EU’s probe of Hollywood may open door to more pan-European rights deals.
On Thursday, the European Commission sent a statement of objections to Sky and six major Hollywood studios, including Disney, Warner Brothers and Fox. The EC has taken the preliminary view that rights agreements between Sky and the studios have impinged on competition and breached EU antittrust rules.
In essence, the Commission is objecting to the sale of film rights on a territorial basis within the EU when the licensing agreements prevent consumers in other EU states from accessing the content in question should they wish to.
Put simply, they are saying that in a free, single market if someone in France wants to get Sky Movies, they should be able to.
The Commission is objecting to Sky buying first run movie rights for the UK and Ireland and then geo-blocking the online and satellite transmissions of these films in other EU member states. It is investigating similar practices by Canal Plus, Spain’s DTS and by the German and Italian Sky businesses that are now controlled by Sky UK.
The football precdent
A system of licences for the broadcasting of football matches which grants broadcasters territorial exclusivity on a Member State basis and which prohibits television viewers from watching the broadcasts with a decoder card in other Member States is contrary to EU law
Court of Justice of the European Union, October 4th 2011
Essential background to this story is the case brought against the Premier League and Sky to the ECJ by pub landlady Karen Murphy. Murphy, who later had her conviction quashed by the High Court, faced large fines for using a satellite decoder to show Premier League matches being aired by a Greek broadcaster in her UK pub, where the rights were held by Sky.
The European Court of Justice ruled that Murphy was within her rights as an EU citizen to purchase the Greek set top box and watch Premier League matches on it in her home. The ruling did not extend to pubs and clubs, with the ECJ conculding that broadcasting Premier League matches containing the ‘protected works’ of the Premier League in public places required its permission.
In this case the copyrighted works were not the matches themselves but items such as the Premier League logo, on screen graphics and the pre-match ‘anthem’.
A better positioned Sky
When Sky acquired 100% of Sky Italia from 21st Century Fox and over nine tenths of all Sky Deutschland shares it said at the time it was doing so for reasons of efficiency and not necessarily to be better positioned in the event of major rights being sold on a pan-European basis.
Nonetheless, should the eventual outcome of the EC’s probe be the Hollywood studios abandoning their territory by territory approach to rights sales, Sky is now in a better position to compete with the likes of Netflix than previously.
How such sales would work to ensure access in markets where Sky, Netflix, Liberty Global or any other distributer doesn’t have a presence in less clear.
Earlier this month, the International Olympic Committee (IOC) sold mulit-screen rights to the Olympics and Paralympics from 2018 to 2024 to Discovery Communications. The €1.3 billion deal covers around 50 European countries and territories.
Will it be the first big pan-European deal in a consolidating media landscape?
Tim Costello, 5 (TIMES 4)
