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The European Commission could well score an own goal

The Digital Single Market is focused on the wrong objective and is set to fail the copyright enforcement needs of sport.



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Ever since the modernization of EU copyright rules was first announced in President Juncker’s Political Guidelines in July 2014, sports rights owners and their broadcasters have been concerned about the potential consequences for their respective businesses. With the European Commission’s communication in December 2015, Towards a modern, more European copyright framework, that concern has evolved into alarm.

The business of sport is unique in many different ways. Unlike other creative industries, such as film or music, more than 90 percent of sport’s value is in the live transmission of its product, so the protection of the broadcasts becomes a critical issue. Another major differentiating factor is the cultural sensitivity of sport. Not only do different sports attract vastly different levels of interest across the EU, but sporting heroes are inevitably either national or regional. This means that fans want to watch their own teams, countries and men and women competing in sport, with commentary in their own language and cultural context.

Because of its territorial nature, the distribution of tailored sports content through territorial exclusive licensing has flourished over many decades, offering consumers precisely what they want to watch. But it is wrong to assume that this offer can simply be shared across a Digital Single Market (DSM). Territorial exclusivity and cross-border access are mutually exclusive; the two cannot co-exist – except potentially in the portability of legally acquired digital content.

Sport has given a cautious welcome to the Commission’s proposal for a European regulation to “ensure the cross-border portability of online content services in the internal market”. The proposed regulation upholds the principle of exclusive territorial licensing while introducing a portable solution for consumers when travelling to another member state for temporary periods. While there are still details to be agreed, particularly around the authentication mechanisms, the duration of portability and the transitional provisions, these issues seem solvable with further consultation.

There are many examples of successful European Union single market policy, such as in energy, where there is uniform demand for the same commodity throughout the EU. However, there is no such uniform demand for any given sporting competition, let alone anything approaching a uniform price. The value of the rights to winter sports in Austria bears no relation to the value of the same rights in Portugal. The same could be said of the value of rugby rights in France compared with Germany or, even more starkly, the value of cricket rights in the UK compared with Italy.

It is this variable market demand which underpins the model of territorial licensing. And it is precisely this territorial model that has led to such a rich and diverse offering of sports content across the EU – without territorial exclusivity, this highly customised content offer could simply not exist. In any case, consumer demand for cross-border access to content is negligible: the Commission’s own Eurobarometer survey in August 2015 found that only 2 percent of its representative EU consumer sample tried to access sport content through online services generally meant for users in other member states.

The Commission recognises that “a copyright framework that offers a high level of protection is the basis of the global competitiveness of Europe’s creative industries”. Yet, rather than addressing how this protection needs to be updated to address the needs of digital distribution, the Commission seems to be focused on ensuring wider access to content across the EU (for which there is very little demand) and injecting “more single market” into an environment where no single market exists. Artificially imposing a DSM may well encourage some rights owners to licence their content exclusively to a single European bidder, effectively creating a pan-European license and a one-size-fits-all solution across the EU.

The Commission also seems to believe that facilitating cross-border access to content will alleviate the issues of piracy and illegal access to content. Yet piracy occurs primarily in the home market of the country’s origin, by consumers who are not prepared to pay, not because the content cannot be obtained by legal means. In fact, the likely consequence of cross-border access to content in a pan-European environment will only exacerbate the piracy problem, as the legal offers will very likely be more expensive and untailored to the local environment.

Sport does indeed need a better legal and copyright framework for its content, above all to protect the value of its live transmissions and stop the illegal streaming of its most valuable commodity. Regrettably, nothing in the current DSM proposals seems to support this objective.

Mark Lichtenhein, Chairman of the Sports Rights Owners Coalition 

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