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MEMO/07/206

Brussels, 24 May 2007

Presenting the new Audiovisual Media Services without frontiers Directive: Frequently asked questions

After a legislative process of only 18 months, political agreement has been reached between Parliament and Council on the new Audiovisual Media Services without frontiers (AVMS) Directive.

Why was a new Audiovisual Media Services without frontiers Directive needed?

Since the present Television without frontiers directive was first adopted in 1989 and then amended in 1997 there have been many changes: The convergence of technologies and services - traditional TV, internet TV, TV on mobile phones and other mobile devices, etc.; the expansion of fixed broadband, digital TV and 3G networks; the increase in pay-per-view TV, and the arrival of new delivery services such as video on demand (VOD) and peer-to-peer exchanges of audiovisual content; the blending of traditional and on-demand services; changing viewer habits where more and more people want audiovisual content to follow their time schedule and not the other way around; and new advertising methods, such as search-related ads on the internet or SMS ads on mobile phones. These all point to a clear need for regulation to keep pace with rapid technological and market developments if Europe’s audiovisual sector is to remain competitive.

The aim of the new AVMS Directive is to provide a modern pro-competitive framework for Europe’s providers of TV and TV-like services by, for example, giving more flexibility for financing audiovisual content by new forms of commercial communications. It will also create a level playing field for all companies that offer on-demand audiovisual media services to profit from Europe's internal market, irrespective of the technology used to deliver their services while continuing to ensure a high level of consumer (i.e.viewer) protection.

What are the main features of the new Directive?

The main elements are:

  • a comprehensive framework that reduces the regulatory burden yet covers all audiovisual media services;
  • modernised rules on television advertising that improve the financing of audiovisual content;
  • new features such as an obligation to encourage media service providers to improve access for people with visual or hearing impairments.

Why have different rules for traditional broadcast and on-demand audiovisual media services?

Traditional TV broadcasting rules need to be updated to accommodate technological progress and market developments as well as new viewing habits. This includes modernising advertising and product placement rules where necessary.

By contrast, there is no justification for regulating audiovisual content supplied at the viewer’s request (”on demand content”), beyond safeguarding essential public interests such as protecting minors, encouraging cultural diversity, preventing incitement to hatred and basic consumer protection rules. The different degrees of regulation for broadcast versus on-demand content therefore reflect differences in user choice and control, and the likely impact on society.

The new directive also encourages co-regulatory regimes that are broadly accepted by stakeholders and provide effective enforcement.

How will the modernised Directive strengthen Europe’s content industry?

The “country of origin” principle has already helped Europe’s broadcasting industry to flourish since 1989. This will extend the benefits to new on-demand audiovisual services (such as video on-demand), so as to improve their prospects for commercial success. For such services, this principle will apply across Europe with a minimum of necessary harmonisation. This will create a level playing field for audiovisual media services in the EU and increase choice, diversity and investment in Europe's audiovisual media industry.

Technological progress, changes in the market and users' behaviour (increased choice and responsibility) also call for more flexibility regarding advertising rules while providing for strong consumer (i.e. viewer) protection.

  • First, relaxing rules on inserting advertising in TV programmes and daily advertising limits, as well as being open to new forms of advertising (such as split- screen, virtual or interactive advertising), will benefit not only advertisers but the whole audiovisual industry in Europe, by strengthening their economic base.
  • Second, providing a clear legal framework for product placement will secure new revenue for Europe’s audiovisual industry, help to boost Europe’s creative economy and reinforce cultural diversity. Product placement is a reality on European TV screens today, but operates essentially to the benefit of non-European content producers and without viewers being informed.

Why modernise the rules on television advertising?

The current rules were conceived in the 1980's, when audiences only had two or three general entertainment channels in each country. They can now choose between a wide range of channels and will tend to "zap" away from those that transmit too much advertising. Greater viewer choice and control calls for more flexible regulation. More flexibility also means that free-to-air channels can better flourish in a media landscape where there is increasing competition for advertising revenues. The Directive strikes a fair balance between limiting the amount of advertising, and the nature and timing of adverts. Advertising will remain restricted to 12 minutes in any given hour and films, current affairs programmes and news cannot be interrupted by adverts more than once for each period of 30 minutes. Only children's programmes over 30 minutes may be interrupted by one break in each 30-minute period during which time minors will also be protected from certain types of adverts which now also includes unhealthy or "junk food" advertising. The Directive increases consumer protection by extending the qualitative TV advertising rules to on-demand services.

Why have rules for product placement?

Product placement is not addressed as such by the old TVWF Directive, which includes the principle of separation and the prohibition of “surreptitious advertising” applied to programmes for which broadcasters are responsible. However, product placement is common practice in independently-produced works and feature films. In Europe, lack or unclear or differing rules on product placement have so far prevented audiovisual content producers from making use of this important source of financing, and clearly failed to protect consumers adequately. Consumers should have the right to know what kind of content they are watching.

Recent figures from countries that permit product placement suggest that clear rules should help the European audiovisual industry to become more competitive, especially compared with the USA. An independent study published in March 2007 found that global paid product placement grew 37% in 2006 and is forecast to grow 30% in 2007. TV Placements remain the dominant choice of brand marketeers, accounting for 71% of global spending.

What are the new rules on possible circumvention of stricter national measures?

The Audiovisual Media Services Directive contains a new procedure regarding broadcasters from other Member States circumventing stricter rules of the target Member State. The first stage of the procedure consists of dialogue between the Member States concerned on a "best endeavours" basis and should enable most difficulties to be solved at an early stage. Should this dialogue fail, a second, formal stage would begin, where the European Commission will play its role according to the new procedure set in place, which is to examine the compatibility of the Member State's proposed measures with Community law, including all relevant secondary legislation and Court of Justice rulings.

How will cultural diversity be promoted in the new Directive?

The new Directive reaffirms the commitment of the European Union to promoting European audiovisual works through a provision stating that Member States shall ensure that media service providers, where applicable and by appropriate means, promote the production of, and access, to European works.

Also the clearer product placement rules proposed by the Commission should help stimulate funding for audiovisual production in Europe, thereby strengthening Europe’s film industry. They permit product placement, within an appropriate legal framework that safeguards viewers’ essential interests such as the right to be informed and exclusion of product placement from news, current affairs and children programmes.

Will European values still be safeguarded?

The new Directive reaffirms the common policy objectives which have been at the heart of Europe's audiovisual policy since 1989. It requires Member States to take appropriate measures to protect minors, to promote European works and independent audiovisual productions, and to prohibit content that would incite religious or racial hatred.

It also explicitly encourages industry self-regulation and co-regulation (see IP/07/138) and underlines the need for independence of national media regulators. Such independence is considered essential to democracy and crucial for ensuring media pluralism (see IP/07/52).

When will the new Directive take effect?

The Directive is expected to enter into force before the end of 2007. Member States will be given 24 months to transpose the new provisions into national law, so that the modernised legal framework for audiovisual business will fully apply in 2009.
The text of the Directive is available from the press pack:

http://ec.europa.eu/information_society/newsroom/cf/itemlongdetail.cfm?item_id=3430


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