Why Europeans (and Floorball) Benefit from Geo-Blocking

Some ideas are bad and some bad ideas die hard. The debate about a ban on so-called “geo-blocking” is approaching a decade. Time has not helped make the idea of a ban any better.

“Geo-blocking” means that some types of online content is not accessible by some consumers. Limiting access is of course completely normal, lots of online content requires subscription or login. The problem here is when the limit is based on geography rather than some other factor. That is a red flag to some European policy-makers.

However, geo-blocking is just the flipside of something more important: tailored consumer offerings. This is one of the strongest features of the digital economy – adapting the content and delivery to the individual. Rather than providing the same feed for everybody, your search-page or social media looks different from mine. Ideally, suppliers will tailor the content in a useful and relevant way. This includes price point.  The purchase power varies throughout Europe. The price of a glass of beer is much higher in Stockholm (where I live) than in Spain (where I go for Christmas break this year) for example. The demand varies across territories.

As I write this, I get news of Sweden’s dramatic win in the floorball (“innebandy”) world cup final. Floorball? Yes, it is a very popular sport in Sweden and Finland and… nowhere else. Swedes and Finns are excited, nobody else cares. Floorball demand peaks in the Nordics. We are happy to pay for floorball. It is hard to see why anyone else would. Why should the price for watching floorball be the same outside the Nordics? There is no single European demand for floorball. In fact, there is no single European demand for most things.

The list of examples can be made very long, but the point is that is a reflection of cultural diversity across Europe. Tailored consumer offerings, in the form of territorial licensing allows commercial investment in places where demand is high. It also allows free access in places where demand is limited. In both cases, audiences benefit. If there is some case where the demand is European-wide, there is nothing in today’s market or rules that stands in the way for a pan-European license. No market failure, nothing broken, nothing that policy needs to fix.

If the idea of the European single market is inspired by the giant domestic market in the US, how does content licensing work there? Is there geo-blocking in the US? No. Licensing is completely dynamic. If you want to license your content to one state: fine. Three states: also fine. Only one city? That’s fine too. You can have any territory terms in your contract. In fact, I’m told American authorities think this is great for competition. Which system do you think works best for innovation, growth, diversity and delivering for the consumer? One where the government decides which contract terms can apply? Or one where the market actors figure it out?

A ban on geo-blocking would make content more expensive in many cases. It would limit investment into content and services. It would hurt jobs and the European economy. It would limit the choice for the audiences. It would make translation and adaptation more expensive, thus more difficult and therefore more scarce. It goes against the concept of cultural diversity. How would anyone think that is a good idea?

On December 13, European parliament will vote on a ban on geo-blocking. I see a risk that this becomes the new daylight savings time. One misguided attempt to make EU policy popular for consumers that ends up in a big mess. And in the end, nobody cares about daylight savings time anymore because our phones adjust the time without us noticing.

Did I say this debate is age-old? If you don’t take my word for it, read this opinion by a number of MEPs. It was posted December 7, 2017. Can we bury this idea now, once and for all please?