Copyright fight club

By  ALEX SPENCE  and ZOYA SHEFTALOVICH

EU wants to change how millions watch Hollywood films and YouTube videos, but legacy media groups are pushing back hard.

The biggest tech fight on the Continent this year doesn’t involve Google or Uber, though those are big. Nor is it the raging Transatlantic policy debates over net neutrality or the privacy shield so steeped in technocratese of little relevance to most people.

The biggest is the fight over copyright. A looming overhaul of the morass of laws and regulations across the EU will impact how millions of people consume images, words and music on their various devices.

The folks in Brussels picked it knowingly. Coming into office in 2014, the European Commission laid out an ambitious agenda to overhaul the entire digital copyright system in the EU.

It’s moving on various fronts, investigating contracts between Hollywood studios and TV stations while preparing new legislation that could change everything from watching movies and sports to publishing videos on YouTube. President Jean-Claude Juncker and his Commission pledged from the start to tear down regulatory walls and create a truer European single market.

With this initiative, Brussels stepped right in between aggressive consumer rights advocates as well as Silicon Valley giants and legacy content-makers, from Hollywood studios to major sports leagues. Playing out in backrooms for the past few months, this clash is now coming to a head.

At first, it seemed a possibly easy win for Brussels. Modern digital users are demanding. They want to read articles, watch movies and TV programs online wherever they are, whenever they want, on whichever device they happen to be using. Removing the formidable barriers in place in Europe to doing that would be popular.

Yet the push from the Commission soon encountered stiff resistance from companies and interest groups that had a lot to lose. Unwittingly or not, Brussels was reviving an age-old debate that has raged since the early days of the web and has only grown in scale. On the one side are proponents of a free, open Internet who argue that copyright laws are out of date with modern consumer habits; on the other, media companies that are desperately trying to keep their business models intact. “Once upon a time copyright was very technical and between people who made music and films,” said James Waterworth, vice president of the Computer and Communications Industry Association. “Copyright affects users on a much bigger scale now.”

If advocates of open Internet came with the stronger hand and enjoyed the support of the Juncker Commission, the lobbying countercharge from the so-called creative industry has succeeded at least in toning down Brussels’ ambitions. The old boys of media have won a few battles. They’ve not yet won the war.

“It’s still very hard to read what is happening exactly and what the plan is,” said Martin Moszkowicz, the chief executive of Constantin Film, a German film and TV company. “Until we know what the plan is, I won’t sleep well.”

Hollywood drama

Moszkowicz makes movies for a living. Recently, he’s spent much of his time shuttling back and forth to Brussels, worried that copyright reforms under consideration there will devastate his business.

The Commission’s review of copyright laws is wide-ranging, affecting a broad range of businesses in industries including tech, retail, telecoms and media. But none feel like they have as much to lose as the Continent’s film and TV producers.

The howls of panic went up when Andrus Ansip, the Commission vice president for the digital single market, said he “hated” so-called geo-blocking — a comment that was seen as a direct and existential threat to their business model.

Producers raise money to make programs and movies by selling exclusive rights over again in different countries and across different platforms, often in advance. If their productions had to be made available online to all consumers at the same time across the EU, their revenue would plummet. That would hit small, independent producers particularly hard, they argue, wiping out huge chunks of Europe’s audiovisual industry.

In December, the Commission released a proposal to allow consumers to take their paid content subscriptions to services such as Netflix with them when they travel in the EU.

Those in the creative industries hoped this bone thrown from the other side would end the geo-blocking debate. But there’s talk of more to come. By summer’s end, the Commission will present new rules for cross-border distribution of television and radio online and measures to tackle online content piracy. Also on the agenda: measures on the role of platforms and illegal content.

“The scope [of the copyright package] is still under discussion,” said Nathalie Vandystadt, a Commission spokesperson.

That lack of certainty has all sectors nervous — and angry.

An open letter sent by consumer rights groups, tech industry lobbyists and digital rights advocates to the Commission last week argued that Europe’s “outdated” copyright regime was putting free communication and access to knowledge online at risk. Wide-ranging reforms would boost creativity, research and innovation, it said.

On the other side, media groups are just as fervent, arguing that sweeping reform is beside the point, since consumers already have access to a huge array of entertainment online. The media companies warned the Commission is putting at risk businesses that provide 7 million jobs and contribute €509 billion to Europe’s economy because it doesn’t really understand their industries. “Are we dealing with this because it’s [seen as] low-hanging fruit?” asked Grégoire Polad, director general of the Association of Commercial Television.

Commissioner discord

Ansip, the former Estonian prime minister, is famously digitally savvy. An avid gadget user, he is rarely seen without his iPad. He came in openly determined to ensure European citizens should not face cross-border restrictions. In one speech, in April last year, Ansip described geo-blocking as a “clear example of a practice that should not exist in the 21st century.” As Ansip saw it, programs on the BBC’s iPlayer, for example, should be accessible not only to Britons when they travel overseas, but to “millions of people [who] are ready to pay for it” elsewhere in the EU.

In the other camp was Günther Oettinger, the EU’s digital society and economy commissioner. The German didn’t even have a computer in his office when he took up the post. He had no experience in tech, and was by all accounts unenthused by the digital economy and society portfolio.

Where Ansip was perceived as sympathetic to the technology platforms and open Internet advocates, Oettinger was seen as more aligned with the traditional media companies.

When Ansip triggered panic with his comments about hating geo-blocking, Oettinger made soothing noises. “I hate my alarm clock at 5 o’clock in the morning,” Oettinger said in a remark that was taken as a rebuke to his colleague.

The divide has resulted in confusion among media companies about the Commission’s ultimate intentions. “What I see as a lobbyist is that you get very different sounds and messages if you go and see the Ansip people from seeing the Oettinger people,” one representative of a media company said.

Vestager goes after Sky

Even if the producers win the regulatory fight with Ansip and Oettinger, they are worried about a competition investigation by Margrethe Vestager, the EU’s competition commissioner, against the U.K. satellite broadcaster Sky and six Hollywood movie studios.

The Commission says contracts between the studios and Sky to screen their movies breach EU competition rules because they prevent transmission outside the U.K. and Ireland. If the media companies lose the case, it will be “a big defeat” that will undermine their business model, a lobbyist said. The case is ongoing, and lobbyists say they’re struggling to read which way it’s heading.

If there’s uncertainty about the direction of the copyright reforms, the media companies say they at least have this much in their favor: The mood within the Commission toward technology platforms appears to have shifted in the past few years.

The previous college of commissioners was in thrall to Silicon Valley — the “GAFA” group of Google, Apple, Facebook and Amazon — media companies say. As the U.S. tech companies faced scrutiny over tax affairs, competition practices and privacy concerns triggered by the Edward Snowden leaks, there is more skepticism among officials about arguments pushed by the tech sector in favor of removing online barriers. Perhaps because they’ve got other fights of their own to worry about, the Silicon Valley giants have been relatively quiet in the copyright debate.

“It just feels like it’s more of an equal battle right now than it used to be,” a media lobbyist said.

At the same time, traditional media companies are getting smarter about lobbying. In the past, big media was often its own worst enemy. In the early 2000s, for example, record labels sued thousands of individual Internet users for piracy, creating a huge public relations disaster while doing little to stem the tide of illegal downloads.

This time, media companies are presenting a united front. Hollywood studios are standing shoulder-to-shoulder with independent producers, emphasizing the creative industry’s economic and cultural importance to the EU.

“There is a general trend toward increasing copyright term length, without harmonizing the exceptions and limitations that keep copyrights balanced in the public interest,” said Jan Gerlach, public policy manager at the Wikimedia Foundation, which fights against such measures. “We see this trend both in Europe and on a global level,” Gerlach said.

Even so, plenty of media companies are nervous about where the debate will end up.

Fighting on all fronts, the Commission may push ahead with sweeping copyright reform despite the rights holders’ objections, feeling it is a political victory it can achieve.

“They put a lot of pressure on themselves with that extremely ambitious agenda [at the beginning of Juncker’s presidency], putting copyright as one of the main objectives,” one lobbyist said. “But unfortunately they’ve put so much pressure on themselves that I don’t really see how they could stop.”

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