Movie, Music and Sports Industries Urge EU to Keep Geo-Blocking in Place

Threatened by potential EU regulatory changes, the movie, music, and sports industries are vehemently defending the practice of geo-blocking, as an essential part of their business models. Rightsholders argue that eliminating geo-blockades would devalue content, force price hikes for consumers in some countries, and ultimately reduce investment in content and localized services.

eu flagThe Internet made all areas of the globe accessible with a keystroke. But that doesn’t mean artificial barriers no longer exist.

The entertainment industries, in particular, rely heavily on the territorial lines that were once drawn on a map.

Movies and TV shows are not typically offered globally, but sold instead based on geographical licenses. This allows rightsholders to get the best possible price for their content in each region and if the best offer isn’t good enough, the content simply won’t be made available.

The same model also applies to other industries, including live sports, where the value of broadcasting rights is highly dependent on the region. This is often a reflection of consumer demand, where more demand leads to higher licensing fees, which are partly passed on to fans.

EU Unblocking Measures

Increasingly savvy consumers circumvent these barriers using VPNs, for example, which are now promoted by YouTubers, bloggers, and podcasters as a potential solution to uneven pricing. While that may work in some cases, rightsholders and online services typically frame this as abuse.

Another option to deal with these geographical restrictions is to outlaw them. The European Union has looked into this previously. As a union of 27 countries, it aimed to level the playing field between member states.

To counter consumer-unfriendly limitations, the European Commission previously banned certain types of geo-blocking as part of the Digital Single Market reforms. This legislation has been in place for a few years and works well, although video content is currently exempt.

The movie industry and sports broadcasters were happy with this exception, but they remain vigilant. The European Commission is currently evaluating geo-blocking regulation and is open to making changes, which understandably has rightsholders worried.

A recent EU consultation asked stakeholders, including consumers, to submit feedback. While some are in favor of removing ‘broadcast’ and ‘streaming’ barriers in the EU, rightsholders are rallying against upsetting the status quo.

Hollywood, Netflix, and Amazon are Worried

In a response to the consultation, the Motion Picture Association’s EMEA branch urged the EC to keep audiovisual content excluded from current regulation. Representing the major Hollywood studios, Netflix, and Amazon, the MPA stressed that territorial exclusivity is of critical importance to the industry.

The MPA says that geographical restrictions serve as foundations for developing, financing, producing, marketing, and distributing culturally and linguistically diverse audiovisual works.

These barriers allow companies to price their products based on consumer purchasing power, the MPA adds, noting that research indicates lifting these restrictions would devalue their content.

“This has a direct and negative impact on content development, financing and distribution opportunities, as well as on the recoupment of investments in future film and audiovisual content in Europe.”

These negative effects would impact the studios directly. It can also impact streaming services, European cinemas, and some consumers who might see price increases, MPA warns.

Sports Industry & Broadcasting Concerns

The Audiovisual Anti-Piracy Alliance (AAPA) is equally worried. The group represents many major sports rightsholders including the Premier League, Sky, beIN, and Viaplay, whose multi-billion-euro businesses are largely built around geographical licenses.

AAPA shared many of the same concerns as the MPA, with a specific warning that a ban on geo-blocking would harm many consumers too.

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The group notes that territories have diverse demands in terms of content, and pricing reflects those demands. Setting the same price across the EU for content with geographically specific levels of popularity would likely impact consumers.

“100 million European sports fans could face increased charges, eliminating local pricing flexibility and imposing financial burdens on lower-income regions,” AAPA writes.

AAPA also notes that some consumers will benefit from lower subscription fees but at the cost of broadcasters and rightsholders. That could result in reduced investment in localized services, such as local language commentary for sports.

Music Industry Fears Piracy

Even the music industry is in favor or maintaining regional differences. While geographical licensing is rarer, Spotify subscriptions are priced differently from country to country, often taking the purchasing power of consumers into consideration.

In a submission to the EU consultation, industry group IFPI also warns that banning geo-blocking will severely hurt the music industry and many consumers.

If streaming services can no longer vary the price based on the purchasing power of consumers, subscriptions will become too expensive for some. This could drive these consumers to use pirate alternatives instead.

“[A] significant number of consumers who would wish to consume licensed music but are no longer able to pay the higher prices, would be unserved or in a worst-case scenario could turn to piracy,” IFPI notes.

IFPI fears that a ban on geo-blocking would lead to lower subscription revenue, especially in less wealthy countries. This would result in lower investment in music, especially in those regions.

Overall, it’s clear that the audiovisual industries view geo-blocking bans as a potential existential threat, at least to parts of these industries. While there are no concrete plans for the EU to lift the current exceptions, these companies will be watching the EU evaluation closely.

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