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This morning’s decision by the European Court Of Justice in Luxembourg could derail the way that most independent films and TV shows are financed now and end the pre-selling territorial rights upfront. That’s because the court ruled that selling movie and TV rights country-by-country goes against the spirit of the single European market. It could also mean that Hollywood studios may only be able to sell Europe-wide pay-TV licences for movies, rather than striking deals with individual broadcasters. The ECJ said that this exclusive system of licences is “contrary to EU law” as the whole thrust of the European Union is to encourage the single market.
The European court also ruled that there is nothing to stop viewers from paying for cheaper pay-TV movie and sports channels beamed in from elsewhere in Europe. From now on, they will not have to pay BSkyB in the UK or Canal+ in France but could buy cheaper. “On the face of it, this is bad news for Big Content,” one TV analyst tells me. “The ruling means that restricting rights geographically is restraint of trade in single market. From this ruling, it would seem that, if someone wanted to use a foreign satellite decoder to watch a movie or TV series, and thereby bypass the local rights holder, there would be nothing to stop them.”
Today’s ruling comes because an English pub landlady fought UK pay-TV giant BSkyB and the soccer Premier League and won, after they tried stopping her from showing soccer matches on her premises using a Greek pay-TV decoder card. The Portsmouth woman, Karen Murphy, was fined for breaching UK copyright laws. But she appealed. And in 2008 the UK High Court referred the case to the ECJ. The fear now is that smaller broadcasters will be squeezed out if rights can only be licensed across Europe. Only the biggest players could afford to do this, destroying smaller and more local broadcasting markets. One European policy expert tells me: “This will be a black day for pay-TV since it effectively declares unlawful any agreement that would protect territorial exclusivity through preventing the sale and use of decoding hardware from another EU country. The business model for live sports rights is going to have to be significantly rethought.”
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Scary. Hope this gets appealed.
It’s time from them to all start speaking ONE LANGUAGE, too.
And all the food should be consistent. There is simply way too much diversity in Europe. This ruling will help.
There is no appeal. This is a ruling of the European Court of Justice–effectively the supreme court in Europe. What will happen is that its ambiguities and nuances will be tested in future litigation.
Actually very interesting.
Seriously, does common sense ever prevail? Bad news indeed.
This is very scary for independent films that are financed by pre-sales. Banks only loan when there are pre-sales for collateral. If there fewer buyers, there are fewer sales. Fewer sales means less movies will be made.
The French already have quotas.
This has nothing to do with common sense.
The law, the union, was made with a vision. Protecting local interests was not part of this vision.
The case has been comapred to the Bosmann case, where a soccer player sued over the ‘only two non-natives in a soccer squad’ rule in place in Europes domestic leagues at the time. End result? Spending spree by the clubs to stay competitive, where they now all belong to billionaires or corporations, or relying on this very money they now will have less of.
Filed under ‘How to create a monopoly and alienate people.’
This was coming.
Like it isn’t hard enough to finance independent films already… Thanks a lot UK… here’s hoping it gets appealed.
As if there isn’t enough media consolidation, along comes a decision that could gut local European television and implode the US indie film business?!
Nicki, it would be helpful to know the authority and jurisdictional scope of this court. Can this be appealed? Can it be enforced?
The thing about the European “market by market” system is that it’s not the artificial creation of governments or corporations, but an organic situation created by the simple fact that Europe is not a single nation. It has dozens of different languages and cultures, each forming their own unique markets with their own unique needs and wants.
This legal decision is based more on the theoretical notions of a united Europe than the concrete socio-economic reality. The greatest irony, is that the judges think they were sticking it to Rupert Murdoch and Sky TV with the decision, even though the unintended consequences will probably have him becoming even more powerful as he uses it as an excuse to consolidate the “single” European market.
Exactly Furious D – just thinking about all the language dubs that would have to be created for 1 deal if it covers all of Europe – makes my head spin.
Poor decision
This is ridiculous!!! This effectively kills ALL independent film and TV business and kills ALL competition. Now only the multinational corporations will be able to finance films as they only have the capability to buy pan-Euro rights. Let’s hope this never sees its way into law.
Seriously, do you live in the Uk or Europe- Bad News for who?
Sky has just obtained exclusive live rights to ten F1 races in a ludicrious deal with the BBC.
If you’re a hardcore fan and you feel ‘you just gotta watch it live,’ that privilege will cost you about $92 a race.
Or you could watch it free on German RTL on a different satellite with ad breaks.
Sky have been hammering pubs for years for showing football. I’ve heard of some pubs being charged up to $41,000 a year.
The lady in question was being charged $11,000 a year (it was reported) but was able to get another from Greece for about $1,200 (and that’s with no ‘Extras for Exclusive Matches’ like Sky).
Sky has many overheads, as you will have read from the many court cases reported on this very site, but to charge ten times the amount, come on!
Like boxing matches? to Uk Sky subscribers that’ll be $23 a match (sky box office), to people with access to another satellite, that’ll be free.
And you wonder where Mr Murdoch gets all his money to pay for his politicians and court cases!
They just paid out to shareholders about $1,500,000,000 this year.
Yeah, but they do a lot for sport, really!
I used to watch Indycar races all the time, but now I can’t remember the last time I seen one. Is that really good news for the sponsors of those teams?
I will write this very s-l-o-w-l-y so you understand.
Sky has only ONE agenda, and that is total market dominance.
(They dumped one Prime Minister for another because the former wouldn’t get rid of the BBC licence fee-That’s fact. Why else do you think that numpty David Cameron became Prime Minister of the UK.)
Once they have that and there is nowhere else to go to sell Tv productions and Films— How much do you think they’re going to pay then?
Nothing, and what you gonna do about it? Nothing because Sky will control it all.
Are you serious?!? It’s bad news for the GLOBAL film/tv market and consumers everywhere. Everything you’ve written is a surface look at the situation. Once you realize this is big corporate’s version of “Brer Rabbitt”, then you can write something intelligent. Seriously, what happens when there are no longer regional broadcasters because they cannot afford pan-Euro rights. Oh, sure, they close down and all that is left are the Sky, Canal+, etc and the consumer is even worse off than before. I can GUARANTEE you that no company in Greece can afford pan-Euro rights and when that company is gone, little ole pub owner has to go right back to Uncle Rupert and pay the ridiculous fees. This is just a way for the Murdoch’s to gain control all the faster, mate
More likely, it’s gonna be the end of exclusive rights. And that’s all.
I see there’s no shortage of conspiracy nuts in the UK.
The decision is going to bring about systemic and seismic changes for sure, but the whole point of having the EU is to permit the free movement of goods and services. Do viewers in Alabama or MIssissippi get charged extra because they’re over their side of whichever state line, drink mint juleps, are culturally and historically different and speak f-u-n-n-y?
This is one of the worst, short-sighted decisions I have ever seen. They have just gutted independent films – not just arthouse films – but any movie that gets produced outside the studio system. EG: Kick Ass, Don’t Be Afraid of the Dark, Eastern Promises.
Yes, short term view is that its a victory for the pub owner, but the next time sky just buys the rights for the whole of europe.
We seem to be playing into Murdochs hands whatever we do.
First of all, this can’t be appealed since it was already the highest court to decide. And then – this doesn’t change that much for film or TV. You already get free TV and basic cable from all over Europe in every other country in Europe. But obviously a movie in French still has to be dubbed for it to reach an audience in Germany for instance. Even if country-by-country sales were not allowed anymore (which I don’t really think the ruling says) – movie companies could sell the rights to show the movie in a specific language.
F-ing idiots who don’t understand foreign sales! They are needed for loans, it’s simple. Without the ancillary markets Independent filmmakers- the soul of this industry- are screwed.
Maybe it’s time we send the EU our bill for World War II.
The Brits have paid theirs, but I’m all for stiffing the French!
Let’s face it. Many film producer’s need to rethink all of their approach to finance. This naive mentality of… I have script so “give me a 1/4 of a billion dollars cash in brown paper bag in 24 hours” has to stop.
Inevitably, this news report oversimplifies the rulings in the case. The case is not about selling rights territory by territory but about selling broadcast rights, including satellite broadcast rights, that purport to prohibit the reception of the broadcasts outside the territory. As explained by the decision, EU law already guarantees the right to receive crossborder broadcasts. What the case saws is that broadcast licenses that attempt to limit broadcasts to a particular territory (which is only possible using encryption transmissions) violates a fundamental economic freedom of the EU–the freedom to provide services throughout the entire EU market. This ruling does not reach theatrical exhibition or exclusive language rights. In fact, the case specifically notes that granting exclusive rights is a key purpose of copyright as it applies to cinema. In short, the case is about trans-European broadcasting only, which of course may have some effect on pay TV programming other than sports but in all likelihood not the catastrophic one envisioned by many commenters. I think JM is the one commenter who correctly sees the import of the decision.
I cannot overstate how huge the implications of this decision will be. It will effect not only the financing of fims, but also the entire distribution system for studio and independent films. This decision is a clusterfu_k for the industry. The ruling was issued on the basis of EU competition laws, and instead this will have the effect of making distribution of films and TV shows in the EU less competative. Small distributors will be put out of business by this and the big guys will only get bigger resulting in lower MGs for US movies and lower overage shares. See below re a summary of the ruling from the EU firm Olswang (of which I have no affilation with, point number 2 is the big one here:
The Judgment
In answering the questions put to it by the High Court, the ECJ’s judgment comes to the following key conclusions:
• Authorised decoder cards sold in one Member State cannot be prohibited from use or resale in other EU Member States. Any national legislation which precludes the importation and resale of such decoder cards is unlawful. Importation and resale is lawful, even if the decoder card was obtained by the user giving a false name and address or if it is used for commercial purposes when it was intended only for private use.
• Rights holders licensing content to a broadcaster may not impose a prohibition on the broadcaster’s ability to distribute decoding devices or supply content outside of its licensed territory (so-called “absolute territorial protection”). Therefore any agreement designed to stop cross-border provision of broadcasting services is deemed to be anti-competitive and prohibited by EU competition law. The ECJ considers that such provisions cannot be exempted from the prohibition.
• With regards to the protection of FAPL’s copyright, the ECJ held there is no copyright in a football match per se, since sporting events cannot be “the author’s own intellectual creation”. They are not “copyright works”. The only copyright works are those elements (such as opening music, logos and credits) belonging to the rights-owner.
• Transient copies of those copyright works were being reproduced in fragments in the decoder device buffers and on the television screens. However, the mere reception of broadcasts (i.e. the picking up of the broadcasts and their visual display) in private circles is a “lawful” use of a work. The temporary acts of reproduction have no independent economic advantage separate from that provided by the mere reception of the broadcasts. Therefore those temporary reproductions do not require the rights-owners’ consent.
• Pub customers are a new public because they were not taken into account or considered by the authors of the protected works. Accordingly, there is an unlawful, profit-making communication to the public of the copyright works by the publicans.
Struggling to see how this benefits ANYONE? … Does this not just harm EVERYONE!?!/EVERYTHING?!?
Was the judge on crack?!
“I’m smellling a revolution, baby!!!!”
typical euro zone politics-this is counter-intuitive if ANY party wants to actually make a profit from their work at the end of the day. Is there one Europe, really? the financial stress alone in the eurozone and w/wide should be enough to take this bad idea off the burner right now. The licensing agreements from the UK are practically 100 pages long and I think the Queen still has to sign each and every one of them-get a grip Eurofolk, is this really a road you want to go down?
This is actually great news for consumers. I guess very few here remember how music releases in B&M days were exclusive to a specific market/country and to get your hands on a CD released in a neighbouring territory but not licensed to your specific locale you had to pay exorbitant amounts of money bordering on extortion. And that is precisely the reason why online global file sharing is proliferating (since the likes of itunes and amazon online music stores are still region-restricted).
I believe this decision will benefit independent film producers by opening up a very fragmented European market for their films. On the short term, it obviously means enormous changes to the way films are financed through pre-sales. They days of national distribution rights are over!
I think everyone is overreacting – ultimately this may affect the viewing of sports in public spaces, but I can’t see how it effects independent films.
We are talking about 27 different member states in the EU with at least 20 distinct languages used for broadcast, if you live in the UK you might watch a greek broadcast of football in a pub where you can’t hear the commentary but you’re not going to watch a film dubbed in greek are you? Ultimately many of these broadcasters and distributors go to the expense of dubbing and subtitling the films they acquire. If you live in france it’s not like you’re going to watch The King’s Speech subtitled or dubbed in German…