Copydan World TV and a possible revision of the Satellite and Cable Directive

Transcription

1 November 2015 Copydan World TV and a possible revision of the Satellite and Cable Directive In August 2015, the European Commission launched a public consultation on the Review of the EU Satellite and Cable Directive. The central focus of the consultation is how and to what extent the country of origin -principle and mandatory collective licensing of cable retransmission has facilitated cross-border access to European content, and whether these might be extended into other areas than satellite broadcast and cable retransmission respectively. This document deals with the Danish perspective from Copydan World TV, concerning how the directive have worked, and which potential changes to the directive, could lead to what results. It starts with an introduction to Copydan World TV and its licenses. It then propose a possible model for expanding the collective mechanism of the directive, including a mechanism for licensing of portability of TV-packages in Europe. Finally, it examines the functioning of the country of origin - principle, and what consequences an extension of the principle into other areas might lead to. Introduction to Copydan World TV Copydan World TV is a Danish collective management organization that collects and distributes remuneration regarding cable retransmission and other kinds of re-use of broadcasts. The licenses provided by Copydan World TV generate a yearly revenue of approx. 130 mil. per annum to authors, performers, producers and broadcasters. The main area of licensing for the collecting society is cable retransmission according to the Danish implementation of Article 9 of the Satellite and Cable Directive. 1 In addition to this, other uses accessory to cable retransmission, like catch up, have been licensed through the same collective framework used for licensing based on Article 9. Copydan World TV contributes to a well-functioning copyright environment: A framework for cultural diversity Ensures a sustainable financial environment for the creation of new creative content, not least in minor languages Protects artistic and creative content against infringements and other unauthorized usage 1 In Denmark this has been done via the Extended Collective Lisensing system, which is one the arrangement conserning the management of right, which is acknowledged in EU-Law, e.g. in recital 18 in the Infosoc Directive, recital 24 of the Orphan Works Directive, and recital 12 of the Directive on Collective Management of Copyright and Related Rights. 1

2 Constitutes the basis for the creative industries with an annual turnover in excess of 500 billion euros in EU-28 and employing at least seven million Europeans. The activities of Copydan World TV fulfill one of the objectives in the EU Directives in the copyright field: to achieve fair remuneration to the right holders. This is, for instance, made clear in the EU Court of Justices decision in the Premier League case (C-429/08), para Collective management secures the objective of fair remuneration to the rights holders. Agreements on the use of content within certain pragmatic frameworks lead to greater flexibility than sweeping ideological legislation, and that is why in Denmark lawmakers, right holders and users in general have established a tradition for voluntary agreements. For years now, such agreement models have enabled The Danish Broadcasting Corporation (Denmark s major national public service media enterprise) to offer a comprehensive selection of free archival content online. Article 9 of the Satellite and Cable Directive supports two different paths to licensing of cable retransmission. It secures both the possibility of collective management of rights regarding cable retransmission and an alternative system where all rights are concentrated with the broadcasters. I.e., it provides two choices, two options for rights clearance in the market. The provision establishes a quite general framework, and the arrangements concerning the management of right in relation to the option of collective management in Article 9 have been implemented in vastly different ways, but in spite of these differences licensing of cable retransmission function very well across Europe. How Copydan World TV aggregates its rights World TV is a joint organization representing all types of right holders involved in broadcasting; World TV does not have any individual right holders as members. 2

3 Rights from the authors and performers are acquired from more than thirty different organizations representing film directors, actors, script writers, journalists, photographers, musicians and other groups of creative right holders on a non-exclusive basis. Rights in musical works (Koda) are not directly represented, but are managed by Copydan World TV according to a cooperation agreement. Broadcasters rights come through a cooperation agreement with UBOD. UBOD represents public service broadcasters and many commercial broadcasters on a non-exclusive basis. Commercial broadcasters that are not part of the UBOD cooperation, license their own rights, including rights acquired in accordance with Article 10 in the Satellite and Cable Directive, directly to the distributor. Film, TV and record companies are organized in an organization called CAB. CAB is governed by both Danish and international producers. Among others, MPA (Motion Picture Association), AGICOA, G.W.F.F. and IFPI are represented on the board of CAB. CAB passes rights to Copydan World TV on a non-exclusive basis. Foreign right holders are represented through non-exclusive representation agreements with several European rights management organizations. In some cases Copydan World TV enter into the agreements, and in some cases the member organizations do. 3

4 Whereas re-use of broadcast content affects thousands and thousands of different rights holders in many different rights categories, a mechanism for non-represented right holders is needed. World TV relies on the extended licensing provisions in the Danish Copyright act, which constitute the Danish implementation of Article 9 in the Satellite and Cable Directive. How Copydan World TV receives mandates from the rights holders The rights from the individual right holders are usually transferred non-exclusively to their member organizations through membership. The non-exclusive transfers from the individual rights holder to the member organization typically follow from the by-laws of the member organization and not through an individual agreement. The transfer of rights typically implies a broad mandate to licensing of mass use of audiovisual content (retransmission, on demand re-use of broadcasts by cable distributors, other public performance etc.). The rights are transferred to World TV through the member organization s membership in Copydan World TV or by a specific mandate from the member organization to Copydan World TV. 4

5 These mandates are non-exclusive and only concern rights that the right holder has not transferred to somebody else. As such Copydan World TV only represents the residual rights. This can be either exclusive rights or remuneration rights, e.g. where permission to a certain use has been given, but where payment is still outstanding. Sometimes the individual right holders have made a transfer to a third party for a given use; in that case Copydan World TV does not represent the right holder. The freedom based on Article 9 in the Satellite and Cable Directive to choose whether to transfer rights to a broadcaster, or exercise them through collective management, functions very well with this system, as it makes sure that the cable distributors will always be able to obtain the necessary rights through one of these, or through these combined. How Copydan World TV distribute remuneration Remuneration is not distributed directly by Copydan World to individual right holders. Instead remuneration is distributed to the member organizations or to sister societies, that distribute individually. Distribution keys are agreed between the different categories of right holders, without intervention from Copydan World TV. This means that Copydan World TV can remain neutral and focus solely on licensing, and that distribution between right holders in relation to different licenses, is based on the rights picture related to the specific use licensed. 5

6 Copydan World TVs licensing and services Licensing of use of TV content: 1) In some cases Copydan World TV also represents the broadcaster: Copydan World TV licenses all necessary rights to the user. 2) In some cases Copydan World TV does not represent the broadcaster: If the broadcaster has acquired all the rights necessary: no involvement by Copydan World TV If the TV producer has acquired all the rights necessary from authors and performers but has not transferred all these rights to the broadcaster: Copydan World TV licenses the producer s rights If the TV producer has not acquired all the rights necessary from authors and performers Copydan World TV licenses all residual rights. Examples of licenses and services: Cable retransmission of Danish and European public service channels, and other channels in the UBOD cooperation Subtitles on channels from neighboring countries Cable retransmission of commercial channels Web-TV inside and outside of the household Start Over service 48 hour catch-up across all channels 30 days catch up on subtitled programs from neighboring channels Network PVR Cable retransmission of Danish and European public service channels, and other channels in the UBOD cooperation Simultaneous and unchanged retransmission Copydan World TV licenses all necessary rights to the user (incl. broadcasters rights) More than 50 channels from Europe and the rest of the world Simple tariff based on number of channels 6

7 Subtitles on channels from neighboring countries A service, where selected programs from the primary public service channels from neighboring countries Germany, Norway and Sweden are subtitled Launched in 2009 in cooperation with the TV-distributors An estimated 9000 hours of subtitled programming in 2015 by the year end Subtitles are made by external bureau, and added to the signal by the distributors Not-for-profit all payments from distributors are used on subtitling Very broad market penetration not dependent on set-top box Cable retransmission of commercial channels Simultaneous and unchanged retransmission Copydan World TV licenses residual rights, which have not been licensed by the broadcaster Simple tariff based on number of channels Tariff based on volume of music content in channels where all other rights have been licensed by the broadcaster Web-TV inside and outside of the household A service, which implies that the end-user can access all her channels on computers and mobile devices like tablets and smartphones The service entails an accessory streamed mirror of the retransmitted channels Launched inside the household in 2010 and outside the household in 2012 Generally access to all digital services on Web-TV Large marked penetration Start Over service A service, which implies that the end-user in a cable networks etc. are able to restart any TVprogram (except live sport), across all channels, until the program in the flow channel has ended. This means that if a user is late to watch a TV-program she can re-start it and watch it from the beginning and if a user is channel surfing and bump into an interesting TVprogram she can watch it from the beginning 7

8 In legal terms, this catch-up service is an on-demand service but it is an accessory to the cable retransmission Launched in 2009 as the first of its kind in Europe Reflects new end-user demands, new technological functionalities Licensing agreements with several cable TV distributors (including the major distributor in the market, TDC/YouSee) 48 hours catch-up across all channels A service, which implies an extension of the start over service until 48 hours after a program has been broadcast Launched in 2012 If an end-user has missed a program they can see it anyway, and users can go back in their Electronic Program Guide to find and choose programs to watch Licensing agreements with several cable TV distributors (including the major distributor in the market, TDC/YouSee) 30 days catch up on subtitled programs from neighboring channels, including stacking A service, which implies that the end-user can access all subtitled programs from neighboring channels until 30 days after broadcast Launched in primo 2015 Makes content from neighboring countries more accessible to end-users, as they might not have the same awareness of the programming schedule on channels from other countries Also includes stacking, where all episodes of a TV-series is available while the present season is running This makes it possible for users to get cached up, and thereby makes the content more accessible Presently launched at the major distributor in the market, TDC/YouSee Network PVR A service, which implies that the end-user in a cable networks etc. are able to record TVprograms in the cloud at the server of the distributor The TV-distributor is able to use single reproductions of works for all users, minimizing the cost of infrastructure Removes the need of set-top boxes 8

9 Pending launch has been announced by the two biggest distributors in the marked, TDC/YouSee and Stofa With the technological advances, TV-distributors have gone from retransmitting and selling channels as part of their TV-packages, to a much more active role. All the new digital possibilities give the TV-distributors a lot of opportunities to improve their services, and thereby retain their customers in a volatile content marked. However, it also entail a lot of new copyright relevant acts, which can be a challenge for TV-distributors to obtain access to licenses to. All the services above, are in Denmark seen as accessory to cable retransmission, and a part of the reality in a digital world. Therefore, the Danish section 35 in the Danish Copyright Act, which implements Article 9 of the Satellite and Cable Directive has been supplemented with a new subsection, which extends the two option framework for cable retransmission to other forms of reuse by third parties, which happen on the basis of a broadcast, and is connected in time to the broadcast. As such, TV-distributors can either obtain a collective license, a license from the broadcaster, when the broadcaster hold all rights, or a combination. The extension is not mandatory, which is the case with cable retransmission, but contains competence for the Copyright License Tribunal to rule on the fairness of terms and fees. As is the case with cable retransmission according to the Satellite and Cable Directive, an arrangement concerning non-represented right holders is needed. In Denmark the Extended Collective License-mechanism is used. Individual right holders retain a right to opt out, but because of familiarity with the well-functioning cable retransmission system, to which these services are accessory, as well as the fact that individual right holders, aside from broadcasters, would not be able to license these uses individually, as the complexity and cost of individual licenses for the TVdistributor would be prohibitive, all parties take part voluntarily. 2 A similar extension of Article 9 and 10 in the Satellite and Cable Directive, to services accessory to cable retransmission, could give the same possibilities elsewhere in Europe. As with the current Article 9, member states would be able to choose the arrangement concerning management of rights in accordance with their current system for cable retransmission, and their legal tradition. 2 See Terese Foged: Danish Licenses for Europe [2015] E.I.P.R., Issue I, p , for a further description in English of the Danish extension. 9

10 Portability In addition to the above described possible extension of the legal framework in the Satellite and Cable Directive to other areas, Copydan World TV has the following proposal regarding portability of cable TV packages: Goal: When a TV customer subscribe to a TV package with a TV distributor (e.g. Vodafone or TDC), this subscription could readily be brought with the customer if he or she takes up residence in another EU country. Method: Motivate the market to find market-driven solutions for cross-border access to TV by providing a better opportunity to use collective management societies to address the rights challenges. The idea is to make a modest intervention in the way individual rights holders can exercise their rights in the limited, albeit common situation that a TV package subscribers reside temporarily in another EU country. This will expectedly lead to market-driven solutions that voluntarily provide wider access to TV across the EU countries (either through collective management companies or individual licenses). Drafting: Addendum to the Satellite and Cable Directive on mandatory collective management of the situation in the case that a TV package subscriber take up residence in another EU country and the rights are not transferred to a broadcaster, i.e. the rights to license and require payment in such cases of portability of TV packages can only be exercised collectively, if the rights are not held by the broadcaster. The scheme should probably extend to the EEA. More about the model: The Satellite and Cable Directive now contains a requirement for mandatory collective management, i.e. the right holders must accept that their rights are exercised through the collective management organization, such as Copydan World TV. This requirement will be extended to the portability of TV packages across borders. This implies that a right holder in the same way as in the case of simultaneous and unchanged retransmission, can only pursue their claims through a two-tier system: The right holder can either transfer the rights to a broadcaster on the basis of individual contracts or exercise the rights conferred through a management company. In the same way as in the case with simultaneous and unchanged cable retransmission, it does not take a position on how collecting societies mandates from the individual rights holders and how outsiders right holders handled. This may be governed by national law. An individual right holder will not be able to independently prohibit or submit a payment claim against a TV distributor, as the right may only be exercised through a collecting society. 10

11 The proposal will lead to rights to portability of TV packages across borders generally either being transferred to TV stations or collective management companies. This is because each individual rights holder will not have an interest in keeping the rights back, as they cannot be exercised individually. Moreover, the proposal is expected to result in a change of representation agreements between collecting societies across the categories of rights. This will allow collective management organizations to be able to license portability of TV packages vis-à-vis TV distributors. The country of origin -principle to date Initially, it is important to realize that even if the country of origin -principle has made satellite broadcast in Europe easier (by solving the problem of technically unavoidable overspill that occurs due to the footprint of a satellite not being confined to a single member state), it is not without faults. In relation to the Commission s focus on cross-border, the principle has not solved all problems related to cross-border access, especially in relation to premium content, including sports. Likewise, due to market considerations, it has not lead to the sale of satellite services subscriptions across borders on any significant scale, aside from broadcasters that have misused the principle in order to circumvent obligations grounded in the AVMS-directive (previously the Television without Frontiers directive) or in tax laws, by establishing themselves in other member states than the states of their sole target audience ( targeted channels ). This forum shopping has also lead to Nordic commercial broadcasters established in the UK, clearing Nordic music rights in channels targeted solely for the Nordic region (Nordic language, Nordic commercials, etc.) with PRS in the UK, and not in the target countries. It is worth noting that PRS has one of the lowest levels of remuneration for music rights in Europe. Why the country of origin -principle has worked to the extent it has One of the main reasons for cross-border disputes, is the risk that licensing of content in secondary and tertiary markets in other European countries, where it constitutes niche content, might affect the value in the primary market where it constitutes premium content. Because of territoriality, content can be sold in other markets exclusively or at a discount, which is necessary to penetrate these. Especially exclusive sale of pre-sale rights have emerged as a primary financing model of European cinema and television, as the sale of DVDs has declined. Financing through pre-sale rights and coproduction across Europe is a European success story, and tinkering with the basis of these possibilities would jeopardize the already fragile financing of new audiovisual works. 11

12 The primary reason why the country of origin -principle has worked to the extent is has, is that the principle has not had a large disruptive effect on the primary products and the primary markets, because the overspill of satellite signals to single households in other countries in practice has been negligible. One area where the principle has not been accepted by the market, is in relation to sports, which is the most common subject of territorial disputes. This is due to the disruptive effect, or fear thereof, on territorial licensing of sports. Sports is not protected by copyright according to the ECJ, and serves to illustrate that territoriality of content has more to do with market forces, than national copyright laws. Adverse effects of extending the country of origin -principle online If the principle is extended to online, especially in relation to on demand, it will be much more disruptive, because the technology is not limited in the same way that satellite broadcasting is. Premium content can generally be included in satellite broadcast without disruptive effect, as it is part of a programming schedule in channels targeted at a different audience, which it requires a specific technical set-up to receive. This is not the case in relation to online, and especially not in relation to on demand. This will instead lead to licenses being sold as pan-european licenses, which will mainly suit large American companies, and not be obtainable for national European distributors, except for maybe a select few. This will also lead to content being aggregated in a few large catalogues, which would hurt European diversity, as these will not have the same need or incentive to push niche European content. Alternatively, European content will only be available from service providers in the home market of a production, meaning that end users in other member states will have to pay a premium home-market price, in order to access content they will likely consider as niche, and are interested in, but probably not at a premium price. As has already been seen in the on demand market, these American companies will use any forum shopping possibilities to limit their costs. This would include establishing themselves in the member states with the lowest protection of copyright, and might lead some member states to a copyright race to the bottom, in order to attract these businesses. This will put further pressure on national European distributors, who indeed want to support European culture and right holders, but struggle with the competition from American corporations, which do not compete according to the same rules, either because of forum shopping or the use of the safe harbor provision in the E-commercedirective. Likewise, it might lead to a license fee race to the bottom, in areas where several collective management organizations hold the rights to the complete European repertoire through law or through reciprocal agreements. A race to the bottom will not be accepted by holders of rights to premium content, whether it is music or audiovisual productions. The right holders will, to protect revenue streams, most likely 12

13 withdraw their rights from any collective licensing, ultimately leading to complete fragmentation of rights. Multinational companies might be able to navigate in and seek to exploit such a fragmentation, but smaller upcoming companies will drown in transactional cost when acquiring the relevant rights. Choice of Law Looking at the jurisprudence of the EU Court of Justice, the international treaties on copyright and general EU rules, EU law must be interpreted in a mandatory way to the effect that also law of the country where the effect of a communication to the public takes place is applicable, i.e. the country of reception. As such, the country of origin -principle in relation to broadcast is an anomaly in a special area with elements, e.g. technically unavoidable overspill, that are not present in other areas (satellite broadcasts are point-to-multipoint transmissions, while online is interactive point-to-point transmissions). Instead of expanding the country of origin -principle to other areas, it should be considered to amend the principle, in accordance with what has worked in relation to broadcast, in such a way, that the country of origin -principle only applies in cases, where there is technically unavoidable overspill, as the consideration behind the principle is not present e.g. in the case of targeted channels, as pointed out above. It is worth noting that online geo blocking has as much to do with digital service provider s business and roll out plans, than with difficulties stemming from the clearing of rights in the country of reception. 13