What is the battle between the film, sports streaming, and music industries over the EU's 'geoblocking' ban?
Games and video content may be subject to 'geoblocking,' meaning that they can only be purchased in certain regions, that purchased content in one region cannot be used in other regions, or that prices vary greatly depending on the region even though the service is the same except for the language. Since 2018, the European Union has restricted certain types of
Movie, Music and Sports Industries Urge EU to Keep Geo-Blocking in Place * TorrentFreak
https://torrentfreak.com/movie-music-and-sports-industries-call-on-eu-to-keep-geo-blocking-in-place-250316/
The EU describes geoblocking as 'unjustified regional blocks that impede online shopping and the cross-border sale of content,' and gives specific examples of unjustified geoblocking. Examples of geoblocking regulated by the EU are as follows:
- Restrict physical shipping to other countries
If a customer in Belgium buys something on a German site, they will not be able to order the product and arrange for it to be delivered to their home.
- Price differences for electronically provided services
For example, if a Bulgarian user wants to purchase website hosting services from a Spanish company, they will have to pay an additional fee compared to a Spanish user.
- Limiting the nationalities that can receive services provided at a particular physical location
An Italian family visits a theme park in France and wants to take advantage of a family discount on admission tickets, but is denied the discount because they are not French.
In 2021, Valve, which operates the PC game sales platform Steam, and five game publishers, including Bandai Namco and Capcom, were fined a total of 7.8 million euros (approximately 909 million yen at the time) for violating geoblocking regulations in the European Economic Area (EEA). In its opinion, the European Commission (EC) pointed out that Valve had 'set geographic restrictions on the activation of activation keys to launch games on Steam and geoblocked gameplay based on the user's geographic location.' It also pointed out that game publishers 'requested Valve to set geographic restrictions on the activation of activation keys, and then provided the sale and distribution of activation keys to distributors in EU member states.'
The EU will impose a fine of about 1 billion yen in total on 'geoblocking' that prevents certain games from being purchased in certain countries on Steam - GIGAZINE
At the time of writing, the EU geoblocking regulations do not include digital video content or live sports streaming services, but discussions are underway to expand the scope of the regulations. In response, the EMEA branch of the industry group Motion Picture Association (MPA) emphasized that 'territorial exclusivity is vital to the industry' and called for continued exemptions from geoblocking regulations.
According to the MPA, geographical restrictions on video content are the basis for the development, financing, production, marketing and distribution of culturally and linguistically diverse audiovisual works. Geoblocking allows companies to set prices for their products based on consumer purchasing power. The MPA points out that 'research shows that restricting geoblocking reduces the value of video content. Extending geoblocking restrictions to video content could have a direct negative impact on content development, financing and distribution opportunities, as well as on the return on investment in future film and audiovisual content in Europe, and could also affect some consumers, who may experience higher prices.'
In addition, for sports distribution services, the popularity of sports varies from country to country, so the value of broadcasting rights also reflects regional differences. Therefore, it is inevitable that there will be price differences for sports distribution services from country to country. The Alliance Against Audiovisual Piracy (AAPA) said, 'There are different regional demands for content, and pricing reflects those demands. Setting the same price across the EU for content with different regional popularity levels is likely to have an impact on consumers. Restricting geoblocking could mean that 100 million European sports fans would face price increases, eliminating flexibility in regional pricing and placing an economic burden on low-income regions.'
While geoblocking is rarer in the music industry than it is for video content, Spotify subscriptions, for example, are priced differently in different countries to take into account consumer purchasing power. In a submission to the EU consultation, the UK-based music industry body IFPI warned that 'many consumers who want to listen to licensed music but cannot afford the high uniform fees imposed by geoblocking regulations will be denied service and, at worst, may turn to piracy.'
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