Opinion n° 2010-22 of September 27th, 2010 on a decree project
relating to the services of audio-visual mediums to the request
The Superior council of audio-visual was asked for an opinion by the Government, pursuant to articles 9.27 and 33-2 of the law n° 86-1067 of the modified September 30th, 1986 relating to the freedom of communication, of a decree project fixing the mode applicable to the services of audio-visual mediums at request (SMAD). After having deliberated on it in plenary assembly on September 27th, 2010, he gives the following opinion.
In accordance with the provisions of the directive 2007/65/CE of December 11th, 2007 transposed to articles 33 and 33-2 of the law of September 30th, 1986 by the law n° 2009-258 of March 5th, 2009, the decree project has the aim of creating a specific regime to the SMAD has lying support for the production and promotion of European works and French original expression, in order to support cultural diversity. It also defines the regulation framework of the commercial communications on these new services and modifies that which is applicable to the television services.
In its contribution to the reflection on the transposition of the directive, adopted in plenary assembly on April 15th, 2008, the Council had indicated that, as regards rules relating to the promotion of European works on the SMAD, two risks could result from obligations which would be excessive:
“ on the one hand, the risk of delocalization of the services, particularly easy for on-line services, and, on the other hand, the risk to attach the innovation and the diffusion of new formats corresponding to waitings of the televiewers and the Net surfers. This is why the CSA estimates that such obligations should be adopted only with prudence, in a progressive way, while following the evolution of these services and by taking account of their characteristics. ». This analysis is always of news.
The Council considers thus that the objectives of promotion of cultural diversity and on development of the legal offer largely depend, for their realization, of the economic viability of the national SMAD, whose regulation must support the development and competitiveness in order to establish a “virtuous circle” for the promotion of national and European works. In the spirit of considering 58 of the directive according to which the SMAD must profit from rules lighter than those which are planned for the linear services, the Council emphasizes the need for taking into account the new character of these services, of which the profitability remains fragile, and the economic constraints in which their activity is exerted (frontal competition of transnational services, VAT rate superior with that which is applicable to the television services, weakness of the assistances and the access to the funds of support, difficulties of access to the rights, etc).
The economic equilibrium of the new services conditions not only the effective support for the production of audio-visual and cinematographic works European and French original expression, but also the development of an attractive legal offer. The Council thus wishes that all measurements be favoured being able to encourage the development of a rich and diversified legal offer.
The effectiveness of this device finally supposes to set up operational rules as for their application and with their control.
However the Council estimates that the decree project, although having been very appreciably improved compared to previous versions which had been communicated to him, imposes excessive obligations on the SMAD. In particular, the elevated level of the rates of financial contribution and their absence of progressiveness are likely to strongly block the development of the services in France and to penalize them vis-a-vis the competition of foreign services which are not fixed with such constraining rules. This situation can also encourage the delocalization out of France.
This preoccupation with an economic realism leads the Council to give an unfavorable opinion in the state of the text which is subjected to him and to formulate, to answer the concerns stated above, the following proposals.
I/ Proposals relating to the obligations of contribution to the development of the production of audio-visual and cinematographic works European and French original expression
The introduction of a principle of re-examination
In addition to the economic context evoked previously, the Council draws the attention of the Government to uncertainties existing in four fields:
- the availability of the rights, whose largely has it ttractivity of the offers depends;
- levels of consumption of these works by the public;
- possible evolution of the assistances allotted to the SMAD thanks to the funds of support;
- the chronology of the media.
The Council observes on this last point that the rates of 26% and 21% will apply only subject to one evolution of the chronology of the media which will have to be defined by professional agreements under the conditions fixed by the code of the cinema and the animated image.
Thus, it seems imperative to re-examine in the medium term the device set up by the decree project, in accordance with the directive which encourages with a periodic revaluation of the relative tendencies to promotion of European works for the services of audio-visual mediums. This re-examination could intervene 18 months (or at the latest 24 months) after the coming into effect of the device and relate in particular to the threshold selected, the levels of financial contribution, the distinction between SMAD by subscription and other SMAD. This period will also make it possible to observe, on the one hand, the real competition exerted on the television services and, on the other hand, the development of the hertzian and nonhertzian SMAD in order to appreciate the relevance of U possible distinction as for their mode of contribution. Lastly, this re-examination will make it possible to evaluate the competing impact of the transnational SMAD on the SMAD established in France.
The Council calls its wishes the conclusion, during this time, of professional agreements establishing the methods of provision of works to the SMAD, in particular the duration of the rights of exploitation, the remuneration of having the right, the measures allowing the conciliation between the respect of the moral right of the authors and the advertising breaks of works. Lastly, it invites the public authorities to establish an economic framework adapted to the development of these services, by reinforcing the support mechanisms with their development.
The installation of an annual progressiveness of the obligations of contribution
The fixing of a threshold of release of the obligation of financial contribution for the SMAD except television of correction makes it possible to take into account the recent character and the economic brittleness of these services. However, the Council considers that the taking into account of the innovation of the SMAD also implies an annual progressiveness of the rates of contribution since the service exceeds the threshold of has ssujettissement of 10 million euros of annual turnover Net, so that they do not reach the rate of contribution expected that after five years, with a progression of a percent a year.
Nonexclusive character of the market of the SMAD
The installation of exclusivenesses is likely to lead to the fragmentation of the legal offer and a loss of its attractivity. The Council recommends not to privilege has it cquisition of exclusive rights by the prefinancing of works, in order to support their broader exposure and their circulation. He asks the removal of the last subparagraph of article 7 imposing to the editors of SMAD by subscription whose figure of has ffaires annual Net is higher than 50 million euros an obligation of prepayment accounting for 25% of the expenditure. It also suggests, as regards criteria of the independent production definite in article 8, the lowering of the maximum duration of E xploitation of the rights acquired on a purely exclusive basis, fixed at 18 months.
Clarification of the plate of the contribution
It is necessary more precisely to define the annual turnover on the basis of which the contribution of the services is calculated, by referring to the figure of has ffaires service and either of the editor, in order to raise any ambiguity on the case in particular of the editor holding several services of which some would not constitute, in all or partly, of the SMAD.
Clarification of the expenditure taken into account
The Council is favorable to the provisions allowing the taking into account, under the expenditure contributing to the development of the production of cinematographic works and audio-visual, of the purchases of rights of exploitation which will understand mainly the transfers with having the right. In a preoccupation of clearness and an alignment on the conventional mode of the services of pay-per-view, it seems however necessary that the decree contains a provision specifying that the purchases of rights aimed to the 4° of article 7 can understand, in addition to the guaranteed minimas, the sums paid with having the right according to the number of downloads or visualizations.
The television of correction
The Council considers that it is relevant to establish a mode of contribution specific to the SMAD taking into account their bond with one or more linear services. He proposes however that the decree project defines the concept of television of correction as proposed in appendix.
The certification of the accounts
The Council asks that the decree force the editors whose annual turnover Net is higher than 10 million euros, to annually produce a cost accounting certified by a chartered accountant or an auditor, to calculate the annual turnover Net of each service according to its nature (television of correction or video on demand), of its mode of marketing (by subscription or other), of the programs suggested (works audio-visual or cinematographic, “not works”) and of their consumption by the public.
The decree should also provide that, on fast request of the Council and if this one would wish to make sure that a service is not fixed with the financial contribution, this declaration can be required of the editors of services whose annual turnover Net is lower than 10 million E uros.
II Proposals relating to the provisions allowing to guarantee the offer and to ensure the effective development of European cinematographic works and audio-visual and E French original xpression
To retain obligations quantitative to answer the legal objective “ to guarantee the offer and to ensure the effective development of cinematographic works and audio-visual, European and of French original expression ” involves difficulties of application for the editors and control for the Council. This one suggests that, so quantitative obligations were to be retained, they are softened.
Obligations allowing to guarantee the offer
The obligation for all the editors to devote, in the full number of cinematographic works and audio-visual in catalogue, 60% of this one with European works and 40% with works of French original expression could justify a progressiveness according to the figure of has ffaires service. These proportions could be maintained for the only services whose annual turnover Net is at least equal to 10 million euros and lowered to 50% from European works and 35% of works of French original expression for the services not reaching this threshold.
Moreover, the Council notes that the decree project does not specify the periodicity of the appreciation of the respect of this obligation. He proposes that the text specifies that this obligation must be respected constantly.
Obligations of development
The decree project provides that the editors book on their homepage a majority proportion of this one with European works and French original expression by the mention of the title, the exposure the visual ones or the provision of trailers. The Council underlines the difficulties of application and control which such an obligation because of its continuous character would raise and the E xistence of personalized homepages. He asks that the project be modified by providing that the editors of SMAD book a “substantial” share of their page of has ccueil to these works, formulates allowing a more flexible application and an appreciation.
III/Proposals relating to the commercial communications
The Council is favorable to the easings envisaged on the SMAD (in particular the absence of rules of advertising volume and suppression of the majority of the rules of insertion of the advertisements), subject preserving the interests of the consumer by I dentification of the commercial communications and to maintain a separation clear between these last and the programs.
It wishes that the re-examination envisaged with the I of this opinion also relate to the relative tendencies to the commercial communications in order to evaluate the impact of the new rules.
Identification of the commercial communications
For a satisfactory protection of the consumers, the principle of identification of all the commercial communications must be recalled. Thus, the Council considers it regrettable that the principle of identification of publicity, envisaged to articles 43 of the law of September 30th, 1986 and 14 of the decree of March 27th, 1992, is not pointed out in the project, as regards SMAD.
In the same way, the decree should specify that any offer of armchair shopping, that she takes seat or not in an emission devoted to armchair shopping, must be clearly announced.
As regards sponsorship, it is proposed that the identification of the godfather is done “ in a way adapted to the program at the beginning of this one”.
Observations specific to sponsorship
The Council recommends that the same means of I dentification of the godfather are used for the television services and the SMAD.
As regards the reference to the products and services of the godfather, it wishes, in an objective of consumer protection, maintenance of the exclusion of the presentation of the product itself or its conditioning, for purposes of identification of the godfather, as that is fixed for the television services.
As regards the modification of the decree of March 27th, 1992 applicable in particular to the television services, the Council I nterroge on the details of implementation of the sponsorship of a television service, envisaged by the decree project.
Clarification of the relative tendencies to propaganda in favour of alcoholic beverages
The decree project should take again the principle of the prohibition of publicity in favour as of drinks including more than 1.2 degree of alcohol, enacted in article 8 of the decree of March 27th, 1992. It is thus recommended that the decree envisages the application of the first indent of this article.
The Council stresses that the adopted measures will be of determining importance to draw the aspect of the market incipient from the SMAD: the market shares acquired in the initial phase could indeed structure the offer for many years. It is thus paramount that the national actors can fight with equal footings with all their foreign competitors.
For the implementation of the observations which precede, the Council proposes the additions and textual modifications mentioned in appendix.
Fact in Paris, on September 27th, 2010.
For the Superior council of the audio-visual one:
Consult the appendix of opinion (pdf at the top of page)
Consult the page of the Official journal