Territorial Licensing: A Consumer Interest

In the conversation around the Digital Single Market, the consumer interest is a big part of the motivation. The European Commission wants consumers to be able to access their online content services when travelling to a different member state. It also wants consumers to be able to access content from other member states, because if they can’t, how can it be a Digital Single Market?

In the balance is the freedom of contract for those who make the content: why should they not be able to decide how the content is delivered? Why should the policy-maker decide how the consumer offer is designed? For many types of content, selling licenses territory by territory is an important method to get the most value from the market.

So, is this a classic standoff between the consumer and the business interest? Let’s take a closer look. While consumers may have an interest in theory to take their subscriptions with them on the road, the actual appetite is small. Fewer than 4% of internet users try to access content online while in another member state, according to the European Commission’s own research.

On the other hand, consumers like to have content in their local language, 62% of Europeans only watch films or series that have either audio or subtitles in their own language (same source). Translation is possible with territorial licensing. It is fair to expect that consumers also like a price in their local currency not to mention a price point tailored to the local purchasing power, which can vary greatly across Europe: the purchasing power of the consumer in Sweden is more than twice that of the Southern neighbour consumers in Poland, meaning that a subscription that costs €10 per month is more than twice as expensive to those paying with zloty rather than kronor. Consumers also like things like a helpline operator speaking their own language and context tailored to the local preference. All these things are made possible by territorial licensing and would be in jeopardy without it. Territorial licensing is a consumer interest.

Without territorial licensing, the consequence is the same offer to all consumers across Europe: same price, same content, same context. That would be a digital single market that does not take into account the diversity of the European consumers.

Portability of content services may have found its solution with the adoption by the European Parliament of a regulation on May 18. But many other policy decisions remain, not least regarding the Geo-blocking regulation. European policy-makers, when you make these decisions please keep the consumers interest in mind and allow territorial licensing as an opportunity so consumers can get the content the way they want it.

This is Netopia’s newsletter June 6th 2017