AUDIOVISUAL MEDIA SERVICES DIRECTIVE

Key Issues for the Television Business

EPP Group hearing, 29 June 2006

► Media groups active in 28 European countries

► Operating over 270 free-to-air and pay-TV channels and distributing 540 channels and 170 new services

► Every line of the directive affects our businesses

BUSINESS CONTEXT

-New competition with powerful competitors

-Rights costs increasing, but revenue flat – good content costs money

-Multiplication of broadcasting technologies

-“Consumer is king” : personal use

- Reinventing business models - and regulatory ones?

THE ACCELERATING PACE OF NEW TECHNOLOGIES AND BUSINESS MODELS : the example of VIDEO

1950 1960 1970 1980 1990 2000 2010

CINEMA

TELEVISION

VHS

ANALOG CABLE

ANALOG SATELLITE

DIGITAL SATELLITE

DIGITAL CABLE

DVD

The question should not be

• « What will TV be in 2010 ? »

but

• « What will TV be in 6 months ? »

WEB

TVoDSL

VOD

PODCAST

SVOD

3G

DVB-H

XXth centuryXXIst century

The Future: Digital

All EU states to be fully digital

Slide 5

Finland and UK: market leaders

Majority around 2012

For consumers Increased choice

Interactivity and niche interests

For broadcasters In France after DTT launch

from 6 to 25 terrrestrial channels

New media, new players

Advertising budgets moving away from TV?

And from global players

Competition from telecom operators…

•European telcos: €210 billion

turnover

Time Warner 2004 revenue

$ 42.1 billion

EU Advertising market 2004

$ 29.8 billion (incl. Pubcasters)

1990

103 channels

2003

1100 channels

Slide 6

New media, new players

New media, new playersMultiplication of channels

New media, new players

So how should this new environment be regulated ?

FOUR SPECIFIC ISSUES

Scope & Non-linear services : technological neutrality

Country of Origin : cornerstone of EU policy

Advertising rules : more flexibility for responsible broadcasters

The rights holder is king

SCOPE & NON LINEAR SERVICES

We favor the limited scope extension to non-linear services : core principles should be applicable to everyone

We plead for technological neutrality : same use, same rules

Let’s give time to new services to find their balance before regulating them completely

COUNTRY OF ORIGIN

Cornerstone of EU policyNeed to have one jurisdictionOnly way to encourage transfrontier

televisionCompetition and consumer choice

ADVERTISING

- Only way to provide free, legal and attractive content to the consumer

- Broadcasters need more flexibility, and are responsible enough not to abuse of it : insertion, minutage

- Let’s provide space for new advertising techniques but let’s not deprive broadcasters of revenues : we know how to create attractive contents

RIGHTS PROTECTION

The consumer is king, so is the rights holder

Our main issue : the quest for rights Viewers get access to information from

broadcasters, not middlemen Bad example : short reporting

“The aim is for Europe´s audiovisual content industry to flourish under one of the most modern and flexible

set of rules in the world”

Commissioner Reding, 13.12.05