Audiovisual media services: Back to the 80's?!

On 19 March 2018, the European Commission published a notice to stakeholders on the consequences of Brexit for audiovisual media services. This makes it clear that, subject to any transitional arrangement, as of the withdrawal date, the EU rules in the field of audiovisual media services will no longer apply to the UK. Therefore, in summary, UK-based broadcasters would be left relying on laws written in the 1980s.

Currently, broadcasters based in the UK have the benefit of the “Country-of-Origin” principle enshrined in the EU’s Audiovisual Media Services Directive (“AVMSD”), which allows them to freely transmit throughout the EU without needing multiple licences as long as they are licensed and regulated in the UK. The principle has particularly benefitted the UK broadcasting industry. Coupled with the UK also having a stable and supportive regulatory regime, a developed creative sector, a large domestic broadcasting market, access to highly skilled workers in the industry and being English speaking, among other reasons, it is unsurprising that many non-domestic multinational broadcasters base their European operations here and the UK regulator, Ofcom, licenses more than half of the 2,200 channels broadcast across the EU.

However, as of the withdrawal date (and subject to any transitional arrangement), the AVMSD will no longer apply to the UK. The European Commission has made it clear that from this date, audiovisual media services received or retransmitted in the EU will no longer benefit from the freedom of reception and retransmission principles laid down in Article 3 of the AVMSD. Therefore, the EU member states will be entitled, based on their national law and where applicable, within the limits of the European Convention on Transfrontier Television (“Convention”), to restrict reception and retransmission of audiovisual media services originating from the United Kingdom.

The Convention is founded on broadly the same country of origin principle as that which went on to be enshrined in the Television Without Frontiers Directive and now the AVMSD, meaning media service providers would still only need one licence from a regulatory body in their jurisdiction to broadcast throughout Europe. However, it is questionable whether the Convention on its own is likely to be enough to prevent broadcasters from relocating elsewhere in the EU. The Convention excludes seven Member States (including Ireland and the Netherlands), lacks an effective enforcement mechanism and, of course, does not cover online streaming. In addition, those EU countries that are signatories to the Convention will be following the AVMSD rules whilst the UK would be following the Convention rules so working out how cross-border relationships between UK and EU media businesses work in practice could prove tricky.

In addition, the current status of the Convention is unclear; following adoption of the AVMS Directive, the Council of Europe proposed to amend the Convention to bring it in line with the Directive and extend the scope to cover on-demand services. However, following intervention from the European Commission the revisions to the Convention were eventually discontinued and there is no longer a Convention Standing Committee.

There is also currently limited precedent for a third country securing single market-equivalent access for broadcasters and, according to the European Scrutiny Committee, audio visual media services are generally excluded from EU free-trade agreements due to “cultural sensitivities”. The Commission’s latest notice therefore serves as a further reminder of the importance of a deal to the UK’s broadcasting sector.

With less than 12 months to go before the UK leaves the EU, multinational broadcasters wanting to transmit across the EU and to continue relying on the country of origin principle, will no doubt currently be reviewing their licensing portfolios against their current operational footprint in the EU.