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Top 3 predictions for Media in 2019!

By Alessandro Ferrari and Laura Borelli

2018 has been a crucial year for the audio-visual media sector since it saw the revision of EU Audiovisual Media Services Directive (AVMSD) which has finally put traditional broadcasters and their video-on-demand competitors on the same playing field in terms of the regulatory environment. Still, the ongoing transformation of the media landscape shows no sign of backing off, thanks also to the mushrooming partnerships raising among Over The Top video providers and traditional mobile network operators  and the adoption of technologies such as augmented reality and artificial. So, what’s next with media?

  1. Media meets Fintech!

Developments in both audio visual and fintech are leading to a convergence of the two sectors and are leading to the growth of new entertainment platforms which are based on block chain technology. The motto of such platforms is that it is not enough to create value only for the platform itself, but the value shall be created also for the user community. Thus, in the near future users not only will not pay to enjoy premium contents, but will be rewarded for watching them via a tokenized rewarding system! This is certainly a winning business model that might grab the attention of on-demand streaming giants, thus leading to a new way to enjoy audio visual media contents and giving space to a new economy designed around user value rather than user as a product.

  1. 5G revolution

At this date there are more than 3.5 million Italian families watching television via the Internet and, according to the 2018 IT Media Consulting report, in 2020 the broadband TV will become the first modality of access to television content for 8.5 million users in Italy, with video on demand by subscription and by consumption (the so-called transactional video on demand) like Netflix and Chilli representing almost 20 percent of the total Pay-TV market share by the end of 2020.

One of the most significant drivers of this incredible growth is the spread of broadband and ultra-wideband networks, which favored the entry of new important national and international competitors in the provision of both free and paid television services. The advent of 5G will have an enormous impact on the provision of video on demand services, such as interactive contents. However, the evolution to the 5G technology is facing some hitches in Italy. In fact, traditional broadcasters have not welcomed the plan for the transition to 5G technology proposed by the Italian legislator. In a nutshell, the past 2018 Italian Budget Law  provided for the sale of the old 700 MHz band by television channels to telecommunication operators for the purpose of the transition to 5G technology and assigned to the Italian Communications Authority (Autorità Garante delle Comunicazioni e del Mercato, AGCOM) the duty to issue a new frequency allocation plan. The plan, which was recently issued by AGCOM, has to be gradually implemented starting from January 1, 2020 and ending on June 30, 2022. However, the solution proposed by the Italian legislator has met the remonstrations of traditional broadcasters, since the allocation of 700 MHz band to telecoms as devised will erode their spaces in the radium spectrum and undermine their transmitting power against satellite and online providers. Discontent was further fostered by AGCOM, which last September decided to launch a public consultation to review the criteria for the frequency allocation. As said by AGCOM, the solutions proposed by AGCOM to ensure broadcasters’ transmitting capacity are either to collect frequencies dismissed by broadcaster against a monetary compensation or to reconsider the allocation of frequencies to local televisions. In any case, this may result in an extension of the time necessary for the transition to a full 5G core. Therefore, the next months will be of a significant importance for the evolution to this new technology as well as for the life of national and local broadcasters.

  1. Geo-blocking ban extended to audio-visual media services?

One of the aims of the EU Commission’s Digital Single Market Strategy is to remove barriers to online traders within the European Union in order to strengthen the single market. This objective has been accomplished with EU Regulation 2018/302 (Geo-blocking Regulation), which entered into force on March 22, 2018 in all EU Member States and is applicable from December 3, 2018. As mentioned, such Regulation addresses unjustified online sales discrimination based on customers’ nationality, place of residence or place of establishment within the internal market.

For reasons of consistency and legal certainty, the Geo-blocking Regulation is aligned with the Services Directive 2006/123/EC and thus, does not apply to a number of services such as audio-visual media services, among others. This means that online audio-visual service providers can continue to restrict access to online content on a territory-by-territory basis within the EU.

However, recently the EU attention has focused on audio-visual media services and on what some legislators view as an inherent friction between the realization of a single digital market in the European Union and the use of territorial licensing in the audiovisual sector. Within this context, the EU Commission has launched a Call for Proposal for a study on the impacts of the extension of the scope of the Geo-blocking Regulation to audio-visual and non-audio-visual services giving access to copyright-protected content so as to contribute to the Commission’s assessment on whether the scope of the new rules ought to be expanded to apply to audio-visual services offering copyrighted content, such as video on demand. Should such an extension take place, it would certainly benefit both users and Over The Top providers, to the detriment of traditional broadcasters. Besides the fact that eliminating cross-border access to streaming services raises complicated questions that go beyond geo-blocking, there is the concrete possibility that a ban on geo-blocking of online audio-visual services may well be revisited in the near future. This is even more concrete in light of the obligations for providers to enable cross-border portability of online content services under EU Regulation 2017/1128.

If you wish to discuss, feel free to contact us at alessandro.ferrari@dlapiper.com and laura.borelli@dlapiper.com!