Public Consultation on the Review of the EU Satellite and Cable Directive

ABOUT AGICOA

AGICOA (Association for the International Collective Management of Audiovisual Works) is an international, not-for-profit organization established thirty years ago in Geneva to represent worldwide, collect and distribute royalties to independent producers of audiovisual works. We represent more than one million audiovisual works and more than 15.000 rights holders, including audiovisual producers and distributors whose works are retransmitted in the European Union and around the world.

We operate in numerous countries all over the world through the AGICOA Alliance, a network of not-for-profit organizations and professional associations working on behalf of independent producers.

AGICOA is an observer member of WIPO and its Standing Committee for Copyright and Related Rights and a founding member of WIPO’s TAG for Excellence Initiative aiming at establishing high level standards for transparency and efficiency of collective management. We also cooperate with the European Commission in awareness initiatives related with collective management of copyright.

AGICOA licenses certain forms of the exclusive right of communication to the public, including in particular cable retransmission to enable use of audiovisual works contained in such retransmissions. AGICOA is mandated by its rights holders to authorize or prohibit the use of their exclusive rights and collect remuneration arising thereof, under the legal framework established in the Berne Convention and in Directive 93/83/EEC, as well as in national legislation implementing its provisions. Through a coalition of member and partner organizations, AGICOA is active in licensing said rights in the majority of EU Member States.

AGICOA and its partners manage retransmission rights on behalf of audiovisual producers in a highly efficient and transparent manner. This alliance represents and defends the interests of producers, in a legal framework where collective management is required, ensuring that royalties due for retransmission of their works are delivered to rightsholders, as an important stream of revenue contributing to finance the production of quality content.

EXECUTIVE SUMMARY

The principle of country of origin for the communication to the public by satellite

broadcaster or to an operator will diminish producers’ ability to recoup production investment which is accomplished through territorial licensing in markets where demand is strong.

In the event the Directive is reopened, a more balanced solution would be one in which the principle of country of origin does not preclude or limit contractual freedom to select territories for license, obtaining appropriate remuneration. This is the de-facto situation today.

Considering the evolution of commercial offers of satellite operators, which are to a large extent equivalent to the audiovisual services offered by cable operators, it should be made clear that said commercial offers involve an additional exploitation that should be remunerated. To this extent, a provision similar to article 8, paragraph 1 of the Directive could be adopted:

Member States shall ensure that when works included in a linear audiovisual service are retransmitted or by any means communicated to the public by satellite in their territory the applicable copyright and related rights are observed and that such retransmission or communication to the public by satellite takes place on the basis of individual or collective contractual agreements between copyright owners, holders of related rights and satellite operators.

In addition, satellite operators should be subject to transparency and information obligations (in relation to the channels offered and number of subscribers of their services in the various countries) consistent with the provisions of article 17 of Directive 2014/26/EU.

The management of cable retransmission rights

In case the Directive would be reviewed, AGICOA invites the Commission to further consider harmonization in respect of the following topics:

- To address imbalance that impedes some producers from monetizing retransmission rights when assigning the said rights to broadcasters, by alternatively: o Clarifying that when acquiring the exclusive rights from producers to license third parties, broadcasters shall be required or liable to demonstrate the remuneration paid to acquire those rights, as a condition to exercise said exclusive rights vis a vis third parties, including cable operators. o Providing the means for granting of extended collective licenses including the authorization for cable operators to retransmit works which rights are held by the broadcasters in the license granted by CMOs representing audiovisual producers. In line with the discussions held at WIPO on occasion of debating the Broadcasting Treaty, it should be clarified that the protection granted to broadcasters aims exclusively their own broadcast signal. Equal treatment with producers would be reached by enabling clearance of rights over all works, including those for which

the broadcasters hold exploitation rights, through CMOs, subject to an opt out right should this be necessary under relevant international law and the EU Copyright acquis. - To address technological evolutions that have impacted negatively the ability of producers to license retransmission rights directly or through their CMOs: o Clarifying that cable retransmission occurs whenever a linear broadcasting service is retransmitted or by any means communicated to the public by a third party other than the licensed broadcaster, in a simultaneous, unabridged and uninterrupted manner. - To provide for transparency and effective rights clearance mechanisms: o Providing for obligations of users to grant access to information required for an effective application of the tariffs set by CMOs, as required by the provisions of article 17 of Directive 2014/26/EU. o Introducing appropriate mechanisms to enforce rights, such as provisional and precautionary measures including requirement that pending resolution of a tariff, cable operators would have to pay royalties at a previously agreed amount or at the tariff set by the CMO for similar users or uses. o Clarifying that the burden of proof related with the acquisition of all rights from broadcasters favours right holders and not cable operators, without which the infringement of producers’ copyrights is assumed.

Assessment of the need for the extension of the Directive

If the Directive is reopened and prior to any move to extend the scope of the country of origin principle, there should be an assessment to identify potential market failures that require such regulation.

Multiterritorial licenses already exist and are available for users on the basis of producers being effectively remunerated for the exploitations of their works in several countries. If the Directive is reopened, additional regulation imposed should be balanced and not erode the monetization of exclusive rights. It should thus not preclude a territorial model of licensing and establishing value, even if the licensing is taken in one initial territory.

When assessing the market of online services, a distinction needs to be made between services provided by broadcasters (to be licensed directly by producers within the primary exploitation rights) and services provided by third parties based on the linear broadcast.

With regards to the latter, in case collective management would not impair primary licensing of digital rights, it could and is considered at producers’ discretion. As an example, AGICOA has been developing licensing schemes for those producers that require collective tariffs to license cable operators’ TV Everywhere services because direct licensing did not reveal possible or desirable. It should be noted that this is a decision of producers within a context of contractual freedom where collective licensing becomes the producers’ choice.

To the extent that producers had a preference for implementing collective licensing schemes (such as in the Nordic countries), extended collective licensing is a useful tool to include works of non- members in the licensing scheme while maintaining individual contractual freedom for those producers that prefer to opt out and license directly.

II. Assessment of the current provisions of the Satellite and Cable Directive

1. The principle of country of origin for the communication to the public by satellite

For satellite broadcasting, the Directive establishes (Article 1.2) that the copyright relevant act takes place "solely in the Member State where, under the control and responsibility of the broadcasting organization, the programme-carrying signals are introduced into an uninterrupted chain of communication leading to the satellite and down towards the earth" (often referred to as “the country of origin” principle). So, rights only need to be cleared for the "country of origin" of the broadcast (and not for the country/ies of reception, i.e. the countries where the signals are received[1]). The Directive indicates that in determining the licence fee for the right of communication to the public "the parties should take account of all aspects of the broadcast such as the actual audience, the potential audience and the language version" (Recital 17).

[1] There is no case-law from the Court of Justice of the European Union regarding the interpretation of Article 1.2 of the Directive.

1. Has the principle of "country of origin" for the act of communication to the public by satellite under the Directive facilitated the clearance of copyright and related rights for cross-border satellite broadcasts?

Yes

To a large extent

To a limited extent

No opinion

1.1. If you consider that problems remai n, please describe them and indicate, if relevant, whether they relate to specific types of content (e.g. audiovisual, music, sports, news).

AGICOA’s replies to questions related to satellite are based on its experience in collectively licensing satellite platforms that offer TV packages consisting in a selection of retransmitted TV channels made available to subscribers paying a subscription fee, similar to the business model applied by cable operators. These services developed after the adoption of the Directive which was intended to cover the transmission of channels by the broadcasters directly to the home via satellite technology. The intention underlying the establishment of the principle of country of origin was to facilitate the setup of a pan European or at least multi-territorial offer of satellite broadcasting services keyed to their footprint. However, in the 2011 GREEN PAPER on the online distribution of audiovisual works in the European Union: opportunities and challenges towards a

digital single market the European Commission acknowledged that “more than fifteen years after the application of the relevant Directive, this approach does not seem to have led to a broad emergence of pan-European satellite broadcasting services”. Extending the “country of origin principle” requires careful consideration not only due to its questionable efficacy but also in view of the negative effects it may have in licensing European audiovisual works.

The principle of country of origin may have facilitated the licensing of audiovisual works to some extent at least in the sense that it makes clear how the licensing of primary transmission of channels directly to home screens is to be handled. It may also have helped with music rights clearance. However, it should be noted that the audience demand, and by extension that of service providers, drops off substantially for audovisual content from outside of their geographical and linguistic area. Therefore, the principle of country of origin cannot be regarded per se as the solution to ensure demand for cross border access to content. It is not commercially realistic or desirable.

Additionaly, to the extent that it could be used as a tool to force producers to license multiple territories without appropriate monetization, the principle of country of origin can be detrimental to producers’ rights and to their commericial freedom to finance productions.

In this regard, the position of the Association of Commercial Television in Europe (ACT) expressed in various consultations of the European Commission has been explicit to state that broadcasters determine their acquisitions by the interests of audiences in the countries where the channels will be available. As a result, broadcasters or operators will likely not be willing to compensate producers for the use of their works in territories where demand is minimal to none and there is limited expectation for consumer demand.

Audiovisual works rely on strong copyright licensing systems to be financed and produced. And they are based on territoriality. Even if in a context of a single point of licensing covering multiple territories, rights are valued according to the different territorial markets in which they will be exploited by producers selling and distributors acquiring.

When licensing based on the country of origin, producers are often confronted with an unfairly reduced value of acquisition of their rights for other countries when compared to the country of production/initial broadcast. Thus, being required to assign rights on a multi-country basis to a broadcaster or to an operator will diminish producers’ ability to recoup production investment which is accomplished through territorial licensing in markets where demand is strong.

The level of investment and the complexity of licensing structures required for audiovisual works to be produced cannot be compared with any other content (such as music or literary works). Audiovisual works imply a combined effort of hundreds of creative participants, significant technical infrastructure, administrative burdens related with filming in multiple locations, and a very high level of risk that is entirely assumed by the audiovisual producer when gathering financing for the work to be able to reach the public. The producer assumes these risks without

knowing if the work will allow him to recoup investments, thereby taking the burden of risks associated with producing but also the ones arising from exploitation. In order to finance this complex and costly enterprise, producers rely on pre-sales of rights on a territory by territory basis. Pre-sales can account for more than 50% of financing for a work. Audiovisual works cannot be produced if the producers cannot rely on licensing copyrights before the work is completed. If producers are deprived of commercial and contractual freedom to manage and license copyrights, the production of audiovisual works will be compromised, in particular for works of quality that have local market appeal. The commercial exploitations that motivate investors are based in local markets and local audiences.

Producers of audiovisual works have been able to overcome the significant challenges to finance quality production of films, series or documentaries in the 21st century by being creative in engineering the financing structures underlying the high level investment required to deliver works to audiences. Broadcasters have been important partners for producers in this endeavor, and are also challenged to recoup investments when producing their own content. These challenges can be overcome by developing new forms of digital exploitation of audiovisual works. Should those be compromised by a country of origin approach that disregards the different territorial value of licenses, the effects on production will be significant. The availability of audiovisual works produced by smaller countries and minority language groups would be likely reduced (as it has less value in a multi country scenario), and will only strengthen the ability of users to acquire licenses at a lower price.

2. Has the principle of "country of origin" for the act of communication to the public by satellite increased consumers' access to satellite broadcasting services across borders?

Yes

To a large extent

To a limited extent

No opinion

2.1. Please explain and indicate (using e xact figures if possible) what is, to your knowledge, the share (%) of audiences from Member States other than the country of origin in the total audience of satellite broadcasting services.

2.2. If you consider that problems remain, describe them and i ndicate, if relevant, whether they relate to specific types of content (e.g. audiovisual, music, sports, news) or to specific types of services (e.g. public services broadcasters', commercial broadcasters', subscription based, adverting based, content specific channels) or other reasons.

3. Are there obstacles (other than copyright related) that impede the cross-border provision of broadcasting services via satellite?

Yes

To a large extent

To a limited extent

No opinion

3.1. Please explain and indicate which type of obstacles.

A large obstacle to cross border licensing would seem to come from an absence of consumer demand. Producers want to license their works where consumers want to watch them. If there is no sufficient demand, there is no basis to license. This is not strictly speaking an obstacle but it is a real consideration and market reality.

4. Are there obstacles (other than copyright related) that impede the cross -border access by consumers to broadcasting services via satellite?

Yes

To a large extent

To a limited extent

No opinion

4.1. Please explain and indicate which type of obs tacles.

Copyright law does not present an obstacle to the cross-border provision of satellite services. As noted, works already in the current copyright environment can be licensed freely for such services, based on consumer demand.

Satellite digital platforms offering packages including national and international channels, equivalent to cable operators’ offers, follow the same trend as the latter by selecting channels that interest local audiences. Broadcasting is to a large extent a local service, aiming at country audiences rather than at a pan-European market.

As concluded in the study of Plum Consulting “The economic potential of cross-border pay -to -view and listen audiovisual media services”, Final report for the European Commission, March 2012, “Cable, IPTV and DTT services are by nature targeted at national (or local) markets, while satellite services tend to be targeted at specific national markets or regions with a common language and culture.”

5. Are there problems in determining where an a ct of communication to the public by satellite takes place?

Yes

To a large extent

To a limited extent

No opinion

5.1. Please explain.

Although we have not experienced problems in determining where communication to the public by satellite occurs, we have a number of problems associated with platforms which seek to avoid the EU and Member State jurisdiction of law in manner contrary to the Directive. In instances where satellite retransmissions are collectively licensed, AGICOA and its partner organizations have experienced difficulties when the satellite operators’ technical platforms are located in countries outside the EU although the companies are based in EU countries. Challenges may thus arise for producers to license their rights collectively based on the principle of country of origin particularly as to the scope of the license required. Satellite operators often establish their platforms in non EU countries thereby arguing that they have no duty to obtain rights clearance since technically the uplink of signals occurs in a country not subject to the jurisdiction of the Directive. Satellite operators also argue that reception is performed by the individual users at their discretion and that satellite operators lack control mechanisms to identify the channels made available. As a consequence, there is often no copyright clearance system in place for rights of audiovisual producers whose works are broadcast on foreign channels offered by satellite operators and made available for individual users to view on an unpaid basis. This is also a problem shared with broadcasters (e.g. Italy).

That said it becomes clear that despite the rules set forth in the Directive to determine country of origin, licensing can be circumvented by exploiting those rules in a manner that avoids European

jurisdiction by placing the technological uplink in countries where copyright is nearly impossible to be enforced.

6. Are there problems in determining the licence fee for the act of communication to the public by satellite across borders, including as regards the applicable tariffs?

Yes

To a large extent

To a limited extent

No opinion

6.1. Please explain.

When license fees are freely negotiated they usually correspond to the relevant market conditions. For producers who do not license collectively, the country of origin does not affect license fees which can be negotiated with channels based on market demands and consumer interests. In instances where satellite retransmissions are collectively licensed, however, the principle of country of origin may cause a race to the bottom in terms of payment of royalties, by allowing satellite operators to seek that uplinks are done in EU jurisdictions that offer lower levels of tariffs that will then apply to the commercial offer available in different countries, including those where higher levels of tariffs are applied.

In instances of collective licenses, clearing rights in one territory which is selected based on a technological act of uplink may in some cases undermine mechanisms that allow a commercial valuation on a market by market basis. Since audiovisual works are not blindly valued in the sense that they do not perform the same in generating audiences’ recognition (which is an important measure of the potential to generate secondary revenues in all markets across the EU), imposing a broad scope of rights clearance based in one country may erode the value of content in each national market and may compromise the ability of producers to adequately value rights.

AGICOA has been made aware of one case of a satellite operator that provides services in more than 50 countries located in Africa and the Middle East based on a license obtained in Bulgaria, where it does not report any subscribers and therefore doesn’t pay any remuneration.

In the event of a re-opening of the Directive, there should be consideration about introducing obligations for satellite providers to be transparent on the commercial offer available in different countries and the subscribers using said offer.

Finally, producers who choose a collective approach in licensing experience difficulties and lose when setting tariffs under the principle of country of origin. Despite the principles set forth by

recital 17 of the Directive (establishing that all aspects of the broadcast should be taken into account when defining license fees, including actual and potential audiences and language versions), its implementation is complicated and detrimental to producers:

- In the moment of licensing works to satellite platforms, audiences in the countries where the services will be made available are unknown and therefore cannot be truly taken into account. As a consequence, operators place the risk on content sellers (broadcasters and producers) and obtain gains by setting a low level of tariffs. - It is a fact that local content motivates local audiences due to cultural and language features. Therefore, in each market local content is usually generating more audiences and higher revenues. Licensing based on the country of origin of the satellite broadcast will not take this fact into account when the delivery of content is done in another market, even if there is a strong demand for a certain local content due to communities of expatriates for example. Therefore, content will be valued in a lump sum basis damaging producers’ potential to properly value local quality content.

In view of the application of the “country of origin” principle, the Directive harmonised the rights of authors to authorise or prohibit the communication to the public by satellite (Recital 21, Article 2), established a minimum level of harmonisation as regards the authorship of a cinematographic or audiovisual work (Article 1.5) and as regards the rights of performers, phonogram producers and broadcasting organisations (Recital 21, Articles 4 to 6).

7. Is the level of harmonisation established by the Directive (or other applicable EU Directives) sufficient to ensure that the application of the "country of origin" principle does not lead to a lower level of protection of authors or neighbouring right holders?

Yes

To a large extent

To a limited extent

No opinion

7.1. Please explain. If you consider that the existing level of harmonisation is not sufficient, please indicate why and as regards which type of right holders/rights.

The existing level of harmonisation is sufficient; action is not needed. In all EU Member States, questions concerning ownership of audiovisual works are impacted by legal presumptions concerning transfer of rights to producers.

Authorship rules are components of complex legal systems which change from country to country based on their cultural traditions. Consequently, any change in this area needs to take careful

account of the spilling over effects that it may have on the entire copyright system. As such, we believe that unless imperative reasons apply, and in accordance to the principles of subsidiarity, opportunity and proportionality, EU action in the form of legislation is not needed at the present time.

For the purposes of evaluating the current EU rules, the Commission should assess the costs and relevance, coherence and EU added value of EU legislation. These aspects are covered by questions 8-9 below.

8. Has the application of the “country of origin” principle under the Directive resulted in any specific costs (e.g. administrative)?

Yes

No opinion

8.1. Please explain.

Despite the fact that licensing activities should only take place in the country of origin in accordance with the Directive, for rightsholders who license collectively to be appropriately remunerated they need to have access to information on use of their works in countries other than in the country of uplink (licensing). Considering that there are no mechanisms in place to compel users to supply information, acquiring the necessary data is costly and diminishes royalties to rightsholders.

Any extension of the principle of country of origin to other rights would likely necessitate further harmonization of national copyright legislations, for example in order to determine authorship, initial ownership of the work, or transfer of control of rights by the producer.

On the other hand the number of consumers that subscribe satellite platforms’ services vary from country to country. Despite that the number of users does not necessarily coincide with audiences of the channels, it is also an important factor to take into account when determining licensing fees. This information is also not public and can be very costly when available to be acquired.

Finally, monitoring the channels on offer in a fast evolving environment such as the one of commercial offers of audiovisual services (where channels on offer often change without prior notice) also involves administrative costs and an ability of producers to be properly staffed or hire professional services that provide them said information. Only with such information can producers be properly paid by the use of their works in countries other than the country of origin of the channels broadcast. Audience monitoring is often restricted to national or regional markets.

Often for many producers that cannot bear the costs of acquiring information that allows them to value their rights correctly in all countries where the satellite service is available the consequence is a loss of rights revenue.

9. With regard to the relevance, coherence and EU added value, please provide your views on the following:

9.1. Relevance: is EU action in this area still necessary?

Yes

No opinion

9.2. Coherence: is this action coherent with other EU actions ?

Yes

No opinion

9.3. EU ad ded value: did EU action provide clear added value as compared to an action taken at the Member State level?

Yes

No opinion

9.4. P lease explain.

Considering the evolution of commercial offers of satellite operators, which are to a large extent equivalent to the audiovisual services offered by cable operators, in the event of a re-opening of the Directive, it should be made clear that said commercial offers involve an additional exploitation to copyright. To this extent, a provision similar to Article 8, paragraph 1 of the Directive could be adopted:

contractual agreements between copyright owners, holders of related rights and satellite operators.

In addition, as users, satellite operators are subject to transparency and information obligations (in relation to the channels offered and number of subscribers of their services in the various countries) consistent with the provisions of Article 17 of Directive 2014/26/EU.

2. The management of cable retransmission rights

The Directive provides a double track copyright clearing process for the simultaneous retransmission by a cable operator of an initial transmission from another Member State (by wire or over the air, including by satellite) of TV or radio programmes (Article 1.3). Broadcasters can license to cable operators the rights exercised by them in respect of their own transmission, irrespective of whether the rights concerned are broadcasters' own or have been transferred to them by other copyright owners and/or holders of related rights (Article 10). However, according to Article 9, all other rights (of authors and neighbouring right holders) necessary for the cable retransmission of a specific programme can only be exercised through a collecting society. Finally, Articles 11 and 12 introduce negotiation and mediation mechanisms for dispute resolution concerning the licensing of the cable retransmission rights.

10. Has the system of management of rights under the Directive facilitated the clearance of copyright and related rights for the simultaneous retransmission by cable of pro grammes broadcast from other Member States?

Yes

To a large extent

To a limited extent

No opinion

10.1. Please explain. If you consider that problems remain, please describe them (e.g. if there are problems related to the concept of “cable”; to the different manner of managing rights held by broadcasters an d rights held by other right holders; to the lack of clarity as to whether rights are held by broadcasters or collective management organisations).

Establishing collective management as a system to clear rights required for cable retransmission has been an advantage for producers who do not avail themselves of Article 10 of the Directive and, also, for those who assign rights under Article 10 while retaining remuneration rights. Collective rights management has also eased administrative burdens for operators and been of benefit to consumers. Indeed operators can avail themselves of a system of copyright clearance that allows them to easily supplement authorizations granted by broadcasters. Moreover, clearing rights in the country where cable companies operate and make a communication to the public of a

selection of channels allows them to benefit from a flexible licensing model that can accommodate the fast pace changes required to promote a selection of channels that is attractive to consumers (and that may vary from time to time). Collective licensing of exclusive rights has also proven to be an advantage for rightsholders in cases where they do not wish to license their exploitation rights and remuneration rights directly to the initial broadcaster. Collective rights management can thus allow such right holders to receive remuneration on the basis of effective use. CMOs acting in each country are in a better position to monitor the channels offered by cable operators in their territories and the works broadcast on said channels. In addition, CMOs can benefit from the fact that cable operators are subject to supervision and regulatory measures in their country of operation, facilitating access to the effective number of subscribers of the cable operators’ commercial offers. This enables CMOs to have tools to establish proper tariff schemes, ensure transparency and where necessary take legal or administrative action to protect their rightholders.

It should be noted however that the system implemented by the Directive creates an unbalanced situation for producers: whereas producers are forced to choose between collective management and assigning their rights to broadcasters (thus being prevented of other direct licensing options, including to territorial distributors), this is not the case with broadcasters who keep their contractual freedom vis a vis the users, i.e., the cable operators. Ultimately this can create an unbalanced situation in regards to the capacity of producers to generate royalties arising from different sources for cable retransmission of their works, which may be impaired when compared with the capacity to negotiate that is granted to broadcasters. It should also be noted that the mechanisms of the Directive limit producers’ ability to receive market value for their works, since cable operators will obtain rights clearance through CMOs rather than through a market negotiation.

In this respect, it should be considered as a solution to favour equality that producers and broadcasters are offered the same level of licensing tools, thereby maximizing the recoupment of investments for all productions, either independent or broadcaster owned works. The prominent role of broadcasters in financing audiovisual productions implies a special position to acquire rights, including retransmission rights, which may weaken producers’ ability to monetize said rights. It is often the case that broadcasters’ commissioning and financing of productions is conditional upon acquisition of all copyrights in the resultant works. This limits the ability of the producer to license the work for new uses in other media and often reduces the scope of appropriate monetization.

Possible solutions to address the above mentioned imbalance in the position of broadcasters vis a vis producers could include consideration of tools such as a form of extended collective license of works which might work in favour of producers who seek to license collectively or a possible presumption against transfer of the producers’ authorization to a broadcaster. Currently, exclusive rights of broadcasters are in fact stronger than those of producers under the Directive. Were the broadcaster rights to consist only of the right to protect their signals, this arguable imbalance could be addressed.

Considering the role of broadcasters in financing productions, they often benefit from a special position to acquire rights which weakens producers’ ability to monetize their works. Producers should be afforded sufficient protection to monetize rights and recoup investment. A possible

solution would be to require some degree of evidence from broadcasters that would demonstrate payment of effective remuneration to producers in cases where retransmission rights have been acquired by broadcasters and to allow producers to retain their retransmission rights in such situations where no evidence of payment can be presented. This is particularly relevant for television productions that benefit from a reduced number of exploitation windows.

Since problems remain for producers to achieve a position to license and also obtain a proper remuneration for the use of their works, there are important tools that should be considered to tackle said problems:

- Difficulties arising from technology: with the arrival of digital terrestrial television, free to air methods of broadcasting are becoming extinct. This leads to a potential erosion of application of the Directive even though the exploitation of rights has not changed. Indeed, there continue to be two acts of exploitation of audiovisual works and two different entities benefiting from said economic exploitation of delivery of linear broadcasting services to consumers by means of cable retransmission.

In a direct injection process, the first exploitation occurs when the broadcasters license the work for a channel by acquiring rights from producers (financed by ad revenues and by the revenues deriving from licensing the linear broadcast to secondary exploiters, such as cable operators), and the second exploitation is carriage of the work in the channel carried or offered by the cable operator, who sells a new audiovisual product (refer to Airfield vs. AGICOA) resulting from aggregation of a selection of channels into a commercial offer made available to consumers upon payment of a subscription fee. Changes in the technology used by cable operators should have no bearing on the economic reality.

Accordingly, direct injection methods of supplying broadcast channels to cable operators involve two acts of communication to the public: one act performed by the broadcaster, in a business to business context, and a second act of exploitation performed by the cable operator through a business to consumer transaction. Technological evolution has simply enhanced the role of platforms in delivering content to consumers. This so called direct injection method of carrying the linear broadcasting services into the cable operators’ offer has replaced the highly costly and ineffective free to air technology also as a consequence of European policies related with Digital Terrestrial Television.

When analyzing the CJEU decision on the Airfield case, it is possible to conclude on the similarities of said case with the new landscape of direct injection resulting from technical evolution of retransmission. The following conclusions of the Court are relevant also to establish that, despite the direct injection of channels into the cable platform, the cable operators continue to offer a new audiovisual product that requires licensing by a CMO (for cable delivery) when the producers have not assigned the rights to license said cable operators to the broadcasters:

“Moreover, the satellite package provider’s intervention amounts to the supply of an autonomous service performed with the aim of making a profit, the subscription fee being paid by those persons not to the broadcasting organisation but to the satellite package provider. It is undisputed that that fee is payable not for any technical services, but for access to the communication by satellite and therefore to the works or other protected subject-matter.

Finally, it is to be noted that the satellite package provider does not enable its subscribers to access the communication of a single broadcasting organisation, but brings together a number of channels from various broadcasting organisations in a new audiovisual product, the satellite package provider deciding upon the composition of the package thereby created.

Accordingly, it must be found that the satellite package provider expands the circle of persons having access to the television programmes and enables a new public to have access to the works and other protected subject-matter.”

Cable operators increasingly argue that, due to direct injection as a technical means of delivery of content in broadcasters’ channels, they do not have an obligation to license rights in content owned by broadcasters and by producers who license works to the broadcaster. Cable operators effectively insist that they should be presumed to have obtained and paid for all rights to use the content in broadcaster-licensed channels and presumptively they should be able to earn subscription fees for use of the content without further obligation to remunerate right holders. To the extent that neither the producer or the broadcasters have licensed producers rights to cable operators, these platforms infringe producers’ exclusive rights to communicate their works to the public.

This is a totally unacceptable position, since the act of retransmission is effectively performed by the cable operator on the account of a subscription fee that renders the cable industry approximately 11 billion EUR of revenue per year (according to Cable Europe). In this respect, AGICOA notes the position of the EBU expressed in the position paper submitted by occasion of the EU Green paper on the online distribution of audiovisual works in the European Union: opportunities and challenges towards a digital single market. Transferring the liabilities, costs of negotiation and overall payment of royalties to all creative participants to broadcasters would be unacceptable, as it would place an additional burden on broadcasters for an activity that does not yield them any direct profit and moreover granting cable operators an unfair commercial advantage that diminishes their costs by circumventing rights of broadcasters and producers and increasing the profits resulting from selling subscription fees.

In the event the Directive is reopened, the Commission could clarify that cable retransmission occurs whenever a linear broadcasting service is retransmitted or by any means communicated to the public by a third party other than the broadcaster, in a simultaneous manner and shift to the platform the burden of proof that rights for third party distribution have been granted by producers.

- Need for transparency: when licensing CMOs set tariffs based on fair and transparent criteria to adequately value the works included in cable operators’ commercial offers. One of the fundamental criteria is the number of subscribers enjoying said commercial offer. If the Directive is reopened, increased regulatory oversight at EU and national level might be proposed to provide balanced protection to right holders, including producers and broadcasters. Some mechanisms that might be considered would include measures by which rightsholders could be assured access to information required for an effective

application of the tariffs set by their CMOs, which is already required under the provisions of article 17 of Directive 2014/26/EU.

- Need for appropriate mechanisms to enforce licenses: as effective systems of mediation are available only in few Members Sates, when a cable operator refuses to pay a license, producer CMOs are often confronted with very high costs of litigation. In addition to struggling with this reality, CMOs are often requested to prove that they represent the rights that are entrusted to them, whereas cable operators are often exempted by courts from submitting contractual agreements that prove that they have effectively acquired all the necessary rights from broadcasters (AGICOA Belgium vs. TV Vlandereen). In the interim, cable operators are able to continue to use producers’ works in violation of their exclusive rights (where they lack an authorization to do so) and without any payment. Were the Directive to be reopened, AGICOA would welcome introduction of appropriate mechanisms to enforce rights, such as provisional and precautionary measures including requirement that pending resolution of a tariff, cable operators would have to pay royalties at a previously agreed amount or at the tariff applied by the CMO to the same category of users. AGICOA would also welcome clarification that the burden of proof related with the acquisition of all rights from broadcaster favours right holders and not cable operators, without which the infringement of producers’ copyrights is assumed.

11. Has the system of management of rights under the Directive resulted in consumers having more access to broadcasting services across borders?

Yes

To a large extent

To a limited extent

No opinion

11.1. Please explain. If you consider that problems remain, please describe them and indicate, if relevant, whether they relate to specific types of content (e.g. audiovisual, music, sports, news) or to specific types of services (e.g. public ser vices broadcasters', commercial broadcasters', subscription based, advertising based, content specific channels) or other reasons.

Collective rights management has revealed to be efficient by allowing cable operators to obtain rights clearance over a comm ercial offer that comprises channels from different countries by means of a single blanket license granted in the country where the cable operator offers its service. Moreover, collective licenses allow flexibility in the selection of channels made availab le to consumers by facilitating rights clearance in accordance with audiences’ preferences.

12. Have you used the negotiation and mediation mechanisms established under the Directive?

Yes, often

Yes, occasionally

Never

Not applicable

12.1. If yes, please describe your experience (e.g. whether you managed to reach a satisfactory outcome) and your assessment of the functioning of these mechanisms.

12.2. If not, please explain the reasons why, in particular whether this was due to any obstacles to the practical application of these mechanisms.

These mechanisms are not available in the majority of Member States.

For the purposes of evaluating the current EU rules, the Commission should assess the costs as well as the relevance, coherence and EU added value of EU legislation. These aspects are covered by questions 13-14 below.

13. Has the applic ation of the system of management of cable retransmission rights under the Directive resulted in any specific costs (e.g. administrative)?

Yes

No opinion

13.1. Please explain your answer.

It has resulted in costs to implement collection systems that are recouped with royalties collected from users and due to audiovisual producers.

Cable operators often refuse to clear rights (e.g. direct injection arguments) thus leading CMOs to engage in very costly litigations, where they are often required to prove their representation while cable operators do not provide proof of acquisition of all the necessary rights from broadcasters. Preparing evidence for litigation is a challenging and costly procedure for CMOs, implying monitoring of broadcast schedules (acquisition of this data being very costly), identifying rightsholders and contacting them to obtain affidavits to prove representation for each retransmitted channel. Moreover CMOs are required to provide

economic substantiation of their tariffs by submitting expert reports which are also costly.

14. With regard to the relevance, coherence and EU added value, please provide your views on the following:

14.1. Relevance: is EU action in this area still necessary?

Yes

No opinion

14.2. Coherence: is this action coherent with other EU actions?

Yes

No opinion

14.3. EU added value: did EU action provide clear added value when compared to an action ta ken at Member State level?

Yes

No opinion

14.4. Please explain your answers.

In case the Directive would be reopened, AGICOA invites the Commission to further consider harmonization in respect of the following topics:

o Providing the means for granting of extended collective licenses including the authorization for cable operators to retransmit works which rights are held by the broadcasters in the license granted by CMOs representing audiovisual producers. In line with the discussions held at WIPO on occasion of debating the Broadcasting Treaty, it should be clarified that the protection granted to broadcasters aims exclusively their own broadcast signal. Equal treatment with producers would be reached by enabling clearance of rights over all works, including those for which the broadcasters hold exploitation rights, through CMOs, subject to an opt out right should this be necessary under relevant international law and the EU Copyright acquis. - To address technological evolutions that have impacted negatively the ability of producers to license retransmission rights directly or through their CMOs: o Clarifying that cable retransmission occurs whenever a linear broadcasting service is retransmitted or by any means communicated to the public by a third party other than the licensed broadcaster, in a simultaneous, unabridged and uninterrupted manner. - To provide for transparency and effective rights clearance mechanisms: o Providing for obligations of users to grant access to information required for an effective application of the tariffs set by CMOs, as required by the provisions of article 17 of Directive 2014/26/EU. o Introducing appropriate mechanisms to enforce rights, such as provisional and precautionary measures including requirement that pending resolution of a tariff, cable operators would have to pay royalties at a previously agreed amount or at the tariff set by the CMO for similar users or uses. o Clarifying that the burden of proof related with the acquisition of all rights from broadcasters favours right holders and not cable operators, without which the infringement of producers’ copyrights is assumed.

III. Assessment of the need for the extension of the Directive

The principles set out in the Directive are applicable only with respect to satellite broadcasting and cable retransmissions[2]. They do not apply to transmissions of TV and radio programmes by other means than satellite or to retransmissions by other means than cable. Notably these principles do not apply to online transmissions or retransmissions.

Until relatively recently, broadcasters' activities mainly consisted of non-interactive transmissions over the air, satellite or cable and broadcasters needed to clear the broadcasting/communication to the public rights of authors, performers and producers. However, the availability of broadcasters' programmes on an on-demand basis after the initial broadcast (e.g. catch-up TV services) is on the increase. Providing such services requires broadcasters to clear a different set of rights than those required for the initial broadcast, namely the reproduction right and the making available right. Forms of transmission such as direct injection in cable networks or transmissions over the internet (e.g. webcasting) are also increasing. Digital platforms also enable programmes to be retransmitted simultaneously across networks other than cable (e.g. IPTV, DTT, simulcasting).

[2] The concept of retransmission is generally understood as the simultaneous transmission of a broadcast by a different entity such as a cable operator.

1. The extension of the principle of country of origin

15. Please explain what would be the impact of extending the "country of origin" principle, as applied to satellite broadcasting under the Directive, to the rights of authors and neighbouring right holders relevant for:

15.1. TV and radio transmissions by other means than satellite (e.g. by IPTV, webcasting).

15.2. Online services ancillary to initial broadcasts (e.g. simulcasting, catch -up TV).

15.3. Any online services provided by broadcasters (e.g. video on demand services).

15.4. Any online content services provided by any service provider, including broadcasters.

AGICOA is opposed to any extension of the country of origin principle. However, if the Directive is reopened and prior to any move to extend the scope of the country of origin principle, there should be an assessment to identify potential market failures that require such regulation.

It should be considered that there is no impairment or obstacle for broadcasters and other online service providers to acquire rights that allow them to use audiovisual works on their platforms available in different countries. Users have at their disposal the possibility to acquire licenses with a multi territorial scope in the current context of contractual freedom thus there appears to be no justification for a restriction on the business model. Imposing the principle of country of origin seems unnecessary as a practical matter and in any case should not undermine the territorial basis of licensing and valuing audiovisual content.

It is important to note that licensing copyrights is paramount for producers to ensure continued production of quality content that consumers want to enjoy.

As recognized at the international level and by legal systems around the world, producers are themselves the best and original “one stop shop” for licensing their works. Only if and to the extent that exploitation rights are centralized in producers can works be licensed efficiently and in order to reap sustainable returns to creative participants. The licensing systems developed by producers rely on a territorial exploitation of works, which should not be undermined by an expansion of the country of origin paradigm. In this respect, the following considerations are relevant:

- It is a commitment of both producers and broadcasters to deliver quality content to audiences. Quality content has a high value for audiences but it brings a high cost for producers. It is not a

challenge that producers want to refuse; but to be able to succeed and respond to public demands producers need to license their copyrights in a context of commercial freedom to raise the necessary financing for producing what the public wants to watch including in the online space. Commercial freedom includes being able to select the territories of licensing and establishing appropriate prices for each territory based on the effective audiences reached.

- The broadcasters most probably share the view that quality content represents high value for their audiences. This is visible when they are able to increase their direct advertisement revenues by broadcasting quality content: because more viewers seek that content, broadcasters are able to maximize their add tariffs. This is a positive result both for broadcasters and producers. Protection of quality content is also a key shared goal for producers and broadcasters. In the discussion of the challenges presented in online distribution of content, producers and broadcasters agree in fighting against all forms of illegal distribution of content.

- As noted above, producing quality content has a direct link with local and national audiences: this is the adequate territorial basis for licensing copyrights and valuing audiovisual works.

- By controlling all rights and determining how to exploit the film through multiple platforms, the producer is also able to develop the strongest audience recognition of the title and thus to generate the greatest audience uptake platform by platform. Local and national audiences are key drivers as audience recognition is based on cultural and linguistic preferences. Cultural diversity serves diverse audience preferences.

- Distribution strategies are driven by local language, interests and preferences of audiences that vary not only on a national basis, but also locally. This is also applicable to production. There are countries that offer illustrations of this strong local anchorage of production, such as the UK, where the commissioning broadcasters invest in a variety of regional and local content not standardized on a national basis to satisfy their commitment to audience preferences.

- Decisions to invest in producing works also vary depending upon the territory of distribution. This is illustrated by the fact that even public broadcasters distributing their channels in different territories organize special program services depending on the country of broadcast and also invest in local production when present in those foreign countries. Respecting national identities and local audiences appears to be a strong point also in guiding broadcasters’ editorial responsibility.

- Producers often deficit finance or incur deferrals in order to produce quality content. Therefore preserving the rights to sales along the value chain of finished programmes/films also allows such deficits and deferrals to be recouped and more content to be made. Online services are a relevant part of this value chain, increasingly growing based on the preference of audiences.

- Distribution of audiovisual works including in online services implies significant investment in selecting, promoting, adapting, translating and offering content that local audiences will enjoy. Online services do not survive without being customer oriented or offering customer support; platforms rely in the preferences of their national audiences to succeed with their offer of content. Content is acquired on that basis and not on a worldwide or pan European scale because there is no global audience without cultural and linguistic preferences.

- Having a single country of licensing in replacement of national licensing solutions in such a way that payment of rights acquired will not take into account the different markets of distribution can completely undermine the development of the online services’ market. Since platforms are profit oriented, they will seek the country with the lowest costs in acquiring rights. Such a practice can be pervasive in destroying viable local productions and discouraging investments by producers, since the chances to recoup will be remote.

- A model of single country of licensing in replacement of national licensing solutions will have a negative impact on audiovisual production, limiting recoupment of investment and remuneration of creative participants, discouraging reinvestment in new quality content. The copyright framework that exists today allows multi territorial distribution to be achieved on a fair price basis and guided by the need to recoup investments in production. This is valid for the entire value chain, from primary to secondary rights.

- It is important to distinguish online services offered by broadcasters from the non-linear services offered by third parties other than the broadcasters, highlighting that in both cases the existing licensing models have not proven to be a barrier to clear rights and enable content offering. Whereas the former are complimentary to the linear broadcasting, the latter are a sole avenue of exploitation – and this will be reflected in the market value and audience recognition of works made available.

- Licensing of making available rights required for on demand services offered by broadcasters and other platforms seems impracticable under a country of origin approach. Given that the work is used both at the point of sending and of reception, it appears unfeasible to determine the country of origin. Moreover, the absence of the principle of country of origin does not prevent broadcasters or platforms from acquiring rights for several countries, which is and will continue to be possible. Subjecting making available to the country of origin principle also raises a host for further issues including the questions related to the reproduction rights underlying some of the making available based services.

16. Would such an extension of the "country of origin" principle result in more cross border accessibility of online services for consumers?

No. Not in the long term as ultimately such an extension would reduce choice and harm cultural diversity. Cross border accessibility where demand is sufficient can be achieved within the current licensing models without damaging producers’ ability to recoup their investments and reinvest in national production. As demonstrated above, reducing licensing markets through application of the country of origin framework would disregard the different value of content across territories with a negative effect on local production, especially the one that serves linguistic minorities.

Cross border access is determined by the effective existence of audiences and customers; legislation cannot contradict the fact that content is primarily desired by audiences of its country of origin.

It should be noted that as the EBU correctly states in its submission to the EC GREEN PAPER on the online distribution of audiovisual works in the European Union: opportunities and challenges towards a digital single market such a solution would only be admissible where the exact same service would be available in several EU Member States. This does not happen: when online audiovisual services are available in different countries there is sub-titling or dubbing available, there are special programs scheduled for destination audiences and the advertisement structure is also adjusted to local audiences to maximise add revenues. It is very rare that broadcasters’ online services supplied in foreign countries mirror the ones available in the country of origin.

Many broadcasters have reservations in making their online services available across the EU irrespectively of a commercially sustainable decision, including some which are publicly funded with a mission to respond to their national audiences and tax payers’ interests (e.g. recent position of the BBC refusing the availability of its iPlayer across the EU), which are consistent with the national mandate they enjoy. Commercial broadcasters have consistently underlined that multi- country acquisitions are possible without any further regulation, and should be decided on the basis of a reasonable possibility to monetize content instead of being imposed by law.

Moreover legislative action by the Commission must be premised subsidiarity and should be proportionate to satisfy lack of regulation or of national legislative tools. Since broadcasters and producers are partners in business both for production and distribution of audiovisual works, there is no lack of negotiation tools. Broadcasters can easily negotiate with producers for multiterritorial licenses should that be required, as happens today (e.g. the BBC’s terms of trade are negotiated with reference to various markets, including the UK, Ireland and the Benelux, providing for different conditions of rights’ acquisition depending on the territory. Thus far, the UK is the market for which the BBC requires a more complete acquisition of rights and consequently incurs in higher expenditures, related with their public mandate for British tax payers).

The same applies to platforms other than the broadcasters: acquisition of multi-country licenses has always been and is available at an appropriate price that takes into account audience recognition in the various territories.

16.1. If not, what other measures would be necessary to achieve this?

Ensure that the market continues to function properly and that both broadcasters and third party platforms other than the broadcasters’ effectively acquire the rights they need to commercially exploit audiovisual works in different territories .

17. What would be the impact of extending the "country of origin" principle on the collective management of rights of authors and neighbouring right holders (including any practical arrangements in place or under preparation to facilitate multi territorial licensing of online rights)?

As explained above, producers believe that the existing solution to license cable retransmission rights relying on national licensing schemes is adequate to protect the interests of authors and

neighboring right holders and to contribute to reinvestment in producing quality content to respond to the needs of local audiences. They do not believe that replacing national licensing solutions by a single country of licensing will be beneficial for any stakeholders or for audiovisual production. As explained above, it will have a negative impact and endanger cultural and linguistic diversity as key drivers of audiovisual production. This is also a valid principle for online services offered by cable operators or other platforms.

AGICOA has been preparing collective licensing schemes at the request of those of its members who choose a collective approach for licensing in the on-line space. It should be noted that online services provided by third parties other than the broadcasters and based on the linear broadcasting services, namely by retransmission operators, are confined to the geographical area of offer of the traditional cable retransmission services as thus far the selection of channels by these operators has been guided by the preferences of their national costumers. Imposing a multiterritorial licensing scheme based on the principle of country of origin would burden producers and broadcasters with loss of revenues without yielding any advantages to consumers.

Giving a practical example, if a cable operator established in several EU countries could clear rights for the entire EU with a license obtained in one country paying only the tariff established in the country where the license is obtained, this would obviously open the door for said operator to pick the cheapest license available and exploit works with no costs in all other countries. Yet it is not guaranteed and there is no evidence to support a conclusion that consumers’ access to works would be improved or enhanced due to differences in the commercial offer made available by said cable operator in the various countries (related with channels selected, determined by audiences but also by broadcasters’ commercial strategies, different online services depending on bandwidth made available to customers, etc.). Is this a desired result?

18. How would the "country of origin" be determined in case of an online transmission? Please explain.

As stated above, AGICOA disagrees with the application of country of origin to any new service environment. Moreover, there is a profound risk that such an approach would enable a race to the bottom, in the sense of selecting the country with the lowest price to obtain a license covering all other EU countries. By seeking corporate establishment or technical platforms to be placed in countries where lower tariffs are applied platforms would effectively maximise their profits to the detriment of producers.

The country of origin would also allow operators to avoid national regulations (e.g. related with film funding) by seeking establishment in countries where such obligations do not exist, despite of offering services to customers in all EU countries.

AGICOA welcomes the respect of the principles established in the 2001 Information Society Directive for the making available right that takes place in every country where the work is made available to the public on the basis of mere accessibility (regardless of whether the work is actually accessed). Only by fostering national licensing solutions can the Commission achieve the high level of protection of copyright required in recitals 4 and 9 of said Directive.

AGICOA also welcomes the Commission to value the principles of fair competition and freedom to contract that discourage creating unnecessary restrictions to business models.

Finally, AGICOA questions the compatibility of such an approach with the recent rules introduced to harmonize VAT on online services – would this solution not be regarded as an override of said rules thus opening the door for online service providers to challenge them and continue to seek digital tax havens?

19. Would the extension of the "country of origin" principle affect the current level of copyright protection in the EU?

Yes. Please revert to our answers above.

19.1. If so, would the level of EU copyright harmonisation need to be increased and if so in which areas?

No.

2. The extension of the system of management of cable retransmission rights

20. According to your knowledge or experience, how are the rights of authors and neighbouring right holders relevant f or the simultaneous retransmissions of TV and radio programmes by players other than cable operators currently licensed (e.g. simulcasting or satellite retransmissions)?

Acquisition of rights is made in direct negotiations: broadcasters trade these rights along with the primary broadcasting rights in their negotiations with producers and distributors and digital platforms acquire making available rights from the same producers and distributors.

20.1. Are there any particular problems when licensing or cl earing rights for such services?

No. The market functions well under direct licensing schemes supplemented by collective licensing schemes at the rightsholders’ discretion to cover licenses required for cable operators to supply digital services based on the linear broadcasting services (such as TV Everywhere).

For producers that choose collective licensing of services provided by third parties other than the broadcasters, based on the linear broadcast of channels, one possible model, should the Directive be reopened, could rely on an extended collective licensing framework, which would increase the value of the collective license while maintaining the option of individual licensing for those producers that prefer to opt out from the collective regime.

21 . How are the rights of authors and neighbouring right holders relevant for the transmission of broadcasters’ services via direct injection in cable network currently licensed?

As previously stated, AGICOA perceives of direct injection in the same way as traditional cable retransmission based on free to air technology. Therefore channels which are directly injected for exploitation on cable platforms require a license to be granted by producers to broadcasters (direct primary license) and to cable operators (second license granted either by broadcasters having acquired rights from producers or by CMOs).

Considering that often producers acquire retransmission rights from creative participants such as authors, they act as a one stop shop for licensing. Voluntary collective management could be an option for authors and performers that have retained their rights under contractual arrangements with producers.

If the Directive is reopened, AGICOA suggests that clarification is provided as to direct injection being recognized as retransmission thus requiring authorization and remuneration in addition to primary licenses, as noted above.

21.1. Are there any particular problems when licensing or clearing rights for such services?

The fact that there is a different technological basis for retransmission opens possible arguments of cable operators to refuse to clear or remunerate retransmission rights of producers. This interpretation could cause infringement of producers’ rights when cable operators refuse to take a license from producers while not being fully licensed by broadcasters either. It should be clarified that rightholders retain the possibility to licence both broadcasters and third party platforms such as cable for the act of communication to the public, despite the different technologies used to deliver content to consumers.

It is worth to note the conclusions of the CJEU in the TV Catch Up case:

1. The concept of ‘communication to the public’, within the meaning of Article 3(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, must be interpreted as meaning that it covers a retransmission of the works included in a terrestrial television broadcast

– where the retransmission is made by an organisation other than the original broadcaster,

– by means of an internet stream made available to the subscribers of that other organisation who may receive that retransmission by logging on to its server,

– even though those subscribers are within the area of reception of that terrestrial television broadcast and may lawfully receive the broadcast on a television receiver.

2. The answer to Question 1 is not influenced by the fact that a retransmission, such as that at issue in the main proceedings, is funded by advertising and is therefore of a profit-making nature.

3. The answer to Question 1 is not influenced by the fact that a retransmission, such as that at issue in the main proceedings, is made by an organisation which is acting in direct competition with the original broadcaster.

Should the Directive be reopened, the above conclusions could be reflected by stating that producers can avail from licensing their exclusive rights and obtaining appropriate remuneration in case of any third party other than the broadcaster performing a communication to the public.

22. How are the rights of authors and neighbouring right holders relevant for non -interactive broadcasters’ services over the internet (simulcasting/ linear webcasting) currently licensed?

Simulcasting/linear webcasting performed on broadcasters’ online services is a separate act of communication to the public and thus one of primary exploitations directly licensed by producers. There is no tradition of licensing primary rights on audiovisual works through collective

management. Generally producers license directly. This is a substantial difference vis a vis other types of content, such as music.

AGICOA’s view is that the current licensing schemes for simulcasting and broadcasting of audiovisual works are fully operative and that no further action is required. As noted, generally producers acquire retransmission rights from creative participants such as authors, so they serve as as a one stop shop for licensing.

22.1. Are there any particular problems when licensing or clearing rights for such services?

No.

23. How are the rights of authors and neighbouring right holders relevant for interactiv e broadcasters’ services currently licensed (e.g. catch-up TV, video on demand services)?

It should be noted that the so called interactive or non-linear broadcasting services rely on a different type of right, the making available right, for which collective management is not traditionally used, as well as the reproduction right. Thus far producers have licensed said rights directly (to distributors or broadcasters) as they assume great relevance in financing production namely within the pre-sales stage. These rights are also traded in the negotiations between broadcasters and producers for the acquisition of primary rights.

Should it be the case that audiovisual producers would wish CMOs to have a role for secondary exploitations (in the case of on demand services supplied by platforms other than the broadcasters, especially retransmission platforms), collective licensing schemes could be developed for those rightsholders who favour this approach.

23.1. Are there any particular problems when licensing or clearing rights for such services?

No.

24. What would be the impact of extending the copyright clearance system applicable for cable retransmission (mandatory collective licensing regime) to:

24.1. the simultaneous retransmission[3] of TV and radio p rogrammes on platforms other than cable (e.g. satellite, IPTV, internet)?

[3] Understood as the simultaneous transmission of the broadcast by a different entity than the broadcaster (see footnote 2).

Whereas cable and satellite operators are distributors that come into play after the work is produced and licensed to broadcasters, mandatory collective management was introduced as a means of simplifying rights clearance for geographically limited platforms, i.e., cable operators. When the SatCab Directive wa s adopted, the Members States considered that it would be a tool to achieve an important dissemination technology at that time, without negative implications in financing the production of works. In essence, it was an extension of broadcasting for content already subject to a primary license. Collective management provided a tool to facilitate a secondary license.

As previously stated, digital rights are fundamental in the production landscape. Where retransmissions occur over the open Internet exclusive r ights apply as per TVCatchup decision quoted above. To the extent that collective management could impair the capacity of producers trading those digital rights, by significantly diminishing the financing they obtain from an all rights included license to territorial distributors, for example, it would not be a desirable solution.

In case collective management would not impair primary licensing of digital rights, it could be and is considered at producers’ discretion. As an example, AGICOA has been developing licensing schemes for those producers that opt to be remunerated for certain digital distribution rights on a collective basis, for example to license cable operators’ TV Everywhere services. It should be noted that this is a decision of producers within a context of contractual freedom where collective licensing is used at the producers’ discretion.

To the extent that producers have a preference for implementing collective licensing schemes (such as in the Nordic countries), extended collective licens ing is a useful tool to include works of non-members in the licensing scheme while maintaining individual contractual freedom for those producers that prefer to opt out and license directly.

24.2. the simultaneous transmission[4] of TV and radio prog rammes on platforms other than cable (e.g. satellite, IPTV, internet)?

[4] Understood as the simultaneous transmission of the broadcast by the broadcaster itself.

Simultaneous transmission by a broadcaster is comprised within a primary use of the works to compose the program schedule of a linear broadcasting service. The technological means may vary but the use and users of the works remain the same. In this context, producers license copyrights directly to broadcasters within the primary exploitations and the negotiations comprise clearance of rights for multiple platforms of broadcast as required by the broadcasters. No further action is required.

IPTV, meaning the simultaneous, unaltered and unabridged cable retransmission of linear broadcast performed by a cable operator within a closed network and not via the open Internet is in AGICOA’s view already subject to the regime applicable to the cable retransmission right as provided for in the Directive and is licensed accordingly.

25. In case of suc h an extension, should the different treatment of rights held by broadcasting organisations (Article 10 of the Directive) be maintained?

A level playing field should be considered to avoid creating an additional imbalance, as pointed out above.

We note that the flexibility provided by Article 10 can in principle accrue usefully to both producers and broadcasters. However, we also have reservations about a regime that in practice often concedes to broadcasters a special advantage over independent producers in Europe by

strengthening the formers’ positions to the latters’ detriment. We note that the film funding systems in force in the EU and supported by the MEDIA program include the digital chain as ancillary to the financing and future distribution of European productions. Independent producers can face significant pressure from broadcasters who seek to use Article 10 as leverage to acquire rights. As noted, such producers are often effectively forced to transfer their retransmission rights frequently without appropriate compensation, though ironically the broadcasters themselves seek this compensation on account of such acquired rights in many Member States (where available) by asserting claims to retransmission royalties for such rights.

Options to be considered to promote greater fairness between broadcasters and producers could include a mechanism that requires broadcasters to demonstrate payment for acquired rights; alternatively, an extended collective license approach, including with an effective opt-out right, could improve the imbalance.

26. Would such an extension result in greater cross border accessibility of online services? Please explain.

No. Cross border accessibility is not prevented by difficulties in clearing rights. Rights can easily be acquired by broadcasters within direct negotiations and the same applies to platforms.

Cross border accessibility is indeed limited by audiences preferences and consequently by commercial decisions of broadcasters (including in some instances governmental guidance to protect national tax payers’ interests in the case of PSBs).

27. Given the difference in the geographical reach of distribution of programmes over the internet (i.e. not limited by geographical boundaries) in comparison to cable (limited nationally), should any extension be limited to "closed environments" (e.g. IPTV) or also cover open simultaneous retransmissions and/or transmissions (simulcasting) over the internet?

Yes, it should be limited to closed environments. The internet is not limited by physical boundaries. Thus, rational commercial decisions imply that territoriality should continue to be the base for considering making interactive services available in different countries and consequently the licensing mile stone for producers of content. This is also valid for broadcasters when licensing their channels to other platforms – negotiations are conducted on a country per country basis and prices are determined accordingly. This principle has already been guiding commercial decisions of broadcasters with regards to their own online services and the same applies to other platforms (e.g. online services provided by cable operators are not available with the same features in all EU countries – these are commercial decisions of the platforms to maximize their profits that have nothing to do with rights clearance).

Should any such extension be justifiable and legally sustainable for the same subject of licensing, e.g. the simultaneous, uninterrupted, unabridged retransmission of a linear broadcast resourcing to a different technology, insofar as it is clear that the same retransmission right is at stake, it should be limited to closed networks.

28. Would extending the mandatory collective licensing regime raise questions on the EU com pliance

with international copyright obligations (1996 WIPO copyright treaties and TRIPS)?

Although the treaties would not pose obstacles to extension in the case of some services that rely on the communication to the public right (e.g. retransmission related) it could be challenging to justify an extension of mandatory collective licensing to the making available right as being compatible with the WCT and TRIPS.

Article 11 bis(2) of the Bern Convention has anchored the establishment of mandatory collective management for the retransmission right.

However, the 1996 WCT (article 8) does not provide for the same solution for the making available right, neither does TRIPS, as in both cases relevant norms do not allow for the prescription of conditions for its exercise nor its limitation to a mere remuneration right.

As stated before, this does not preclude the establishment of licensing schemes at the discretion and under decision of producers or any other category of rightsholders should they deem it as an advantage to complement their direct business models.

29. What would be the impact of introducing a system of extended collective licencing for the simultaneous retransmission and/or the simultaneous transmission of TV and radio programmes on platforms other than cable, instead of the mandatory collective licensing regime?

It is important to make a distinction between primary rights underlying the initial transmission of content from secondary rights underlying a retransmission or a use by a third party of content already licensed to another user, such as a broadcaster.

As stated above, primary exploitations are licensed directly by producers who are in the best position to determine market value and how, when and where to license their works. In the case of exploitations by a third party other than the broadcaster, restricted to simultaneous retransmissions of TV channels, collective licensing has been an advantage for producers in monetizing the retransmission right albeit on a blanket basis and at commercial cost for those who would prefer an individual licensing approach. Mandatory collective management can be beneficial to the extent that it establishes an obligation for the platforms to clear rights. Extended collective licensing can bring advantages to the extent that is preserves contractual freedom for producers through opt out mechanisms while allowing those that wish to monetize their content to receive royalties even if they are not members of a given CMO.

It is important to note that ensuring that any retransmission is dependent on rights clearance by producers (either based on individual or collective licensing agreements, as stated for the cable retransmission right) should be the departure point for reflection.

30. Would such a system of extended collective licencing result in greater cross border accessibility of online services?

Since cross border accessibility is not impaired by absence of rights clearance (direct licensing is available at all times), it would depend on whether commercial decisions would be adopted by operators of said services to offer them in multiple territories.

3. The extension of the mediation system and the obligation to negotiate

31. Could the current mechanisms of negotiation and mediation in Article s 11 and 12 of the Directive be used to facilitate the cross border availability of online services when no agreement is concluded regarding the authorisation of the rights required for an online transmission?

Provided that such mechanisms would be available in all negotiation frameworks they could be a facilitating tool.

32. Are there any other measures which could facilitate contractual solutions and ensure that all parties concerned conduct negotiations in good faith and do not obstruct negotiations w ithout justification?

IV. Other issues

33. These questions aim to provide a comprehensive consultation on the main themes relating to the functioning and possible extension of the Directive. Please indicate if there are other issues that should be consid ered. Also, please share any quantitative data reports or studies to support your views.