Europe is threatening to turn the popular phrase "content is king" on its head. The European Commission is accusing big filmmakers of failing to give European pay-TV subscribers fair access to their movies. If the charges stick, Tinseltown may have to rethink business practices in light of likely lower revenue.
The current regime works like this. Hollywood studios sell exclusive distribution rights to movies in a way that prevents usage across borders. They may strike as many as 28 different deals with distributors in each of the countries in the European Union bloc. Pay-TV customers, meanwhile, will only get access to premium movie packages in their home countries.
On July 23, trustbusters from Brussels formally charged Disney, NBC Universal, Paramount Pictures, Sony, Twentieth Century Fox and Warner Bros, along with pay-TV provider Sky UK, of restricting cross-border access to content anywhere in Europe. The EC said similar licensing agreements with other broadcasters including France's Canal Plus, Sky Italia, Sky Deutschland and Spain's DTS are under its microscope.
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The tussle plays into the bigger - and noble - EU goal of making a single and fair market for goods and services. It aims to put consumers top of mind. But Europe's pay-TV market is not set up to meet this goal. There are no pan-European TV providers. If the script plays out, fewer distributors may bid for film rights because they will struggle to offer cross-border access. It may also weaken Hollywood's leverage in the media rights sales process. That, in turn, may oblige the film studios to think hard about how much they invest in the quality and variety of movies Europeans love to watch.
