INTRODUCTION

Compact Media Group has been involved with various submissions, in regards to current or upcoming legislation, that affect those that control/exploit IP or are the creators themselves. The Digital Britain report was a missed opportunity for the UK to fall into line with the rest of Europe (and other territories), in relation to secondary rights especially for producers/distributors in the film and TV industries.

The UK has been flourishing in terms of overseas exports (up 25% to €980m in 2008 - Pact research) against a backdrop of the number of new commissions in the UK decreasing, especially in key areas such as drama. Broadcast's Distributors report highlighted the UK's expertise; both independent distributors and those owned by broadcasters, are a key factor behind the growth in UK TV exports. Their turnover topped £1 billion for the first time in 2007 thanks to continued strong performances from the biggest players, plus impressive growth from companies in the £10-100 million turnover bracket.

This growth is possible in part because of the different income streams that are available in other territories such as Private Copy / Satellite & Cable Retransmission rights. Producers, providing content to their domestic market across Europe, know how important these revenues are to their operations. Within the UK there is an ever-widening funding gap due to the changing landscape of lower production fees and rising costs and lower revenues from ancillary sources such as the rental market / DVD sales, even without access to these rights. It is therefore imperative that these rights are considered via a full OFCOM review.

Additionally, there is a need for legislation to recognise that delivery methods in the future will differ wildly. It is essential to have proper mechanisms in place, to ensure that there is a clear rights landscape that encourages innovation and provides consumers with access to the best content available whilst rightsholders are compensated. The Digital Economy Bill introduced by Lord Mandelson has the opportunity to start looking at these key issues.

KEY POINTS OF THE REPORT:

1. UK inaction is providing second class rights for first class films and television programming
   
2. The aim should be to add to the discussion of what the best mechanisms are to balance creativity, accessibility and viability through remuneration.
   
3. There is a need for OFCOM (possibly in conjunction with other departments) to lead a review in to the current inequity between Europe and the UK  in regards to rights. This was mentioned within the Digital Britain Report and is required sooner rather than later.
   
4. There is a moral issue; for years European partners have made available remuneration to UK rights holders whilst they receive nothing in this territory in return
   
5. This report should not be interpreted as a simple call for the industry to be ‘propped up’ by payments from cable and satellite operators. There is a need for a framework that allows for creativity to be rewarded as well as being a catalyst for new technological developments in the future.

THE VALUE OF SATELLITE & RETRANSMISSION
RIGHTS IN EUROPE

• Cab/Sat Retransmission mechanisms exist in 29 countries in the EEA, we have figures for  23 within the document. Our estimate is that total collections for producers share is circa €478 million between 2002-2006.
• Over the five years it is estimated that rights holders (Broadcasters / Producers / Authors) benefitted €1.36 billion
• Average producers' share  of total pot is 35%
• Six countrie - Belgium, Germany, France, Netherlands, Denmark & Ireland - account for nearly €336 million out of €478 million or 77%.
• An IPPR study hypothesised a £5 flat fee on Sky/Virgin per subscriber would generate £45m / £18m respectively (£63m based on 2008 subscriber base).

THE VALUE OF RE-USE FEES IN THE UK

• Revenues from associated schemes raised a total of over €2.6 billion in 22 territories between 2004-2008.
• Germany, France, Spain, Belgium, Italy and the Netherlands raised €463.2 million.
• Germany raised €148.841 million in levies during 2007 (of which €14.339 million was from music/audio media, €46.685 million from audiovisual media and €87.817 million from hardware).
• France raised €163,402 million in levies during 2007 (€44.908 million was from audio, €63.129 million  from audiovisual and €42.218 million from hardware).