IS EUROPE 2020 STRATEGY FOR DIGITAL SINGLE MARKET WILL MAKE CANNES FESTIVAL OBSOLETE?

” I want to see pan-continental telecom networks, digital services that cross borders and a wave of innovative European start-ups. I want to see every consumer getting the best deals and every business accessing the widest market – wherever they are in Europe.” Declared EC President Jean-Claude Juncker recently.
The concern for distributors and filmmakers is whether the EC’s Digital Single Market (DSM) strategy will destroy Europe’s independent film and television businesses in favor US-based technology companies – Amazon, Apple, Google, and Netflix?

In 2016, the EC released a 16-point plan to encourage the free movement of digital services across European borders. These provisions were to be enacted by the end of 2016, but after Brexit distractions and intense industry lobbying, they have not, until recently.

In May 2017, the Commission presented the mid-term review of the Digital Single Market to review the current status and present ideas for the future. It is accompanied by the European Digital Progress Report which give an in-depth assessment of how the EU and Member States are progressing in their digital development and identifies potential steps to help improve national performance in digital.

During June 2017 meetings, the European Parliament’s Internal Market Committee voted on final amendments to DSM proposals. The final legislation will reform copyright laws in Europe and end how independent film is financed.

There are several small steps left, but by the end of summer, most of these will be addressed, with a final piece of legislation expected in early 2018.

By May 2018, it will no longer be possible to license films (or any digital products) to specific territories. The Cannes Film Festival may have a different face and large US Companies may start to lower the intensity of their presence as we have known it for the past 50 years.

According to all market participants this will have a cost and depending on what camp you are, it fluctuates from $9 billion per year and reduce content production by half to lower number.
Independently form the numbers, all agree that the DSM strategy will produce turbulence in an industry that has remained static and immovable to change for a generation.

However, changes generate opposition and the most recent group to oppose the DSM is the MPAA, IFTA and most recently the Society of Audiovisual Authors (SAA), which represents screenwriters across Europe.

With almost unanimous resistance to DSM proposals from content creators, aggregators, producers, and media conglomerates, it is surprising that there have been no significant changes to the legislation through its two-year process to becoming law.

But the EU has its path for forcing its way and vision. For instance, using several Antitrust cases Paramount, against all expectations is now taking a different position. Paramount Pictures has made several commitments to the EC in their antitrust case against the major US studios, Sky UK, and several other European broadcasters that will change the way content is licensed in Europe.

Paramount to resolve its Antitrust challenge agreed to two fundamental changes in how they license content in Europe:
* First, PayTV and SVOD contractual clauses that prevent cross-border access to content in the 28 European Economic Area (EEA) countries would be abolished.
* Second, clauses that protect the exclusive licensing of content by one provider in a particular territory are no longer enforceable.
This could become the rule and if it is the case it is then the end of sales of Territories as we knew it in Hollywood for the past 50 years, so why spending money to go to Cannes, Milan, Berlin when we need to meet only with one buyer to sell all one Territory: Europe.

Will it happen? We can expect a lot of push back when people will start to understand the consequences of such a new path.

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