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Films Are Not Fast Food – Digital agenda has drawbacks?

Putting creators, diversity and jobs at the heart of the Digital Single Market

The European Commission is currently working on its Digital Single Market (DSM) strategy, due in May writes Carole Tongue. One of its priorities is to remove obstacles so that consumers can securely and conveniently access goods and services, “including digital content wherever they are regardless of borders”. It is as if culture and creation were the same as ties, cars or coffee machines. French moviemaker Bertrand Tavernier declared at a conference two weeks ago: “I don’t want our films to be treated like fast food”. Indeed, these important creative works are conveyors of meaning, values and identity, and cannot be treated like any other sector. Unfortunately, words and ideas like cinema, culture, creation, citizenship seldom appear in the lexicon of the EU Commission these days.

Defend a high level of protection for authors’ rights and copyright

Current plans of the Commission and some in the European Parliament to reform copyright – as part of the DSM strategy – are particularly alarming. They want to sacrifice copyright on the altar of consumerism: harmonizing and possibly extending exceptions; end of the territoriality of rights … We are all consumers but it is the responsibility of policy makers to remember that copyright policy first and foremost exists to ensure the remuneration of authors, the financing of creation and the protection of works. IP rights are in the European Charter of Fundamental Rights and must be considered a civil right for creators. A high level of protection of copyright therefore remains essential for the diversity of creative works to continue. Portability and an end to geo-blocking will not be delivered by weakening copyright. These are commercial issues not copyright issues.

It is also important to remember that the first plague that threatens copyright is non enforcement and piracy. Effective measures to fight against counterfeiting of audiovisual, cinematographic, music and literary works remain essential, all the more so as the creative sector represents at least 4.2% of the EU economy, over 7 million direct jobs and nearly €540 bn in turnover, making it one of the biggest sectors in Europe and key to Europe’s post-crisis recover. Yet, huge amounts of creative content continue to be stolen online on an everyday basis. Online copyright infringement threatens jobs, damages revenues and undermines investment in the creative industries.

The EU and Member States must investigate and prioritise ways to identify and take down services which carry infringing or stolen works. Action bringing all relevant stakeholders together as in the EU Commission’s “Follow The Money” initiative should be emulated more widely in a bid to disrupt the business models of sites carrying infringing content. Support must be given to the EU Action Plan against infringements of intellectual property rights. Meanwhile effective promotion of existing legal online offers across Europe, and support for the extension of these services, is essential.

Completing the Digital Single Market should benefit citizens and consumers but not to the detriment of creation and creative workers. Yet, current plans of the European Commission risk endangering authors’ remuneration, and undermining the financing of creation. For instance, the EU Commission must respect that the financing models to encourage investment in the production of original film and TV content are complex. Effectively, producers must pre-license a film, an audiovisual work to distributors, exhibitors and investors to offset the costs of production. These pre-sales financing systems rely on the licensing of content on a country-by-country basis across Europe and have evolved successfully so that creators can make a return on their investment.

Mandatory cross border licensing of audiovisual content could potentially undermine investment and lead to homogenization as the ability to take risks on innovative new concepts and stories is diminished due to lack of up-front finance. This would run counter to EU obligations to uphold cultural and linguistic diversity. Such measures would also give a competitive advantage to large platforms who distribute works – most of which are non-European and are already in a strong market position.

Modernize regulations to adapt them to the digital era

One of the key priorities, instead, is to modernize policies having an impact on culture, to make them fit for the digital age. The Commission has an opportunity with its digital strategy to put in place equitable rules for all the relevant digital players in financing creative works. Indeed, there is a need to re-balance the value chain, with fair remuneration and fair rules.

Those who produce creative works receive only 2% of the total values from the internet which is at least $800 billion. Means to rebalance the Internet value chain in favour of creators should be urgently examined. We need to guarantee authors’ remuneration for each use of their works. For instance, two parallel approaches are needed in the audiovisual sector. One is to improve creators’ contracts. The other is legislation guaranteeing that the remuneration of authors, co-authors and performers is linked to the exploitation of their works.

An unwaivable right to remuneration, compulsorily negotiated and collected on a collective basis from users, has been supported by several parliamentary resolutions and studies and can build on the recently adopted EU Directive on Collective Rights Management which lays down common rules across Europe.

In Europe, the audiovisual market is not a level playing field but one where some companies enjoy a near monopolistic position in the provision of some audiovisual services. Some dominate the search, aggregation and distribution market, whose financial objective of maximum return, with neither significant investment in creative content nor fair remuneration of creators, leads to competitive practices which without regulation do not promote the interest of creators or diversity. We need to look at the status of large internet platforms which are not included properly in the AVMS directive, even though they provide audiovisual works and benefit from the distribution of audiovisual content.

While traditional TV channels have to invest considerable amounts of their turnover in original local content each year, these relatively new digital players circumvent national rules and obligations. To apply the country-of-destination principle to Internet players will therefore be essential. This will enable a fair and proportionate contribution to the creation of new content and ensure a virtuous circle of investment and increased production in new and existing audiovisual works to the benefit of industry, creators and citizen/consumers alike.

We also need to look at the status of internet players in the e-commerce directive and enforce EU competition law in a way that would ensure fair competition, appropriate liability and a better contribution to creator’s remuneration and investment in creative works. More generally, the fiscal evasion perfected by certain giants of the internet, often linked to cultural services, is challenging Member States’ capacity to benefit from the digital economy in their market. Better fiscal coordination is needed to avoid a race to the bottom.

Finally, other regulations related to taxation need to be modernized in order to adapt to digital changes. Cultural and audiovisual works are currently subject to different VAT rates depending on the way they are accessed (cinema, TV, VOD, etc.) and devices that are used (paper books vs. e-books). Reduced VAT rates for all cultural and audiovisual goods and services, whatever their format, would help online market development and would be more coherent.

Defend cultural diversity

EU Member States individually and the EU as an entity have ratified the 2005 UNESCO Convention on the protection and promotion of the diversity of cultural expressions, which will celebrate its 10th anniversary this year. In this context, any EU rules for European audiovisual and cultural production must be based on premises which remain relevant even when creation and user practices are changing in the digital era, remembering that:

  • To promote and protect the cultural and linguistic diversity of the 28 nation states of the European Union requires both regulation and financial support at both national and regional level;
  • Cultural goods and services are not like those in other economic sectors.

Where the Transatlantic Trade and Investment Partnership, TTIP, is concerned the EU Commission negotiating mandate provides for the exclusion of audiovisual services.  This must apply in both the linear and online world. The new EU Commission must strictly fulfill its mandate and ensure that digital AV services cannot be liberalised in these agreements, as that would prohibit Member States from taking measures to promote European creative works on digital media.   Thus, the Commission must ensure that back door commitments in other fields such as e-commerce or telecoms do not circumvent this commitment by, for example, classifying audiovisual services as “digital products”.

Beyond the support for the audiovisual/cinema sector, we must ensure that cultural policies at all levels of government cannot be challenged in the context of trade negotiations so as to ensure the protection and promotion of cultural diversity.

European creation is one of the EU’s most important source of material and spiritual wealth within a global economy and the key to spreading its values across the world. Furthermore, cultural works are arguably of great importance in our democracy and in building understanding and cohesive communities within and across borders. Given recent violent events and ongoing populist nationalist demagoguery, strengthening Europe’s greatest asset, its cultural and linguistic diversity, should be a priority.

We therefore need to put creators, diversity and jobs at the heart of the Digital Single Market. Irish President Michael D Higgins once said he wanted to see a world of the “unfettered imagination.” Let’s make his dream come true with a European digital agenda committed to cultural diversity, high quality jobs and conditions for creators to unleash their imagination “sans fin”.

Carole Tongue is Chair of the EU Coalitions for Cultural Diversity (ECCD) and is a former Member of the European Parliament

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