The new audiovisual media services directive: Television without frontiers, television without cultural diversity

Common Market Law Review

Volumn 44, Issue 6, 2007, Pages 1689-1725

  Burri Nenova, Mira ^a  

^a NONE

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EID: 56749111096     PISSN: 01650750     EISSN: None     Source Type: Journal    
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References (266)

1. On IPTV, see Horlings, Marsden, van Oranje and Botterman, "Contribution to Impact Assessment of the Revision of the Television without Frontiers Directive", Report Prepared for DG Information Society and Media of the European Commission, RAND Europe, TR-334-EC DG, 1 Nov. 2005, at p. 5;
2. Marsden, Cave, Nason, Parkinson, Blackman and Rutter, "Assessing Indirect Impacts of the EC Proposals for Video Regulation", Report Prepared for the United Kingdom Office of Communications, RAND Europe, 2006, at pp. 55-78.
3. In its simplest form, a digital code is a binary bit or digit indicating one of two alternatives (represented as either 0 or 1) to denote the presence or absence of an electrical signal or two different voltage levels. Binary bits can be grouped in various combinations to represent numbers, alphabetical characters, symbols or any other type of information. Through a combination of microprocessors and sophisticated algorithms, these bit streams can then be compressed to manageable lengths, therewith allowing a wide range of content to be stored, retrieved and transported electronically in the form of encoded text, audio and video traffic over any digital network.
4. On convergence, see Blackman, "Convergence between telecommunications and other media" (1998) Telecommunications Policy, 163-170;
5. Longstaff, "New ways to think about the visions called 'convergence': A guide for business and public policy", Program on Information Resources Policy, Harvard University, April 2000;
6. OECD, "The implications of convergence for regulation of electronic communications", DSTI/ICCP/TISP(2003)5/final, 12 July 2004;
7. Geradin and Luff (Eds.), The WTO and Global Convergence in Telecommunications and Audio-Visual Services (Cambridge University Press, 2004),
8. especially therein Mueller, "Convergence: A reality check", pp. 311-322 and Larouche, "Dealing with convergence at the international level", pp. 390-422.
9. See e.g. OECD, "The future digital economy: Digital content creation, distribution and access", DSTI/ICCP/IE(2006)2/ANN, 22 May 2006.
10. Gordon Moore of Intel postulated in 1965 that the transistor density on a single integrated circuit microchip would double approximately every eighteen months. This rule showing the incredible pace of technological advance became known as Moore's law. On Moore's law, see e.g. Frieden, Managing the Internet-Driven Change in International Telecommunications (Boston/London, Artech House, 2001), at pp. 17 et seq.
11. Metcalfe's law holds that the potential value of network increases by the square of the number of nodes, while the Fibre Law holds that capacity doubles every 9 months. See e.g. Marsden et al., supra note 1, at pp. 72 et seq.
12. I.e. internet protocol-based: OECD, Information Technology Outlook 2006 (Paris: OECD, 2007).
13. Ibid.
14. See Mueller, "Digital Convergence and its Consequences: a Report on the Digital Convergence and Market Structures", 1999, available at
15. See Longstaff, supra note 3.
16. The lack of demand for converged services was one of the reasons for the "bursting" of the dotcom bubble in 2001. See The Economist, "Beyond the Bubble", 9 Oct. 2003.
17. Horlings et al., supra note 1, at p. 6.
18. Social networking sites are websites, where communities of people who share interests or activities can interact using various web-based tools, such as chat, messaging, video, file sharing, discussion groups, etc. Blogs (or web blogs) are websites, where entries are written in chronological order and displayed in reverse chronological order. Blogs can combine text, images and links, and provide commentaries or news on a particular subject, or function as personal online diaries with possibilities for comments and interaction. Wikis are web applications allowing multiple authors to add, remove and edit content.
19. Web 2.0 is a phrase coined by O'Reilly Media (www.oreilly.com/) in 2004. Proponents of the Web 2.0 concept say that it differs from early Web development (labelled Web 1.0) in that it moves away from static websites, the use of search engines and surfing from one website to the next, towards a more dynamic and interactive World Wide Web. See O'Reilly, "What Is Web 2.0?", available at .
20. See also OECD, "Participative web: User-created content", DSTI/ICCP/IE(2006)7/FINAL, 12 April 2007.
21. See Benkler, The Wealth of Networks: How Social Production Transforms Markets and Freedom (Yale University Press, 2006).
22. See also Jenkins, Convergence Culture: How Old and New Media Collide (New York University Press, 2006).
23. See OECD op. cit., supra note 7.
24. See also OECD, "Digital broadband content: Digital strategies and policies", DSTI/ICCP/IE(2005)3/FINAL, 19 May 2006 and OECD op. cit., supra note 4.
25. nd ed. (Blackwell, 2000), at p. 356. Castells noted that, "[t]he potential integration of text, images, and sounds in the same system, interacting from multiple points, in chosen time (real and delayed) along a global network, in conditions of open and affordable access, does fundamentally change the character of communication. And communication decisively shapes culture⋯".
26. On the developments of EC telecommunications law, see Nihoul and Rodford, EU Electronic Communications Law (OUP, 2004);
27. nd ed. (OUP, 2005).
28. Commission, Proposal for a Directive of the European Parliament and of the Council Amending Council Directive 89/552/EEC on the Coordination of Certain Provisions Laid Down by Law, Regulation or Administrative Action in Member States Concerning the Pursuit of Television Broadcasting Activities, COM(2005)646 final, 13 Dec. 2005.
29. See also Commission Staff Working Document, Annex to the Proposal for a Directive of the European Parliament and of the Council Amending Council Directive 89/552/EEC, SEC(2005)1625/2, 13 Dec. 2005.
30. Council Directive 89/552/EEC of 3 Oct. 1989 on the Coordination of Certain Provisions Laid Down by Law, Regulation or Administrative Action in Member States Concerning the Pursuit of Television Broadcasting Activities, O.J. 1989, L 298/23.
31. Proposal for a Directive, supra note 19, at p. 2.
32. See Art. 5(3) EC and the Protocol on Subsidiarity and Proportionality, Attached to the Treaty of Amsterdam, O.J. 1997, C 340/1.
33. The Maastricht Treaty inserted a new Title IX into the structure of the Treaty of Rome. It bore the broad rubric of "Culture" and included one article - Art. 128, which is now, since the Amsterdam renumbering, Art. 151 EC. Art. 151 entails an obligation for the Community to "contribute to the flowering of the cultures of the Member States, while respecting their national and regional diversity". Following the principle of subsidiarity, the Community is to encourage cooperation between Member States but could, if necessary, supplement their action in certain fields, notably, "artistic and literary creation, including in the audiovisual sector". Art. 151(4) EC specifies further that the Community must take cultural aspects into account in its action under other provisions of the Treaty. For a comprehensive analysis of Art. 151 EC, see Craufurd Smith (Ed.), Culture and European Union Law (OUP, 2004). On the duties of the EC institutions in the field of culture, see de Witte, "Trade in culture: International legal regimes and EU constitutional values" in de Búrca and Scott (Eds.), The EU and the WTO - Legal and Constitutional Issues (Hart, 2003), pp. 237-255.
34. The ECJ played an important role in expanding the scope of activities falling under the Community's prerogative. Since Sacchi, it is clear that the broadcasting of televised messages falls under the rules of the Treaty relating to the provision of services. See Case 155/73, Guiseppe Sacchi, [1974] ECR 409.
35. See also Case 52/79, Procureur du Roi v. Marc J V C Debauve and others, [1980] ECR 860;
36. Case 62/79, Coditel v. Ciné-Vog Films (Coditel I), [1980] ECR 881
37. and Case 262/81, Coditel v. Ciné-Vog Films (Coditel II), [1982] ECR 3381.
38. Commission, Television Without Frontiers: Green Paper on the Establishment of the Common Market for Broadcasting, Especially by Satellite and Cable, COM(84)300, May 1984. For the developments leading to the adoption of the TVWF, see Levy, Europe's Digital Revolution: Broadcasting and Regulation, the EU and the Nation State (Routledge, 1999), at pp. 41-43.
39. Graber, "Kulturpolitische Auswirkungen eines Schweizer Beitritts zur Europäischen Union - Untersucht am Beispiel des Film- und Fernsehrechts" in Cottier and Kopše (Eds.), Der Beitritt der Schweiz zur Europäischen Union: Brennpunkte und Auswirkungen (Schulthess, 1998), pp. 987-1024, at p. 995.
40. The endeavours of the CoE to adopt a binding legal instrument covering certain cultural aspects of transfrontier broadcasting began in the early 1980s. Various steps followed, which found expression in a number of recommendations. For an account, see Explanatory Report to the European Convention on Transfrontier Television (ETS No 132), Strasbourg, 5 May 1989, as amended by the provisions of the Protocol (ETS No 171), which entered into force on 1 March 2002.
41. CoE, European Convention on Transfrontier Television (ETS No 132), Strasbourg, 5 May 1989. The CTT was opened for signature by the CoE Member States and other States Party to the European Cultural Convention (ETS No 018), Paris, 19 Dec. 1954.
42. See European Council Decisions of 2 and 3 Dec. 1988, Rhodes, in Bull. EC, No 12/1988, at para 1.1.9.
43. See supra note 20.
44. The CTT provides a minimum of common rules in fields such as programming, advertising and the protection of certain individual rights. It entrusts the transmitting States with the task of ensuring that the TV programme services transmitted comply with its provisions. In return, freedom of reception of programme services is guaranteed, as well as the retransmission of the programmes which comply with the minimum rules of the Convention.
45. Pursuant to Art. 25 TVWF, Member States were obliged to bring their laws, regulations and administrative provisions into conformity with the Directive by 3 Oct. 1991.
46. Updated and revised through Directive 97/36/EC of the European Parliament and of the Council of 30 June 1997 Amending Council Directive 89/552/EEC, O.J. 1997, L 202/60. In the course of this paper, we shall refer to the consolidated version of Directive 89/552/EEC and Directive 97/36/EC.
47. Joined Cases C-34, 35 & 36/95, Konsumentombudsmannen (KO) v. De Agostini (Svenska) Förlag AB and TV-Shop I Sverige AB, [1997] ECR I-3843, at para 32.
48. See also Drijber, "The revised Television without Frontiers Directive: Is it fit for the next century" 36 CML Rev. (1999), 87-122, at 92. On the different types of harmonization in EC law, see Slot, "Harmonisation", 21 EL Rev. (1996), 378-396.
49. See Case C-412/93, Société d'Importation Edouard Leclerc-Siplec v. TF1 Publicité SA and M6 Publicité SA, [1995] ECR I-179, at paras. 28-29 and De Agostini, supra note 34 at paras. 24-28.
50. See also Wheeler, "Supranational regulation: Television and the European Union" (2004) European Journal of Communication, 349-369, at 351-357.
51. See Arts. 43 and 49 EC.
52. See also supra note 24.
53. Arts. 4 and 6 TVWF.
54. Art. 5 TVWF.
55. Arts. 10-20 TVWF.
56. Arts. 22, 22(a) and 22(b) TVWF.
57. Art. 23 TVWF. Teleshopping rules were added by the 1997 amendment of the TVWF.
58. See supra note 33.
59. Art. 3(a) TVWF.
60. Art. 2 TVWF.
61. See Art. 2(3)-(5) TVWF. For the relevant case law, see Drijber, supra note 34, at pp. 92-97.
62. See Case C-11/95, Commission v. Belgium, [1996] ECR I-4115, at para 34 and Case 14/96, Criminal Proceedings against Paul Denuit, [1997] ECR I-2785, at paras. 32-34. For the limitations of the transmitting State principle, see De Agostini, supra note 34, at paras. 33-35.
63. De Agostini, ibid.
64. See e.g. Case C-348/96, Calfa, [1999] ECR I-0011, at paras. 21 and 23. For a more extensive overview of the case law, see Drijber, op. cit. supra note 34 at 98-104 and the annotation of De Agostini by Stuyck in 34 CML Rev. (1997), 1445-1468.
65. See Art. 2(a)(2) TVWF.
66. See Art. 3(1) TVWF.
67. Commission, Fifth Report on the Application of Directive 89/552/EEC "Television without Frontiers", COM(2006)49 final, 10 Feb. 2006.
68. Ibid., referring to the European Audiovisual Observatory, 2001 Yearbook.
69. Ibid., referring to the European Audiovisual Observatory, 2004 Yearbook.
70. Papathanassopoulos, European Television in the Digital Age (Cambridge, Polity, 2002), at p. 14.
71. Public service broadcasters in the EU25 zone had total revenues of € 29.1 billion in 2003, whereas private broadcasters recorded revenues totalling € 18.3 billion. Pay-TV and package subscriptions increased their revenues to an overall amount of € 13.6 billion in 2003. See Commission, Fifth Report, supra note 51, referring to the European Audiovisual Observatory, 2005 Yearbook.
72. Commission, The Commission Proposal for a Modernisation of the Television without Frontiers Directive, MEMO/06/208, Brussels, 18 May 2006, at p. 1.
73. For an overview, see Papathanassopoulos, op. cit. supra note 54, pp. 9-32.
74. Papathanassopoulos, ibid. at pp. 17-18.
75. Papathanassopoulos, ibid. at pp. 18-19, referring to Blumler, "Vulnerable values at stake" in Blumler (Ed.), Television and the Public Interest: Vulnerable Values in Western European Broadcasting (London, Sage, 1992), pp. 22-24;
76. Achile and Miège, "The limits of adaptation strategies of European public service television", (1994) Media, Culture and Society, 31-46.
77. Papathanassopoulos, ibid. at p. 19, referring to McQuail, "Commercialisation and Beyond" in McQuail and Siune (Eds.), Media Policy: Convergence, Concentration and Commerce (London, Sage, 1998), pp. 107-127, at pp. 119-120
78. and Ouilette and Lewis, "Moving beyond the 'vast wasteland': Cultural policy and television in the United States", (2000) Television and New Media, 95-115, at p. 96.
79. See also Webster, Theories of Information Society (Routledge, 1995), at p. 22.
80. On the "multi-channel paradox", whereby despite the diversity of channels, there is no actual diversity of content, see Ariño, "Competition law and pluralism in European digital broadcasting: Addressing the gaps" (2004) Communications and Strategies, 97-128, at pp. 98 et seq.
81. For a critique of the cultural industries and on the homogeneity of content, see Graber, Handel und Kultur im Audiovisionsrecht der WTO. Völkerrechtliche, ökonomische und kulturpolitische Grundlagen einer globalen Medienordnung (Staempfli, 2003), at pp. 18 et seq. For counter arguments, see Romano, "Technologische, wirtschaftliche und kulturelle Entwicklungen der audiovisuellen Medienmärkte in den letzten Jahren" in Graber, Girsberger and Nenova, Free Trade versus Cultural Diversity: WTO Negotiations in the Field of Audiovisual Services (Schulthess, 2004), pp. 1-13, at pp. 4 et seq.
82. Papathanassopoulos, op. cit. supra note 54, at pp. 20-23.
83. See also Esser, "'Tabloidization' of news: A comparative analysis of Anglo-American and German press journalism" (1999) European Journal of Communication, 291-324.
84. Franklin, Newszak and News Media (London, Arnold, 1997), at p. 4.
85. Papathanassopoulos, supra note 54, at p. 19, referring to Pfetsch, "Convergence through privatization? Changing media environments and televised politics in Germany" (1996) European Journal of Communications, 427-451, at 428-429.
86. Negrine and Papathanassopoulos, The Internationalisation of Television (London, Pinter, 1990), at p. 76.
87. The ECJ has even held that the CTT and its explanatory memorandum can be used to clarify the interpretation of the TVWF. See Joined Cases C-320, 328, 329, 337, 338 & 339/94 Reti Televisive Italiane SpA (RTI), Radio Torre, Rete A Srl, Vallau Italiana Promomarket Srl, Radio Italia Solo Musica Srl and Others, and GETE Srl v. Ministero delle Poste e Telecomunicazioni, [1996] ECR I-6471, at para 33.
88. ECHR as amended by Protocol No 11, ETS No 155.
89. Graber, supra note 26, at pp. 996-998.
90. See supra note 35.
91. See infra section 5.
92. See Fischer-Lescano and Teubner, "Regime-collisions: The vain search for legal unity in the fragmentation of global law", (2004) Michigan Journal of International Law, 999-1046.
93. See Levy, op. cit. supra note 25, at pp. 50-59.
94. See also Westphal, "Media pluralism and European regulation", (2002) European Business Law Review, 459-487, at 461-467.
95. Hitchens, "Identifying European Community audio-visual policy in the dawn of the Information Society" in Yearbook of Media and Entertainment Law 1996 (OUP, 1997), at pp. 71-72, as referred to by Levy, op. cit. supra note 25, at p. 40.
96. See also in the same sense, Wheeler, op. cit. supra note 35.
97. See e.g. the 2006 decision of the Commission to bring court proceedings against Sweden for its failure to change rules giving the State-owned company Boxer TV Access a monopoly over the provision of access control services in the Swedish digital terrestrial broadcasting network. The case is based upon Commission Directive 2002/77/EC of 16 Sept. 2002 on Competition in the Markets for Electronic Communications Networks and Services, O.J. 2002, L 249/21. See Commission, "Competition: Commission takes Sweden to Court for failure to end broadcasting services monopoly", IP/06/1411, 17 Oct. 2006.
98. See e.g. Commission Decision of 2 April 2003 Declaring a Concentration to be compatible with the Common Market and the EEA Agreement (Case No COMP/M. 2876 - Newscorp/Telepiù), C(2003) 1082 final, 2 April 2003. Previous cases on media concentration include Case No IV/M.110, ABC/Generale des aux/Canal+/WH Smith, O.J. 1991, C 244/06;
99. Case No IV/M.469, MSG Media Service, O.J. 1994, L 364;
100. Case No IV/M.490, Nordic Satellite Distribution, O.J. 1995, L 53;
101. Case No IV/M.553, RTL/Veronica/Endemol, O.J. 1996, L 294;
102. Case No IV/M.993, DFI/Premiere, O.J. 1997, C 374/4.
103. See Art. 25(a) TVWF.
104. See Horlings et al., supra note 1, at pp. 3-20.
105. Commission, Green Paper on the Convergence of the Telecommunications, Media and Information Technology Sectors, and the Implications for Regulation: Towards an Information Society Approach, COM(97)623 final, 3 Dec. 1997.
106. See also Commission communication on Principles and Guidelines for the Community's Audiovisual Policy in the Digital Age, COM(1999)657 final, 14 Dec. 1999.
107. European Council, Presidency Conclusions, Lisbon, 23 and 24 March 2000, at para 5.
108. See also Commission, i2010 - A European Information Society for Growth and Employment, COM(2005)229 final, 1 June 2005.
109. Commission, Fourth Report on the Application of Directive 89/552/EEC "Television without Frontiers", COM(2002)778 final, 6 Jan. 2003.
110. In the period up to the adoption of the new Directive, legal certainty in the changing environment of European media has been guaranteed through an interpretative Communication on television advertising, in particular new advertising techniques (split screen, virtual and interactive advertising) and update of the Recommendation on the protection of minors and human dignity. See Commission, Commission Interpretative Communication on Certain Aspects of the Provisions on Televised Advertising in the "Television without Frontiers" Directive, O.J. 2004, C 102/2 and Recommendation of the European Parliament and of the Council on the protection of minors and human dignity and the right of reply in relation to the competitiveness of the European Audiovisual and Information Services Industry, O.J. 2006, L 38/72.
111. There were particularly intensive discussions, which involved manifold stakeholders. All stakeholders' opinions from the diverse hearings are available at .
112. See Commission, Fourth Report, supra note 80, at Annex, pp. 33-37.
113. See also the six Issue Papers of July 2005, available at
114. See supra note 19.
115. The Council addressed in particular four major issues, namely the Directive's scope, jurisdiction, product placement and quantitative advertising rules. Following a long discussion, a compromise text was agreed that was supported by all delegations except Sweden, Ireland, Latvia, Belgium, Lithuania, Luxembourg and Austria.
116. Report of the Committee on Culture and Education, Rapporteur: Ruth Hieronymi, A6-0399/2006, 22 Nov. 2006.
117. European Parliament, Legislative Resolution on the Proposal for a Directive of the European Parliament and of the Council amending Council Directive 89/552/EEC, P6-TAPROV(2006)0559, 13 Dec. 2006.
118. Commission, Amended Proposal for a Directive of the European Parliament and of the Council Amending Council Directive 89/552/EEC ("Audiovisual Media Services without Frontiers"), COM(2007)170 final, 29 March 2007.
119. Commission, "Commission welcomes political agreement on new Directive for Europe's audiovisual media", IP/07/706, Brussels, 24 May 2007.
120. See also Council Report on the Amended Proposal for a Directive of the European Parliament and of the Council Amending Council Directive 89/552/EEC, 2005/0260 (COD), 10 May 2007 and the Addendum to it containing the text agreed upon.
121. "'Audiovisual media service' means a service as defined by Articles 49 and 50 of the Treaty which is under the editorial responsibility of a media service provider and the principal purpose of which is the provision of programmes in order to inform, entertain or educate the general public by electronic communications networks within the meaning of Article 2(a) of Directive 2002/21/EC of the European Parliament and of the Council. Such audiovisual media services are either television broadcasts as defined in paragraph (c) of this Article or on-demand services as defined in paragraph (e) of this Article and/or audiovisual commercial communication". Pursuant to some examples given by the Commission, the following qualify as audiovisual media services: films, telefilms, serials on demand; sports events on demand; entertainment shows on demand; video reports of concerts and live arts performances on demand; TV news reports on demand; and advertising delivered in connection with these on-demand services. In contrast, advertising not delivered in connection with the on-demand services; video clips inserted in websites when the main purpose is not the delivery of audiovisual content but to deliver information on the activities of the site owner; animated images inserted on press websites and blogs for non-commercial purposes, are not covered by the definition of audiovisual media service. See Commission proposal for a modernisation of the Television without Frontiers Directive, MEMO/05/475, Brussels, 13 Dec. 2005.
122. Media service provider is defined in Art. 1(b) AVMS as "the natural or legal person who has editorial responsibility for the choice of the audiovisual content of the audiovisual media service and determines the manner in which it is organised".
123. The concepts of "programmes" and "editorial responsibility" were introduced by the EP in pursuit of a clearer delineation from other audiovisual services. Programme is defined as "a set of moving images with or without sound constituting an individual item within a schedule or a catalogue established by a media service provider and whose form and content is comparable to the form and content of television broadcasting. Examples of programmes include feature-length films, sports events, situation comedy, documentary, children's programmes and original drama" (Art. 1(aa) AVMS). Editorial responsibility is "the exercise of effective control both over the selection of the programmes and over their organisation either in a chronological schedule, in the case of television broadcasts, or in a catalogue, in the case of on-demand services. Editorial responsibility does not necessarily imply any legal liability under national law for the content or the services provided" (Art. 1(ab) AVMS).
124. Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a Common Regulatory Framework for Electronic Communications Networks and Services (Framework Directive), O.J. L 108/33, 24 April 2002. Art. 2(a) thereof defines electronic communications networks as "transmission systems and, where applicable, switching or routing equipment and other resources which permit the conveyance of signals by wire, by radio, by optical or by other electromagnetic means, including satellite networks, fixed (circuit- and packet-switched, including Internet) and mobile terrestrial networks, electricity cable systems, to the extent that they are used for the purpose of transmitting signals, networks used for radio and television broadcasting, and cable television networks, irrespective of the type of information conveyed".
125. In Recital 13 AVMS, it was stressed that the economic element must be significant to justify the application of the Directive. Accordingly, the scope "does not cover activities which are primarily non-economic and which are not in competition with television broadcasting, such as private websites and services consisting of the provision or distribution of audiovisual content generated by private users for the purposes of sharing and exchange within communities of interest".
126. See also Recitals 14-16 AVMS.
127. Art. 1(c) AVMS.
128. Art. 1(e) AVMS.
129. Recital 28 AVMS.
130. See also Case C-89/04, Mediakabel BV v. Commissariaat voor de Media, [2005] ECR I-4891.
131. All of the Member States had some requirements on advertising, protection of minors and human dignity. None had rules regarding European or independent productions and only one Member State had some regulation of advertising limits. See Horlings et al., supra note 1, at pp. 16-17.
132. Horlings et al., ibid., at p. 75.
133. Commission, supra note 90.
134. Marsden et al., supra note 1, at p. vi.
135. Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on Certain Legal Aspects of Information Society Services, in Particular Electronic Commerce, in the Internal Market (Directive on Electronic Commerce), O.J. 2000, L 178/1.
136. This was a major contentious issue during the AVMS adoption. See e.g. McDowall, "The Television without Frontiers Directive: Another 'Directive Too Far'", IT Analysis, 5 May 2006, available at
137. and The Economist, "Regulation without Frontiers", 12 Oct. 2006.
138. Marsden et al., supra note 1, passim.
139. Marsden et al., ibid., at p. 25.
140. A recent report of the OECD acknowledges the enormous potential that user created content has. It states that, "[t]he Internet as a new creative outlet has altered the economics of information production and led to the democratisation of media production and changes in the nature of communication and social relationships (sometimes referred to as the 'rise - or return - of the amateurs'). Changes in the way users produce, distribute, access and re-use information, knowledge and entertainment potentially gives rise to increased user autonomy, increased participation and increased diversity. These may result in lower entry barriers, distribution costs and user costs and greater diversity of works as digital shelf space is almost limitless". See OECD, Participative Web, supra note 14, at p. 5.
141. See Benkler, supra note 15.
142. Marsden et al., supra note 1, at p. 130.
143. Emphasis added. "European works" were defined pursuant to criteria set out by Art. 6 TVWF.
144. Art. 4(1) TVWF.
145. For an overview of the national legislation put in place in the diverse Member States, see Graham & Associates, Impact Study of Measures (Community and National) Concerning the Promotion of Distribution and Production of TV Programmes Provided for under Art. 25(a) of the TV Without Frontiers Directive, Final Report Prepared for The Audiovisual, Media and Internet Unit of DG Information Society, 24 May 2005, at Chapt. 6. While the majority of Member States has transcribed the definitions directly into national legislation, France and Germany apply stricter definitions. France distinguishes between audiovisual works and cinematographic works. Germany defines what is included as qualifying hours: feature films, television movies, series, documentaries and comparable productions. Six Member States - Finland, France, Italy, The Netherlands, Spain and the UK - apply higher percentage requirements than those contained in TVWF on some or all of their broadcasters. For example, in France, legislation requires all broadcasters to reserve at least 60% of their qualifying hours for European audiovisual and cinematographic works (ibid).
146. Graham & Associates, op. cit. supra note 111.
147. See also Commission, Seventh Communication on the Application of Articles 4 and 5 of Directive 89/552/EEC "Television without Frontiers", as Amended by Directive 97/36/EC for the Period 2003-2004, COM(2006)459 final, 14 Aug. 2006.
148. Graham & Associates, ibid., at p. 14 and Chapter 7. The more prescriptive a Member State is in the way that it implements Arts. 4 and 5 TVWF, the higher the average ratio of European works to qualifying transmission hours in that country. Member States with a national average for European works greater than the EU average - such as Finland, France, Greece, Italy and Luxembourg - are also among the most prescriptive in the way they apply Arts. 4 and 5 (ibid. at section 8.1).
149. The impact study noted however that the "where practicable" mode, which offers an exemption from the requirements of Arts. 4 and 5 TVWF, compares unfavourably with other legislation (despite the existing reporting obligation), where general rules are established and the exemptions clearly defined, leaving less room for avoidance. It was further considered that the use of this exemption may need to be reviewed as secondary channels take a greater share and often become part of larger multi-channel conglomerates. Ibid at p. 181 and section 8.2.5.
150. Graham & Associates, supra note 111, at p. 181 (emphasis added) and section 4.6.3.
151. Commission, "European works' share of TV broadcasting time now stable over 60%", IP/06/1115, Brussels, 22 Aug. 2006.
152. Graber, supra note 61, at pp. 253-254.
153. Art. 6(2) in conjunction with 6(1)(a) and (b) TVWF.
154. Such a rationale is apparent from Recital 20 TVWF ("Whereas it is therefore necessary to promote markets of sufficient size for television productions in the Member States to recover necessary investments not only by establishing common rules opening up national markets but also by envisaging for European productions where practicable and by appropriate means a majority proportion in television programmes of all Member States"). See e.g. Donaldson, "'Television without Frontiers': The continuing tension between liberal free trade and European cultural integrity" (1996) Fordham International Law Journal, 90-180.
155. Although it was found that, "there is a greater appetite for US programming among European audiences than for programmes produced in other Member States ⋯ [because] US programme storylines have broad appeal, whereas European production has a national cultural appeal which does not travel well". See Graham & Associates, supra note 111, at p. 18 and section 9.3.3. For an interesting comment on the global power of American popular culture (influencing through attraction rather than coercion), see Rosendorf, "Social and cultural globalization: Concepts, history, and America's role" in Nye and Donahue (Eds.), Governance in a Globalizing World (Brookings Institution Press, 2000), pp. 109-134, at pp. 117 et seq.
156. Graham & Associates, supra note 111, at section 8.5.
157. See supra section 2. There is evidence that primary channels have reduced the proportion of European works that are stock programmes (generally more expensive) and increased the proportion of (generally cheaper) flow programmes. See Graham & Associates, supra note 111, at section 7.3.4.
158. These conflicts are not new and arose every time the TVWF was discussed. See Drijber, supra note 34, at 90.
159. Art. 3(h)(1) AVMS (emphasis added).
160. Art. 3(h)(1) AVMS.
161. Art. 3(h)(3) AVMS. Recital 35 AVMS clarifies that within the framework of these reports, Member States should take into account the financial contribution by such services to the production and rights acquisition of European works; the share of European works in the catalogue of audiovisual media services, as well as in the effective users' consumption of European works proposed by such services.
162. Art. 3(h)(4) AVMS.
163. Art. 3(h)(1) and Recital 35 AVMS. A previous version of the latter provision also included the option of a minimum share of European works proportionate to economic performance.
164. See also Horlings et al., supra note 1, at p. 52.
165. Horlings et al., ibid., at p. 47.
166. Recital 35 AVMS.
167. In its briefest form, the Long Tail theory, pursuant to its author - the editor-in-chief of the Wired magazine - holds that in digital markets: (i) supply and demand are not concentrated only on a small definite number of products (as in the offline world) and the tail of available variety is almost endless; (ii) the entire tail is within reach economically; and (iii) all those niches, when aggregated make up a significant market. These developments are above all due to the significantly reduced in the digital environment storage and distribution costs, as well as the new methods of searching and finding products and services online. See Anderson, The Long Tail: Why the Future of Business is selling less of more (New York, Hyperion, 2006).
168. See also Brynjolfsson, Hu and Smith, "From niches to riches: The anatomy of the long tail", (2006) Sloan Management Review, 67-71;
169. Brynjolfsson, Hu and Simester, "Goodbye Pareto principle, hello long tail: The effect of search costs on the concentration of product sales", February 2007, available at .
170. Brynjolfsson, Hu and Smith, "Consumer surplus in the digital economy: Estimating the value of increased product variety at online booksellers", (2003) MIT Sloan Working Paper No 4305-03, available at .
171. Horlings et al., supra note 1, at p. 66;
172. Marsden et al., supra note 1, at pp. 22-23.
173. th Cannes Film Festival (available at ).
174. Commission, Fifth Report, supra note 51, at p. 4.
175. Ibid., referring to the European Audiovisual Observatory, 2005 Yearbook.
176. See also Graham & Associates, supra note 111, at section 3.2.1.
177. Horlings et al., supra note 1, at p. 9, referring to Zenith Optimedia, "Advertising Expenditure Forecasts", July 2005, available at
178. Directive 2000/31/EC (see supra note 102) defines in its Art. 2(f), "commercial communication" as "any form of communication by electronic means designed to promote, directly or indirectly, the goods, services or image of a company, organisation or person pursuing a commercial, industrial or craft activity or exercising a regulated profession".
179. Art. 1(f) AVMS.
180. Art. 3(d)(1)(b) AVMS.
181. Art. 3(d)(1), point (c) AVMS.
182. Art. 3(d)(1), points (d) and (ea) AVMS.
183. Horlings et al., supra note 1, at p. 79.
184. Art. 18 AVMS states that, "[t]he proportion of advertising spots and teleshopping spots within a given clock hour shall not exceed 20%".
185. See also Recital 44 and the Commission Interpretative Communication, supra note 81, at paras. 9-13.
186. Emphasis added. One could view Recital 43 AVMS as a sort of leftover of the EP's demands. The latter states that, "[t]he Directive is intended to safeguard the specific character of the European television landscape, where advertising is preferably inserted between programmes, and therefore limits possible interruptions for cinematographic works and films made for television as well as for some categories of programmes that still need specific protection".
187. Art. 11(2) AVMS. The provision clarifies further that the transmission of children's programmes may be interrupted by advertising and/or teleshopping once for each scheduled period of at least 30 minutes, provided the scheduled duration of the programme is greater than 30 minutes. No advertising or teleshopping may be inserted during religious services.
188. See Graber, Zwischen Geist und Geld; Interferenzen von Kunst und Wirtschaft aus rechtlicher Sicht (Nomos, 1994) at pp. 151 et seq.
189. The notion of product placement is not entirely new. The Unfair Commercial Practices Directive mentions in its provisions "legitimate product placement" and the Commission Communication interpreting the TVWF Directive allows product presentation for the purposes of identifying the sponsor. See Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 Concerning Unfair Business-to-Consumer Commercial Practices in the Internal Market and Amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council ("Unfair Commercial Practices Directive"), O.J. 2005, L 149/22, at Recital 6.
190. Art. 1(k) AVMS.
191. Surreptitious advertising remains fully banned. See Arts. 1(h) and 3(d)(1)(a) AVMS.
192. See also Recitals 40 and 45 AVMS.
193. As well as in cases where no payment is made but certain goods or services are merely provided free of charge. See Art. 3(f)(2) AVMS.
194. Art. 3(f)(2), points (a)-(ba).
195. Art. 3(d)(1)(a) AVMS.
196. See also Art. 10(1) AVMS.
197. Art. 3(f)(2)(c) AVMS. As an exception, however, Member States may choose to waive these requirements provided that the programme in question has neither been produced nor commissioned by the media service provider itself or a company affiliated to the media service provider (Art. 3(f)(2), last paragraph).
198. Art. 3(f)(3) AVMS.
199. The EU has a notoriously vast deficit vis-à-vis the US, which amounts to about € 4.1 billion. See Graham & Associates, supra note 111, at section 3.3.1.
200. See Carat & Koan, Final Report of the Comparative Study on the Impact of Control Measures on the Televisual Advertising Markets in European Union Member States and Certain Other Countries, prepared for the Commission, July 2005, at pp. 60-61.
201. Commission, supra note 90.
202. Ibid.
203. There are different types of product placement. One can distinguish between product placement per se, where branded goods are presented, either visually (if the product is shown) or verbally (if it is mentioned or described). Endorsement is an intensification of the verbal placement, when the media representative mentions certain positive features of the product. One may also distinguish different degrees of product integration: on-set placement where the product is only part of the requisite scenery versus creative placement where the product plays an active role in the plot.
204. Rössler and Bacher, "Transcultural effects of product placement in movies" (2002) Zeitschrift für Medienpsychologie, 98-108, at 99.
205. It has been established that stronger placement effects can be expected when the placement is presented as a natural part of the story. See Rössler and Bacher, ibid., at p. 101.
206. For the classic critique of the cultural industries, see Adorno, Aesthetic Theory (Routledge, 1984). On the relationship between art and money, see Graber, supra note 146.
207. See also Graber and Teubner, "Art and Money: Constitutional Rights in the Private Sphere?" (1998) Oxford Journal of Legal Studies, 61-74.
208. Horlings et al., supra note 1, at pp. 4-5.
209. In the mid-term (2009-2010) and even for some time thereafter, no complete overhaul of the European audiovisual media is foreseen. See Horlings et al., ibid., at p. 5. The same position is shared by the impact study, see Graham & Associates, supra note 111, at section 3.5.4.
210. Horlings et al., supra note 1, at p. 13.
211. Graham & Associates, supra note 111, at section 3.5.1.
212. These are defined as channels with audience share equal to or greater than 3%. See Graham & Associates, ibid., at section 7.
213. Ibid., at section 3.5.5.
214. Ibid., at section 3.5.1.
215. RAND Europe outlines three plausible scenarios for the digital future of audiovisual media: (i) Linear Continuum: where the citizen behaviour will change at the margins, but media consumption will remain a largely linear experience; (ii) Digital Content Divide: where the digital "haves" will experience greatly increased interactive media use, while an equal number of "refuseniks" will continue exactly as before to rely on offline media and public service broadcasters; (iii) Time Shifting Linear Consumption: where the majority of the population will use broadband and mobile or in-home devices to time-shift their media to suit their schedule instead of that of the broadcaster. See Horlings et al., supra note 1, at p. 8. The same scenarios have been reiterated by the Commission in its Staff Working Document annexed to the AVMS proposal, see supra 19.
216. Horlings et al., supra note 1, at p. 8.
217. Horlings et al., ibid., at p. 6, referring to the Oxford Internet Survey (OxIS), February 2005, available at .
218. Horlings et al., ibid.
219. European Council Decisions of 2 and 3 Dec. 1988, Rhodes, supra note 29.
220. Ibid.
221. Commission communication on Principles and Guidelines for the Community' Audiovisual Policy in the Digital Age, COM(1999)657 final, 14 Dec. 1999, at p. 8.
222. See also Council Resolution of 21 Jan. 2002 on the Role of Culture in the Development of the European Union, O.J. 2002, C 32/2, and Council Conclusions of 19 Dec. 2002 on the "Television without Frontiers" Directive, O.J. 2003, C 13/1, at Recital 3.
223. The final AVMS text, while preserving the above text, substantially shortened it. Recital 3 now reads: "Audiovisual media services are as much cultural services as they are economic services. Their growing importance for societies, democracy - in particular by ensuring freedom of information, diversity of opinion and media pluralism - education and culture justifies the application of specific rules to these services".
224. rd Session of the General Conference of UNESCO, 20 Oct. 2005, entered into force 18 March 2007 (hereinafter UNESCO Convention on Cultural Diversity). On the UNESCO Convention, see Graber, "The new UNESCO Convention on Cultural Diversity: A counterbalance to the WTO" (2006) Journal of International Economic Law, 553-574. On cultural diversity, see Graber, supra note 61, at pp. 73 et seq.;
225. Smiers, Arts under Pressure (New York, Zed Books, 2004) and the collection of contributions in Graber, Girsberger and Nenova, supra note 61.
226. Art. 4(1) of the UNESCO Convention on Cultural Diversity.
227. It was in 1952 when Kroeber and Kluckholn compiled a list of more than 200 different definitions of culture (see Kroeber and Kluckholn, Culture: A Critical Review of Concepts and Definitions (Cambridge, MA: Peabody Museum, 1952)). Since then the concept has only gained in complexity and controversies despite the ample literature discussing it.
228. Graber, supra note 61, at p. 74. In the original: "Vielfältig ist eine Kulturlandschaft, in der neben kommerziellen Grossproduktionen, bei denen die Maximierung der Zuschauerzahlen allem andern vorgeht, auch solche existieren können, die sich z.B. durch die eigenwillige Handschrift ihrer Autoren vom 'mainstream' abheben, mit einem 'low budget' produziert wurden, experimenteller oder avantgardistischer Machart sind oder aus anderen Gründen einen eigenen Aufwand des Publikums an Phantasie oder Gedanken erfordern." (translation by the author).
229. Variety refers to the number of categories into which a certain quantity can be partitioned (e.g. types of programmes). Balance refers to the pattern in the distribution of that quantity across the relevant categories. As for disparity, it refers to the nature and the degree to which the categories themselves are different from each other. The greater the variety, the balance and the disparity of a system are, the larger its diversity. See Moreau and Peltier, "Cultural diversity in the movie industry: A cross-national study" (2004) Journal of Media Economics, 123-143.
230. Moreau and Peltier examine the EU15, France, Hungary, South Korea and Mexico and refer to both supplied and consumed diversity. Ibid.
231. For a critique, see e.g. Craufurd Smith, "Article 151 EC and European Identity" in Craufurd Smith, op. cit. supra note 23, pp. 277-297.
232. Case 120/78, Rewe Zentrale v. Bundesmonopolverwaltung für Branntwein (Cassis de Dijon), [1979] ECR 649.
233. See e.g. Scott, "Mandatory or imperative requirements in the EU and the WTO" in Barnard and Scott (Eds.), The Law of the Single European Market: Unpacking the Premises (Oxford: Hart, 2002)
234. and Spaventa, "On discrimination and the theory of mandatory requirements", (2000) CYELS, 457-478.
235. These mandatory requirements are still available as justification only of indistinctly applicable measures (Case 113/80, Commission v. Ireland (Irish Souvenirs), [1981] ECR 1626, para 11;
236. Case 177/83, Ringelhan, [1984] ECR 3651, para 19;
237. Case 59/82, Schutzverband gegen Unwesen in der Wirtschaft v. Weinvertriebs-GmbH, [1983] ECR 1217, para 11;
238. Case C-21/88 Du Pont de Nemours [1990] ECR I-889, para 14;
239. Joined Cases C-1 & 176/90 Aragonesa de Publicidad Exterior SA and Publivía SAE v Departamento de Sanidad y Seguridad Social de la Generalitat de Cataluña [1991] ECR I-4151).
240. And only in the absence of harmonization (Case 120/78, Cassis de Dijon, supra note 185, at para 8).
241. Case C-288/89, Stichting Collectieve Antennevoorziening Gouda and others v. Commissariaat voor de Media, [1991] ECR I-4007, at para 23.
242. See also Case C-353/89, Commission v. the Netherlands, [1991] ECR I-4069, at para 30;
243. C-148/91, Vereniging Veronica Omroep Organisatie v. Commissariaat voor de Media, [1993] ECR I-487, at paras. 9-10
244. and Case C-23/93, TV10 SA v. Commissariaat voor de Media, [1994] ECR I-4795, at paras. 18-19.
245. Graber, supra note 26, at p. 997.
246. Ibid., at p. 998.
247. Mueller, op. cit. supra note 3 at p. 322.
248. The impact study has pointed out that, "[t]he additional content requirements on broadcasters to reflect linguistic or cultural specificities of a particular Member State, intentionally or otherwise, ⋯ act as barriers to cross-border trade in programmes and channels because (a) they set conditions on programme content that only domestic programme producers can meet; and (b) they lead to channel schedules that are specific to a Member State, thereby limiting the appeal of these channels in other markets". See Graham & Associates, supra note 111, at section 6.4.3.
249. The EC itself is a party to the Convention. See Council Decision of 18 May 2006 on the Conclusion of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions, O.J. 2006, L 201/15.
250. See in particular Arts. 7-11 of the UNESCO Convention on Cultural Diversity. For a critique of the lack of binding obligations in the Convention, see Acheson and Maule, "Convention on Cultural Diversity" (2004) Journal of Cultural Economics, 243-256.
251. This engagement has been reiterated in the AVMS. Recital 3(a) thereof states: "In its resolutions of 1 December 2005 and 4 April 2006 on the Doha Round and on the WTO Ministerial Conferences, the European Parliament calls for basic public services, such as audiovisual services, to be excluded from liberalization under the GATS negotiations. In its resolution of 27 April 2006, Parliament supports the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions, which states in particular that 'cultural activities, goods and services have both an economic and a cultural nature, because they convey identities, values and meanings, and must therefore not be treated as solely having commercial value'. The Council Decision of 18 May 2006 on the conclusion of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions approved the UNESCO Convention on behalf of the Community. The Convention entered into force on 18 March 2007" (footnote omitted).
252. Commission communication on a European Agenda for Culture in a Globalising World, COM(2007)242 final, 10 May 2007.
253. See also Commission, "Inventory of Community Actions in the Field of Culture", Accompanying Document to the Communication on a European Agenda for Culture in a Globalising World, SEC(2007)570, 10 May 2007.
254. Three interrelated sets of objectives are defined, to which all actors (the Member States and their regions, stakeholders in the field of culture and the Commission) are called upon to contribute. These sets of objectives encompass: (i) promotion of cultural diversity and intercultural dialogue; (ii) promotion of culture as a catalyst for creativity in the framework of the Lisbon Strategy for growth and jobs; and (iii) promotion of culture as a vital element of the Union's international relations. See Commission communication on a European Agenda for Culture in a Globalising World, ibid. at p. 8.
255. Ibid., at p. 10.
256. O'Regan and Goldsmith, "Making cultural policy: Meeting cultural objectives in a digital environment" (2006) Television and New Media, 68-91, at 88.
257. Horlings et al., supra note 1, at p. 56.
258. O'Regan and Goldsmith, supra note 198, at p. 69, referring to Schlesinger, "Television production, audio-visual policy and the creative industries", paper presented at the Television; Past, Present and Future Conference, University of Queensland, Brisbane, 3 Dec. 2000.
259. High Level Group on Audiovisual Policy, The Digital Age: European Audiovisual Policy, Chaired by Commissioner Marcelino Oreja, 26 Nov. 1998.
260. See supra section 4.1.2.
261. See Brynjolfsson, Hu and Smith, "From Niches to Riches⋯" (supra note 131), who stress the importance of search as enhancing choice and prove that the facilitation of search changes the distribution of sales.
262. Recital 25(a) AVMS states that, "[m]edia literacy refers to skills, knowledge and understanding that allow consumers to use media effectively and safely. Media-literate people will be able to exercise informed choices, understand the nature of content and services and take advantage of the full range of opportunities offered by new communications technologies. They will be better able to protect themselves and their families from harmful or offensive material. Therefore development of media literacy in all sections of society should be promoted and monitored".
263. See also Commission, "Making sense of today's media content: Commission begins public media literacy consultation", IP/06/1362, Brussels, 6 Oct. 2006. On the media literacy initiative, see also .
264. See supra note 133. See also .
265. Decision No 1718/2006/EC of the European Parliament and of the Council of 15 Nov. 2006 Concerning the Implementation of a Programme of Support for the European Audiovisual Sector (MEDIA 2007), O.J. 2006, L 327/12.
266. Levy, supra note 25, at p. 40.