New regulation on investment obligations for on demand services

Further to a public consultation, as discussed in our previous post, the Italian Communications Authority (Autorità per le garanzie nelle comunicazioni, “Agcom”) published a new resolution modifying the investments obligations for on demand audiovisual media services (Agcom Resolution No. 526/14/CONS).

Here a brief outline on the topic.

The Audiovisual Media Services Code. Pursuant to Section 44 of the Legislative Decree No. 177/2005 (the “Audiovisual Media Services Code“) broadcasters are required to promote the production and distribution of European works in accordance with a programming quota.

The Audiovisual Media Services Code (which “recalls” the provisions of the EU Audiovisual Media Services Directive 2010/13/EC) describes “European works” as “(i) works originating in EU Member States, (ii) working originating in European third States party to the European Convention on Transfrontier Television of the Council of Europe and (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 the agreements.”

A certain percentage of European works falling into one of the above mentioned categories shall therefore be included in the programming schedules of the broadcasters which are also required to maintain certain levels of investment in audiovisual works by independent producers.

Agcom Resolutions. In order to promote the production and distribution of European work as described above and therefore guarantee a more competitive market, Agcom originally issued Resolution 66/09/CONS further revised by Resolution 188/11/CONS.

The latter was the result of discussions by a panel of interested parties and resulted in the obligation for on demand broadcasters to:

  • ensure that their catalogue contains at least 20% of European works (a percentage to be calculated on the total number of hours of programming made available each year in the same catalogue); or
  • allocate an annual financial contribution to the production of or purchase of rights of European works for their catalogues amounting to 5% of the revenues attributable to the public provision of on-demand content within the catalogue in the previous year.

Agcom considered to modify the regulation on the topic and, in particular, incorporated the following:

  • while under the previous regulation certain on demand services were not subject to the broadcasting and investment obligations, now all on demand services are required to comply with the above mentioned obligations;

nevertheless

  • on demand services may benefit from a reduction (equal to 1/5) of the broadcasting and investment obligations provided that they give adequate prominence to European works within their catalogues.

According to Agcom, the aim of the changes is to avoid to affect the market of on demand services which are experiencing a continuing growth and popularity throughout Europe, including Italy.