“You cannot force the creation of a European “ghost” market for transmission rights”

3 Questions to Anthony Level, Digital Chief Policy Officer, TF1

Per Strömbäck: How is your business taking advantage of the digital opportunity ?

Anthony Level: Above all, TF1 is a company with its roots outside of the digital world. Its DNA was not encoded to follow technological innovation. So honestly, we had to adapt, and today we offer services and applications covering the whole online ecosystem, in particular thanks to our VOD and SVOD platforms, as well as MyTF1, our catch-up TV-platform, which is the number one media portal in France. TF1 group also owns four free TV-channels and three pay TV channels. So yes, we are digital now, despite the fact that – and I admit it – digital used to mean first and foremost the “fight against piracy”. Today it means business opportunities.

We therefore need to look at how businesses who employ young creators are financed because European broadcasters do invest a lot! Altogether TV channels in Europe invest 40 billion euros per year in creation. If we do not preserve this ecosystem, some European projects will not be funded.

So I have rather mixed feelings about the digital single market: the so-called copyright package, for instance, will put filtering at the heart of the reform model. These provisions will set safeguards against piracy but also ensure better redistribution of value. At the same time, we also have a draft regulation on geoblocking which will eventually remove the freedom of rights-owners and could jeopardize the business model. This regulation provides the opportunity for any buyer to acquire rights in France and disseminate them throughout Europe, without the means to geoblock them.

But we cannot talk about geoblocking without looking at the same time at the antitrust procedure currently being undertaken by the European Commission against Sky and the main American studios. This antitrust lawsuit may result in a ban on geoblocking in Europe. Prohibiting geoblocking means giving rise to pan-European licenses. But pan-European licenses are not a viable business model for TV broadcasters since television markets are either national, regional or even local. Netflix, for example, has understood this when it invested in the TV-series “Marseille” focusing on a local story and with notorious French actors such as Gerard Depardieu. We see here local investment from a GAFA.

Phasing out geoblocking necessarily means that rights will be purchased at European level. This will lead to the exclusion of smaller players. TF1 may be a big French company, it’s actually a small player globally. Without geoblocking, TF1 won’t be able to submit its bid to tenders because it will not have the financial capacity to do so and it will not have the bargaining power that GAFA or global operators enjoy.

The opportunity for small actors to benefit from the end of geoblocking is a myth!

In a model of pan-European licenses, there is also the issue of advertising markets! Not all national products can be sold throughout Europe and there is a problem of cultural references. You cannot force the creation of a European “ghost” market for transmission rights. By doing so, you weaken the power of operators to economically optimize the use of their rights and make deals for each territory. The fact that operators can optimize their revenues for each market allows them to finance creators. Changing all this seems very dangerous to me.

PS: You say: if we take away geoblocking it’s going to hurt the smaller actors, but if you listen to the people who support geoblocking, it’s the opposite. They say if you open a market where everybody can compete, it’s going to help the smaller players. Which one is true?

AL : You have published a book on myths. You should add another myth to your book: the opportunity for small actors to benefit from the end of geoblocking. In fact, no! It’s the big European actors who stand to gain rights. With their negotiating power, there’s no space left for small actors. You can already see it today in online platforms that deny smaller actors, and only engage with those who pose a threat or who might flex their muscles. A little anecdote about DailyMotion and YouTube: TF1 is special in that it has filed two big lawsuits with the aim of protecting its IP rights (and indirectly protecting its employees and the material they had created). One against DailyMotion and one against YouTube, both of which ended well for TF1 because DailyMotion was forced to pay €1.5million and Google/YouTube agreed to an out-of-court settlement opening up other synergies. These actors only come to the table if there is a real opposition. TF1 is able to offer some resistance, but little compared to the American giants. And who were the losers in this system of gap value for whom TF1 was able to glean some value? Well, at the end of the day it was the writers. The same phenomenon was observed in the Viacom suit against YouTube. In the end, the authors, the real authors didn’t get a penny in this gap value system. So no, ending geoblocking won’t save the small guy, because there won’t be any more investment in smaller creators. Investment will go to lower-risk projects.

PS: What would be your message if you were President of the European Commission ?

AL : No, I’m not going to play the president of the Commission. I’d just like us to keep in mind that culture is the most beautiful manifestation of freedom. For me, freedom includes the freedom of contract, particularly as regards territory. Let’s preserve the creative ecosystem in order preserve creative jobs. It’s important that we understand how the system works rather than having a pro-consumerist vision. The desire to take steps to the benefit of consumers, and provide full access to any content, ultimately jeopardises jobs.