The rise of digital has completely remodelled the media sector. Media convergence is a reality. The boundaries between traditional media and digital media are ever more blurred.
For example, social media are hosting more and more professionally-made content and are an increasingly important route to news.
Take the Discover feature of the instant messenger Snapchat, housing content from both broadcasters and publishers.
Or the recent agreement between Facebook and some publishers, allowing them to offer their content directly on the platform and sharing or letting them manage advertising revenues.
The Reuters Institute for the Study of Journalism just published these days shows that in countries like Germany, France, UK, Italy, and Spain Facebook is increasingly the vehicle to deliver news.
The same report also shows that a significant proportion of young people no longer wait to watch the evening television news. They prefer to find out what is going on as it happens from a multiple source of online media sources.
Messaging services are also increasingly prominent: one-quarter of Spanish internet users said they have read, watched or discussed news on WhatsApp.
Traditional and new media are quickly converging into a larger, predominantly-digital media environment.
Physical boundaries – including among national media markets – are becoming less relevant, thanks for instance to mobile technologies.
The good news is that Europe has a very strong and high-quality media sector. In such a mutable context, we only need to make sure that media are up to speed as regards innovation and that our regulatory framework is adapted to the new environment. I will therefore focus my intervention on three main aspects:
- Firstly, I intend to share with you some thoughts about the implications of media convergence for media businesses;
- Secondly, I will present the work the Commission has undertaken towards a regulatory modernisation for the digital single market, including for audiovisual media services;
- Finally, I'll say a few words about the importance of preserving media freedom and pluralism.
1. Implications for media businesses
New players join the market, new hybrid services become ever more popular, and a huge quantity of audiovisual content is available. This can bring new ways of monetising content, new sources of advertising revenue and new possibilities to reach out to consumers directly and through innovative methods. New market niches and opportunities for international development become available
There are also challenges. Established models and practices might have to be re-assessed. And some players are struggling more than others to adapt.
Technology and R&D
One of the challenges is to keep up to speed as regard innovation. I refer in particular to the necessity of investing more in research and technology innovation.
I am aware that investing in technology can be a challenge for the European media sector, especially in times of economic difficulties.
The Commission is doing its part to help. We are funding research and innovation on social media verification, on convergence of traditional media services and Internet-based services and on the use of Big Data for media. In a few months for example, we will publish the results of several research projects in the field media and content convergence. Only for these projects we have spent 19 million euros.
Business models innovation
But innovation is not just about technology. Business models need to be innovative too.
I see encouraging examples of promoting an innovative mind-set by European media companies.
German publisher Axel Springer has created its own media start-ups incubator. This is an initiative that other media companies could and should replicate.
I also see media businesses, big and small, addressing the changing needs of the consumers in innovative ways.
For example, Berlin-based start-up LaterPay is a platform that enables content providers to sell digital content without having to register or pay in advance. This has a potential to simplify micropayment for all sorts of content on the Internet.
Designing content in a way that combines our strong cultural traditions with a global business mind-set is also crucial.
And our content productions are often of great quality.
Yet, despite all this, I sometimes fear a certain risk-averse approach from the European media sector. I sense that far too many players are far too happy with their – often national-based – comfort zone and lack an international perspective.
I take the point that is also partly due to the regulatory frameworks and to insufficient access to finance. Still, I believe there is scope for the industry to make further efforts.
2. The regulatory framework
The EU Digital Single Market Strategy
The Digital Single Market (DSM) Strategy that the Commission unveiled on 6 May will lead to a more integrated EU market, with better services at better prices and more choice.
In monetary terms, bringing down digital barriers within Europe could contribute an additional EUR 415 billion to European GDP.
The Strategy revolves around three main pillars:
o improving access to online goods and services across Europe.
o digital networks and innovative services.
o maximizing the growth potential of the Digital Economy.
On 1 June in Berlin German Chancellor Merkel, French President Hollande, and Commission President Juncker met to express their commitment to make the Digital Single Market Strategy a reality and in a few days' time the EU Heads of State and Government will deliver their guidance on the way forward.
The DSM announces two legislative initiatives that will have a direct impact on the European media and content landscape.
Audiovisual Media Services Directive - REFIT evaluation
Regulation in this domain has a significant impact on the EU's economy and on citizens' everyday life. The EU Digital Single Market strategy announces the creation of "A media framework for the 21st century".
With this goal in mind, the Commission is now assessing the functioning of the Audiovisual Media Services Directive (AVMSD). This process is called REFIT (regulatory fitness) evaluation and will be followed by a proposal for the modernisation of the Directive in 2016.
My vision is that businesses should be empowered to innovate and compete in the digital world. The EU's creativity and rich cultural diversity should be promoted just as much as EU values and consumer protection.
The Directive has fostered unhindered cross-border transmission of audiovisual media services within Europe. Just consider that at the end 2013 about 23% of TV channels established in the EU targeted foreign markets (either EU or extra EU).
We want to offer to all stakeholders the opportunity to genuinely contribute to the modernisation of the law.
A Public consultation will be launched in the coming weeks. I strongly encourage all of you to participate.
Let me anticipate some of the main items the Commission is looking at.
The current law applies to television broadcasts. It also applies to audiovisual media services offered on-line when the provider has control over the content. Services like Netflix are therefore already regulated by the Directive. We will now assess whether other types of online services, not regulated in this Directive, should be also regulated.
If we conclude in this direction, we will need to analyse what is the right legislative or non-legislative instrument to deal with this. This debate is important. We need to be sure that our regulatory environment is fair and fit-for-purpose in the digital age.
Also, the existing law applies a set of important "societal values" rules to all audiovisual media services but offers lighter touch regulation to on-demand services where the users decide on the content and the time of viewing.
We will look closely at whether this system is working well and, if not, what are the right tools to address any shortcomings. For example:
On commercial communications, such as advertising and product placement, we should consider the advent of new advertising techniques. Space for innovation in this field is important in the digital age.
On the protection of minors, I already mentioned publicly that an assesment of existing rules is important.
On the promotion of European works, the Digital Single Market strategy makes an explicit reference to the need to find the most efficient way to promote European works not only by broadcasters but also in video-on-demand.
Again, I am looking forward to engage with you all in the weeks to come.
Copyright is another key domain which will be subject to modernisation.
A legislative proposal will be presented by the end of 2015.
In this area, I want to make sure that we find a good balance between the interests of the consumer and the creative sector, especially for the film industry.
For this reason we are looking closely at ways consumer can access online services they have paid in an other EU country, when they are on holidays and at how we can achieve harmonised copyright exceptions in fields such as research and education.
We aim to modernise cross-border enforcement of copyright and we intend to obtain a clear picture on how copyright-protected works are used by online intermediaries.
3. Media freedom and pluralism
I would like to conclude by mentioning a crucial value for the EU: media freedom and pluralism.
Whether a media outlet is so-called traditional or online, media practitioners will always have to be warranted the right to report facts and offer their views and opinions.
Political pressure, economic hardship, physical attacks against journalists, restrictive legislation, and a general financial crisis in the sector all influence the media's ability to operate freely.
A lack of media freedom and pluralism affects negatively the European media and creative industries. This can indeed have an impact on a media company's decision whether to have a presence or to made additional investments in a given Member State.
Europe is unfortunately not immune to these problems.
We should all react, within our competences, to these types of attacks to media freedom. I would like to inform you about the launching of two new independent projects in the field of media freedom and pluralism. They are part of the European Centre for Press and Media Freedom and have the support of the European Parliament.
The projects – one coordinated by the Leipzig media foundation and the other one by Index on censorship – will address media freedom violations in the EU and neighbouring countries. Violations of press freedom will be observed, researched, registered, and reported to both the public and the relevant authorities. Actions to support threatened journalists will also be organised. The existing monitoring tools will be enhanced and complemented by digital training and campaigning actions.
The Media Pluralism Monitor tool is another EU-financed pilot project. It is run independently by the European University Institute in Florence (Centre for Media Pluralism and Media Freedom - CMPF) to identify potential risks to media pluralism in Member States. The first phase of the project – based on a sample of nine Member States – has showed that risks to media pluralism are spread all over the EU. The tool is currently being applied to the remaining Member States.
I have mentioned media innovation, the modernisation of regulation, and media freedom and pluralism, as some of the key issues that the converging media environment is confronted with.
In all of these areas there is work ahead for every one of us: media practitioners, NGOs, national authorities, European Institutions, and citizens.
I believe that that dialogue and coordinated actions, at all levels, can be effective to reinforce Europe's free and innovative media sector.