Speech Neelie Kroes: Taking TV and film into the digital age

Amsterdam, 12 September 2014

The world of audiovisual is changing, converging, going digital. With implications for content producers, distributors, audiences. With new platforms, new devices, new networks; new producers and new players; new audiences with new expectations. Innovation in how we develop and distribute, sell and share, watch and enjoy, review and recommend.

That change brings new options and new opportunities: new ways to stimulate, produce, enjoy and benefit from creative works.

Audiovisual is not the only sector that is changing.

Across the board, new technology models mean not just new business models, but whole new ways of operating. The change is fast and getting faster.

Take cloud computing. It's a whole new disruptive delivery model. Just when we were getting used to the huge changes brought by computer technology - connectivity and the cloud have in turn taken that business model and turned it on its head; making it flexible, cheap, convenient. A totally new model for software, services, processing power and more. Taking capacity that is currently constrained, and making it virtually unlimited.

Likewise we have many new apps like Uber disrupting old sectors. So simple, you wonder why you didn't think of it yourself.

But often those new innovations are misunderstood, mistrusted and held back.

Mistrust may come from legitimate fears. But often it makes people ignore the opportunity entirely.

You all come from many different sectors. You gather together as your markets converge. As the technology being showcased all around the IBC makes access to high quality interactive media easier and better on increasingly converged platforms.

So why do we allow old regulations to keep them apart? Why are sectors trying to pull apart? Stakeholders prefer to separate and fight; and our regulations encode division, distortion and divergence.

In the media sector, digital developments bring new dilemmas. How to ensure a level playing field. The role of competition law, contract law, sector-specific law; the role of intermediaries and internet providers. And how to enjoy the economies of scale of our single market.

Of course: it's also important to remember how much is not changing. With all the mobile and internet innovation, people still love TV; the quality content that entertains and informs, celebrates and stimulates our culture, provides jobs, safeguards a free and plural journalism sector

So we should strengthen, not start from scratch.

But the furthest-seeing can look beyond the status quo. They look ahead beyond innovations like the cloud; into the stratosphere.

My dream is a market that is open, borderless and competitive. Stimulating a sector pushes innovation, creativity and culture.

It's about ensuring a mindset open to change. But it's also about bringing down barriers. The Internet doesn’t know borders - that is the online reality. Let's embrace the single market, our crown jewel.

Creation takes effort; and that investment needs its reward. But today's rules often do the opposite; technology is three steps ahead of our legal framework; territorial restrictions just put barriers in the way.

We already have a single, simple rule to promote that: the 'country of origin' rule for audiovisual and media services. So once you've created your programme, once you've invested: you can broadcast anywhere in the EU. Giving you - not a tangle of rules to deal with - but consistency, clarity and certainty. That is central to a single market, central to our digital future.

And we need to build on it with copyright reform. Today broadcasters spend years on paperwork to clear licences, so they can show material in other EU countries. That's expensive enough for the established players; new innovative players can't afford it at all. Only those with patience and deep pockets can afford to negotiate that maze. On the other side, many people ask me - why can't I pay to access my favourite TV show when I travel? Or watch the match of my favourite football team from back home? And I just don't know how to answer them. It's time for change.

Today's rules are obstructing tomorrow's digital future.

I hope the next big player will be European. But that will only happen if we look ahead and think smart.

When markets are still developing and converging, we should not regulate too far or too fast.

But we should find the best tools for the job, those that help the sector develop, innovate and grow. If they are not doing so, we shouldn't copy the mistakes of the past: we should take every opportunity to deregulate.

One thing is clear: protectionism is not the answer to any problem. Nor is levelling up regulation to make everyone's life equally difficult. Quite the opposite. Make our market a complex obstacle course - and you won't be favouring Europe culture, creativity or competitiveness.

Jean-Claude Juncker, Commission President-elect, has made the digital single market a priority. And he is right to do so!

Audiovisual content - films, videos, games, and TV - will be central to that single market.

How do we achieve it? Not through ambitions and announcements: but by actions and achievements. And in fact many of the actions are already on the table.

For one thing: we need ensure open access to content. That starts with net neutrality - so viewers are free to access whatever they choose; without their telco provider deciding for them. Of course: some new services like IPTV may need a guaranteed, high quality; that should be possible, as long as it doesn't degrade the regular internet. We have proposals on the table to do that: to safeguard the open internet, without blocking new services. I hope lawmakers can agree those rules soon, for a connected continent. And of course access to content goes much wider than just this one issue; it also means platform neutrality, search neutrality and more. We need to focus on the whole value chain.

Second - we have a specific legal framework, a Directive for audiovisual and media services. We just consulted; it is due for review in 2015.

One thing is clear to me: often those rules are too dated or too detailed to deal with digital. In some areas there is room for deregulation, for greater industry cooperation, for legislation based on clear principles but without being too prescriptive. In an area like protecting children, while the motivation is the same; the tools are different. Online there is so much diversity - for example, many different options and tools for advertising.

So while self- and co-regulation are nothing new - but they are well-suited to the online world; fast-moving and flexible. If we are too rigid, too controlling, or too intrusive we will crush diversity and constrain innovation.

And finally - and this is my main point today - to channel all that quality content needs network capacity. We are stimulating significant investment in broadband, private and public. Every European now has basic broadband coverage; we now need to push for fast and superfast broadband everywhere. Agreeing our package on the telecoms single market could take that a step further.

But this also means mobile capacity - and that calls for radio spectrum. With strong demand from players old and new - Europe needs to use its spectrum resources better. We need to plan ahead and act together, to avoid falling behind.

Spectrum is a vital resource. In a changing market we need to use it to the full. Who knows how technology could transform and enable in future. In the meantime - you cannot change the laws of physics; but you can change the law. And you can change how you think and how ready you are to adapt, particularly with the opportunities provided by new technology.

Our spectrum inventory shows there is much we can do to use this resource more efficiently.

And - in particular - Pascal Lamy has put forward some very good recommendations on how to use the 700 MegaHertz band, given what others are doing internationally.

He suggests repurposing the 700 MegaHertz band for wireless broadband - but not until 2020, plus or minus two years: just enough time to prepare!

With stability in the remaining bands - giving certainty until 2030. With a stocktake in between to take account of changing technology and demand.

In this case balancing different interests is not easy. But this not an issue to avoid - because it's not a question that will go away. Other parts of the world are moving ahead here, and giving this spectrum to broadband. Many EU countries are doing so too. A strategic, European plan is the best way - perhaps the only way - to ensure this happens in a way that is coordinated, predictable, and fair.

Make no mistake: this is a field that could be constantly disrupted. New innovations could appear at any moment, providing significantly more efficient ways to use capacity. That kind of disruption has happened in so many other areas. If that happens here too - let's be ready to embrace it, not turn our backs.

In this speech I have raised many questions. Answering them will be for my successor.

And here is my advice to the next digital Commissioners.

These are not trends we can avoid or ignore.

And this is no longer a sector we can afford to constrain.

Don't regulate too far or too fast: in some markets - still changing and converging - action would be premature.

In other areas, like copyright, reform is long overdue.

So let's take every opportunity to deregulate and adapt.

Most of all - remember where you want to go. Build on your strengths and support them: but look beyond the present. Do not allow the outcome and the opportunity to be determined and defined merely by the status quo.

The ingredients are in place for positive change - for an audiovisual sector that stays strong, enlightening Europe, leading the world.

That's what I hope to see - long into our digital future. So let's make that change. Thank you.