This is the final report of the study “The economic potential of cross-border pay-to-view and listen audiovisual media services” produced by a consortium of TNS Opinion, Plum Consulting and the Futures Company for the European Commission.
The objective of the study is to provide the Commission with data on the demand for cross-border pay-to-view and/or listen to audiovisual media services in the European Union from an economic perspective. The study is in response to issues identified in the Commission’s second report into the implementation of Directive 98/84/EC1 regarding conditional access.
That report found that there was a “grey market” for satellite pay-television services. Some consumers who live outside their country of origin (or first language) use letter box addresses to obtain reception equipment (set-top boxes and conditional access cards) for pay-TV services in their country of origin. They then view the services in their country of residence. On 4 October 2011 the European Court of Justice ruling in cases C-403/08 and C-429/08 made it clear that this is a legitimate (i.e. not grey) market.
The Commission’s second report identified the need to ‘gather information, in particular concerning the exercise by European citizens of the right to free movement and the supply and demand situation for audiovisual and/or listen to media services abroad. Such information should help to establish the potential of such pay-to-view cross-border services and contribute to deliberations on copyright and rights to cultural and sports events'.
We have interpreted “cross-border pay audiovisual media services” to include services in which both the contract and the delivery of the service are cross-border, so excluding the provision of non-national EU channels in national pay-television packages and non-national programming on national television channels.
Despite this narrow definition, the scope of the study is broad. The study includes all distribution platforms relevant to cross-border audiovisual media services, existing services and potential new services designed for cross-border markets and all populations that may be interested in cross-border propositions, including migrant populations and nationals who may have an interest in foreign content in all 27 EU Member States.
The satellite and internet-based pay-television services that are the focus of this study are part of a larger audiovisual media sector in Europe. There were over 6,000 distribution platforms in 36 European countries in 2010, the majority of which were cable platforms. Of 201 million EU 27 households at the end of 2009 61 million had digital terrestrial television, 51 million digital satellite, 21 million digital cable and 14 million IPTV2. Television sector revenues in the EU were €69.3 billion in 2009 including €27.3 billion from television advertising, €23.3 billion in public income and €27.7 billion of consumer spending on pay-television services.