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European Commission Vice-President for the Digital Agenda
European media revolution –
viability through innovation
Keynote address at the Media Lounge event of ACT, EGTA, WFA, AER, ENPA, EPC, FAEP
Brussels, 30th June 2010, European Parliament
Tonight I want to do two things – look at some of the specific issues faced by parts of the media sector. For example, advertising. But I want to place those issues firmly in the wider context of the Digital Agenda for Europe and the challenges digital transformation creates for all of you.
The Digital Agenda for Europe arises out of the urgent need for Europe to lift its productivity growth and the possibilities that digital technologies provide for addressing many of our social challenges.
The premise of the Agenda is that only a comprehensive strategy for maximising the potential of ICTs will have a real impact. ICTs are shaping our quality of life, how we do business, how we consume, and how we fill our days. They are also changing the power balance between countries, communication platforms and generations.
The relevant pattern for you is that to be a successful company or content creator in the 21st century means to make good use of digital innovations, or indeed to create those digital innovations.
What does that mean specifically for broadcasting, radio, print and online media? Well, I think we each still have questions and answers – it's work in progress.
But I think that none can afford to be passive in the face of the challenges of digital transformation - whether policy-maker, or publisher or producer of content.
Having said that let me be clear that I bring a few certain principles to debates about the future of media regulation and innovation.
As a firm believer in practising what I preach – so let me now move to specific policy points.
Press / online news
I believe in a rich, diverse and quality press. Clearly the digital challenge is so great here that simply waiting and seeing will not do. But that cuts both ways. While people are used to paying for content, and are sometimes simply not willing to pay, there are enough examples to show that given the right, distinctive, quality content they may pay.
While I can't solve that content challenge for you, I am eager to hear about whether we can assist in getting outlets ready to offer that better content.
In essence I am saying that few people expect the public to get all their news from blogs. There is a valuable role for trusted mediators then. However, customers are obviously no longer as locked-in as they used to be. That makes winning a place in their hearts and minds and wallets much harder.
I'm not a journalist, but I have been a businesswoman. The days of double digit returns from a traditional business model are over, and print journalism needs to find new ways to balance the books.
Broadcasting may have been less affected by advertising trends, but that may not be a good thing in the long term. As a regulated market, strongly influenced by public management of spectrum resources in particular,, European free-to-air television has clearly been insulated from the wake-up call the press is now going through.
There have been basic responses to advertising fragmentation – for example, the growth in reality programming that has lowered costs and reached new audiences. But the real storm may yet be coming. I wonder what is being done to stabilise the boat?
How are you diversifying your revenues? Are there new pay TV business models you can tap into, to give one example? What print and online platforms can you monetise to support your programming?
Are you ready for new business opportunities that may come your way? To give one example, online distribution of audiovisual works, which currently lies outside the scope of the Satellite and Cable Directive. Is change required in this field? This could be an issue for discussion in the context of the extensive stakeholder dialogue and the forthcoming Green Paper addressing the opportunities and challenges of online distribution of audiovisual works and other creative content planned in the Digital Agenda for Europe. That point brings me to regulation more generally.
A view I often hear is that the AVMS Directive is encouraging Member States to regulate free-to-air television. I will monitor closely whether Member States are going beyond the levels specified by the Directive, and whether this is justified under the principle of proportionality.
Having said that, if you want to minimise your national regulatory burden, I would say that you need to look at your choice of platforms.
Linear services – television-like services – are more regulated because of their impact on society and the limited degree of choice and control of users. On-demand services, on the other hand, are subject to a much lighter regulation. It is not for me to design your business model, and there are certainly valid reasons to choose one or the other but regulation lies only where it is required..
On advertising – which I think you wanted me to speak about tonight – I would say that the regulatory burden has clearly been reduced by the AMVS directive.
I understand the temptation to avoid disruptive change. But as Winston Churchill once remarked – you should walk hand in hand with change lest it grab you by the throat.
As you grapple with that challenge, let me assure you I do not want to make that transition harder. But at the end of the day you must know that my job is to promote pluralism in general, not one platform or one group of players in particular.
I said Europe must never become a media museum, and I mean that. Picasso's Cubist masterpiece Les Demoiselles d'Avignon was published exactly one hundred years ago. He left his Rose period and embraced the future. I hope you do the same.