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A single European market won't lead to a single European Netflix

Engadget Engadget 25/05/2016 Aaron Souppouris
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The European Commission (EC) today published a large number of proposals in its ongoing pursuit of a Digital Single Market -- the notion that a person or company in one European nation should be able to buy goods from any person or company in another. Chief among them were new rules regarding geoblocking that would make accessing sites from other European countries easier. But while this might make it easier for a Brit to buy video games in France, it's not likely to make a huge difference when it comes to streaming services, which the EC has identified as one of the areas "most affected by geoblocking."

To summarize the problem, let's look at Netflix in the EU. While the popular streaming site's expansion in the region has been rapid -- the entire continent is now covered -- not all Netflixes were created equal, and the library of available content differs vastly from country to country. For an example of how annoying this can be, a Netflix user in Spain can't watch the latest season of perhaps the company's flagship show: House of Cards. That's because in Spain the rights to the first run of that show belong to a local TV broadcaster.

Europe's dream of a single market would fix that. Everything would be available everywhere. Companies in different member states could compete on price and quality of service. And Spanish people could watch House of Cards whenever they wanted.

But although the proposed new rules would effectively outlaw "geoblocking and other forms of discrimination on the grounds of nationality, residence or establishment," the EC specifically notes that this won't be able to be applied to every sector. That's because this geoblocking isn't a commercial issue, it's a licensing issue.

Media rights, before the internet, were typically divided nationally, by TV networks for non-physical media, and by various publishing houses for video cassettes. While the method by which media is delivered has moved forward, the licensing deals that make that delivery happen for the most part are still bound by the physical restrictions of national TV networks. That means that Netflix and Amazon are buying rights as though they are traditional players with the same regional specificity -- indeed, some big shows like Breaking Bad and Mr Robot aired exclusively on Netflix and Amazon Prime in parts of Europe.

There are ways forward. Music, the EC notes, is typically solid through multi-territorial licenses that serve the entire European market. How long it'll take for the video market to follow suit isn't clear, but it'll likely be a long time, especially while European broadcasters continue to spend big to syndicate shows from US companies like HBO and AMC. And even with music, there are exceptions that make the French Spotify differ slightly from the Italian one. Likewise with e-books, rules on pricing differ from state to state, and gambling is legal in some places and illegal in others. Europe won't just wake up one day to discover that every company in the region is open for business.

Ironically, given the Digital Single Market branding, one thing the rules will do very effectively is ensure that Europeans can mostly buy physical goods -- clothes, video game discs, cars, etc. -- from any country they please. In that way, outlawing geoblocking will have a huge impact -- no longer will you attempt to visit the German version of a retailer and get redirected to the British one because of your location. They're also looking to promote cross-border parcel delivery services and increase pricing transparency for shipments between countries.

And for Netflix, too, there is some light at the end of the tunnel. Legislation currently being mulled over separately by the EC would mean that, for example, a user abroad would have access to the same library of content no matter which member state they were currently in. Essentially if I, a British Netflix member, were in Spain, I could watch House of Cards just fine, while James Trew, an Engadget editor who lives in Spain permanently, could not.

While it's not perfect, the proposed legislation would certainly go a way to fixing some of the weirdness you encounter when travelling through Europe. Oh, and the EC being the EC, it's also proposing that the various streaming services operating in Europe should have quotas that ensure one fifth of their content is European.

Europa Press

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