EPC and CEPI Demand EU Wide Regulations for Streaming Platforms
Earlier this year, several organizations representing the interests of independent producers across the world released a joint statement encouraging governments to regulate streaming platforms in their respective markets. Among the European organizations that support this initiative are The European Producers Club (EPC) and CEPI, the European Audiovisual Production Association.
In this exclusive interview, Alexandra Lebret, Managing Director of the EPC, and Mathilde Fiquet, Secretary General of CEPI, talk about the activities of their organizations in facilitating a favorable EU legislature for the independent audiovisual sector in the face of numerous challenges like regulating the streaming platforms and the protection of intellectual property with the emergence of artificial intelligence.
In this exclusive interview, Alexandra Lebret, Managing Director of the EPC, and Mathilde Fiquet, Secretary General of CEPI, talk about the activities of their organizations in facilitating a favorable EU legislature for the independent audiovisual sector in the face of numerous challenges like regulating the streaming platforms and the protection of intellectual property with the emergence of artificial intelligence.
Alexandra Lebret, Managing Director of The European Producers Club (EPC)
Alexandra, the European Producers Club (EPC) represents 185 members from over 37 countries. What are your main activities and what is your mission?
We are today the most important organization of individual independent productions companies in Europe. We act on 3 pillars: the first one is to represent the producers when it comes to regulation; the second one is to support them for producing their film and TV series, by giving them contacts, information, advice; the third one is to think the future together, the production being part of a wider ecosystem in order to foster our industry.
Which are the territories you have members from and do you plan to attract producers from new countries?
We have producers coming from 36 countries in Europe plus Quebec. It means that we cover the Council of Europe perimeters rather than the strict European Union one. We don’t tackle specific countries when we recruit new members. We just welcome them. The balance of the different countries in our organization reflects the balance of co-productions in Europe: the countries which are coproducing the most: Germany, Italy, France, Spain.
Most recently, we had ATM Virtual joining from Poland, Mandragora from Romania, NDF GmbH from Germany and Fabula from Italy. It shows the diversity of Members in our organization.
What are the main challenges for film and TV producers in Europe nowadays and the necessary steps to tackle them?
This period is a fast-changing one. Producers are known for being able to adapt; to be pragmatic animals. Nowadays it’s even more relevant than ever. After a blooming market due to the arrival of the streaming services in Europe, we are now witnessing a strong contraction of the market. Many producers and countries have sized up their production capacity to respond to the high volume of content demand. This is not the case anymore. Production companies must reduce their production volume and size; technicians are left over. In the UK, which has been hit by the US trike and the contraction of the market, local revenues have decreased by 60%, unemployment is at 70%, and 40% of the workforce in the UK industry may not return.
However, traditional broadcasters have not decreased their investment, on the contrary.
The main challenge today is to readapt to these new conditions of market, but keeping in mind that the demand of content remains very strong.
Earlier this year EPC supported a joint statement from international organizations regarding the regulation of powerful digital streaming platforms. What is the main purpose of the statement and what are the necessary steps in order to ensure the independence and viability of the global screen industry?
The EPC has been deeply involved for many years with the AVMS Directive, which is a European law giving the possibility to Members States to impose a levy or/and Investment obligation to media online services based on their turnover on the targeted country. France has been the first country to handle this new regulatory tool to impose to streaming services an investment obligation of 25% (20% in certain cases) based on the turnover in France. This measure is also accompanied by regulations when it comes to IP ownership and associate remuneration. The French law is highly sophisticated and responds with the conditions attached to the investment obligations to the market imbalances.
We presented the French law to many countries, from Chile to Australia, New Zealand and Israel. We discovered that we were all facing the same problems: a lack of bargaining power when it comes to investment in countries and contractual relations. We discovered that it was not an epiphenomenon reserved to indies in Europe. It was a worldwide issue.
We were in collaboration with Matthew Deaner from Screen Producers in Australia and we have had this idea of expressing strongly and widely our concern. Many other organizations joined this call.
The first objective of this call was to create awareness. In many countries, the arrival of the big US platforms has been acclaimed. And it’s true that they are investing massively in local content, not in all countries nonetheless, and not at the good conditions to maintain the industry.
We need an EU regulation, that will help as example for the rest of the world, on IP ownership. We need to protect more strongly the independent sector, which is the guarantee of the cultural diversity of the content offer.
The recent intense lobbying that happened in Italy where we have seen the force of the streaming services removing all conditions about ownership of IP shows how much of the bargaining power is in the hands of these giants.
How could an individual producer succeed where a State has not?
Only a strong regulation, applying to all Members States can rebalance the game and insure the perennity of the European audiovisual sector.
In the statement you put focus on local content and intellectual property. What is the best way for European governments and the EU to ensure that digital platforms make fair and proportional contributions to the creation of new local content in the markets in which they receive revenue?
By a strong EU regulation. IP is key, it’s an asset for our companies. It’s what creates their value. The European Commission is willing to foster the private equity financing in the sector, but this will not happen without the control of the IP. Not one equity fund will invest into a service production company, whose benefit is in the sole hands of streaming services based in LA. It brings too much uncertainty as well as low turnover. Independent production companies need to make profit, and for that they need to own the IP they created or co created.
IP ownership covers many aspects:
Ownership of the copyright (or a share of it in coproductions) in any audiovisual works produced which were developed and codeveloped by an independent producer. Ownership also of the underlying works which were used to develop the audiovisual work. These rights include sequels, prequels, remakes, spin-offs, subsequent series and merchandising rights.
Rights to proportionate remuneration, on a mandatory basis, linked to the exploitation of the work on the VOD service commissioning the work and on any other service it is made available. We have seen over the past months financing models leaving a possible remuneration to independent production companies linked to a delayed exploitation of downstream rights, or to secondary sales of the work done by the producer. What is needed is the obligation on the streaming services to pay proportionate remuneration based on the exploitation of the work on the service for which the contract is signed, on the platform itself.
Ownership of the ancillary and secondary rights in the Film or TV series itself, whatever the manner of financing of the work: the independent producer, by investing in the creation and development of an IP is creating a European asset. As in any biotech innovation: what matters is the ownership of the creation of the protected asset, not its reproduction which is licensed. All the rights to license this exploitation should be owned, whether wholly or partially, by the independent production company.
Rights linked to the exploitation of the work. We are focusing here on the exploitation of the primary audiovisual work. We recommend limiting the number of exploitation mandates in the contracts signed between independent production companies and streaming services. However, ANY exploitation of the work should give a proportionate remuneration linked to its exploitation to the independent production company.
In order to prevent the total vertical integration of the industry, we need to protect the independent producer with the right to exploit and sell the works they produce. A limitation in the number of mandates by the commissioning entity, as it is in the French law, is a solution.
Limitation of the duration of the rights granted to the commissioning service: examples in national regulation provides for limits at 3, 5 and 8 years.
Reversion of the rights when they are not being used.
The use of AI (artificial intelligence) has been booming lately, not only in the content production and distribution sector. What is EPC’s stance on the use of AI in content production?
AI is already used in many fields of the value chain to produce a film, from the script to the exploitation. Many of our jobs will evolve by the arrival of AI. But I am sure the sector will adapt, as it always did.
As highlighted by Microsoft’s decision to include an AI software into its Bing search tool, we will very soon not be able to identify which are the tools we use that have AI implementation. We need to have transparency on where AI is used. That’s the benefit of the AI Act that has been just voted.
Many of the AI tools used by producers are solutions owned by US companies. We should be careful of not depending on US-based solutions and having some European software developed as well. That’s for the big picture.
There is another important issue that is related to AI and the copyright. AI needs to be fed to be relevant, while protecting the copyright. How can we protect our works while working with software companies? That’s a key question. The second question is in regards to the nature of the works including AI? The “synthetic works”. What is their status on the copyright basis? For all these we are following all the cases at different jurisdictions: in the US, UK and Europe. What we need is a clear regulation that enhance predictability and certainty.
Mathilde Fiquet, Secretary General of CEPI
Mathilde, CEPI represents 19 different national associations and 1 European association of independent producers across Europe. What are your main activities?
CEPI’s role is to represent the interest of European independent producers at European level. We are the interfact between producers and diverse European institutions. CEPI supports the activities of its film and television producers, helping them to inform and engage with the European policy makers it promotes the importance of sustainable cultural and economic growth in the European audiovisual sector.
In 2018, CEPI relaunched itself as European Audiovisual Production, representing over 2.400 independent production companies in Europe. Which are the territories you have members from and do you plan to attract producers from new countries?
Some of our members are Animation in Europe, Asociacion Estatal de Cine – Spain, Association of Independent TV Producers – Portugal, Audiovisual Producers Association – Italy, Association of Film Producers of Slovenia, Film Industry Association of Ukraine, Audiovisual Producers’ Association – Czech Republic, Polish Producers Alliance, Screen Producers Ireland, Slovakia Audiovisual Producers Association, Union Syndicate for Audiovisual Production – France; etc.
CEPI is in contact with national associations from other territories in order to grow our community of independent producers. We believe that the challenges and opportunities the European independent producer sector faces are better addressed together and we place a large emphasis on information sharing and collaboration among our members.
What are the main challenges for the independent producers in Europe nowadays and the necessary steps to tackle them?
Independent producers are facing very fast changes in the industry, with consolidation of actors, the presence of very large players such as non-European streamers, offering opportunities, but also bringing different business practices. We need to ensure that independent producers continue to benefit from an environment which promotes diversity of creation. Very fast technology evolutions, as well as environmental and societal considerations also create challenges which independent producers need to adapt to.
Earlier this year CEPI supported a joint statement from international organizations regarding the regulation of powerful digital streaming platforms. What is the main purpose of the statement and what are the necessary steps in order to ensure the independence and viability of the global screen industry?
This global statement shows that independent producers across the world face similar challenges, with the rapid evolution of the sector. It was important to communicate this to policy makers as well as the other stakeholders of our industry. It emphasizes the importance of the creation of local and diverse content and the major role that IP detention plays for producers.
Different regions of the world will look at different solutions but with similar objective. In Europe, European and national film fundings as well as legislations are important pillars to support independent creations. They need to adapt in order to continue play this role in a changing ecosystem.
In the statement you put focus also on local content and intellectual property. What is the best way for European governments and the EU to ensure that digital platforms make fair and proportional contributions to the creation of new local content in the markets in which they receive revenue?
The European AVMS Directive introduced the possibility for member states to impose financial obligations on streamers. An opportunity that the majority of EU Members have now taken, with obligations adapted to their respective market. This has been a great first steps towards better contribution to the European AV sector. These investments should respond to qualitative criteria in order to steer them towards independent productions as well as ensure they benefit a diversity of genre.
The use of AI (artificial intelligence) has been booming lately, not only in the content production and distribution sector. What is CEPI’s stance on the use of AI in content production and the main points of the AI Act which you support?
We welcome the approval of the EU AI Act by the European Parliament, and we thank Members of the European Parliament for the essential role they have played in supporting creators and rightsholders throughout the legislative process.
It was essential that the AI Act recognize the existence of the EU copyright directive and open the door for rightsholders to enforce their rights.
AI is increasingly going to play an important role for production and distribution, it will develop tools to help the ecosystem enabling creators to focus on creation. However, it is absolutely essential that AI does not replace creators. We will need to ensure that training is available to provide the skills to use these new tools.
Alexandra, the European Producers Club (EPC) represents 185 members from over 37 countries. What are your main activities and what is your mission?
We are today the most important organization of individual independent productions companies in Europe. We act on 3 pillars: the first one is to represent the producers when it comes to regulation; the second one is to support them for producing their film and TV series, by giving them contacts, information, advice; the third one is to think the future together, the production being part of a wider ecosystem in order to foster our industry.
Which are the territories you have members from and do you plan to attract producers from new countries?
We have producers coming from 36 countries in Europe plus Quebec. It means that we cover the Council of Europe perimeters rather than the strict European Union one. We don’t tackle specific countries when we recruit new members. We just welcome them. The balance of the different countries in our organization reflects the balance of co-productions in Europe: the countries which are coproducing the most: Germany, Italy, France, Spain.
Most recently, we had ATM Virtual joining from Poland, Mandragora from Romania, NDF GmbH from Germany and Fabula from Italy. It shows the diversity of Members in our organization.
What are the main challenges for film and TV producers in Europe nowadays and the necessary steps to tackle them?
This period is a fast-changing one. Producers are known for being able to adapt; to be pragmatic animals. Nowadays it’s even more relevant than ever. After a blooming market due to the arrival of the streaming services in Europe, we are now witnessing a strong contraction of the market. Many producers and countries have sized up their production capacity to respond to the high volume of content demand. This is not the case anymore. Production companies must reduce their production volume and size; technicians are left over. In the UK, which has been hit by the US trike and the contraction of the market, local revenues have decreased by 60%, unemployment is at 70%, and 40% of the workforce in the UK industry may not return.
However, traditional broadcasters have not decreased their investment, on the contrary.
The main challenge today is to readapt to these new conditions of market, but keeping in mind that the demand of content remains very strong.
Earlier this year EPC supported a joint statement from international organizations regarding the regulation of powerful digital streaming platforms. What is the main purpose of the statement and what are the necessary steps in order to ensure the independence and viability of the global screen industry?
The EPC has been deeply involved for many years with the AVMS Directive, which is a European law giving the possibility to Members States to impose a levy or/and Investment obligation to media online services based on their turnover on the targeted country. France has been the first country to handle this new regulatory tool to impose to streaming services an investment obligation of 25% (20% in certain cases) based on the turnover in France. This measure is also accompanied by regulations when it comes to IP ownership and associate remuneration. The French law is highly sophisticated and responds with the conditions attached to the investment obligations to the market imbalances.
We presented the French law to many countries, from Chile to Australia, New Zealand and Israel. We discovered that we were all facing the same problems: a lack of bargaining power when it comes to investment in countries and contractual relations. We discovered that it was not an epiphenomenon reserved to indies in Europe. It was a worldwide issue.
We were in collaboration with Matthew Deaner from Screen Producers in Australia and we have had this idea of expressing strongly and widely our concern. Many other organizations joined this call.
The first objective of this call was to create awareness. In many countries, the arrival of the big US platforms has been acclaimed. And it’s true that they are investing massively in local content, not in all countries nonetheless, and not at the good conditions to maintain the industry.
We need an EU regulation, that will help as example for the rest of the world, on IP ownership. We need to protect more strongly the independent sector, which is the guarantee of the cultural diversity of the content offer.
The recent intense lobbying that happened in Italy where we have seen the force of the streaming services removing all conditions about ownership of IP shows how much of the bargaining power is in the hands of these giants.
How could an individual producer succeed where a State has not?
Only a strong regulation, applying to all Members States can rebalance the game and insure the perennity of the European audiovisual sector.
In the statement you put focus on local content and intellectual property. What is the best way for European governments and the EU to ensure that digital platforms make fair and proportional contributions to the creation of new local content in the markets in which they receive revenue?
By a strong EU regulation. IP is key, it’s an asset for our companies. It’s what creates their value. The European Commission is willing to foster the private equity financing in the sector, but this will not happen without the control of the IP. Not one equity fund will invest into a service production company, whose benefit is in the sole hands of streaming services based in LA. It brings too much uncertainty as well as low turnover. Independent production companies need to make profit, and for that they need to own the IP they created or co created.
IP ownership covers many aspects:
Ownership of the copyright (or a share of it in coproductions) in any audiovisual works produced which were developed and codeveloped by an independent producer. Ownership also of the underlying works which were used to develop the audiovisual work. These rights include sequels, prequels, remakes, spin-offs, subsequent series and merchandising rights.
Rights to proportionate remuneration, on a mandatory basis, linked to the exploitation of the work on the VOD service commissioning the work and on any other service it is made available. We have seen over the past months financing models leaving a possible remuneration to independent production companies linked to a delayed exploitation of downstream rights, or to secondary sales of the work done by the producer. What is needed is the obligation on the streaming services to pay proportionate remuneration based on the exploitation of the work on the service for which the contract is signed, on the platform itself.
Ownership of the ancillary and secondary rights in the Film or TV series itself, whatever the manner of financing of the work: the independent producer, by investing in the creation and development of an IP is creating a European asset. As in any biotech innovation: what matters is the ownership of the creation of the protected asset, not its reproduction which is licensed. All the rights to license this exploitation should be owned, whether wholly or partially, by the independent production company.
Rights linked to the exploitation of the work. We are focusing here on the exploitation of the primary audiovisual work. We recommend limiting the number of exploitation mandates in the contracts signed between independent production companies and streaming services. However, ANY exploitation of the work should give a proportionate remuneration linked to its exploitation to the independent production company.
In order to prevent the total vertical integration of the industry, we need to protect the independent producer with the right to exploit and sell the works they produce. A limitation in the number of mandates by the commissioning entity, as it is in the French law, is a solution.
Limitation of the duration of the rights granted to the commissioning service: examples in national regulation provides for limits at 3, 5 and 8 years.
Reversion of the rights when they are not being used.
The use of AI (artificial intelligence) has been booming lately, not only in the content production and distribution sector. What is EPC’s stance on the use of AI in content production?
AI is already used in many fields of the value chain to produce a film, from the script to the exploitation. Many of our jobs will evolve by the arrival of AI. But I am sure the sector will adapt, as it always did.
As highlighted by Microsoft’s decision to include an AI software into its Bing search tool, we will very soon not be able to identify which are the tools we use that have AI implementation. We need to have transparency on where AI is used. That’s the benefit of the AI Act that has been just voted.
Many of the AI tools used by producers are solutions owned by US companies. We should be careful of not depending on US-based solutions and having some European software developed as well. That’s for the big picture.
There is another important issue that is related to AI and the copyright. AI needs to be fed to be relevant, while protecting the copyright. How can we protect our works while working with software companies? That’s a key question. The second question is in regards to the nature of the works including AI? The “synthetic works”. What is their status on the copyright basis? For all these we are following all the cases at different jurisdictions: in the US, UK and Europe. What we need is a clear regulation that enhance predictability and certainty.
Mathilde Fiquet, Secretary General of CEPI
Mathilde, CEPI represents 19 different national associations and 1 European association of independent producers across Europe. What are your main activities?
CEPI’s role is to represent the interest of European independent producers at European level. We are the interfact between producers and diverse European institutions. CEPI supports the activities of its film and television producers, helping them to inform and engage with the European policy makers it promotes the importance of sustainable cultural and economic growth in the European audiovisual sector.
In 2018, CEPI relaunched itself as European Audiovisual Production, representing over 2.400 independent production companies in Europe. Which are the territories you have members from and do you plan to attract producers from new countries?
Some of our members are Animation in Europe, Asociacion Estatal de Cine – Spain, Association of Independent TV Producers – Portugal, Audiovisual Producers Association – Italy, Association of Film Producers of Slovenia, Film Industry Association of Ukraine, Audiovisual Producers’ Association – Czech Republic, Polish Producers Alliance, Screen Producers Ireland, Slovakia Audiovisual Producers Association, Union Syndicate for Audiovisual Production – France; etc.
CEPI is in contact with national associations from other territories in order to grow our community of independent producers. We believe that the challenges and opportunities the European independent producer sector faces are better addressed together and we place a large emphasis on information sharing and collaboration among our members.
What are the main challenges for the independent producers in Europe nowadays and the necessary steps to tackle them?
Independent producers are facing very fast changes in the industry, with consolidation of actors, the presence of very large players such as non-European streamers, offering opportunities, but also bringing different business practices. We need to ensure that independent producers continue to benefit from an environment which promotes diversity of creation. Very fast technology evolutions, as well as environmental and societal considerations also create challenges which independent producers need to adapt to.
Earlier this year CEPI supported a joint statement from international organizations regarding the regulation of powerful digital streaming platforms. What is the main purpose of the statement and what are the necessary steps in order to ensure the independence and viability of the global screen industry?
This global statement shows that independent producers across the world face similar challenges, with the rapid evolution of the sector. It was important to communicate this to policy makers as well as the other stakeholders of our industry. It emphasizes the importance of the creation of local and diverse content and the major role that IP detention plays for producers.
Different regions of the world will look at different solutions but with similar objective. In Europe, European and national film fundings as well as legislations are important pillars to support independent creations. They need to adapt in order to continue play this role in a changing ecosystem.
In the statement you put focus also on local content and intellectual property. What is the best way for European governments and the EU to ensure that digital platforms make fair and proportional contributions to the creation of new local content in the markets in which they receive revenue?
The European AVMS Directive introduced the possibility for member states to impose financial obligations on streamers. An opportunity that the majority of EU Members have now taken, with obligations adapted to their respective market. This has been a great first steps towards better contribution to the European AV sector. These investments should respond to qualitative criteria in order to steer them towards independent productions as well as ensure they benefit a diversity of genre.
The use of AI (artificial intelligence) has been booming lately, not only in the content production and distribution sector. What is CEPI’s stance on the use of AI in content production and the main points of the AI Act which you support?
We welcome the approval of the EU AI Act by the European Parliament, and we thank Members of the European Parliament for the essential role they have played in supporting creators and rightsholders throughout the legislative process.
It was essential that the AI Act recognize the existence of the EU copyright directive and open the door for rightsholders to enforce their rights.
AI is increasingly going to play an important role for production and distribution, it will develop tools to help the ecosystem enabling creators to focus on creation. However, it is absolutely essential that AI does not replace creators. We will need to ensure that training is available to provide the skills to use these new tools.
