As many Member States are (belatedly) in the process of transposing EU Directive 2018/1808 amending the Audiovisual Media Services Directive into national law, service providers are preparing for the new rules which will enter into force upon implementation. Whilst this Directive serves multiple purposes – such as better protection of minors and combating the incitement to hatred or to commit a terrorist offence - it also aims to strengthen cultural diversity. This is pursued particularly through new Article 13, which introduces the obligation for media service providers of on-demand audiovisual media services to secure at least a 30% share of European works in their catalogues and ensure prominence of it. Whilst this obligation seems relatively easy in theory, it may give rise to uncertainties and difficulties in practice.

Nationality assessment under local film funding rules

On 14 November 2018, EU Directive 2018/1808 was adopted, amending Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services in view of changing market realities (the Audiovisual Media Services Directive, “AVMSD”). To comply with the new obligation under new Article 13 AVMSD, the first and most important step will be to assess when a work is considered to be a European work (the ‘nationality assessment’). It is often assumed that a work considered as ‘national’ under the local film funding rules of a Member State of the EU automatically implies that the work is also ‘European’ in the sense of the AVMSD. In practice, however, this will not always be the case: a work considered to be ‘French’ under the French Cinema Code, for example, will not per se be ‘European’ under the AVMSD. The reason for this is that these two pieces of legislation serve a different purpose and therefore, do not always speak the same language. Under local film funding rules, the nationality assessment of an audiovisual is required for the purposes of having access to public financial support. Under the AVMSD, the nationality assessment is required to comply with the new promotion obligation of ‘European works'.

Nationality assessment under the AVMSD

Therefore, on-demand service providers cannot blindly count on the nationality assessment of audiovisual works under the local funding rules in order to assess whether a work is also European in the sense of Article 13 AVMSD or not. The assessment will have to be made solely on the grounds of the guidance the AVMSD provides for under Article 1. Article 1(1) qualifies European works as (i) works originating in Member States, or (ii) works originating in European third States party to the European Convention on Transfrontier Television of the Council of Europe (“ECTTC”) and fulfilling certain other conditions, or (iii) works co-produced within the framework of agreements related to the audiovisual sector concluded between the Union and third countries and fulfilling the conditions defined in each of those agreements. The second question would then be: when does a work ‘originate’ in a Member State or a European third State party to the ECTTC? In accordance with Article 1(3), this will be the case when a work is made with authors or workers residing in one or more of the States referred to provided that (i) they are made by one or more producers established in one or more of those States, (ii) the production of the works is supervised and actually controlled by one or more producers in one or more of those States or (iii) the contribution of the co-producers of those States to the total co-production costs is preponderant and the co-production is not controlled by one or more producers established outside those States. Lastly, Article 1(4) provides for an exception in the event that a work cannot be qualified as a European work under Article 1(1). If these works are produced within the framework of bilateral co-production agreements concluded between Member States and third countries, they will still be considered European works, provided that the co-producers from the Union supply a majority share of the total cost of production and that the production is not controlled by one or more producers established outside the territory of the Member States.

Difficulties and ambiguities

It is apparent that Article 1 AVMSD does not provide a clear, concise definition of a European work, but rather provides for conditions under which a work may be qualified as European. These conditions are open to interpretation and may require access to a significant amount of information. On-demand service providers can easily identify all the relevant information of audiovisual works of which they are the producer or co-producer. However, with respect to the audiovisual works licensed or bought from external producers, this information is not always easily accessible. Due to the absence of generally recognized sources of information, the information is being provided by multiple standard identifiers and databases, such as IMDB, ISAN, EIDR and Cineuropa. The problem then arises that all the relevant information necessary to assess whether a work may be qualified as ‘European’ is widely spread. Moreover, the information provided for by the identifiers and databases is sometimes inaccurate, incomplete or inconsistent. Therefore, the assessment task for on-demand service providers buying large catalogues of works from external producers will often be difficult and cumbersome.

Way forward

The solution could be twofold. Firstly, the creation of a generally recognized, centralized, pan-European database would entail easily accessible, homogeneous and consistent information and would ensure that the nationality assessment of audiovisual works occurs in the same way and on the same grounds throughout the whole EU. Secondly, Member States could opt for gold-plating and impose an obligation to producers to label their works in terms of nationality in accordance with the AVMSD. Since it is rather unlikely, however, that such an obligation will be introduced, and since the relevant information surrounding audiovisual works is, as for now, still widely spread throughout a broad array of identifiers and databases, on-demand service providers would do well to include a contractual clause in their agreements with external producers, which would oblige them to label their audiovisual works upfront or to, at least, provide all necessary information concerning the works to enable on-demand service providers to make a proper nationality assessment under Article 1 AVMSD themselves. In this way, on-demand service providers will not be presented with uncertainties and difficulties trying to fulfill their soon-to-be new obligation to secure and promote at least a 30% share of European works.