Study reveals highly fragmented approach in Member States

The Free University of Brussels (Université libre de Bruxelles) published in December 2018 a study on the Obligations on on-demand audiovisual media services providers to financially contribute to the production of European works”. The report (available in English) was commissioned by the Administration for Culture, Youth, Sports and Media of the Flemish Government and is authored by an academic team led by Prof. Dr. Karen Donders.

In addition to clarifying the rules that already existed for obligations for on-demand AVMS providers to contribute financially to the production of European works, the revised Audiovisual Media Services Directive allows Member States to impose investment obligations to media services providers established in a different Member State, but targeting the audience of the Member State imposing the obligation. Against this backdrop, the report provides a timely overview of the existing approaches of European Member States with regard to the imposition of investment obligations for on-demand audiovisual media services providers (both  domestic and foreign).

The research provides case studies on the nine EU countries which impose financial obligations on the providers of on-demand audiovisual media services: Belgium (both communities), Croatia, the Czech Republic, France, Germany, Italy, Portugal, Spain and Slovenia. However, it is worth noting that - so far - only France and Germany, and from 2019, the Flemish Community of Belgium, Italy and Denmark have developed obligations for non-domestic providers of on-demand audiovisual media services.

The study also provides useful information on:

• Varying financial obligations: the investment obligation in the form of a levy to be paid to an audiovisual fund seems to be the most straightforward way to ensure on-demand audiovisual media services providers are contributing to the production of European works.

• The motivation for imposing investment obligations: investments obligations seem most solid when they are based on several objectives and combine, preferably, legal, economic and cultural motivations, as is the case in most of the EU Member States.

• Criteria to determine the scope of application: yet again, Member States adopted different approaches in order to determine which on-demand audiovisual media services are covered by these obligations, but almost all countries follow the definition set down in the AVMSD.

• Applicable tariffs: most countries calculate the obligation as a percentage (ranging from 0.5% to 26%) of a monetary basis. The obligation can be based on four different money flows: revenue/income from the exploitation of on-demand audiovisual services, turnover, price paid by the end user and number of subscribers. The system based on turnover (used in Germany, France, Slovenia and the French Community of Belgium) seems the most convenient for domestic companies, while a system based on revenues (incl. pay-services and advertising income) seems to be the only possible system for foreign on-demand audiovisual media services providers.

• Definition & calculation of financial obligation: in most EU Member States the turnover or revenue is based on figures for the previous financial year. In the case of turnover, it is usually the one published in the annual report of the company which could be used as a calculation basis. When defining revenues, it is best to keep the definition simple and to include all income derived from activities in the country imposing the obligation, e.g. income from commercial communication, TVOD, SVOD, catch-up etc.

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• "Obligations on on-demand AVMS providers to financially contribute to the production of European works, An analysis of European Member States' practices" (EN)

Source: Website of The Free University of Brussels