Journalists working with new digital technologies are expected to film and edit as well as carrying out their journalistic role. There is less quality and less time to investigate and assess information. In transitions countries, international financial institutions or local governments seek to privatize former state broadcasters. The IFJ/EFJ supported journalists’ organizations and civil society in the transformation of state broadcasters in central and eastern Europe into genuinely public service institutions, not state-run or government-controlled, but professional, impartial and high-quality networks that serve the public, not private, interest. The European Federation of Journalists severely criticized one aspect of the enlargement process in 2005, noting that although the European Union had enforced rigorous changes in the social, economic and political structure of former communist countries, virtually nothing had been done to confront the political tradition of control of state media which continued into the new era. As a result, the general European Union – wide commitment to public broadcasting was weakened and severe problems for public broadcasting emerged in many of the new Member States. The EFJ with other media groups in 2006 was lobbied strongly for revision of the “Television Without Frontiers” Audiovisual Media Services Directive, concerning the regulation or administrative action in Member States which has provided some minimum levels of protection for European programming and production in the face


of the overwhelming competition from the United States. This directive sets out a new European framework for a series of aspects concerning broadcasting, both analogical and digital audio-visual services. The EFJ believes that in the current context of transition to digital broadcasting and with the development of non-linear media, it is essential to safeguard the European dual system of public and private broadcasting and to defend pluralism and public service values in the European broadcasting sector. It warns of the threat posed by relaxing rules of product placement, which can lead to a form of censorship by commerce in favour of contemporary rather than historical themes for programming, and for populist programmes rather than for specialized themes which appeal to minority opinion. As the directive was meandering to its conclusion, through a parliamentary process involving more than 1,000 amendments, it was clear that pluralism was not one of the objectives that would find itself in the finished document. A rearguard action in defence of European programming and standards was being fought as this book went to press. Media ethics and culture dialogue It is in the area of media content where most difficulties between journalists and politicians arise. Journalists groups like the European Federation of Journalists have always been quick to remind political institutions of the limits of their interests in this tricky area. In February 2006, when the media, politicians and the public were debating the “Cartoon crisis” following the publication of pictures of the prophet Mohammed in several newspapers, the EFJ organized a meeting of leaders of journalists, editors, publishers and broadcasters and other media experts from Europe. They committed themselves to work with colleagues from Arab and Muslim communities to defuse the crisis over controversial cartoons, which have caused outrage in many parts of the world. Importantly, that meeting reiterated a strong position from the European Federation of Journalists that codes of conduct or other regulation of content – something which had crept into the language and discourse of European Union officials as the controversy raged – was something for media professionals alone. This is a position endorsed by Commission officials. But the incident served as a warning that vigilance is always needed to discourage the political impulse to control or to interfere in media content. Nevertheless, the work of the European Union in this area can be substantial and useful, not least in promoting good practice and information sharing between media. A number of projects – the MEDA work linking North African and Middle Eastern media with European Union media is one example and the work of the European Union Monitoring


Centre Against Racism in Vienna has done much to highlight the role that good, ethical journalism can play in strengthening quality of media work in this difficult area. European lobbying: Transparency and protection of sources Over the years the EFJ has also encouraged the European Union to open its doors to public scrutiny. The campaign for greater access to EU documents begun in the early 1990s led to the milestone EC Regulation of 30 May 2001 on access to documents in the three central EU institutions and the current “European Transparency Initiative” of the European Commission. The EFJ has supported freedom of information campaigns at national level. It does so knowing how journalism has benefited greatly from moves towards freedom of information within Member States. But in the age of security and terror there have been setbacks. In recent years many journalists have had their phones illegally tapped, or their contacts and material seized by the police. In addition, a whole raft of new legislation is being enacted throughout the Continent in response to the “War against Terrorism” that directly undermines the rights of journalists. This increasing pressure threatens a fundamental shift in the traditional rights of journalists’ vis à vis the authorities and their ability to perform their ‘watchdog role’. All of these cases undermine the Council of Europe Recommendations on the right of Journalists to protect their Sources, viewed as a ‘cornerstone of press freedom’ by the ECHR in several Court cases. During 2006 the European Federation of Journalists complained to the European Commission and Parliament about a number of instances of illegal tapping of journalists’ phones in the Netherlands and elsewhere, about the placing of spies in the newsrooms of German media and about the prosecution of journalists in Denmark because they wrote stories that were in the public interest, but that embarrassed the government (in fact, they were acquitted at trial). The EFJ said that the European Union call for “balancing of rights” in the security debate was not being taken seriously at national level. The Commission may have agreed, but they preferred not to say. They replied that these matters were dealt with by national governments and they had no jurisdiction. Looking to the future: An agenda for action In its efforts to create a European-wide approach to media policy that will work, the EFJ has said that to genuinely reinforce the values of European democracy, to meet the aspirations of the public and to confront a widespread crisis of confidence, which has led to a resurgence of intolerance and political extremism, it is urgently necessary to


promote professional solidarity and to adopt practical confidence-building measures that will improve the flow of quality information between and within communities. This implies action at a European level to: • Strengthen public service values in the media by adopting policies and actions that will reverse the reduction of public service content in European media and will expand the public information space across all media sectors; and to ensure free access to public service content for all on all technical platforms; • Reinforce inter-cultural dialogue and challenge increasing cultural division through new initiatives to raise awareness of minority concerns and cultural identity among media professionals and to promote open discussion between media and representatives of different communities; • Promote media pluralism by combating media concentration and by supporting more and diverse media voices; • Provide appropriate frameworks for other media, in particular non-commercial media, capable of contributing to pluralism and diversity and providing a space for dialogue. These media could, for example, take the form of associative, community, local, minority or social media. • Stimulate public engagement with media and policy-makers in order to develop a more balanced, accessible and democratic media system including consultation with the public by regulators and public service media organizations, which may involve the creation of advisory structures, reflecting the diverse nature of the public. • Encourage editorial independence in media by actively supporting the efforts of journalists and media professionals to work freely and to resist all forms of internal and external pressure that undermine the quality and ethical standing of media; • Renew efforts to end all forms of discrimination and make equality between women and men a living reality in the life of European media; • Adopt a comprehensive strategy for diversity to help media meet the challenge of improving levels of diversity both in content and within media institutions and among broadcasters in particular; • Act to combat the digital divide that exists in many European communities and improve access to new digital technologies across all communities; • Recognize the need for media literacy and develop programmes that will increase the understanding of people, as citizens and consumers, of how media content and information especially, no matter how it is disseminated and received, can shape and influence the world in which we live; • Support research, monitoring and advocacy about media concentration and pluralism and promote public debate on these matters. Particular attention could be paid to the effect of media concentration on diversity of media content, on the balance between entertainment programmes on the one hand and information and programmes fostering public debate on the other hand, and on the contribution of the media to intercultural dialogue.


All of these points currently figure on the European media policy agenda, but as yet they have to achieve the status of priority that can make a difference to the current confused and uncertain state of media across the Continent. It will take political will for these issues to be addressed in a coherent and integrated programme of action. Not surprisingly, although many journalists and unions look to Brussels with hope and anticipation, their feet are firmly on the ground at home where they know the battles have yet to be won.

SCREENWRITERS AND EUROPEAN MEDIA GOVERNANCE Christina Kallas

President, Federation of Screenwriters in Europe

Introduction Writers are not well treated. For the good of the European film and television industries, it is essential to change this. At the moment the European film and television industries are structured in a way that minimizes and marginalizes the role of writers. Contracts between writers and those who want access to their work, regardless of the legal system of the country involved, routinely seek to remove or limit writers’ creative, economic and moral rights in their work. Funding agencies prioritize producers, convinced, sometimes even despite evidence to the contrary, that they will reconnect to audiences in pursuit of profit. Critics emphasize the role of directors, according them the status of the sole creators of the audio-visual work. A career as a professional writer for the screen in Europe is consequently extremely difficult and sometimes even impossible. The present system thus diminishes the quality of films and television programmes reducing their capacity to attract audiences and succeed commercially and culturally. European film-making ends up focused on film financing rather than on making relevant stories for audiences. In order to change this it is important that European writing talent should be trusted, encouraged and supported. The European film industries need to find ways to attract and keep its screenwriters in the cinema and in their craft.


There are three main areas of concern: the way films and television programmes are developed, produced and distributed, the rights situation and the financial situation. As independent contractors screenwriters are in a weak position in negotiating contracts with producers who often do not have sufficient funds available to pay for the early stages of development of feature films in particular but also of television programmes. Thus, state aid plays an important role. Another important source of income and, consequently, of creative freedom is residual payments coming from levies paid for private copying – a concept which came under direct assault recently. The function of the FSE is to help to create a sense of community among Europe’s modern storytellers, the screenwriters and to represent their collective interests internationally. This, of course, is particularly important at European Union level. Europe’s role in determining the legal framework governing the audio-visual sector and in making policies relating to culture in general was, of course, radically strengthened by the adoption of the Treaty establishing the Union in 1992, which is commonly known as the Maastricht Treaty and which included Article 128 on Culture. This Article, which is so important for all creators, was retained in the Amsterdam Treaty as Article 151. But Maastricht was the seminal point for Europe’s screenwriters also in other ways. One critical factor was the decision of the Union to establish a single internal market. The internal market has encouraged the ushering in of a whole series of new European directives. Especially critical for the screenwriters and all the other creators is the Copyright Directive of 2001. These two European policy areas – culture and copyright – were the key reasons why screenwriters established a Europe-wide federation. The Federation of Screenwriters in Europe (FSE) was formed in Athens in 2001. It now comprises twenty-two guilds in seventeen countries: two guilds from Belgium (the francophone- and Flemish-speaking guilds), guilds from Denmark, Germany, Norway, Iceland, Ireland, Netherlands, Britain, Italy, Portugal, Greece, France, Sweden, Finland, Serbia and Bulgaria and five guilds from Spain (comprising writers working in different languages) which between them represent just under nine thousand writers for the screen. The role of the FSE in Brussels Writers can achieve individual creative success giving them a high profile, but in general even the writers who do achieve that profile have to fight for their rights and credits and the acknowledgment of their creative input. What the FSE is called to do (at European level and working as closely as possible with other organizations outside Europe too) is to point out this situation and its consequences for the European film and television industries and endeavour nothing less than a change of perception that will eventually lead to a change of environment for the writers.

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As a first step the FSE aims to enhance the status of screenwriters and their craft at European level by lobbying the European institutions to develop a legal and financial environment that facilitates new artistic audio-visual creation and ensures proper and fair remuneration of screenwriters for the use of their work. To carry out this aim, FSE has developed alliances with other cultural organizations, trade unions and collecting societies. To a lesser extent the FSE has cultivated links with independent film and TV programme producers, broadcasters and consumer organizations. Although screenwriters typically work alone (and usually as independent contractors), they work in a business that is by its nature collaborative. They are contracted by independent producers or broadcasters. They are sometimes (particularly in the feature film area) also the directors of the films they write. Key decision makers may be the commissioners of television product or the development executives or chief executives of public funding institutions such as film boards, institutes or film centres. FSE has a great deal of common ground with other creators’ organizations and artists organizations. The main organizations that FSE co-operates with are the Directors’ Federation (Fédération européenne des réalisateurs audiovisuels – FERA), the International Federation of Actors (FIA) and the European Writers Congress (EWC) and to a lesser extent the International Federation of Musicians (FIM). With these organizations FSE has a common front to uphold and promote European civil law on the rights of authors and artists and to ensure that European law on audio-visual media services remains up-to-date and meaningful. FSE also works very closely with trade unions, particularly UNI-MEI (Union Network International for Media and Entertainments Industries). UNI-MEI represents technicians’ unions throughout the world and some of these unions include film and television writers and directors. Without the material support of UNI-MEI, FSE would have found it very difficult to operate, especially in its early years. Along with UNI-MEI, FSE has also worked in co-operation with the European Journalists Union (EFJ) in promoting the rights of authors. Very important is the close relationship FSE is developing with the collecting societies. FSE and collecting societies have shared interests on copyright issues. Co-operation with consumer organizations (BEUC), independent producers (European Independent Producers Club - CEPI) and state broadcasters (European Broadcasting FSE co-operates with: Union) are also important. Film directors organization – FERA Trade Unions – UNI-MEI and EFJ Most importantly the FSE is also Collecting Societies keen to have good contacts with the Artists organizations (FIA and FIM) European institutions, in particular the Broadcasters (EBU) European Commission and the European Independent producers (CEPI) Parliament. Consumers organizations (BEUC)


In the Commission the key General Directorates of importance are: • Directorate General for the Information Society and Media, which is responsible for audio-visual media services, content online and digital libraries and the Media Programme. • Directorate General for Internal Market and Services, which is responsible for all matters relating to intellectual property rights. These two directorates are responsible for regulating and determining policies that affect the lives of screenwriters. FSE has been communicating with these two directorates and trying to influence and to shape policy. The FSE had been engaging with the Directorate General for Culture and Education (DG EAC), however, since the audio-visual services of this directorate moved to DG INFOS, engagement with DG EAC has been much less. This could change, especially with developments at international level with the adoption of the UNESCO Convention of cultural diversity. The European Parliament is also of great importance, especially the Committee for Culture and Education (CULT) and the Committee for Internal Market and Consumer Affairs (IMCO). The Committee for Culture and Education is responsible for examining the audio-visual policy and in that context leading the Parliament in the revision and re-drafting of the Audiovisual Media Services Directive. It also deals with content online, digital libraries and with culture policy in general. Thanks to its very good relations with DG INFOS, it seems to be a very well-informed committee that from our perspective seems to work well with the Commission and is interested in safeguarding and embracing the interests and needs of all stakeholders, including creators like screenwriters. The Committee for Internal Market and Consumer Affairs (IMCO) deals with intellectual property rights and that includes the rights of authors. The importance of this committee will increase in 2007 with the debates on the review of the Copyright Directive 2001. Last, but not least, the most important goal of the FSE in Brussels is that European law should explicitly acknowledge that the writer is an author of the film, something which may seem self-evident, but which has not yet happened. The EU regulations which are relevant to screenwriters There are several European laws that are relevant to screenwriters and to the audiovisual media industry. These are the European directives governing audio-visual media services and other issues such as copyright, electronic commerce and culture. Other laws of enormous complexity are those relating to labour law such as the Postal Workers Directive which are also important but for the moment demand less attention, though


this may change with the publication of the recent European Commission Green Paper on labour law.1 • EU regulations relating to Audiovisual Media Services: The main EU regulation currently in place is the Television Without Frontiers Directive2 (TVWF) to be replaced by the Audiovisual Media Services Directive (AMS Directive).

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EU regulations: • Television Without Frontiers Directive, i.e. Audiovisual Media Services Directive • E-commerce Directive • Copyright Directive 2001 • Recommendations on the collective management of music rights and on private copying. • The TEU, in particular Article 151.

The AMS Directive will become the main regulatory tool for audio-visual content and will therefore have priority over the E-commerce Directive. It will follow on from the TVWF Directive by ensuring that obligation on linear services to devote more than 50 per cent of viewing time to European audio-visual works will at least continue. At the time of writing it seems that the AMS Directive will strongly infer that Member States ensure that a minimum amount of European audio-visual works are made available also on non-linear services that target European audiences. Regulations on advertising (including product placement) will be included as well as previous provisions that were in the TVWF Directive relating to the protection of minors, human rights and dignity and for the first time the mention of the need to ensure media pluralism. At this stage it is still debatable what shape the AMS Directive will finally take. It seems that the European Parliament and the European Commission are more or less agreed to the content of the AMS, but much of the fine detail remains to be clarified. In the FSE we are strongly of the view that the AMS Directive’s quotas for European works can and should be extended to non-linear audio-visual services. Given the rapid and far-reaching developments in digital media services it is probable that within a relatively short period most consumption of audio-visual material will be outside the traditional methods of television broadcasting, so if such an extension of obligations were not included then the meaning and effectiveness of the AMS Directive as the continuation of the TVWF Directive would be fatally undermined. We are also of the view that the quotas, which have successfully existed for fifteen years, can have some of their more cautious aspects tightened and improved. There is no reason any more, for example, to allow an escape from the quotas by saying that they only apply ‘where practicable and by appropriate means’. Another important issue for screenwriters is the introduction of specific quotas for drama.


For more information regarding our position in relation to the critical issue of product placement and integration, please see the attached intervention which I addressed to the European Parliament in the Public Hearing on the AMS Directive. • The E-commerce Directive3 This directive does not regulate content. That is done by TWF/AMS. But until the AMS Directive is adopted and extended to non-linear services, the only other EU regulation that online on-demand services need to adhere to is the E-commerce Directive. This directive tries to set out a level playing field for all electronic commerce service providers and to allow new players to enter the market. An important issue for screenwriters and other rights holders is that of piracy and illegal downloads, where the E-commerce Directive is less effective than, in our view, it could be. • Copyright Directive 20014 This directive is a partial harmonization of copyright law across Europe. The directive does recognize the importance of levies on private copying. Indeed Article 5, 2B of the 2001 Copyright Directive states: “…in respect of reproductions on any medium made by a natural person for private use and for ends that are neither directly nor indirectly commercial, on condition that the right holders receive fair compensation which takes account of the application or non-application of technological measures referred to in Article 6 to the work or subject-matter concerned…” Because of the unreliability of DRM, screenwriters and other rights holders are deeply concerned by the suggestion that levies that facilitate private copy be abolished (see below). The loss of the levies would have a dramatic negative impact to authors’ incomes and, therefore, also to their creative freedom. Consequently, we see the directive as a vital legal instrument in safeguarding authors’ rights to be compensated for the unlicensed copying of their work. Recommendation on the collective management of music rights and on future recommendation on private copying.5 As a follow-up to its Recommendation on the collective management of music rights (October 2005), the European Commission Directorate General for the Internal Market published on 19 May 2006 a staff working paper on “Copyright Levies in a converging world”. The staff working paper argues that levies are an obstacle to the digital economy; they should be abolished and replaced by Digital Rights Management systems (DRMs). The FSE has campaigned against this staff working paper which DG Market aspired to turn into a Recommendation similar to that issued in October 2005.


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It should be noted that the first Recommendation drew the wrath of the European Parliament, the creative and artistic community and of collecting societies. Rather than view collecting societies as trustees for their members, it viewed them as commercial enterprises that should aim to maximize profits. The Recommendation called for collecting societies to compete and to have just three or four operating at a European level. Such a move could be detrimental to collecting societies in smaller EU countries and to art produced in lesser spoken languages, while arguably only the English-language music catalogue would benefit. As a next step DG Market aimed to issue a Recommendation in December 2006 that calls for the abolition of levies on private copying which is contrary to the 2001 directive. This, to the relief of collecting societies and creators’ organizations, did not happen. Such Recommendations are of great concern to the FSE. As they are not law like a directive they do not have to be submitted to scrutiny and discussion with the European Parliament, nor do they need formal approval by the Council. But even though they are not law, they do act as a powerful European guideline, which can be picked up and implemented. A further negative side effect of such Recommendations is that a proper review of the Copyright Directive of 2001 is, thus, being prevented or delayed. • Article 151 of the Treaty on the European Union Article 151 in the Treaty established culture as a European competence. Through paragraph 4 it also established that the other services and sectors of the European Commission have to take the interests of culture into account when determining policy. This article is important as it permits the European institutions to fund cultural projects and even cultural organizations. As well as funding initiatives, it has enabled the European Union to co-operate with international bodies like UNESCO to assist in the drafting of the Convention on Cultural Diversity, which recognizes the importance of culture and the need for its exclusion from normal trade agreements. It is, therefore, our view that Article 151 should be taken into account by the European Commission also when developing laws and recommendations relating to copyright. Position papers of the FSE Until recently the FSE did not prepare position papers per se, but rather got directly involved in discussions with the major stakeholders and responded to all the consultation papers of the European Commission. It also has been invited to participate at a recent public hearing on 1st June 2006, organized by the European Parliament on the AMS Directive where the FSE was requested to present a paper on product placement. Such invitations are most important to us as it is our view that the creators are rarely involved as they should be in the discussion and formation of practicable and constructive laws and regulations.


To give itself guidance in its formative years, the FSE developed a Screenwriters Charter. This outlined the primary objectives and policies of the FSE – it can be seen in an annex attached at the end of this chapter. The Charter has been recently supplemented by the European Screenwriters Manifesto or also Manifesto of Thessaloniki (agreed and signed at the Conference on European Screenwriting, Thessaloniki 22.11.2006, also annexed at the end of this chapter), which lends further weight and guidance to FSE policy. It explicitly calls on European law makers, national governments and funding agencies to acknowledge and give credit to the work of screenwriters, stop the buyout of rights, respect writers’ moral rights and uphold the right of screenwriters to organize and negotiate contracts collectively. On product placement, the paper addressed to the European Parliament’s public hearing on the AMS Directive in June 2006 outlines the FSE’s position regarding unregulated product placement and product integration. This intervention is also annexed at the end of this chapter. The FSE board is currently in the process of preparing a more comprehensive and detailed policy paper, the FSE Policy Paper, which will outline its main goals and recommend strategies to get there. Current state of affairs and the future issues that FSE is preparing to address The FSE is facing short-term and long-term developments. In the short term, it is completing the debates and discussion surrounding the revision of the TVWF and the adoption of the AMS Directive. It is also wrestling with the issue of the Recommendation on private copying and the abolition of levies that was to be announced as soon as 20th December 2006. It is engaged in helping the Eastern European screenwriters create their own interest groups and join the FSE. Our efforts have succeeded so far in Bulgaria and Serbia, and we are currently working with Hungarian, Rumanian and Polish colleagues. Another major issue for the FSE is the funding of an infrastructure, which enables a more accurate and quick response to the issues of our concern. Last, but not least, the implementation of the Manifesto of Thessaloniki is of major importance, as it not only defines the role of the screenwriter in the twenty-first century but is also an important tool towards the analysis and possibly also solving the problems of the European film and television industries. It is our strong belief that we are historically at a kind of a crossroads, where it is most important for the European film and television industries to finally give the screenwriter his/her place. In the longer term the FSE will be involved in a major way in discussions relating to: 1. The review of the 2001 Copyright Directive. 2. Content online and the related Digital Libraries Initiative of the European Commission. (A communication on these issues is expected soon.) 3. The discussion relating to the Green Paper on Labour Law (22.11.2006).


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4. The future of state aid to film-making and particularly to screenwriting and screenwriters. Review of the 2001 Copyright Directive The FSE will call for an extension of levies to those countries where no levies are in operation and most importantly demand that any harmonization of copyright should ultimately be based on European civil law, which recognizes the rights of authors. Content online and the related Digital Libraries Initiative of the European Commission. FSE very much favours the development of these initiatives which aim to put the European audio-visual heritage online and make them accessible to the public and which will encourage the use of online services to provide for new films and other audio-visual content. These initiatives recognize the importance of authors’ rights as a facilitator in developing an environment that is conducive to further artistic creation and which will enhance in an equitable way the development of online services for all stakeholders. The discussion relating to the Green Paper on Labour Law (22.11.2006) Screenwriters are interested in this Green Paper as it could lead to recognition of creators and artists as partners in the collective negotiation of contracts. The screenwriters’ business partners up to now are mostly powerful broadcasters and independent producers and soon also telecommunications firms. It is recognized in most cases that agreements are best negotiated collectively rather than business partners having to waste time negotiating a contract individually. The future of state aid to film-making It is expected that the European Commission will issue a Communication on the future of state aid schemes in June 2007. This may raise issues about state aid to film. In January 2004 the entire industry was confronted by a European Commission communication that current state aid schemes should end because they are territorial in nature and do not comply with internal market rules. The entire industry stuck together in a common front to explain to DG Market that actually state support to national film-making was not a problem and did not give any country any particular advantage over another country and that there was subsequently no need to change the territorial nature of state aid to film-making. A similar discussion took place in Brussels in early July 2007 when the Commission unveiled the preliminary results of a study,6 which will eventually be completed and published early in 2008 on the territorialization clauses of State aid schemes to film-making. The preliminary results indicate that these territorialization clauses do not result in any market imperfections. However, the final results of the study are eagerly expected in 2008. The FSE is particularly concerned about the nature and forms of state aid and is interested in consulting with the different national and international funds in order to help them evaluate and rethink the goals, which comply with the new realities of film-making and

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with the imminent need to give the screenwriter his place. The FSE is therefore planning a conference or think tank to address this particular area. In the First Conference on European Screenwriting (which as said resulted in the Manifesto of the European Screenwriters, see attached) the writers agreed that the solution to the problems of the European film and television industries lies in improving the condition for writers in order to improve the quality of scripts in order to improve the quality of films. One big issue was identified as key: The way we develop film and television screenplays. Therefore, the Second Conference on European Screenwriting (TBC) will endeavour to answer the question: Do we develop the right way? The conference shall be divided into three thematic cycles: cinema, television and new media. Some of the questions: Do we produce too many films? Does state aid for script development reach the writers? Do the European film industries put too much weight on the production and distribution rather than on development? Should writers get slate funding too and what would be the pros and contras? Are the writers subsidizing cinema and TV development? What stories do we tell, and how? Why are there no spec scripts in Europe and how can we effectively support an original, creative production of ideas? What are the differences between the American and the European philosophy in development? Is TV the cinema of tomorrow? Are there new storytelling formats in development? Does every screenplay need to be filmed and should that goal remain the measure of success for the European state aid? Development contracts: Do we transfer too many rights much too early? Do we have the right education system? Do we produce too many screenwriters? What should lifelong training for professional screenwriters look like? Do new formats mean new stories or do we always tell the same stories clad in different ways? Residuals collection and DRM: Will collecting societies survive and in what format and will this eventually increase or decrease income for writers? How are collecting societies dealing with new exploitation methods? Co-operation with associations outside Europe FSE is an observer to the International Affiliation of Writers Guilds (IAWG). The IAWG comprises writers’ guilds in Australia, New Zealand, South Africa, the two writers’ guilds in the USA (WGA East and WGA West), the English-speaking and Frenchspeaking guilds in Canada and the Irish and British guilds, which are members of the FSE. Observer status to the IAWG has been also granted to the Mexican guild as well as to the French and German guild, which are also FSE members. The IAWG has lent FSE considerable knowledge and understanding of the legal framework that exists in these countries and in dealing with issues that are new to Europe but are long established elsewhere, like, for example, product integration in the USA. Conclusion Writers are central to the film and television production process and are at the core of the most popular and subsequently important art form of our times. The working


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relationship they have with those who use their services is flawed in many respects. Their legal status, on issues around copyright and moral rights as well as on questions of equitable remuneration for their work, is weak and consequently their creative freedom and professional independence suffers. The vision is to strengthen this, to encourage and maintain the distinct cultural identities of each country, to seek means to facilitate the free movement of writers in and between all nations and last but not least to enhance the common European identity which unites us all and which is so important for the development of the European film and television industries. Notes 1. Modernising labour law to meet the challenges of the 21st century (COM (2006) 708 final – 22.11.2006). 2. Television Without Frontiers Directive 89/552/EC (03.10.1989). 3. Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on Electronic Commerce). 4. Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (commonly just referred to as the ‘Copyright Directive’). 5. Commission Recommendation of 18 October 2005 on collective cross-border management of copyright and related rights for legitimate online music services (2005/737/EC). 6. Study title: Study on the Economic and Cultural Impact, notably on Co-productions, of Territorialisation Clauses of State Aid Schemes for Films and Audiovisual Productions. Preliminary draft report: 29 June 2007.

ANNEX 1

European scriptwriters charter • In the beginning there is the script. The script is an artistic work in its own right, which is capable of being published and directed. • The scriptwriter is the only author of the script and therefore is a co-author of the audio-visual work. • We will work for the harmonization of scriptwriters’ rights throughout Europe. We demand minimum contractual terms with no buyouts and payment for every exploitation of each script. • Scriptwriters, directors and producers are partners. They must join together as creative forces to establish the principle that every film is created by: a writer; a director; a producer. • We will analyse the two systems of “droit d’auteur” and “copyright”, establish a common approach and seek to enshrine it in national legislation. • We will seek constructive dialogue with rights and royalty collection agencies. • We will seek to agree an ethical code of conduct with directors. • We will seek constructive dialogue with broadcasters and advertisers to strengthen the controls and rights that scriptwriters have over the work they have created. • We seek to create a balance between artistic and economic forces to defend the integrity of writing. • We will work together as scriptwriters to maintain cultural diversity throughout Europe and ensure that our national policies remain sovereign in the cultural sphere. We will protect our linguistic diversity.

ANNEX 2

The European Screenwriters Manifesto Stories are at the heart of humanity and are the repository of our diverse cultural heritage. They are told, retold and reinterpreted for new times by storytellers. Screenwriters are the storytellers of our time. European writing talent should be trusted, encouraged and supported. The European film industries need to find ways to attract and keep its screenwriters in the cinema and in their craft. We assert that: 1. The screenwriter is an author of the film, a primary creator of the audio-visual work. 2. The indiscriminate use of the possessory credit is unacceptable. 3. The moral rights of the screenwriter, especially the right to maintain the integrity of a work and to protect it from any distortion or misuse, should be inalienable and should be fully honoured in practice. 4. The screenwriter should receive fair payment for every form of exploitation of his work. 5. As author the screenwriter should be entitled to an involvement in the production process as well as in the promotion of the film and to be compensated for such work. As author he should be named in any publication accordingly, including festival catalogues, TV listing magazines and reviews. We call on: 6. National governments and funding agencies to support screenwriters by focusing more energy and resources, whether in form of subsidy, tax breaks or investment


7.

8.

9. 10.

schemes, on the development stage of film and television production and by funding writers directly. Scholars and film critics to acknowledge the role of screenwriters, and universities, academies and training programmes to educate the next generations in accordance to the collaborative art of the medium and with respect towards the art and craft of screenwriting. Festivals, film museums and other institutions to name the screenwriters in their programmes and plan and screen film tributes to screenwriters just as they do to directors, actors and countries. National and European law should acknowledge that the writer is an author of the film. National and European law should ensure that screenwriters can organize, negotiate and contract collectively, in order to encourage and maintain the distinct cultural identities of each country and to seek means to facilitate the free movement of writers in and between all nations.

We will: • Distribute this manifesto to industry members and the press in our respective countries. • Campaign for the implementation of the agenda defined by this manifesto. • Seek the transition into national and European law of the legal changes demanded by this manifesto.

ANNEX 3

Public hearing on the audiovisual media services directive European parliament Intervention of christina kallas, president of the federation of screenwriters in Europe FSE 1st June 2006 My name is Christina Kallas. I am a writer. I am the President of the Federation of Scriptwriters in Europe which has twenty-one member organizations representing 9,000 writers all over Europe. I am also a member of the Board of the German Screenwriters Guild – and I am Greek. So I consider myself a genuine European film-maker. I am most grateful to you for this opportunity to address this public forum on the question to the proposed review of the Television Without Frontiers Directive and in particular the question of the proposed loosening of the rules on product placement. The directive has been a considerable success. It offers a framework that has encouraged the development of the European audio-visual industries. Also it allows broadcasters to earn a significant income from advertising, while protecting consumers. We want it to be clear that we are not opposed to commercial television or to advertising. But we do believe that some rules are necessary. The Commission has done an excellent job in many respects in its review of the Television Without Frontiers Directive. In most respects it has succeeded in maintaining a careful balance in its proposed amendments to the directive – but: in common with most of the groupings of creative workers in the industry, writers are concerned that in some areas the Commission has faltered, and erred too much on the side of doing nothing when, in fact, some modest level of regulation is needed.

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For example, we are strongly of the view that the directive’s quotas for European works can and should be extended to non-linear audio-visual services. Given the rapid and far-reaching developments in digital media services, it is probable that within a relatively short period most consumption of audio-visual material will be outside the traditional methods of television broadcasting, so if such an extension of obligations were not included then the meaning and effectiveness of the directive would be fatally undermined. We are also of the view that the quotas, which have successfully existed for fifteen years, can have some of their more cautious aspects tightened and improved. There is no reason any more, for example, to allow an escape from the quotas by saying that they only apply ‘where practicable and by appropriate means’. In general, however, we welcome the proposed amendment to the Television Without Frontiers Directive and congratulate the Commission, and the Commissioner, on the document. There is, however, one more topic in the proposed draft directive where the Commission has not got it right, I’m afraid to say, and that is the question of product placement. The Commission is wrong on two points – firstly, the approach to product placement is immensely unclear in the draft directive, and its proposal is full of contradictions which will lead to serious potential difficulties for the implementation of the directive (I will enumerate some of those in a moment) and, secondly, the Commission seems not to be in touch with rapid changes which are taking place in the area of product placement in the comparatively unregulated advertising market of the United States – changes which will be coming to Europe soon. Firstly, may I address the question of the problems of drafting in the current Commission proposal. One drafting problem concerns the definitions: product placement is defined as placement of products in the programme where consumers are aware of the product and surreptitious advertising is where consumers are not aware. The only real difference would be the notice at the beginning of the programme. But can the Commission guarantee that consumers will read that notice? If the consumer fails to notice the announcement that there is product placement, then in what way does his or her experience of the product placement differ from surreptitious advertising? Besides, product placement is advertising and placing a product in a programme clearly is the combination of advertising and content. The current draft quite properly prohibits this combination. The same draft allows product placement. There is more than a slight contradiction there.


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The current draft also limits the amount of advertising time, which can be broadcast per hour but has no limit on the amount of advertising which can be placed inside the programme in the guise of product placement. This is not a theoretical problem. An American reality series, “The Contender”, set a record last year when it inserted 626 product placements into every hour of the show. Another drafting problem concerns the impact of advertising on minors. The current draft has quite properly inserted separate concerns about the impact of advertising on minors, but there is no definition of children’s programmes and no definition of family programmes. Often the line is very thin there. There are other problems with the current draft that are not referred to at all. For example, the copyright and moral rights situation is different in Europe. If an advertisement is inserted into a programme, who will own the copyright in the advertising copy? And what about the writer’s moral rights? However, these drafting problems, important though they are, do not actually address the new reality of product placement. The Commission has endeavoured to find a system for dealing with the simple, rather old-fashioned version of product placement, which involves the placement of commercial products in television programmes and films in return for money or promotional consideration. This form of product placement clearly constitutes a combination of content and advertising but is also relatively benign. And it is not this form that is now increasingly common in the United States and is soon to arrive in Europe. The new approach to product placement is to integrate advertisements into the storyline of film and drama on television and in feature films. For example, a character in Desperate Housewives promotes a car to a seventeen-year-old; a man proposes marriage by hiding the engagement ring inside a biscuit; a man lavishes praise on a brand of women’s make-up, naming the product on numerous occasions and holding the bottle so that the label fills the screen in order to be read and recognized by the audience. In this form of product placement whole advertisements are taken out of the advertising slot and combined with the programme. The authority and reputation of the characters are recruited to endorse the product, and characters carefully constructed by writers, directors and actors suddenly have to advertise products as part of the story. How can I explain to you the outrage, which such a proposal causes me and my fellow writers? Were I to suggest that product placement be considered by the European Parliament itself then the problem would become clearer. Why not include references to relevant products during your speeches at the parliament or in your written reports? This would

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earn money for the Parliament reducing the burden on the taxpayer of paying for your work. A speech on the Common Agricultural Policy, for example, could include some paid references to cattle feed or pesticides. Of course, only some speeches would be suitable for product placement. It would be hard to imagine that a speech on racism or gender-based violence would be suitable for product placement, so the people organizing the placement of products in the speeches of parliamentarians would prefer if you didn’t make these speeches – not, of course, that they would wish to interfere in any way in your right to make any speech you want – it’s just that only the nice speeches would earn the money of the product placement. You may say politics are not the same as entertainment. Well, you see, we do not see our work simply as entertainment or as what entertainment has come to mean but as in meaning also education and information – entertainment in the original, Aristotelian sense of the word. And we feel the weight of this responsibility as I am sure you do. But if the scenario of product placement in speeches still seems too far-fetched, perhaps we could examine the issue in the context of other arts. Couldn’t the libretti of operas be re-written to include some product placement? Surely the Ride of the Valkaries could include a reference to low-cost airlines; could the golden arches of McDonalds hamburgers hold up the Parthenon; when Samuel Beckett says, ‘I can’t go on’ surely that is a perfect place in the play for an ad for anti-depressant drugs? But there is a problem. If Romeo can call Juliet on his mobile phone, with cheap weekend calls and, thereby, save her, this might be good for the phone company but it would somehow reduce the tragedic impact to the play’s conclusion. As a writer I want to write good entertaining drama. I don’t want to write advertisements. If I did I would have taken up the honourable profession of copywriter. But more to the point, I don’t want to be told what I can and cannot include in the drama that I write. It seems obvious to me that advertisers have different needs to writers and audiences. Advertisers will want to put their products in programmes, which reflect well on the products. Safe, anodyne, unchallenging stories will attract product placement, drama dealing with the many difficult issues, which our societies are grappling with, will not be as attractive. Programmes with product placement of the kind just mentioned will have an economic advantage over those that do not. Again this is not a theoretical objection. Writers and actors in the United States have organized a major campaign to try to ameliorate some of the worst effects of this kind of product placement and quote a depressingly long list of attempts by advertisers trying to change the content of programmes to make them more suitable for the placement of their products.


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To sum up the position of the European scriptwriters, we believe that allowing product placement is a Pandora’s box whose results will be negative for writers, as well as for consumers and, therefore, for broadcasters. Product placement, of the new kind, will change what I can write and will disadvantage some kinds of writing relative to others. My creative writing will have to suit the needs of advertisers rather than the needs of the audience. The content of European drama will be decided by companies wishing to promote their products and not by Europe’s broadcasters, producers and writers. European audiences including children will have no choice about whether they wish to watch advertisements or not and it will be made difficult for them to differentiate between programmes and advertising. Is it really the job of the European Union to force consumers to watch advertisements whether they want to see them or not? Although the issue of product placement may seem complex in our view, the solution is straightforward. We suggest that the inclusion of products into programmes can be divided into three clear categories which can then be separately addressed. These three categories are: • The inclusion of products in programmes where there is no payment, monetary or in kind, and the products do not get undue prominence. • The placement of products in a prominent position so that they can be seen by audiences in return for payment of some kind, usually called product placement. • The incorporation of the product into the storyline of the programme so that the product appears to be endorsed by the programme or by its characters, now usually known as product integration. We believe that the sections in the original directive and in the proposed amendments from the Commission should reflect these three categories of product placement and regulate them as follows: • The inclusion of products in programmes, where no payment of any kind took place, should be explicitly allowed; the simple placement of products for money can only be permitted subject to quantitative controls and a system of effective signposting; integration of ads for products into the storyline of programmes should be emphatically prohibited. We have provided more details of how this approach could be implemented to Ruth Hieronymi. In conclusion, we know that much of television is commercialized and must earn its way from advertising, and we understand well that new technology will alter the business

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models of broadcasters. But television is still the most important and most popular of the carriers of cultural values in our society. We must keep content and advertising separate. The integration of advertising into programmes has become a reality in the United States and there is growing concern that it is damaging the quality of programming. We should not repeat their mistakes. For Europe, we should say ‘no’ to the integration of advertising and content and at least preserve the integrity of our own stories.

CONSUMERS

TELEVISION WITHOUT FRONTIERS – ADVERTISING WITHOUT LIMITS Cornelia Kutterer

Senior Legal Advisor, The European Consumers’ Organisation, BEUC

1. Introduction BEUC is a Brussels-based organization representing the independent consumer associations from 30 European countries, including all the Member States of the EU. BEUC is the main – if not the only – consumer voice. As such, BEUC seeks to influence all EU policies which may affect consumers including policies relating to food, agriculture, environment, competition, single market, trade, financial services, legal interests, health and safety. BEUC aims at defending the interests of European consumers – citizens as purchasers or users of goods and services. We seek to maximize the benefits of the Single European Market and minimize potential risks for the consumer, focusing increasingly on matters of quality and on ethical issues paying special attention to the needs of our most vulnerable citizens, including children, the elderly and the disadvantaged. Social and cultural aspects also play increasingly a role in defending consumers’ interests.

2. The European media industry from the consumer’s point of view Digitalization and convergence in the field of electronic communications are changing the media world. Separated players are renegotiating between each other their respective positions of power within a new and more integrated market. This consolidation of the marketplace is accompanied with a new phenomena: in a digital world where more and more consumer-generated media emerges and boundaries between creators and users blur, consumers become an active player in the media world, rather than a mere user of

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products and services. Anybody can create a content media company. This simple but successful concept creates new chance for mindset businesses to develop value-added services and audio-visual media services across the spectrum of platforms – PC, TV and mobile. It does, on the other hand, threaten traditional business models that are based on linear and mainstream media. Traditional broadcasting is struggling with the trend that large numbers of younger generations turn to the Internet to enjoy and engage with new media. At the same time, more and more broadcast channels – mainstream or niche market – pay-TV or free-to-air – appear on the market. Advertising plays an important role therein as a driver of a competitive free market. Advertising revenue in so far contributes to the development of audio-visual media services and consumers thereby benefit somehow from this source of revenue. But advertising revenues have to be increasingly shared among many different players, and commercial communication is changing profoundly in the light of increasing sophistication of advertising technology and advertising psychology. Marketing companies are constantly searching for an edge. The advertising industry likes to say that the public has more control over what advertising they see, or whether they see it at all. They point to the increasing expansion of the media – everything from mobile phones to video-on-demand – and argue that advertising is now less powerful. The sector is therefore characterized at a disadvantage now that users can effortlessly fast-forward through commercials or create their own personal, ad-free media. But in fact, such allegations do not reflect what is actually happening. Through digital marketing, advertising is becoming more powerful, not less. Advertising has the potential to become more powerful and influential than ever before. Boundaries between advertising and other forms of communication are becoming more and more difficult to distinguish. There is an increasing proliferation of commercial communication in all forms. Advertising is everywhere, not only on the television screens, on radios, on the Internet. Advertising is present even for the smallest children in a day-care station In a world in which private can in some important respects become the new public (Zittran in ‘The glass consumer’), we are seeing a kind of mutual arms race between the desire of people to maintain a private sphere and the desire of advertisers to go beyond the public sphere to get their customized attention. One effect has been that the commercial communications industry has developed more and more ways to abandon their own long-held principle of separation between advertising and programme or editorial content. Another is that children in particular are targeted with commercial communications in increasingly sophisticated ways. Of course, it is not only the quantity of advertising to which children are exposed, or merely the techniques used, but the content of the commercial communications that may be harmful – as we will address below.

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There are thus continuing and increasing grounds for concern of consumers about the overall place of advertising and commercial communications in our media.

3. EU media regulations and consumer protection Of course, there are other relevant regulations beneath the surface of media content regulation, such as intellectual property, competition laws, or the question of access to information in a digitalized world more generally. In respect to advertising specifically, there is a complex interaction of different laws and regulations, both national and European. Article 10 of the European Convention of Human Rights protects ‘advertising freedom’. Advertising – being considered a service – is also protected as part of the fundamental freedoms under the EC treaty. Nevertheless, it is legitimately limited by Member States in areas such as the protection of minors (as long as proportionate and in the public interest; where advertising restrictions concern specific selling arrangements it must be assessed in light of the free movement of goods and be non-discriminatory). Advertising is also regulated in different European instruments. Some of these EC laws concern specific products (for example, the tobacco advertising directive) and some have a horizontal approach such as the Unfair Commercial Practices Directive. This recent directive applies to relations between businesses and consumers (B2C). Business to business (B2B) is regulated within the directive on misleading and comparative advertising. The Unfair Commercial Practices Directive (UCPD) deals with all kinds of commercial practices, mainly categorized in aggressive or misleading advertising that may influence consumers’ transactional decisions in relation to products. It should be highlighted that the Unfair Commercial Practises Directive does not cover services. Sector specific regulations take precedence over the UCPD, such as the Audiovisual Media Service Directive or the E-commerce Directive, however, infringements of the rules contained in the Audiovisual Media Service Directive, may also constitute breaches of the general clause in the UCDP. Another horizontal instrument, the proposal on the sales promotions regulation, has been finally dropped by the Commission in 2005. As far as sales promotions are considered a service, they are now largely covered by the general rules of the Service Directive. This may impact Member States’ regulations on sales promotions more intensely than the consideration that special sales promotions can restrict the volume of imports and therefore hinder the free movement of goods. The E-commerce Directive also deals with commercial communications and advertising intended to promote a product, a service, a brand, etc. Content regulation in regard to commercial communications and advertising is complex, the interaction of different instruments is not always apparent. Nevertheless, while

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overlaps may exist, gaps do as well – as is clearly the case in marketing of unhealthy foods and drinks to children.

4. BEUC position papers In 1995 when the TVWF Directive was undergoing a first review, our main concerns then were to ensure that the Commission reinforce the provisions relating to the protection of consumers and minors. We also highlighted that the directive should make explicit links to other EU legislation on advertising and distance selling and that these rules should apply across all electronic media. An issue that has always been high on the agenda of our member organizations is advertising and children. The Court of Justice has developed the notion of a ‘reasonably well-informed and circumspect consumer’, i.e. a consumer as someone who is able to protect himself or herself on the basis of sufficient information. But it is also recognized that a large group of avid television viewers cannot be brought into this category and must be better protected – among in particular children.

5. The current state of affairs The European Parliament has voted in first reading on the Audiovisual Media Services Directive. The Council adopted a compromise text on 24 May and the plenary is expected to approve the common position without amendments in second reading. The proposal for a directive on audio-visual services could have been the occasion for a reflection on the wider role of commercial communications in our society. Two controversial debates around product placement and unhealthy food advertising stand for a key choice on the way and the extent our lives and that of our children will be dominated by commercial communications. But the industry claim to loose some of their revenues has won over more fundamental considerations. This is in particular lamentable in regard to product placement that will have incontrovertible effects for editorial freedom. Product placement jeopardizes the principle of separation of advertising and editorial content – one of the most important and widely acknowledged rules in electronic (and print) media. It opens a Pandora’s box of unintended consequences. The respect of this principle allowed consumers to choose how much advertising they want to see and if they want to see it at all. This choice may be lost if policy-makers do not radically change their approach. Special rules for programmes aimed at children are in particular not enough to protect the most vulnerable among viewers. In fact, children spend far more time watching programmes that are not specifically aimed at children – (71 per cent of their TV watching time, according to an OFCOM studying the UK).

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Children in general are an important target for advertisers and marketing professionals as they represent three markets in one: they are a primary market with money to spend on needs and wants of their own; they are a market of influencers, often influencing the purchasing decisions in the household; and they are a future market in that, as adults, they will buy their own goods and services and are likely to stay with products they become accustomed to when young. Very young viewers, besides being incapable of critical analysis, are also inexperienced in the field of economic and monetary issues. Increasingly, adverse effects of targeting in particular children with commercial communications are acknowledged, for example, in the context of an alarming growth rate of diet-related diseases and obesity among children in Europe. The intensive promotion of foods with high levels of salt, sugar or fat is one of the factors (among many others) that make it more difficult for parents to form their children’s taste and to encourage sensible diets and good nutrition. A restriction on the advertising or promotion in audio-visual media services of such products is a necessary (but, of course, not sufficient) step in tackling the wider challenge of obesity and diet-related diseases. It is, therefore, a step in the right direction that the pressing problem of diet-related diseases has been acknowledged in the context of this proposal. Nothing will turn the dramatic trends in obesity figures if a need for change is not accepted by politicians and in the food and advertising business within the context of television advertising. Over 22 million children in the EU are estimated to be overweight or obese, around 1 in 3 children. The number for children is predicted to rise to more than 400,000 a year. In many EU countries more than half the adult population is overweight and 20 to 30 per cent of adults are categorized as obese (WHO). If current trends continue, two out of three Europeans will be overweight or obese by 2030. It is estimated that in the European Union, obesity accounts for up to 7 per cent of health-care costs, and this amount will further increase given the rising obesity trends. From data collected for the recent World Health Report, it is estimated that around 8 per cent of deaths and disability are attributable to being overweight or obese, only slightly less than the 12 per cent attributed to smoking. Recent studies show that children are clearly influenced by advertising and have a strong influence in household purchases. In a systematic review of the evidence, the Institute of Social Marketing at Scotland’s Stirling University examined the evidence of the link between marketing and childhood obesity. Over 30,000 references were identified. The result clearly showed firstly that (i) food dominates advertising to children, (ii) most ads focus on soft drinks, pre-sugared cereals, confectionery, snacks and fast-food restaurants, (iii) the advertised diet contrasts dramatically with the recommended diet, and (iv) that children engage with and enjoy this unhealthy advertising. Secondly, evidence could be produced on the fact that food promotion influences children’s (i) nutritional knowledge, (ii) food preferences, (iii) purchasing and purchase-related behaviour, (iv) consumption, and (v) diet and health-status (Professor Gerard Hastings).

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It is, thus, even more worrying that TV advertisements for food aimed at children on unhealthy food range from 49 per cent in Italy to 100 per cent in Denmark. Our German member, VZBV, found in 2003 that in Germany 200 TV advertisements per day were dedicated to foods liked by children but containing high levels of fat, sugar or salt. Our Belgian member, Test Achats, found in 2004 that television advertising for unhealthy foods amounted to 51 per cent of all food advertising. Our Spanish member, OCU, found in February 2005 that 48 per cent of the TV commercials broadcast during children programmes were for food products – of which the great majority were products high in fat, sugar and salt. These findings are backed by consumers: a recent Eurobarometer survey Health and Food (Nov 2006) revealed that 96 per cent of European citizens consider that food advertising and promotion influences children’s eating habits. Almost as many, namely 85 per cent of respondents, feel public authorities should play a stronger role in fighting obesity. Against this background BEUC campaigned for a ban on advertising, sponsorship or any promotion in audio-visual media services of such products aimed at children, as a necessary (but, of course, not unique) step towards tackling the wider challenge of obesity and diet-related diseases. Nutrient profiles could help to identify foods high in fat, saturated fat, salt or sugar and to provide an incentive for industry to reformulate their products to reduce fat, salt and sugar. The European Parliament finally acknowledged the need for restrictions on advertising to children of foods high in sugar, fat or salt. But codes of conduct are not enough. Current codes in the Netherlands, Spain, the UK and US are not changing TV ads, and, despite industry claims they adhere to codes, from 2000–2004, in the US 46 per cent of new foods targeted at children were candies (2005 British Nutrition Foundation, Nutrition Bulletin). Codes don’t include the right content, fines are not high enough, recall periods too long, no reference to nutritional profiles are made, nor to mandatory pre-screening. The European Parliament vote in first reading is also not in line with the international approach to advertising to children: • On 16 November 2006 at the WHO ministerial conference in Istanbul, the representatives of 53 European governments signed the WHO (World Health Organization) charter on fighting obesity. Among many other provisions, the Charter calls for specific regulatory measures including the adoption of regulations to substantially reduce the extent and impact of commercial promotion of energy-dense foods and beverages, particularly to children, with the development of international approaches, such as a code on marketing to children in this area.

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• On 17 November 2006, the British communications regulatory agency OFCOM announced a ban on the TV advertising of foods high in fat, sugar or salt “in and around all programmes of particular appeal to children (...) broadcast at any time of day or night on any channel”. • On 17 November 2006, the British communications regulatory agency OFCOM announced a ban on the TV advertising of foods high in fat, sugar or salt “in and around all programmes of particular appeal to children (...) broadcast at any time of day or night on any channel”. Of course, there is no simplistic way that “advertising makes children fat”. There is clear evidence, however, that the intensive marketing of “unhealthy” foods for children makes it harder to be a good parent.

6. Future issues In the context of the topic of this paper, there are two main developments that need to be further discussed. A serious problem is that food advertisers are now targeting children via the Internet, which is a much more difficult medium to regulate. Advertisers reinforce the ability of digital marketing communications (so-called adware) to target individuals, including children and teens. The current Audiovisual Media Directive is only scratching on the surface of this trend. The expanding, unregulated role of digital advertising pose also some severe privacy risks but beyond the loss of privacy, we all should be alarmed about how interactive advertising is helping shape the kind of programming and content available to us in the future. What we’re seeing is advertising that is much more intensively marketed to specific age groups – even to the youngest among our children. Where broadcasters are looking for new advertising revenues, participation TV or premium rate services, i.e. those television services (including but not limited to dedicated channels) that rely wholly or mainly on viewers paying for an opportunity to participate in the service – for example, quizzes – evidently appeal to them. Such services attract increasingly advertisers through the ability to have an SMS response mechanism added to a standard TV or radio ad. There is only a small step to collect mobile numbers, e-mail addresses and other information from their viewers in order to facilitate mobile and e-mail marketing campaigns. A key characteristic of these services is frequent, and sometimes constant, messages to viewers to call (or text) one or more premium rate numbers. Both developments need special attention.

7. Cooperation with other lobbies/associations BEUC has focused its lobbying strategy on mainly three issues during the first reading in Parliament to achieve a prohibition of product placement, reasonable and consumerfriendly time limits on advertising, and restrictions of unhealthy food advertising to


children. Naturally, contacts and discussions with other stakeholders with an interest in these issues have been set up and maintained during the legislative process, among public broadcasters, writer’s guilds (US), actors associations and print associations. However, a common goal could be clearly identified with those associations that tried to introduce similar qualitative advertising restriction of specific products.

CONCLUSIONS: MEDIA POLICY OF THE EUROPEAN UNION – TRENDS AND DEVELOPMENTS Bettina Peters

European Journalism Centre

The treaties establishing the European Union do not give it legal competence in the area of media and culture. This is left to the Member States. One might ask why then media policy is debated as much as it is at European level and why organizations representing media professionals engage in discussions and submit countless positions to European Union institutions. The answer is simple: With the creation of the single market the EU has been legislating on all aspects of cross-border trade in services and goods, including media products. So, without direct competence in making media laws, the European Union has adopted over one hundred regulations, directives, recommendations or programmes that in one way or another affect the way media work and trade in the European Union.1 One key aim of European Union media policy and regulation is to promote the competitiveness of European media companies in the global market. As pointed out in the introduction to this book this may seem an outdated approach given that most of the large media companies in Europe have global reach and often international ownership. But since European competitiveness also impacts on the number of jobs in Europe, the policy aims to ensure continued growth of media jobs and companies inside the European Union. In this respect, it should be noted that the big players in European media are largely concentrated in seven of the EU Member States. No large homegrown media company can be found in the new Member States. In fact, many of the media outlets there are owned by one or the other of the big companies.


Another key policy aim is to safeguard cultural diversity and to foster European culture. As a result, EU legislation is developed within the context of these two, sometimes conflicting, policy aims. Two main strands of policy become apparent: The first focuses on aspects of the media market, the media as business subject to regulation as any other business and an integral part of the EU’s strategy of the internal market and free flow of goods, services and persons. The majority of the laws adopted by the EU deal with this area. The second focuses on the media as an important factor in European culture and society. It is this approach that limits EU actions in media policy, for instance, barring the EU from adopting laws governing journalism or adopting regulations on publishing. At the same time it is this policy approach that has been at the base of EU laws that regulate for minimum European content provisions in broadcasting or the protection of minors. Debate on EU media policy therefore centres on finding the best laws and provisions for a prospering media market and safeguarding European diversity and standards. While it would be too simple to say that the argument always runs “market versus culture and content”, these two positions are at the heart of most of the debates on EU media policy. Another key feature of EU media policy is that it largely deals with broadcasting and recently with satellite and digital services. While the publishing industry is affected by general EU laws, such as the ones dealing with copyright, there is no specific EU regulation dealing with the publishing market. This is due to the fact that the EU only comes into play if the functioning of the internal market is in question. As newspapers and magazines only have cross-border scope when they are physically moved from one country to another, the need for regulation is limited. The three main European Union institutions: the Commission, the Parliament and the Council do not always have the same approach to media policy. As examples in this chapter show, the European Parliament tends to put more emphasis on pluralism and cultural issues, while the Commission focuses on the functioning of the internal market. The Council, in recent years, has adopted a more market-oriented approach, it has blocked Commission initiatives that it deemed ‘too regulatory’, and it continues to aim to safeguard national sovereignty in many aspects of media regulation. The EU institutions and EU-wide associations of media owners, journalists, consumers and other relevant parties that have contributed to this book have raised a wide range of issues of European Union media policy. This concluding chapter will focus on those aspects of EU media regulation that have provoked the most debate. It will further outline some trends and developments that characterize the current discussion.

CONCLUSIONS: MEDIA POLICY OF THE EUOPEAN UNION – TRENDS AND DEVELOPMENTS | 183

Audio-visual media services: The challenge of regulating an ever-changing market The first foray of the EU into media regulation started with the Television Without Frontiers Directive in 1989. This legislation has been updated several times since and is currently again under review.2 Now, the directive’s scope will be enlarged to cover the different kinds of audio-visual services available through broadcasting, cable, satellite or Internet. The frequency of revision of this piece of legislation illustrates the EU’s dilemma of trying to regulate an ever-changing market where new technologies make legal provisions obsolete the moment they are adopted. The Green Paper on the establishment of a common market in Broadcasting, published by the European Commission in 1984 outlined its vision for European broadcasting policy. It started the debate that lead to the adoption of the Television Without Frontiers Directive (a base for other legislation that followed), and it established a policy that did allow the European Union to become involved in questions of regulating media content. The Green Paper foresaw the establishment of European support mechanisms for the broadcast media including the film industry. The result was the MEDIA programme, which has been running since 1991. The MEDIA programme does not make legal provisions on content but it departs from a purely market-driven approach to broadcasting by supporting the production and distribution of European films and programmes that would otherwise not be widely accessible to European audiences. Even though debate on the revision of the directive is ongoing, it is clear that some fundamental principles and provisions will not be changed. The main principle established by the directive is the “country of origin” principle. This cornerstone of EU media legislation, stipulates that if a broadcaster or provider of audio-visual services has met the legal requirements of one Member State, it is allowed to broadcast or otherwise transmit its programmes into other Member States. It shows that, given the varying interests and traditions in the Member States, it was not possible to create overall harmonization with every country using the same set of laws. Nevertheless, the directive defines a set of minimum standards that the content regulation of television broadcasts by the Member States must guarantee. One of the most hotly debated articles of the directive is the quota provision which states that the majority proportion of relevant transmission time must be made of works originating in Europe. This provision was included in the first version under the heavy influence of the French government, which had such protection in its national law. Other EU members at the time, notably the United Kingdom, felt that this was undue interference into broadcasting.

184


But the quota provision is in place and Member States are required to put it into national law and to monitor adherence by broadcasters to the provision. This is normally done by the national broadcasting authority. Since relevant transmission is set to mean all programming apart from news, sports, events, games, advertising, teletext and teleshopping, the large majority of broadcasters have no problem meeting the quota in spite of showing a lot of US-produced series and movies. In case of violation, the national broadcasting authority can impose fines and even revoke the license. The latest available study from 2001 dealing with the EU 15 found that no national authority had ever gone this far. Only warnings had been issued, and in the one country were fines were imposed, the Netherlands, the execution of the order was suspended.3 Given the contentious debate around the quota, it is not surprising that the European Commission so far has never pushed Member States to be stricter in their application of the provision. Modernizing the Directive The main challenge the EU is facing is the increasing convergence of media and transmission platforms. The EU has started to regulate the new digital and Internet market with directives such as the E-commerce Directive or the Information Society Directive. A distinction is being made between services offered specifically to individual consumers and programming that is targeting a general audience. The European Court of Justice is likely to be called upon more often in the future to define the difference between the two. A case decided by the Court in June 2005 shows the dilemma: Mediakabel in the Netherlands claimed that it should not be covered by the directive and thus the national broadcasting authority Commissariaat voor de Media. The Court found that a pay-per-view service, which consists of transmitting television programmes intended for reception by the public, that is, an indeterminate number of potential television viewers and which is not supplied on individual demand, is a television broadcasting service and, as such, subject to the provisions of the Television Without Frontiers Directive.4 But other types of pay-per-view services more targeted and not offering general programmes may in future make the same claim. The currently discussed Audiovisual Media Services Directive aims to define television broadcasting (‘linear services’) and ‘on demand services’. The former refers to traditional television broadcasting transmitted according to a fixed programming schedule, while the latter comprises services such as web-TV or video-on-demand – where the user requests the transmission of a given programme on an individual basis. With all kinds of new media services available, the regulation has to be updated to cover the new media services. In its current form the new directive will explicitly not deal with services such as online gambling. The European Parliament, which agreed its position on the draft in December 2006,5 has tabled some 30 amendments to the text. It wants


the directive to deal only with commercial media services and not be applicable to usergenerated content such as videos placed on YouTube. The Parliament also inserted a new article in which Member States shall adopt the measures needed to ensure pluralism of information in television broadcasting. This provision harks back to a long-standing debate between the European Parliament and the Commission and Council. The Parliament over the years has adopted several Recommendations calling for more action to safeguard pluralism. There has been one attempt by the Commission to address the issue, described in this chapter in the section on competition, but it never came to the stage of a directive. Generally, the Commission has kept away from the contentious issue of European-wide regulation safeguarding pluralism and has only initiated concrete action with a soft-policy approach through support programmes for the European audio-visual industry, such as the MEDIA programme. There is agreement among all three institutions that the country of origin principle established in the original directive will remain in place in its new version. In trying to address the constantly changing media market, the European Commission in recent proposals has recognized self-regulation and co-regulation as an acceptable alternative system to detailed legislation. While Television without Frontiers did not rely on such mechanisms, the current draft directive makes direct reference to them. This has been welcomed by associations of media owners or advertisers,6 while the organization representing journalists at European level, the European Federation of Journalists,7 states that self-regulation in areas of commercial value, such as advertising, will not be sufficient to enforce minimum standards. The draft directive was expected to be adopted in the first half of 2007. It is unlikely that it will be the last time the European Commission will revise provisions as technological changes continue to affect how the audio-visual industry works and trades in Europe. At the same time it can be expected that some fundamental principles set out by existing EU rules will remain in place. For instance, it is highly unlikely that the EU will move away from the country of origin principle and aim to completely harmonize national legislation. It will be less intent on trying to regulate all aspects of cross-border audiovisual services, but some basic rules concerning advertising and content provisions such as protection of minors are likely to stay in place. Effects on the media industry: The argument over competition and copyright While many of the EU regulations address specifically the audio-visual sector, there are also an increasing number of regulations and directives that affect the media industry generally. Again, the main strands of debate focus on a market-driven approach or an approach more concerned with safeguarding cultural diversity and pluralism.


Competition: A level playing field, but what about pluralism? The media industry is covered by general EU competition law. No specific legislation dealing with concentration of media ownership (as it exists in many Member States) is in place at European level. There was a move by the European Commission in 1992 to address the issue with the publication of a Green Paper on pluralism and media concentration in the internal market,8 but the Council rejected the proposal. In 2003, more than a decade after the first Green Paper, the Commission again called for comments on European media ownership control. But, as before, there was no support for the measure. While journalists’ and media freedom NGOs welcomed the initiative, European media owners attacked both proposals vigorously. Their position won the day. Given the current political climate in the European Union, which focuses on market liberalization and competitiveness (some argue at the expense of pluralism and diversity of opinion), it is unlikely that concentration of media ownership will be regulated at European level. The hottest topic in the debate on competition rules is the financial support public service broadcasters in Europe receive through license fees levied from viewers. Commercial broadcasters argue that this is state aid and in violation of Article 87(1) of the EC Treaty. There have been many complaints by private broadcasters with the European Commission.9 So far, these complaints have not been successful. The position of the public service broadcasters was given a real boost by the Directorate General in charge of Competition, which recognized the special role of public service broadcasting for maintaining pluralism.64 While the Commission has made it clear that it regards license fees as state aid, it also declared them compatible with the Treaty’s state aid regime. But the pressure on public service broadcast funding is increasing in the EU. The Commission has set out strict conditions that broadcasters must meet: They have to be defined by the national authority as a service of general economic interest, the broadcaster has to be entrusted by the authorities to provide this service and the state funding must not exceed the net cost of the service, taking into account other revenues (such as advertising, sales, sponsorship). Several cases are still pending and there is more scope for debate, especially when looking at how public service broadcasters invest into the digital market, Internet and other services. With debates on license fees raging in several Member States, notably in Germany and the United Kingdom, it is very possible that public service broadcasters may face more restrictions to their funding in the future.


Copyright: No agreement on who owns what Seven key directives govern the copyright regime in the European Union. During the 1990s the EU adopted the first wave of legislation on copyright focusing on satellite broadcasting and cable transmission and lending rights. A long process of consultation and debate accompanied the process. In the end, the copyright legislation was based on the principle already introduced through the Television Without Frontiers Directive: country of origin. Apart from harmonizing some provisions, the general rule is that the copyright laws of the country of establishment of the media company apply. Two quite distinct copyright regimes operate in Europe and it proved impossible to reconcile them. One is based on the principle of authors’ rights, which includes the understanding that the creative right of an author (and this can be anyone who produces an original work be it a programme, an article, a picture etc.) is unalienable and cannot be sold. On this basis, countries following this approach generally provide better protection to individual authors over media companies. The other is based on the principle of copyright, the right to copy and re-use creative works; under this regime all rights including the moral right (the right to be identified as the author and the right to object to modifications and other derogatory treatment of a work) can be purchased. With the country of origin principle EU legislation does not have to tackle this problem. Rights are given to the producers and creators of movies, audio-visual works, software and databases with a myriad of complex provisions defining originality, collaborative efforts, what constitutes a database and so on. But these provisions do not address the grey areas of ownership. An author of a movie is protected by the term directive until 70 years after the death of the author. But he or she can be the producer or the director depending on the national laws. The issue becomes even less clear where journalistic works are concerned. Who is the author of a documentary programme? The EU rules do not deal with this issue and leave it to national legislation. Whoever is the author under the national rules enjoys the protection granted by the different directives dealing with distribution or lending rights. Many provisions of the directives were hotly debated between media owners and representatives of journalists, performers, writers etc. The media owners, who favoured the country of origin approach over harmonization, won this key battle. In other areas, for instance, on the term of protection, performers, journalists and writers were more successful with longer term provisions being written into European law. Media owners have successfully resisted any attempts by the European Commission to address the question of moral rights. They fear this would open the door on harmonizing the two different copyright regimes in the European Union. It would indeed be difficult to introduce a European regime on moral rights without addressing the question of whether these rights can be sold or not. Being mostly concerned with the free movement of goods and services in the internal market, the Commission felt that moral rights had little economic value or impact and that, therefore, there was no need to harmonize.


After the wave of regulation in the 1990s the Commission has slowed down its production of copyright directives. An internal review of the Commission in 2004 found that only minor adjustments to existing laws would be necessary.10 In 2004 the EU adopted a directive on the enforcement of intellectual property rights; generally known as the piracy directive.11 The directive harmonizes existing national legislation on piracy including provisions ranging from fines to imprisonment for serious infringements and aims to improve the cooperation of different national authorities in prosecuting piracy. The directive deals with piracy for commercial purposes, not with the copying and downloading of works by individual consumers. Nevertheless, enforcement of these provisions will become increasingly difficult with countless sites offering downloads of TV programmes from across the world. Many of these sites are not based in the European Union and any enforcement of the piracy rules could only be done within the World Trade Organization framework. Access to information in the EU: Still a way to go In the early days of the European Union the ‘diplomatic’ approach to openness was pervasive throughout the institutions; almost every document was a state secret. The EU did not come easily to opening up to its citizens. It was during the negotiations for membership with Sweden that the issue came to the fore with Sweden making transparency and openness an integral part of its negotiations. The Maastricht Treaty in 1993 and later the Amsterdam Treaty in 1997 finally put the principle of openness into EU law. Between 2004 and 2006 some 40 cases dealing with access to EU documents came before the European Court of Justice.12 Most of the cases against the Commission are brought by companies and deal with competition rulings or commercial secrecy. The cases against the Council are of a more general nature addressing issues such as decisions on rules on immigration, database protection or police cooperation. In fact, the debate on access to information centres on the Council, the EU’s most powerful and still most secretive institution. After the Maastricht Treaty those campaigning for more openness had several important successes, the first one being the case of the Guardian against the Council. In 1994 the Guardian requested access to a set of 49 documents from a Justice and Home Affairs Council dealing with immigration and asylum, policing and judicial cooperation. The Guardian won its case13 on the grounds that the Council did not attempt to weigh the interests of citizens for openness against the Council’s need for secrecy in its deliberations. The case was a significant step in challenging the ‘diplomatic’ approach of the Council. Others followed. On 30 May 2001 the EC Regulation on access to documents in the three central EU institutions was adopted, which established combined and clear rules on access to information. Also the creation of the European Ombudsman, who has been vocal in


calling for better implementation of the regulation by the institutions, is a step in the right direction. But many journalists and media freedom NGOs feel that there is still too much secrecy in EU affairs. With the ‘war on terror’ high on the political agenda and the Justice and Home Affairs Council focusing on curbing what is termed illegal immigration, ensuring efficient cooperation of police is deemed more important than openness. Summing up: The main trends Between 1990 and 2004 the EU was in its most active state. Almost all of the key laws governing the media were adopted during that time. Since then, one can sense a bit of ‘directive fatigue’ among the Member States. As pointed out in the introduction to this book, the Member States gave voice to their concerns at the Lisbon Summit wanting to have less formal directives or regulations and more soft governance in application to policy areas not covered by the acquis communitaire (the term given to all EU treaties and laws put together). This, of course, includes media policy. It can therefore be expected that there will be less directives in the future, that where the Commission will propose legislation it will be narrowly defined in scope and leave room for self-regulatory or coregulation mechanisms. In trying to come to terms with a fast-changing media landscape and media market the EU will continue to struggle to keep up with technological developments. It wants to reap the economic benefits of the technological revolution and the predominant view to date is that this is best done by liberalizing markets and providing the best conditions for company growth. Recalling the two main strands of EU media policy (market versus culture), it is clear that the market approach remains dominant. Specific provisions at European level to safeguard pluralism and diversity of opinion are not likely to be initiated in the near future. Those who argue for more protection of cultural diversity, rights of minorities and diversity of opinion and those who call for more intervention by policy-makers into the media market to obtain these goals, find themselves on the margin of the current debate at European level. But this may change. With attitudes in some Member States becoming more critical towards liberalization and globalization, also the debate at European level may turn around. For now, it is the European Parliament that is most vocal in its calls for putting policy objectives over market considerations. The Commission and the Council tend to stick to the liberalization project. The associations of journalists, press freedom groups, civil rights NGOs continue to make the case for a media policy that is ready to intervene in the market so that standards of quality and rights can be protected. The media owners and advertisers, on the other


hand, argue for a free market as the best way to ensure press freedom and economic growth. With the EU in crisis over its constitution and future shape, there is now more discussion about moving away from an approach that focuses largely on abstract rules and the internal market towards a debate about how we want to live in Europe, not just as consumers but also as citizens. This may also have an effect on media policy. It should certainly affect openness in the EU institutions. In spite of the transparency initiative, those who want to gain access to EU documents and decision-making procedures are still met with bureaucratic reluctance. If the EU institutions want to engage with citizens, this is an area where they can and must change. Notes 1. For updated texts and the consolidated directive as it now stands, as well as the previous version of the directive. see http://ec.europa.eu/comm/avpolicy/reg/tvwf/modernisation/ proposal_2005/index_en.htm. 2. Eleftheria Pertzinidou, study on the implementation by Member States and EEA states of Chapter III of the Television Without Frontiers Directive, European Institute for the Media, Dusseldorf, 2001. 3. Judgement of the Court (Third Chamber) of 2 June 2005, www.eur-lex.europa/ lexUriServ. 4. For more information on the current state of play, see http://ec.europa.eu/comm/avpolicy/ reg/tvwf/modernisation/proposal_2005/index_en.htm. 5. Such as the European Publishers Council, the Association of Commercial Television, the European Association of Communication Agencies. 6. The European Federation of Journalists is the European regional body of the International Federation of Journalists. For more information, see www.ifj.org. 7. European Commission, Pluralism and Media Concentration in the Internal Market. An Assessment of the Need for Community Action, COM (92) 480 final, December 1992. 8. A list of the most recent cases can be found at www.ec.europa.eu/comm/competition/state_ aid/decisions/addional_docs.html. 9. Reference to this decision is made in the introduction to this book, where also the reference can be found. 10. Commission staff working paper on the review of the EC legal framework in the field of copyright and related rights, SEC (2004) 995, Brussels, July 2004. 11. Directive on the Enforcement of Intellectual Property Rights, 2004/48/EC, Brussels, April 2004. 13. The EU court system and freedom of information, compiled by Steve Peers, at www. statewatch.org. 14. The Guardian’s victory proved a difficult one. It took the Council almost a year to provide 46 of the 49 requested documents, access to the last three was refused. The Guardian decided not to follow up with another case on those documents.

ANNEX A

INVENTORY OF EU MEASURES AFFECTING THE MEDIA


INVENTORY OF EU MEASURES AFFECTING THE MEDIA | 193
















INVENTORY OF EU MEASURES AFFECTING THE MEDIA |

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TERZIS

European Media Governance: The Brussels Dimension Edited by Georgios Terzis Commercialisation, concentration, convergence and globalisation have changed the way media is governed in Europe today. Media rules and regulations have shifted from national government policies to local, regional, national, multinational and international ones and away from exclusively governmental domains. Terzis analyzes how European governments slowly but steadily concede media control to international organisations such as the EU and pan European civil society associations, and delves into the media lobby efforts in Brussels.

EUROPEAN MEDIA GOVERNANCE THE BRUSSELS DIMENSION

This fascinating volume investigates how and why the print, broadcast, film and advertising industries and journalists, scriptwriters and consumers unions are lobbying in Brussels. Terzis provides detailed knowledge of the roles of ten mediarelated organizations including the European Broadcasting Union, the Association of European Radios, and the Federation of European Film directors. He examines their influence and their participation in media related debates, as well as presenting relevant work of the European Commission and European Parliament. European Media Governance: The Brussels Dimension is the first book of its kind, presenting a comprehensive study of media governance at a European level. Dr. Georgios Terzis is Associate Professor at Vesalius College, Vrije Universiteit Brussel in Belgium and chair of the journalism studies section of the European Communication Research and Education Association.

Supported by the Dutch Ministry of Education, Culture and Science ISBN 978-1-84150-198-7

9 781841 501987

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www.intellectbooks.com


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The Dimension Riders

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European Media Governance: The Brussels Dimension

European Media Governance: National and Regional Dimensions

Governance in the European Union

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European Integration and Supranational Governance

European Culture and the Media (Changing Media, Changing Europe)

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Governance Stories (Routledge Advances in European Politics)

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