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05.17.2013
Originally featured on BroadcastEngineering.com
Europe’s booming VOD sector hits regulatory hurdles

Europe’s on-demand audiovisual sector is still expanding fast, but it has been reined back a little by running into increasing cross-border regulatory constraints.

This is the finding of the latest survey of VOD services by the European Audiovisual Observatory (EAO), a body set up in 1992 by the Council of Europe to monitor and collect statistics on the whole audiovisual sector including TV and film.

Europe now has 3,087 on-demand services, including 447 VOD services dedicated to movies made originally for the cinema, according to the latest EAO report, the remainder often being mixed services including catch up TV, old shows and some film, along with 44 trailer services and 10 film archive services. This compared with 200 on-demand services just over five years ago at the end of 2007 at the start of the steep climb, reaching 600 a year later by the start of 2009 and then passing 2000 in 2011.

The survey, covering the whole of Europe, also identified 130 movie VOD services targeting EU states that are actually based outside the EU, mostly in the U.S. and Switzerland. For example, of 53 subscription channels recently launched by YouTube, 29 are available in Europe and billed in Euros.

Over 90 percent of the services in Europe, 2,733, were based in the EU. A telling statistic was that a significant number of the VOD services were concentrated in just a few territories, often primarily targeting subscribers in other countries. Luxembourg, a tiny market itself, had 86 services, including the iTunes Stores for most of Europe plus a number of countries in the Middle East, Africa and Asia. It also hosts Netflix, as well as Xbox video services for 15 countries.

In a slightly less extreme example, Sweden hosted 36 services including various HBO on Demand offerings, largely because it often serves the Nordic countries, Norway, Finland and Denmark, as well as some central European states like the Czech Republic.

In total, 52 percent of VOD services identified by the EAO are now available in a separate country, and this has increased regulatory tensions. It has made it harder for individual states to enforce their own content creation and access rules because of service fragmentation and increasing exposure to external outlets. It has also made it harder for content producers and operations themselves, having to operate under multiple regimes.

The problem is that VOD, along with connected TV, has yet to catch up in many cases with the regulatory frameworks already prevailing for other conventional Internet services as well as broadcast TV. This applies to rules over availability of adult content and systems for protecting against illegal material such as child pornography.

The same holds for content rights, where again there is a lack of cross border co-ordination or uniform standards. The EAO believes that harmonization over both illegal content and rights are essential to enable Europe’s whole audiovisual sector to maintain its healthy growth and avoid hitting the buffers.



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