European Commissioner Viviane Reding discusses the new directive, and how it will affect the industry as a whole.

By Robert Logie

Electronic Retailer: The Audiovisual Media Services Directive has now reached a status that shows a consensus between the three institutions: Commission, Council and the Parliament. With the draft that you had proposed in December 2006, what three major positive impacts do you expect this new directive to have on the audiovisual media at large?

Viviane Reding: First of all, providers of audiovisual on-demand services had better take advantage of the internal market and begin to offer cross-border services. This will be made easier with the new directive that extends the scope of the country of establishment principle to on-demand audiovisual media services. A second positive impact will come from the liberalization of advertising rules, giving more room for maneuver to the industry and enabling additional revenues. In addition comes the new rule on product placement, which finally gives legal certainty to this form of commercial communication. The third element is that the directive creates a new right for consumers and broadcasters to access on a fair basis, short extracts of events of major importance for news reports. These three examples demonstrate, in my view, that the results achieved with the new directive are far-reaching and future-oriented. I must also say that I am happy that the final text is close to the initial Commission proposal, showing that all EU institutions have done a good job!

Electronic Retailer: Do you interpret the new terminology--Audiovisual Commercial Communication--encompassing traditional wording such as advertising or teleshopping, as a call for a new relationship between cultural and entertaining audiovisual content and their "income producing" commercial counterparts? Are you expecting some form of hybrid channels to emerge through this new relationship in the future?

Reding: The new directive is based on two categories of audiovisual content (e.g., programs--linear or on-demand--and commercial communications, the latter including in particular advertising, sponsoring, teleshopping and product placement). With regards to these new commercial communications, the Audiovisual Without Frontiers Directive abolishes the obligation to separate program and commercial communication, but confirms the principle of a clear identification of commercial communication, in or between programs. It also clearly enables new advertising techniques. The new provision on product placement is an interesting example of how Europe intends to deal with commercial communications: product placement is allowed in many categories of programs such as films, series and light entertainment. But consumers must be clearly informed that the program in question contains product placement. Then, it is for everyone to decide if he or she still wants to watch the program or not. Now, with digital television and on-demand services, the right to switch is a reality.

Electronic Retailer: As a truly European representative organization, and not a federation of national ones, we are very sensitive of the political implications at stake with the Commission's efforts for harmonization, and we fully support them--especially for consumer affairs issues. Will the new directive implementation include a stronger effort by the Commission to promote harmonized interpretation and a dialogue with member states to facilitate pan-European business to develop in the audiovisual communication sector and, more specifically, in the audiovisual commercial communication one?

Reding: An EU directive is indeed a framework law, which has to be transposed into national law. This directive encompasses the right for the member states to take stricter measures for media service providers under their jurisdiction, as long as they're compatible with Community law. As European Commissioner, I, of course, appeal to the member states to act with a light hand when they implement the new directive, thus sticking to the light-touch approach agreed to in Brussels. In the new directive, I have introduced a provision that encourages member states to use self- and co-regulation to implement rules such as consumer protection rules.

Electronic Retailer: With more and more audiovisual content circulating on the web, and IPTV being an intriguing and promising development, what is the Commission's vision and position on the possible development of local, community, lifestyle and topical IPTV channels that the IPTV broadcasting technology will make accessible to medium or even small-size companies or institutions? Will it encourage it and help it, and incite member states to support it without unnecessary regulatory limitations?

Reding: IPTV is booming in Europe, giving more choice to the viewers, increasing competition between networks for the provision of audiovisual content and lowering the entry market on the TV market. This is a chance for local and niche channels. While these new channels should fully respect fundamental principles of the European audiovisual landscape such as protection of minors against content which might seriously impair their development, and prohibition of racist content, a light-touch regulation should apply to the local services. This is already foreseen by the current directive that, for instance, exempts local broadcasters from the provision on promotion of European works.

Robert Logie is editor of ERA Europe's NewsShop.