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Viviane Reding

Member of the European Commission responsible for Information Society and Media

The new Television Without Frontiers Directive: the Commission proposal to boost Europe’s audiovisual sector

High Level Conference on the future of the Television Sector of the Association for Commercial Television (ACT)
Brussels, 27 April 2006

Good morning, ladies and gentlemen,

It is a pleasure for me to be here with you today to speak to you, CEOs and executives of the Association for Commercial Television, about the Commission proposal for a directive on audiovisual media services, which aims to modernise the Television without Frontiers directive.

After several years of consultation, the Commission adopted its legislative proposal on 13 December last year. Firstly, I would like to remind you briefly of the reasons why the Commission considered that it was necessary to take the initiative to revise the current regulatory framework in the audiovisual field. Secondly, I would like to remind you of the main features of the Commission’s proposal and finally, I would like to conclude with a few words about what we hope to achieve with the proposed new Directive that you will be discussing in more depth today.

Your experience in your daily business shows how dramatically the audiovisual world has evolved since 1989. This includes profound technological and market changes generally put under the heading of “convergence”. With television services becoming available on new platforms including mobile platforms, not only does it not make sense to limit content rules to traditional broadcasting, but there is also a requirement for a legislative initiative to provide the level playing field which is a prerequisite for sound competition in the audiovisual sector.

In other words, the Commission’s proposal aims to create a single market framework for all types of television services irrespective of the technology used to transmit or receive them. This common framework provides the legal certainty necessary for the new audiovisual service providers to offer their services on a pan-European basis. Indeed, we cannot expect the European audiovisual industry to lead the way in developing new services if it is confronted with 25 or more different regulatory regimes.

The main features of the Commission’s proposal are:

  • More flexible, liberal rules for television advertising – without changing the high level of consumer protection with regard to qualitative restrictions.

• some basic obligations for all audiovisual media services – including on-demand, non-linear services –which subject them to the fundamental country of origin principle.

The objective of the Commission’s proposal is thus to ensure that all audiovisual media services providers within the Member States can fully benefit from the internal market on the basis of a set of minimum coordinated rules applied by Member States to media service providers under their jurisdiction.

The issue of jurisdiction is sensitive and I would like to underline that the Commission understands the concerns of some Member States about problems related to the abusive circumvention of local legislation. We know and respect that, above all, the protection of minors and consumers are crucial points for the Member States. Therefore, after long discussions during the consultation process we came to the conclusion that the codification of the European Court of Justice case law in the amending Directive would be an adequate solution.

This would give the Member States the possibility and means to take measures against an audiovisual media service provider established in another Member State that directs for fraudulent purposes all or most of its activity to this Member State.

In my view, one point is vital: I am convinced that the best solution to the problems encountered would be achieved by the Member States themselves on a bilateral basis. Therefore, the procedure proposed by the Commission foresees, in the first place, an attempt at an amicable settlement. Only after failure of such an attempt, would the procedure envisage notification of the intended measures and finally a Commission decision on these measures.

More generally, bilateral cooperation in this field must be taken more seriously by all Member States. Otherwise, there is a risk that, while we are negotiating the new directive, calls become stronger to depart from the single market principles which have made television across borders such a successful reality in Europe.

Ladies and gentlemen,

The Commission’s proposal introduces a basic tier of obligations for all audiovisual media services. This means that for the first time – no matter how, for example, films, or television programmes, are distributed (including over electronic networks) – these audiovisual media services would have to comply not only with a set of minimum rules harmonised at the European level with regard to the protection of minors and human dignity, but also in view of qualitative rules concerning advertising.

The proposal also establishes an obligation for providers of non-linear services to promote, where practicable and by appropriate means, production of and access to European works.

A second prominent feature of the Commission’s proposal is that it aims to liberalise the rules on television advertising (i.e. those applicable in the linear environment) and adapting them to the realities of the modern world. The proposal abolishes a number of quantitative limitations. The insertion rules are simplified and made more flexible. Broadcasters will be able to choose the most appropriate moment to insert advertising during programmes Instead of being compelled – as is the present case – to allow twenty minutes time between each advertising break, . However, cinematographic films, children programmes and news remain protected and may only be interrupted once per each period of 35 minutes time. The proposal also maintains and reaffirms the hourly limit for advertising of 12 minutes and the qualitative restrictions.

The first discussions at working level with the Member States seem to indicate a reluctance of some to relax the current quantitative rules. I also currently hear calls for introducing additional rules and restrictions.

I am well aware of the importance of advertising for the business model of commercial television, and I strongly believe that we should not give in to such calls. In a convergent media world with enhanced competition, commercial television and the advertising business clearly need flexibility under the regulatory framework. I therefore will continue to work on this in the legislative process.

However, your work will also be needed – and frankly speaking, I have the impression that your work, the political support by commercial broadcasters for a more flexible and modern framework, could be much more visible and effective if you want to meet your goals. Your help is needed if you want this directive to support growth in your sector.

The Commission’s proposal for the new Directive also provides, for the first time, clear rules on product placement. This practice is not addressed as such by the current Directive and only prohibited when, under certain circumstances, it must be considered as surreptitious advertising. Product placement is, nonetheless, already authorised under certain conditions by some Member States and is widely practised all over Europe in independently produced works and feature films, without any protection for consumers. It is therefore only reasonable to give product placement a clear legal framework, allowing it in certain programmes, in particular in fiction, after clear information to the consumer, while excluding it in sensitive programmes such as news and children programmes.

If we consider the current situation, the Commission’s proposal, which introduces more freedom to do business as regards product placement, would allow for an additional source of revenue for productions by broadcasters and a higher level of consumer protection.

Even though there is a clear business case for such a legal framework for product placement, let me be very clear about the current political situation: Many seem not to like a clear framework for product placement, in particular many politicians in Germany. The proposal is therefore attacked in the European Parliament and in the Member States and also by some representatives of the print media. Once again a case where the proposal will only survive if you and the European content industry will fight for it.

I believe that this proposed reform of the EU audiovisual rules, ensures that wherever possible, red tape is removed, existing rules are made more flexible and that co-regulation plays its full part in the process of the Directive’s implementation. The Commission’s proposal aims at creating a coherent regulatory framework in line with “better regulation principles”, based on most extensive consultations with stakeholders, and simplifying important aspects of the current regulation.

At the same time, vital values that the current Television without Frontiers Directive purports to safeguard have been reaffirmed: protecting children from harmful content and safeguarding human dignity from racial hatred; upholding consumer interests; promoting the production of, and access to European works as a prime vector of our cultural values, recognising that advertising is the financial basis of a strong and diverse “free-to-air” audiovisual sector; as well as promoting pluralism of audiovisual media by encouraging cross-frontier content provision.

I am convinced that the modernisation process of the Directive will stimulate the development of digital audiovisual media services in Europe. But for convergence to be fully effective, we also have to address the barriers that inhibit the wide availability and distribution of audiovisual content online and on other distribution platforms, like mobile delivery. This includes spectrum issues – such as the flexible use of the digital dividend –, IPR issues and sound and reasonable commercial agreements adapted to new platforms such as mobile TV. I believe that Europe should be a leader on mobile TV and this will be high on my agenda next year.

You probably also know that I have launched the Film Online Talks, which are about leading the way to a Charter of commendable practices and that I am working on a Communication on content online for the end of this year. All these initiatives are part of a strategy to drive European content and to stimulate the competitiveness of our companies: I am giving you sound bases for your business. But the battle ahead of you will be difficult. Competing with you are powerful telecom operators and very creative and innovative internet service providers. You must understand that you cannot expect policy makers to protect you from competition. What we can do is to create the best possible starting conditions for fair competition and sound business models. But it is up to you to rethink your business model for the convergent media world and to take advantage of your know-how as regards competitive audiovisual content.

Thank you for your attention.

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