Winter is coming! exclaimed Amedia, a Russian film company that signed a five-year output deal with HBO, giving it exclusive rights to some of the most popular series of the U.S. cable network: Game of Thrones (which features a plot line involving ominous chaos in a snowy northern and frigid clime) Newsroom, Girls, True Blood and Boardwalk Empire. But trouble also may be brewing in international pay TV. The European Union’s Antitrust Commission — which bared its fangs in a just-settled dispute with search engine giant Google — is opening an investigation into whether major U.S. film studios’ contract clauses and practice of granting exclusivity to content through online streaming and pay television violate the EU’s anti-competition laws.
Studios — including 20th Century Fox, Warner Bros., Sony, NBC Universal and Paramount — “license audiovisual content to pay-TV broadcasters” such as, BSkyB, France’s Canal Plus, Sky Italia, Sky Deutschland and Spain’s DTS, on an exclusive and territorial basis. As reported by EntLawDigest.com, in the Premiere League / Murphy cases, the Court of Justice held that exclusive television licensees of soccer matches “killed both competition and the ongoing dream of a single EU market by creating division along member-state border lines.” And according to The Hollywood Reporter, “The provisions granting absolute territorial protection ensure that the films licensed by the U.S. studios are shown exclusively in the member state where each broadcaster operates via satellite and the Internet…These films cannot be made available outside the member state, even in response to unsolicited requests from potential subscribers.”
Further, as discussed by AP, Commissioner Joaquin Almunia explained that, “Such provisions might constitute an infringement of EU antitrust provisions [because] [m]ore and more European citizens watch films, use pay TV service broadcast by satellite and…online streaming.” The restrictive clauses have the Commission asking, “whether a subscriber to a German pay TV channel should be able to watch his content when using his laptop to stream it online while on vacation in another EU nation.” The investigation’s findings could mean harsh fines for violations of the antitrust laws but could also greatly affect how studios negotiate and make profits from these exclusive territorial deals. Check out exclusive deals recently made by: HBO and BSkyB and Starz Worldwide Distribution Deal.