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      Media businesses

       

      Current state of play

      Regulatory framework for the media sector

      In the EU, broadcasting is primarily regulated under the Audio-visual Media Services (AVMS) Directive. 

      • The AVMS Directive distinguishes between 'linear' services (eg scheduled broadcasting via traditional television) and 'non-linear' services (eg internet-based 'over-the-top' (OTT) services such as video-on-demand (VoD)).
      • As linear services 'push' their content to viewers – who have no influence on the content – they are subject to more stringent regulation. For example, providers of linear broadcasts have to reserve the majority of their production, budget and transmission time for European works and must ensure that at least 10 per cent of their programming is supplied by independent producers. Non-linear services are not subject to such fixed quotas.
      • Television advertising and teleshopping are regulated by the AVMS Directive as well, including limitations with regard to presentation and frequency of advertising and teleshopping.

      EU licences for digital content 

      National organisations which collect royalties for the copyright owners (ie the artists) in the EU have paved the way for pan-EU licences which can be bought by services marketing online music, such as Spotify, Google Music or iTunes. Similarly, the Commission is giving consideration to promoting further initiatives to foster EU-wide cross-border licensing of online content.

       

      What should I be thinking about now?

      Broadcasting

      The UK regulator, Ofcom, has indicated that it would like to take a more stringent approach to regulation of OTT services than is required under the AMVS and align the regulation of VoD and traditional television. It is possible that, following a Brexit, Ofcom would put these policies into practice and enforce a stricter regulation of OTT services. In such a case, OTT providers in the UK might seek to relocate their business to the EU and curtail their UK investments in the hope of mitigating regulatory risk. 

      Pan-EU licences 

      An important question is how pan-EU licences (for all kinds of content) would be affected by a Brexit - would these still cover UK content? This also affects future licenses - separate agreements might be required in order to license content originating the UK. 

       

      What could the position be following a Brexit?

      The answers to many of the above questions would depend on the nature of a post-Brexit UK/EU relationship.

      To give an idea of the range of possible outcomes we have considered what the position would be under the ‘Norwegian option’ and the ‘WTO option’ – on the basis that these are at opposite ends of the spectrum of existing models for an alternative relationship with the EU.

      What if the UK leaves the EU but joins the European Free Trade Association and remains part of the European Economic Area (EEA)? (the Norwegian option)

      The four freedoms as laid down in the Treaty on the Functioning of the European Union (ie the free movement of goods, services, persons and capital, as well as competition and state aid rules) are incorporated in the EEA Agreement. This mean that the AVMS Directive is applicable throughout the EEA. Hence, nothing would change since the UK would still have to comply with this directive.

      What if the UK left the EU without any form of free trade agreement? (the WTO option)

      The UK would be free to revise its media regulatory framework and deviate from EU standards.