The Audio-Visual Media Services Directive

The proposed new AVMS Directive: key features and the impact of Brexit

The background

The Audio-Visual Media Services Directive (the AVMSD) governs EU-wide coordination of national legislation on all audiovisual media, both tradition linear TV broadcasts and on-demand services, and lays down minimum standards that broadcasters have to meet. As part of the Digital Single Market Strategy, the European Commission has adopted a proposal to amend the AVMSD and broaden its scope to include video-sharing platforms (such as YouTube). The revision to the AVMSD was published on 6 May 2017.

The key proposed changes

A key concern of the EU is to ensure that minors are adequately protected when using video-sharing platforms. As a result, the updated AVMSD sets out that such platforms will have to put in place:

• a mechanism that allows users of the platform to report or flag harmful content

• age verifications systems to police access to adult content (such as PIN codes and encryption) and

• parental control systems (in connection with content which may cause prejudice to minors).

In addition to the child protection measures, there are a number of other relevant changes for online platforms to be mindful of:

• at least 20% of the content in their catalogues must be European works (i.e. works originating in Member States) and they must ensure that they give adequate prominence to such works and

• individual Member States will be able to impose financial contributions to on-demand services established in another Member State (towards the production of European works).

Finally, it looks as if the definition of "programme" within the AVMSD may be undergoing a major overhaul with the proposed deletion of the phrase "and the form and content of which are comparable to the form and content of television broadcasting". This may have a profound impact on the reach of the AVMSD (e.g. to sections of newspaper sites which have typically escaped regulation via Ofcom’s interpretation under the UK’s implementing regulations).

What’s next?

Following adoption by the Commission, the legislative proposal will be sent to the European Parliament and to the Council for further scrutiny. Until then, it remains to be seen how similar the final form of the updated AVMSD will be to the draft.

Why is it important?

The changes to the AVMSD could create serious challenges to online platforms. For example, consider the requirement for investment in the production of European works and to have these made readily available on a platform. How will this sit with algorithms which are created to respond to a consumer’s interests, as opposed to "content" quota obligations?

Also, the AVMSD changes are a sign of the growing importance of protecting (and being seen to be taking active steps to protect) minors. It follows that platforms should begin to think about implementing mechanisms to meet these concerns so that they are ready for the changes to the AVMSD when these bite.

The potential impact of Brexit

Although the exact nature and terms of the UK’s exit from the EU remain unclear, it is likely that it the UK will cease to be party to the AVMSD which could impact the broadcasting industry in the followings ways:

• The "country of origin" principle: currently, the AVMSD applies the "country of origin" principle which provides that a broadcaster regulated in any Member State may freely transmit into any other Member State without the need for additional licences/regulation. Should Brexit go ahead as planned, UK broadcasters would lose the benefit of this principle and may no longer be guaranteed the ability to freely transmit into other Member States without compliance with additional regulation in each Member State.

• European works: provided that the UK remains a signatory of the European Convention on Transfrontier Television (CTT) and the definition of European works in the AVMSD is not altered, UK-originating works will continue to be classed as European works. That means UK originating works should continue to receive the benefit of falling with this definition i.e. that European broadcasters have to reserve a majority of their airtime for European works and European on-demand services will actively promote European works.

• Product placement: The AVMSD, as a Directive, was implemented in the UK by primary legislation (Broadcasting Act 1990 and Communications Act 2003). Subsequent changes to the AVMSD were implemented through statutory instruments (one of which dealt with product placement which, prior to the introduction of the AVMSD, was prohibited in the UK). While the acts would remain in force, these updating instruments would lose their legal basis. Accordingly, there would be a lacuna in relation to product placement and action would be required to clarify the position – it will be interesting to see whether the UK decides to revert to a prohibition on this.

• The fall-back: The UK Government has stated that the automatic fall-back to the AVMSD would be its membership of the CTT However the UK government has acknowledged the limitations of relying on the CTT, given that it:

– does not include six members states

– excludes online services and

– it does not contain any specific enforcement mechanisms to ensure its effective operation.

Updating the CTT is a possibility, however, practically it will be difficult as any updates will need to be agreed with the European Commission rather than each Member State.

Therefore, it appears that the landscape for broadcasters based in the UK could change significantly should Brexit go ahead as anticipated.