EUROPEAN COMMISSION

Brussels, 25.5.2016

SWD(2016) 170 final

COMMISSION STAFF WORKING DOCUMENT

Ex-post REFIT evaluation of the Audiovisual Media Services Directive 2010/13/EU

Accompanying the document

Proposal for a Directive of the European Parliament and of the Council amending Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services in view of changing market realities

{COM(2016) 287 final}
{SWD(2016) 171 final}

Contents

1.    Introduction    

2.    Background    

2.1 Situation prior to Directive    

2.2 Baseline    

2.3 Description of the Directive and of its objectives    

3.    Evaluation questions    

4.    Method    

5.    Implementation state of play (results)    

6.    Answers to the evaluation questions    

6.1 Material scope of application    

6.2. Geographical scope    

6.3 Country of origin    

6.4 Protection of minors    

6.5 Ban on hate speech    

6.6 Commercial communications    

6.7 Promotion of European works    

6.8 Independence of regulators and cooperation amongst regulators    

6.9 Accessibility for persons with disabilities    

6.10 Events of major importance for society and short news reports    

6.11 Right of reply    

6.12 Self/co-regulatory initiatives in the context of the AVMSD    52

7.    Conclusions    56

8.    Annexes    57

1.Introduction

Purpose of the evaluation

This Staff Working Document (SWD) provides the results of the ex post evaluation under the Regulatory Fitness and Performance Programme (REFIT) 1 of the Audiovisual Media Services Directive (hereinafter "AVMSD").

In line with the "Better Regulation" requirements 2 , the evaluation assesses the effectiveness, efficiency, relevance, coherence and EU added-value of the AVMSD, and pinpoints areas where there is potential for simplification, without undermining the objectives of the Directive.

The Commission Communication “A Digital Single Market Strategy for Europe 3 ” announces that the Commission will examine the functioning of the rules currently in force and will review the AVMSD in 2016 4 .

Pursuant to this commitment, this evaluation has been carried out in parallel to the Impact Assessment on policy options for the future of the AVMSD. The conclusions of this evaluation will – where relevant – feed into that Impact Assessment.

This evaluation also provides the necessary evidence base for meeting the reporting obligations set out in Article 33 of the AVMSD and Articles 16 and 17 (Reports on the promotion of European Works)  5 .

Scope of the evaluation

The evaluation focuses on the objectives, domains and measures set out in the AVMSD. National transposition measures are not part of the scope of this evaluation.

This evaluation covers the period from December 2007, when the Directive resulting from the last revision entered into force (requiring the Member States to transpose the rules at national level by December 2009), to December 2015. The period between 1989, when the Television without Frontiers Directive 6 entered into force, and 2007 is not covered by this evaluation.

2.Background 

2.1 Situation prior to Directive

The EU regulatory framework in this domain is in place since 1989 and was originally only applicable to broadcast services. The rationale behind the adoption of a regulatory framework for television broadcasting services at EU level served two primary and interconnected objectives:

(1) Facilitate the free movement of television broadcasting services within the internal market;

(2) Ensure the protection of fundamental public interest objectives, through minimum harmonisation of existing regulations.

In addition, the regulatory framework contributed to the fulfilment of wider complementary cultural, social, and economic aims while contributing to the protection of fundamental rights and pluralism.

The regulatory framework was amended twice (respectively in 1997 7 and 2007) to adapt to technological and market developments. The Directive currently in force is the result of the 2007 revision and its subsequent codification in 2010.

The last review of the regulatory framework in 2007 aimed to modernise and simplify the rules for broadcasting services and introduce minimum rules for on-demand audiovisual media services. The Commission aimed at adopting future-proof rules, as it expected that the revised Directive would regulate the internal market for broadcasting and other audiovisual media services approximately over the years 2009-2016 8 .

2.2 Baseline

At the time the last revision was proposed in 2005 9 , the Commission observed that the 1997 Directive had been overtaken by technological and market developments and had to some extent become outdated. This was reflected in the Impact Assessment 10 accompanying the 2005 legislative proposal.

In 1989, non-national satellite commercial television was in its infancy and ICT-based fixed-line methods of service provision were not ready for the market. In 13 of the new Member States (following the 1994 and 2004 enlargements) there were no commercial channels available nationally. By 1997, trans-frontier satellite commercial television was a common phenomenon and terrestrial commercial television held a greater share of viewing than public service broadcasters in most Member States. In 2005, trans-frontier satellite commercial television had become as popular as or even more popular than local terrestrial broadcasting (with cable systems re-transmitting both).

This evolution was accompanied by exponential changes in channel capacity, increased market penetration of multichannel homes and an increasing number of platforms. Cable and satellite television multiplied the number of available pan-European channels. This enhanced the choice available to consumers, including children. Children increasingly controlled their own viewing with risks of harm, as age verification procedures and filtering were in place only in a minority of channels and households.

In light of these developments, the revision of the Directive aimed at the following objectives.

1)Taking full advantage of the internal market for new services

Removing obstacles to free movement of audiovisual media services in the internal market

In 2005, 23 out of 25 Member States had in force national laws applicable to on-demand services for a number of AVMSD domains (particularly advertising and protection of minors 11 ) with often diverging requirements 12 . This had potentially negative impacts on the internal market and on business competitiveness. The Commission considered that laying down minimum rules for these services at EU level would have provided legal certainty and allowed businesses to benefit from the AVMSD Country Of Origin (COO) principle 13 . According to COO, which already applied to broadcasting services since the regulatory framework was first in force, audiovisual media service providers have to abide only by the rules of the Member State with jurisdiction over them but can operate in all Member States. This does not prevent Member States from establishing higher standards at national level. However, a receiving Member State with stricter rules than those laid down by the AVMSD cannot restrict the reception of services from another Member State on the basis of those stricter rules. Exceptions apply in specific circumstances defined in the AVMSD.

Other services, such as video-sharing platforms that did not exercise editorial responsibility over the content or websites where the audiovisual content was secondary to the main service, were deliberately left out of the scope of application of the AVMSD rules. The objective was to enable Internet services to further develop in the EU.

Level playing field for audiovisual media service providers

The Commission observed that on-demand audiovisual media services were offering identical or similar content as traditional television without being subject to the same regulatory treatment 14 . According to the 2005 Impact Assessment, maintaining the status quo would have aggravated unjustifiable differences in the regulatory treatment between the various forms of distribution of identical or similar content based on the delivery modes. At the same time, on-demand services were deemed to deserve lighter touch regulation than broadcasting services as users enjoy a higher degree of choice and control over the content and of the time of viewing than on traditional TV.

2)Ensuring minimum harmonisation of rules in support of certain public interests

It was deemed necessary to regulate on-demand audiovisual media services at EU level for clearly defined public interest domains including protection of minors, human dignity and safeguard of essential public interests in the area of commercial communications.

3)Contributing to cultural diversity

As the promotion of European works was considered essential to contribute to cultural diversity it was deemed necessary to adopt EU rules in this domain for on-demand services.

4)Better regulation by reducing unnecessary regulatory burden

New advertising techniques created opportunities for commercial communications in broadcasting services, enabling them to better compete with on-demand services. Product placement had the potential to generate substantial additional resources for providers. The regulatory framework had to be aligned to this new context, namely via more flexibility with respect to the rules for broadcasting services. This called for allowing (in certain circumstances) product placement and introducing more flexibility to the quantitative rules.

5)Facilitating access to information within the internal market

In the field of broadcasting services, the Commission identified a problem in the absence of EU-level rules guaranteeing access to short extracts of events of high interest to the public. Actual or potential uncoordinated national rules were putting the internal market at risk.

In addition to the above considerations, the 2007 revision aimed at maintaining the general and specific objectives of the regulatory framework related to the internal market as well as cultural and social goals which were deemed to be still valid for the future.

Since the 2007 revision, there have been significant changes in the market and viewing patterns (Annex 3 provides the detailed figures and sources):

TV viewing is still the prevalent mode of consumption of audiovisual content but younger consumers, in particular, increasingly watch content on-demand and online.

Audiovisual content is offered as part of a large number of services. Not all such services are in the scope of the AVMSD rules. For example, services hosting audiovisual content in the form of user generated content (UGC) are excluded.

Consumers often watch audiovisual content offered in innovative and namely shorter formats (e.g. short video clips), particularly on-demand and more in general online. Between 2013 and 2015, the number of minutes spent on a video online has decreased in 6 Member States 15 . The decrease in those Member States ranged from -5% to -36% 16 .Online advertising is set to overtake TV advertising.

There are uneven rules regarding contribution to content financing between broadcasters, on-demand service providers and new online market players.

2.3 Description of the Directive and of its objectives

The AVMSD pursues the general objective to create an internal market for audiovisual media services guaranteeing free circulation of services, a level playing field and conditions of fair competition whilst ensuring at the same time a high level of protection of objectives of general interest, inter alia the protection of minors and human dignity as well as promoting the rights of persons with disabilities.

The AVMSD also pursues a number of specific objectives: protect consumers/viewers including human dignity and the physical, mental and moral development of minors; ensure cultural diversity by promoting European audiovisual production and distribution; promote media pluralism, freedom of expression and information; and foster business competitiveness.

As mentioned in section 2.1, the Directive is based on the Country Of Origin principle (COO)

As the AVMSD has a bearing on the market as well as on values and citizens' rights, it provides minimum harmonisation rules. It does not impinge on the competence of Member States to define stricter requirements according to national circumstances and traditions (e.g. rules regarding content harmful to minors).

Intervention logic – 2007 revision

3.Evaluation questions

Pursuant to the Commission Better Regulation Framework, the AVMSD has been evaluated against the following criteria: relevance, EU added value, effectiveness, efficiency and coherence. The evaluation addresses specifically the following questions:

Relevance: In a converging media environment, to what extent have the AVMSD rules proved relevant to the needs of the EU audiovisual market and to consumers/viewers?

Effectiveness: To what extent have the general and specific objectives of the AVMSD been met? If not, what factors hindered their achievement?

EU added value: What is the additional value resulting from the AVMSD, compared to what could be achieved by MS at national and/or regional level? To what extent do the issues addressed by the AVMSD require action at EU level?

Efficiency: Did the AVMSD deliver good value for money, including for SMEs? Could the general and specific objectives have been achieved at a lower cost? Is there scope for streamlining and/or simplifying the procedures laid down in the AVMSD?

Coherence: How well does the AVMSD work together with other EU regulatory and policy initiatives? To what extent does the AVMSD take into account potential interactions or conflicts with other EU initiatives?

The questions listed above are answered throughout the report.

This evaluation covers the Directive in its entirety. It is structured around the main domains harmonised by the AVMSD, as each domain pursues one or more AVMSD objectives.

The link with the general and specific objectives is as follows:

Under the general objective:

The rules on material and geographical scope of application and on Country Of Origin (COO). (Chapter 6.1, 6.2 and 6.3).

Under the specific objectives:

Protection of consumers/viewers is pursued mainly by the rules on protection of minors, the ban on incitement to hatred, the rules on commercial communications, the provisions encouraging the use of self and co-regulation, and the right of reply (see sections 6.4; 6.5; 6.6; 6.10; 6.11).

Cultural diversity and the promotion of European audiovisual production and distribution are pursued by the rules on promotion of European works (see section 6.7).

The promotion of media pluralism, freedom of expression and access to information are pursued by the rule on cooperation amongst Member States in particular via independent regulators, the provision encouraging accessibility of services to persons with a visual or hearing disability, the rules on events of major importance for society and short news reports (see sections 6.8; 6.9; 6.10).

The system of graduated regulation pursues the overall objective of fostering business competitiveness with a lighter touch regulation for on-demand services and stricter and more detailed rules for broadcast services on grounds that the user has more control and choice in on-demand services. The system applies to the rules on protection of minors, commercial communications, promotion of European works, right to information (short news reports and events of major importance for society) and right of reply. This matter is therefore considered across a number of sections: 6.4, 6.6, 6.7, 6.10, 6.11.

Under each "domain subchapter", the five evaluation criteria are being assessed, thereby allowing for a granular analysis and for drawing – if appropriate - different conclusions for each different AVMSD domains.

4.Method

The REFIT evaluation has been carried out on the basis of data collected from different sources. A more detailed insight is provided in Annex 1.

The evaluation took place between March and December 2015 and drew from the following main data sources:

Stakeholder consultations:

oThree public consultations: 2013 Green Paper Public consultation on media convergence 17 ; 2013 Public consultation on independence of audiovisual regulators 18 and 2015 Public consultation on the AVMSD 19  (the synopsis report is in Annex 2);

oPolicy discussions with Member States in the framework of the Contact Committee 20 meetings;

oDiscussions with regulators within the European Regulators Group for Audiovisual Media Services (ERGA) 21 leading to the adoption by ERGA of specific recommendations on the material and geographical scope of the AVMSD, protection of minors (also based on an "inventory paper") and the independence of regulators 22 ;

oStructured dialogues with representatives of the affected industry and consumers (“Media talks 23 ”).

Recommendations, reports and policy discussions with other EU institutions, namely the European Parliament 24 , the Council 25 , the European Economic and Social Committee 26 and the Committee of the Regions 27 .

Data gathered on the AVMSD costs and benefits via a questionnaire sent to Member States' regulators within ERGA and to industry 28 .

Evidence gathered through publicly-tendered studies 29  on alcohol advertising exposure, independence of audiovisual regulators, self- and co-regulation and standardisation.

Commission's monitoring of the AVMSD pursuant to Article 33 30 of the Directive (1st Application report for the years 2009-2010 31 ; 2nd Application report on the AVMSD 32 for the years 2011-2013; Articles 16 and 17 33 ).

Literature review (e.g. reports of the European Audiovisual Observatory 34 (EAO)) followed by an analysis carried out in-house by the European Commission Directorate General (DG) for Communications Networks, Content and Technology (DG CONNECT) in close cooperation with other Commission DGs in the context of the Inter-Service Steering Group on the AVMSD evaluation and review convened by the General Secretariat of the European Commission.

Time-wise, the data gathering was characterised by continuity. The Commission acknowledged the need to assess the state of play in terms of market and societal developments in 2012, following the 1st AVMSD Application report for the years 2009-2010. The Commission started stakeholder consultations in the Contact Committee, in ERGA and via the "Media talks". Two Public consultations were launched in 2013 (see above) and a third, more targeted one, in 2015. The reporting obligations according to the Directive also were the opportunity to gather data and information on the state of implementation over time. The Commission’s questionnaires in this context were drafted taking into account the main needs that could be identified at that stage in terms of data.

Method-wise, the data gathering followed a participatory and circular approach and strived for triangulation. While the 2013 public consultations were of a broader nature, the questions in the 2015 Public consultation were more focused on possible changes to the AVMSD. However, all main options were considered, in order to enable the Commission to either confirm or contradict previous findings. The questions took into account concerns or views expressed in previous occasions as well as the state of the art in the market and in viewing patterns.

The questions in the ERGA questionnaire were developed by a Task force of Member States' audiovisual regulators and focused on the practical aspects of the AVMSD application. Regulators took into account the difficulty to measure the costs and benefits of the AVMSD in certain fields.

The data provided by the EAO were tailored to the needs of this evaluation and were delivered pursuant to an evaluation-specific contract with the Commission.

A circular approach was followed as much as possible. For example, meetings of the Contact Committee, ERGA and Media talks with stakeholders were held ahead of the launch of the Public consultation. After the Public consultation deadline, the Contact Committee discussed the Public consultation in two occasions. The data gathered from the sources above were analysed respectively: in house, by external contractors, and in cooperation with other Commission DGs.

Moreover, stakeholders were consulted in multiple occasions by different parties, for example, by the Commission via the Public consultation, by relevant national regulators via the ERGA questionnaire and by external contractors in the context of the studies. This circular approach enabled a satisfactory triangulation of data, i.e. its reliability has been confirmed via findings coming from other sources. Also, whenever the same stakeholder provided information in different contexts, the Commission compared these pieces of information so as to assure their coherence and reliability.

The evaluation process was assisted by a Steering Group composed of the representatives of selected Directorates General (DGs) including DG CNECT, DG COMP, DG JUST, DG GROW, DG TRADE, DG EAC, DG SANCO, DG RTD, DG NEAR together with the Secretariat-General and the Legal Service.

The Steering Group steered and monitored the progress of the exercise, ensuring the necessary quality, impartiality and usefulness of the evaluation. Being composed of members from different functions and having the necessary mix of knowledge and experience, the Steering Group brought together a range of different perspectives and provided the necessary input, in particular where the evaluation touched different policy areas.

Limitations – robustness of findings

The data collection and analysis carried out has a number of intrinsic limitations, whose impact was mitigated to a maximum possible extent:

Measuring the effectiveness of the AVMSD rules that aim to protect values (e.g. human dignity and the physical, mental and moral development of minors) is by definition a challenging exercise whose results should be interpreted with caution;

Despite being prompted in a number of occasions by the Commission, the national regulators and the contractors carrying out publicly tendered studies for this purpose, the industry has been reluctant or unable to deliver precise quantitative data on the compliance costs stemming from the AVMSD; given that legislation in this domain has been in place for a long time, it has been revised twice and codified once, and in some cases national legislation was already in place, it is hard for business to assess what costs and lost revenues stem from the Directive;

When the industry did provide data, this was in some cases covered by business confidentiality. When possible, the Commission presented this data in aggregated or anonymised format. When this was not possible, data was taken into account in the evaluation but not provided (this is indicated when applicable);

The EU audiovisual sector is primarily made of large companies and data on the specific impact of the AVMSD on SMEs is not available, also in light of the considerations made above. Accordingly, when the evaluation refers to the impact on the AVMSD rules on business, particularly on business competitiveness, this should be intended as referring in most cases to large companies;

Some data simply does not exist because stakeholders do not generate or gather it. This is the case, for example, for figures on the number of viewers and on viewing patterns in on-demand audiovisual media services and in other services offering audiovisual content;

The evaluation takes into account that the economic and cultural landscape as well as the state of development of the audiovisual media market differ significantly amongst the Member States;

Given the multiplicity of the tools used to consult relevant parties, the results obtained are of different nature. While the 2015 Public consultation proposed a number of questions to stakeholders, the discussions within ERGA went more in-depth on some issues, as regulators had a platform for regular and organised discussions;

The evaluation takes into account the inherent limitations of the findings of Public consultations. Firstly, as in all surveys, the answers received reflect the views of a sample of relevant stakeholders and not those of the entire population who has a stake in this domain. Secondly, stakeholders' views convey an individual rather than a holistic perspective.

Based on the elements above, this evaluation has been carried out on the basis of the best available data. Whenever reliable quantitative data is lacking, this is indicated as appropriate and possibly counter balanced with qualitative data and considerations.

5.Implementation state of play (results)

The implementation of the AVMSD by the Member States is monitored by the European Commission on the basis of Article 33 35 of the Directive. Article 33 AVMSD requires the Member States to report to the Commission and the Commission to report to Parliament and Council on the state of play of the Directive every three years at the latest.

Current state of play

Following the last revision, the Member States were required to transpose the AVMSD at national level by 2009. Whereas to date all Member States have notified full transposition measures, issues of protracted implementation did occur. By the end of 2011, full transposition was notified to the Commission only from 20 Member States 36 .

In 2005, the EU audiovisual market was rapidly changing, also due to the development of the Internet. In 2004, Internet penetration had stabilized at about 65% by household, with mobile phone penetration at about 85%. In 2005, the EU enjoyed better domestic broadband penetration than the United States, with wider 3G deployment.

This evolution, together with the demand for premium content and the continuous search for new sources of revenue, had enabled the development of IPTV and other Internet-based methods of delivery. The need for new revenues was one of the sources of the emergence of triple-play: the convergence of broadband, telephony, and video. However, in 2005, there were still obstacles to IPTV growth, such as a lack of consumer awareness and acceptance of IPTV as a viable alternative to incumbent channels of delivery and the strong market position and economies of scale of the incumbents. As a result, in 2005, audiovisual revenues linked to the development of Internet were still limited.

As already mentioned, in 2005, transfrontier satellite commercial television was as popular as or even more popular than local terrestrial broadcasting (with cable systems re-transmitting both). This evolution was accompanied by exponential change in channel capacity, especially via digital cable and satellite, increased market penetration of multichannel homes (using sports and feature film premium content), and an increasing number of platforms. Consumer choice increased. Cable and satellite television multiplied the number of pan-European channels available.

Video on Demand (VoD) was making inroads into the audiovisual market, whether delivered by cable, fibre or Digital Subscriber Line (DSL). However, in 2005, VoD still generated limited revenues (ca. US 60 million). As regards advertising markets in 2005, television and the Internet were gaining ground, both within Europe and on a global scale.

At the end of 2013, 5 141 TV channels (excluding local channels and windows 40 ) were established in the EU. Almost 1989 of them (about 38% of the total established channels) targeted foreign markets (either EU or extra EU). This share has increased from 28% in 2009 - year of implementation - to 38% in 2013 41 . On average, 31% of the VoD services available in the Member States are established in another EU country 42 .

In the EU28, total on-demand consumer revenues soared from EUR 919 million in 2010 to EUR 2.5 billion in 2014, an increase of 272% and a compound annual growth rate (CAGR) in the 5 year period of 28% 45 .

The 1st Application report for the years 2009-2010 concluded that the AVMSD had overall struck the right balance amongst the objectives pursued and well served the interests of citizens and businesses. The report nonetheless 1) flagged issues around consumer protection (particularly protection of minors) in audiovisual commercial communications and 2) called for assessing whether the AVMSD still attains its consumer protection objectives in a converging media world.

The 2nd Application report for the years 2011-2013 is published as Annex 7 of this evaluation report. The report demonstrates the AVMSD's effectiveness in ensuring the development and free circulation of audiovisual media services in the EU. The report however flags the following issues: 1) complexities in determining jurisdiction and for applying procedures limiting freedom of reception and retransmission in specific case; 2) diversity in the approaches undertaken by Member States to promote European works on VoD services, putting the effectiveness of the procedures supporting the COO principle to the test in this specific field; and 3) concerns around the application of rules for certain types of commercial communications.

In the field of promotion of European works in broadcasting services, Member States shall provide the Commission every 2 years a report on the application of this Article 16 and Article 17 – promotion of European works in broadcasting services. The Member States have up to now complied with this reporting obligation. The Commission shall inform the other Member States and the European Parliament of the reports, which shall be accompanied, where appropriate, by an opinion. The latest of these Commission reports is published as an Annex to this evaluation report (Annex 8). This report shows that the provisions of Articles 16 and 17 AVMSD have been overall correctly implemented by Member States. The current rules on promotion of European works have led to strong shares of transmission of European works, independent productions and recent independent productions. The 64.1% average of European works achieved in 2011 and 2012, well above the obligatory majority proportion set out in Article 16, reflects a generally sound application of this provision throughout the EU. Member States also met comfortably the requirement regarding the share of independent productions set down in Article 17. With 33.1% in 2011 and 34.1% in 2012 the average of independent productions was significantly above the required 10% laid down by Article 17. At the same time, the share of independent productions differs significantly among Member States. The EU average share of recent independent productions was 60.6% in 2011 and 61.1% in 2012.

However, the report also shows some shortcomings. It identifies the main reasons for non-compliance reported by Member States. An often repeated argument was the difficulty for small and specialized channels to comply with the obligatory shares. Additionally, monitoring methods of compliance vary greatly among Member States and not all Member States have put in place verification systems of the data provided by broadcasters.

On promotion of European works in on-demand services, Member States were required to report to the Commission no later than 19 December 2011, and every 4 years thereafter, on the implementation of Article 13(1) – measures to promote European works in on-demand services. Member States have up to now complied with this flexible provision, while considering that there is a general lack of data regarding shares of European works in on-demand catalogues. Also on the basis of this information the Commission shall report to the European Parliament and to the Council. In addition to this report, the Commission more recently proactively analysed and reported 52 on the diverse approaches taken across the Member States on promotion of European works in on-demand services.

Although the AVMSD does not impose an obligation regarding the independence of audiovisual regulatory bodies, the Commission regularly monitored the state of play as regards the independence of national regulatory bodies, through independent studies - first the INDIREG study of 2011 53 and then its update – the RADAR study of 2015 54 .

6.Answers to the evaluation questions

6.1 Material scope of application

The AVMSD applies 55 to television broadcasts and to on-demand audiovisual media services for which providers have editorial responsibility. To be covered by the Directive:

(i)  services must have as their principal purpose the provision of programmes to inform, entertain or educate the general public; and

(ii) programmes should be comparable, in form and content, to television ("TV-like"). 

Relevance of the current rules

The rules defining the AVMSD's scope of application are overall relevant. The 2007 revision brought new on-demand audiovisual media services into the AVMSD scope and as such aligned the Directive to the market developments emerging at that time. In the 2015 Public consultation, a majority of respondents belonging to various stakeholders' categories stated that the rules are still relevant. However, some aspects of the definition of “audiovisual media services", which were relevant during the first years of application of the Directive after the 2007 revision, are no longer fully relevant in light of recent market and legal developments:

The Directive applies to 56 programmes "the form and content of which are comparable to the form and content of television broadcasting" which has primarily meant an exclusion of short clips. Audiovisual content is however increasingly offered in innovative (shorter) formats (e.g. short video clips) online. As said above, while the number of videos viewed tends to increase, the time spent on one given video tends to decrease 57 . Most recently, the ECJ 58 clarified that videos that are short in length can qualify as audiovisual media service under the AVMSD (when the content offered competes for the same audience as television broadcasting). A majority of respondents belonging to various stakeholders' categories also affirmed in the 2015 Public consultation that the "TV-like" criterion has become outdated.

The Directive does not apply to audiovisual material offered by services whose "principal purpose" is not to provide programmes, to inform, educate or entertain, to the general public. However, services such as newspapers' video sections 59 or social media and messaging apps hosting professional video content are increasingly present on the market. Also, the consumption of online news videos is on the rise - not necessarily on newspapers' websites but also on social media 60 and this often coincides with a fall in audiences for traditional TV bulletins 61 . In 2014, the number of children who read or watched news online almost tripled as compared to 2010 62 . Most recently, the ECJ 63 clarified that the AVMSD applies when the audiovisual media content is in content and form independent of the main service offered by a provider (whether it is messaging,  audiovisual content generated by private users i.e. "user generated content" (UGC), press articles, etc.). This is the case even when the main service is of a different nature, e.g. text, and is not merely an indissociable complement to that activity, in particular as a result of the links between the audiovisual offer and the offer in text form.

In light of this, the rules defining the AVMSD's scope of application are overall relevant, although most recent developments call for further reflection.

Effectiveness

The inclusion in the scope of on-demand services along with traditional broadcasting services in the context of the 2007 revision provided a minimum level of consumer protection on these services. In this light, the AVMSD rules on material scope have proven to be effective in an environment where consumption of TV content was primarily taking place on traditional TV or via on-demand services.

Furthermore, by excluding from the application of the rules audiovisual material that is: i) merely incidental to other type of content; and ii) that is not under the editorial responsibility of a provider, the Directive (also in conjunction with the EU eCommerce Directive) contributed to avoid overregulation of online services. This fulfilled the objective to foster the online market and unlock the potential of convergence of different types of media content.

However, the most recent developments in the market, technology and viewing patterns put into question the effectiveness of the rules on material scope to ensure a level playing field and an appropriate level of viewers' protection.

Specifically, the following developments led to a perceived uneven playing field and a lack of consumer protection:

Audiovisual content is increasingly offered by players who are not regulated under the AVMSD: as said above, in 2014, around 2 563 Internet-based, OTT and VOD television providers were established in the EU. Video sharing platforms 64 and social media increasingly include in their offers audiovisual material (be it UGC, advertising or original content). These services often fall outside the scope of the AVMSD either because the providers do not control the selection and organisation of the content 65 or because their principal purpose is not to offer audiovisual content.

Viewing patterns, including those of children, are changing. While TV viewing is still strong, EU audiences increasingly watch and share audiovisual content online 66 including on social media 67 . Consumer spending on digital video and this trend is related to the increasing popularity of connected TV and the soar in mobile usage 68 . In the UK, the amount of people watching short online clips has almost doubled over the period 2007 to 2014 (21% to 39%, the highest increase being among 35-44s with 28 percentage points increase). The popularity of multi-platform online video services, such as YouTube, as an information source has been evident in recent years – 32% of internet users now cite it as an important (very or fairly) source for information, rising to 46% of 16-24 year olds 69 . In the EU, 92% of Europeans in the 15-24 age group use the Internet on a daily basis (or almost daily), compared with 80% of 25-39 year-olds and 65% of 40-54 year-olds. In 2013, the share of internet users who participated in social networking was 89 % for 16-24 year olds compared with 27 % for 55-74 year olds 70 .

When it comes to minors, video viewing is one of the earliest Internet activities carried out by young children. For example in the UK children aged 12-15 spend more time online than watching television (17.2 vs. 15.7 hours per week) 71 . Watching video clips is the second prevalent online activity amongst minors aged 4-17, after listening music and watching films and cartoons 72 . Services such as YouTube are widely popular among children 73 . Connected devices such as mobile phones, tablets and games consoles are increasingly used by minors, often without adult supervision 74 . More than half of YouTube views come from mobile devices 75 .

In all Member States, young viewers watch on average 50% less television than the average viewer. The difference between time spent by the general audience and by young viewers has increased over 2011-2014 76 .

A majority of Member States, regulators, consumer organisations and a fair share of broadcasters who replied to the 2015 Public consultation, cite these developments when underlining that the rules on material scope do not ensure a level playing field for audiovisual media services. On the other hand, a small number of MS, some regulators as well as the Internet, ICT, the press publishing sector, telecom, cable, satellite and advertising industries believe that the AVMSD rules have fostered the free circulation of audiovisual media services within the EU, created a level playing field and opportunities for new entrants to reach the consumers.

As to the effectiveness of the rules on consumer protection, there are a number of concerns:

In the UK, ATVOD 85 found that at least 44 000 primary school children accessed an adult website in one month alone 86 . ATVOD has found that 23 of the top 25 adult websites visited by UK internet users provide instant, free and unrestricted access to hardcore pornographic videos.

A majority of Member States, regulators, consumer organisations as well as a fair share of public service and commercial broadcasters who replied to the 2015 Public consultation and the ERGA recommendations on material scope 89 cite these developments when underlining that the rules on material scope do not ensure a sufficient level of consumer protection. On the other hand, a small number of Member States, some regulators as well as the Internet, ICT, the press publishing sector, telecom, cable, satellite and advertising industries believe that the AVMSD rules guarantee a satisfactory level of consumer protection.

In conclusion, whereas the AVMSD rules on material scope have proven to be effective over the first years from the revision, their effectiveness has by now diminished in light of the most recent developments in the market and viewing patterns.

Impacts on the Internal market:

There is fragmentation in the internal market due to diverging interpretations by Member States as to what is an on-demand service. The Member States have leeway in interpreting the definitions and this may lead to different results also in light of market developments. Diverging interpretations at national level concern specifically the following criteria:

-"Principal purpose", with similar services being considered subject to the AVMSD in some countries but not in others 90 .

-"TV-likeness", also being subject to diverging interpretations 91 .

The lack of uniform interpretation of the rules on material scope across the EU is also perceived by most regulators and broadcasters as well as by a number of Member States as shown in the 2015 Public consultation. This fragmentation has led to shortcomings in the level of legal certainty and coherence across the Union, prompting a Member State to seek clarification from the ECJ on some aspects of the AVMSD scope of application criteria in the New Media Online case, mentioned above.

EU added value

The 2007 revision has contributed to increase the level of harmonisation in a context of diverging national legislation applicable to on-demand audiovisual media services. However, as highlighted in the 2nd Application report on the AVMSD, the EU added value of the rules on material scope is reduced by complexities around the application of the AVMSD definitions to on-demand services (see the Effectiveness sub-section). As a conclusion, the EU added value of the rules lays in the harmonisation they provided, although some problems were observed with the interpretation of the definitions of the services falling within the material scope of the Directive.

Efficiency

The last revision of the AVMSD brought additional administrative 92 and compliance 93 costs due to the inclusion of on-demand services in the scope of application. Those costs are indicated in the Efficiency sub-sections in sections 6.4; 6.5; 6.6; 6.7, that focus on specific AVMSD domains.

For both broadcasters and on-demand audiovisual media services, EU-level harmonisation and the application of the COO principle ensure legal certainty and thus cost savings (see section 6.3 on COO).

As indicated by media service providers 94 in the 2015 Public consultation and in the ERGA questionnaire, being subject to the AVMSD rules in particular on protection of minors may give a competitive advantage to operators. Being identified as family-friendly contributes to the positive branding of an operator. This was confirmed by the British Board of Film Classification (BBFC) which reported that 86% of parents in the UK would encourage or make sure that their children watch online channels with clear age ratings 95 .

At the same time, the current exclusion of services offering audiovisual content has the potential to put those who are currently in the scope (both broadcast and on-demand services) at a competitive disadvantage. This was corroborated by the contributions of a significant number of stakeholders across sectors in the context of the 2015 Public consultation on the AVMSD.

Coherence

The AVMSD qualifies as lex specialis vis-à-vis the e-Commerce Directive (ECD) 96 and is without prejudice to the ECD system of limited liability 97 . The AVMSD rules defining the scope of application for on-demand audiovisual media services are hence coherent with the ECD, including the rules limiting liability for illegal activities for information society services acting as intermediaries 98 set out in the ECD. The ECD and AVMSD adopt a similar approach. According to both Directives, operators are not required to abide by rules regarding information and/or content over which they have no control – provided that the conditions set out in the law are met.

6.2. Geographical scope

The AVMDS applies 99 to audiovisual media services transmitted by service providers under the jurisdiction of a Member State. The AVMSD lays down specific criteria to determine whether a service falls under a Member State's jurisdiction. These criteria take into account, for instance, where the place of the head office is located, where editorial decisions are taken or where a significant part of the workforce operates. As a subsidiary jurisdiction criterion, the AVMSD refers to the Member State where a satellite up-link is situated or where satellite capacity is used. If an audiovisual media service provider falls under the jurisdiction of a third country, the AVMSD and its rules do not apply. Member States remain free to take whatever measures they deem appropriate with regard to audiovisual media services which do not fall within the AVMSD geographical scope, provided these measures comply with Union law and the international obligations of the Union 100 .

Relevance of the current rules

In the 2015 Public consultation on the AVMSD, a majority 101 of respondents belonging to different categories of stakeholders groups flagged that the relevance of the AVMSD rules on geographical scope has been put to the test by technology and market developments. Those respondents argue that the Internet allows services to target viewers in the EU without having an establishment in the Union and thus to bypass EU regulation. 

These concerns notwithstanding, the number of services targeting the EU from third countries is currently very small. According to the EAO, about 50 paying VoD services (this number includes different linguistic versions of the same service) established in the United States target one or more Member States 102 . In addition, most leading foreign providers of on-demand services (Netflix, iTunes, Amazon) have all set up subsidiaries in the EU and are therefore subject to the AVMSD. This confirms that the AVMSD rules are still relevant.

In light of the above, the current rules defining the geographical scope continue to be relevant.

Effectiveness

In the 2015 Public consultation, a majority of respondents belonging to various categories (in particular Member States, regulators, Public service broadcasters and consumer organisations) highlighted that, due to the exclusion of foreign providers, the current rules on geographical scope do not ensure a level playing field and are not sufficiently effective in terms of consumer protection 103 . On the other hand, ICT, digital, Internet companies and satellite operators who replied to the 2015 Public consultation do not see issues regarding the effectiveness of the AVMSD rules on geographical scope.

In the context of the 2nd Application report on the AVMSD, two Member States reported cases where on-demand services provided from outside the EU offered adult content without the necessary safeguards for protecting minors 104 . Also, given that an important satellite operator is established on its territory, one Member State reported several issues about incitement to hatred and respect of human dignity with channels from third countries since 2012. However, given that these channels use a satellite up-link/satellite capacity in a Member State, they would be covered by the AVMSD.

The Internet undoubtedly makes it easier to deliver audiovisual content at global scale. The number and geographical spread of providers targeting EU viewers without being established in the EU may therefore grow over time 105 . However, the currently very small number of services targeting the EU from third countries does not suggest the existence of a problem regarding the effectiveness of the current rules. In view of the size of the problems reported, seeking to address them by changing the geographical scope would be disproportionate. In this regard it should be noted that, already under the current rules, Member States, if they so wish, can apply their national rules to providers established abroad.

In light of the above, it can be concluded that the AVMSD rules on geographical scope are still effective in ensuring a level playing field and sufficient consumer protection.

EU added value

The AVMSD rules on geographical scope have proven their worth as gate-keeper of the internal market to determine what audiovisual media services fall within the jurisdiction of an EU Member State and as such can benefit from the COO principle. This was confirmed by a majority of contributors to the 2015 Public consultation, across various stakeholder groups, who acknowledged the benefits of the rules on geographical scope for the internal market.

Efficiency

The costs of enforcing legislation on operators who have no EU establishment and do not even use a satellite up-link/capacity in the EU would be high, while most of the relevant players are already established in the EU. Imposing on all Member States the obligation to enforce the AVMSD rules to players whose impact on the market has so far not been significant is likely to result in a negative cost-benefit ratio. If foreign providers were to be required to register/appoint a representative, this obligation would have to be monitored and enforced. If the registration/appointment of a representative were to turn out not to be sufficiently effective and real (e.g. a letterbox company), the rules would have to be enforced in a third country which could be complex. Firstly, by analogy to international cooperation in the field of competition, enforcement by the Commission in a third country may require bilateral international agreements ("dedicated agreements") or AVSMD provisions included in general agreements (e.g. Trade Agreements). However, this is likely to be complicated as providers located in the US constitute the major part of the market share of foreign providers targeting the EU. Secondly, any decision from a regulator imposing a fine or seeking a change in the behaviour of a service provider would be difficult to enforce as there would normally be no assets in the EU. In case a foreign provider targets more than one Member State, the need for coordination between regulators so as to avoid conflicts of jurisdiction would trigger further administrative costs. This is in particular the case when considering that the current rules allow Member States, if they so wish, to apply their national rules to providers established abroad.

In conclusion, and although quantitative data is not available, it can be reasonably assumed that the rules have been cost-efficient from the elements outlined above.

Coherence

As highlighted by a number of contributors to the 2015 Public consultation on the AVMSD, the rules on the geographical scope – in their essential role to promote the smooth functioning of the internal market – are part of the logic of completing the Digital Single Market.

This confirms that the current AVMSD rules on geographical scope are coherent with other EU initiatives and activities. This includes the ECD.

It should be noted, however, that the EU General Data Protection Regulation on which a political agreement was reached in December 2015 and which will most likely come into application in 2018, will apply to the processing of personal data of data subjects residing in the EU by controllers not established in the EU. The underlying logic is that Union data protection rules should still apply in relation to data of EU residents, even if data is processed outside the Union. Some contributors to the 2015 Public consultation on the AVMSD mentioned that a similar logic, according to which consumer protection is ensured whenever the consumer is targeted regardless of geographical location of the service, would be best-suited to the AVMSD. However, given the very small numbers of providers of audiovisual media services targeting one or more Member States without being established in the EU, the situation differs from the field of data protection.

6.3 Country of origin

According to the COO principle, a provider under the jurisdiction of a Member State must only comply with the rules of that Member State, while being able to provide its services in any other Member States. 106

Member States may restrict the reception and the retransmission of services freely circulating within the EU only in limited cases and following the procedure laid down in the AVMSD. 107 For broadcasting, restrictions are limited to cases of incitement to hatred and infringement of the rules on protection of minors. For on-demand services, restriction grounds include the protection of public health and public security. The relevant procedure includes a first cooperation phase where the Member State concerned contacts the transmitting Member State to try to reach an amicable settlement.

Member States may adopt stricter or more detailed rules in any of the fields coordinated by the AVMSD. However, a receiving Member State with higher standard levels cannot restrict the reception of services from another Member State which complies with the AVMSD requirements as transposed in the national law of the Member State of jurisdiction. If a Member State has chosen to do so and encounters issues with a television broadcast mostly or wholly directed towards its territory, it can use the circumvention procedure. 108 That procedure entitles the receiving Member States to adopt appropriate measures against the broadcaster concerned provided, among other things, that the broadcaster in question has established itself in the Member State of jurisdiction in order to avoid stricter rules which would otherwise be applicable to it.

Relevance of the current rules

The 2nd AVMSD Application report 109 and the majority of respondents to the 2015 Public consultation from all participating stakeholders' categories show that the COO principle is of continued relevance. The COO principle is critical for the internal market as it provides legal certainty and fosters investments, media pluralism and availability of content.

EffectivenessAt the end of 2013, 5141 TV channels (no local and windows 110 ) were established in the EU. Almost 1989 of them (about 38% of the total established channels) targeted foreign markets (either EU or extra EU). This share has increased from 28% in 2009 - year of implementation - to 38% in 2013 111 . As far as VoD services are concerned, in the Member States, on average 31 % of the VoD services available, are established in another EU country.

The above mentioned figures show that the COO principle has accompanied the increase in the cross border provision of audiovisual media services. . It has also had a positive impact on cultural diversity and on the availability of content 112 in particular in smaller markets According to the industry, in the 10 smallest markets (by population), 75% or more of services are available via non-domestic licenses supported by the COO principle 113 . This was confirmed by an overwhelming majority of respondents from all stakeholder categories in the 2015 Public consultation.

The effects of the COO principle derive from the attribution of jurisdiction to one Member State only which thereby avoids regulatory inefficiencies resulting from subjecting one service to multiple jurisdictions. This limits the costs borne by service providers to one country. This also may facilitate investment in the media sector 114 . This was confirmed by the majority of respondents across various categories (majority of Member States, public service broadcasters, commercial broadcasters, satellite operators and representatives of the internet industry) in the 2015 Public consultation.

However, some problems in the application of jurisdiction criteria and of the derogation/ circumvention procedures have contributed to reducing the effectiveness of the COO principle. This recently prompted the Commission to provide to Member States clarifications 115 regarding the application of the derogation and circumvention procedures.

Some Member States have indeed experienced problems in the transposition into national law of the jurisdiction criteria. Issues related, for instance, to the subsidiary jurisdiction criteria based on using a satellite up-link/satellite capacity in a Member State (Slovenia 116 and Cyprus 117 ) or the transposition of the rule that services intended exclusively for reception in third countries are not covered by the AVMSD (Finland 118 ). The application of the jurisdiction criteria revealed uncertainties and disagreements between Member States on jurisdiction over a Russian language channel in the context of the application of the derogation procedure 119 . Similar jurisdiction issues arose in an earlier decision of the Commission regarding notifications of serious infringements of the rules on protection of minors 120 . In the 2015 Public consultation, the difficulty to identify the service providers was quoted as source of problems related to the application of jurisdiction criteria.

Regarding the derogation procedure, certain Member States (e.g. Belgium 121 , Bulgaria 122 and Lithuania 123 ) experienced difficulties in the transposition into national law of permissible derogations from the freedom of reception and retransmission regarding the substance and/or the procedure. There have also been problems regarding the application of the derogation procedure, notably in the cases of alleged hate speech on Russian language channels retransmitted in Latvia and Lithuania 124 , with concerns on the respect of procedural requirements. The absence of an urgency derogation mechanism for TV broadcasts, as opposed to the urgency procedure in place for on-demand services has been raised in the 2015 Public consultation. A Presidency discussion paper prepared by the Latvian Presidency underlines that, unlike for on-demand services, the AVMSD does not allow for a quick reaction in emergency situations for television broadcasting. 125 According to the outcome of the Education, Youth, Culture and Sport the meeting on 18/19 May 2015, "the procedure to be followed by member states when they are the target of unacceptable content coming from another member state should be streamlined and accelerated, in particular in certain cases of services of non-EU origin licensed in one member state yet targeting the audience of another member state. Effective cooperation among audiovisual regulatory authorities is crucial in this respect." 126

Except for one case, the circumvention procedure has not been used in practice 127 . The only case notified to the Commission concerned alcohol advertising in Sweden 128 and is mentioned in the 2nd Application report on the AVMSD. The case highlighted certain procedural problems.

The effectiveness of the COO principle is linked to the degree of harmonisation between national laws. Particularly for rules on the promotion of European works (section 6.7), there are significant divergences in national transpositions. The concerns of 3 Member States to ensure that service providers active on given national markets contribute their fair share to the support of local cultural production are also reflected in the levy schemes adopted (but not applied to date) in Germany and France which subject certain foreign VoD providers targeting their respective markets to a levy obligation. Both Member States have notified their schemes as state aid to the Commission. The Commission's assessment is ongoing 129 .

EU added value

The EU added-value of the COO principle was confirmed by a majority of stakeholders from various categories (and specifically an overwhelming majority of Member States and industry players) in the 2015 Public consultation. According to most stakeholders, the main advantage of COO principle lies in the legal certainty it provides as it requires providers to abide by the legislation of the country of establishment only. This in turn facilitates investment in the media sector and fosters diversity and consumer choice as well as media pluralism.

Efficiency

The rules underpinning the operation of the COO principle are too complex and result in a difficult application of the Directive and hence an unnecessary administrative burden. This view was confirmed by many respondents to the 2015 Public consultation, who, for example, see scope for rendering the cooperation and circumvention procedures simpler and less time-consuming.

In light of the above, it can be concluded that the application of the COO principle could benefit from simplified and more precise rule and procedures.

Coherence

The COO principle is coherent with the internal market logic of the EU treaties as it ensures the free provision of audiovisual media services across the EU. It is equally coherent with the EU Digital Single market initiatives 131 . In addition, it is coherent with the ECD, including as regards the grounds for derogation from the freedom to provide services 132 .

6.4 Protection of minors

The AVMSD requires Member States to ensure that audiovisual media services do not contain any incitement to hatred based on race, sex, religion or nationality. On protection of minors, TV broadcasts shall not include seriously harmful programmes (pornography and strong violence) but may include potentially harmful programmes (erotic content and mild violence) if children will not normally hear or see them 133 .

For on-demand, service providers are required to take appropriate measures so that minors would not normally hear or see seriously harmful content. There are no restrictions for potentially harmful content 134 .

Relevance of the current rules

The existing framework does not match the most recent developments in the market and in children's viewing patters that were highlighted in the Effectiveness sub-section under section 6.1 on Material scope 135 . In light of this, the AVMSD rules, while being relevant during the first years of application of the Directive, seem no longer fully relevant in light of the increasing exposure of minors to audiovisual media content online, whether covered by the AVMSD (but subject to a lower level of protection) or outside its scope.

As also highlighted in the ERGA report on protection of minors 136 , certain concepts and rating systems for both broadcast and on-demand services are not harmonised at EU level 137 . This is the case for: the age threshold for a person to be considered a "minor"; while for "content likely to impair" there are similarities across the Member States, the concept of "content likely to seriously impair" is not even translated in formal definitions in the Member States and is assessed on a case-by-case basis; content categories (e.g. violence; sex; offensive language) are not harmonised at EU level; although labelling and rating content are widespread, there are different classification systems for audiovisual products at national level 138 .

In the 2015 Public consultation, stakeholders (both Member States and industry) affirmed that minimum harmonisation and flexibility on protection of minors should be maintained as it ensures that national sensitivities towards harmful content can be taken into account.

Clear-cut conclusions on the effectiveness of the Directive's rules on protection of minors applicable to on-demand services are difficult to draw as most Member States do not proactively monitor compliance but act primarily upon complaints and only few of them carry out on-the-spot checks 139 .

Whereas in the 2015 Public consultation a fair share of respondents from various stakeholder categories (with the exclusion of consumer organisations) declared the rules to be effective, there are indications that the AVMSD has not been entirely effective when it comes to protection of minors in on-demand services.

Firstly, developments in the market and viewing patterns diminish the effectiveness of the rules on protection of minors, as highlighted in section 6.1 under material scope.

A majority of Member States, regulators and unanimously by consumer organisations in the 2015 Public consultation 140 stated that the AVMSD rules are not effective in protecting minors because they do not apply to all online content, including video-sharing platforms.

A deficit of effectiveness of the rules may also occur due to the lighter regulatory treatment given to on-demand services, as expressed by most Member States, regulators, Public service and commercial broadcasters in the 2015 Public consultation and by ERGA in its recommendations on protection of minors. Those stakeholders believe that by not requiring sufficient protection in on-demand services 141 , the AVMSD is ineffective.

An additional factor that might reduce the effectiveness of the Directive is, as already mentioned, the fact that most Member States do not proactively monitor compliance with the rules. As a consequence, the Member States may not be aware of or disregard relevant developments that may inform future policies.

EU added value

The EU added-value of the rules primarily lies in:

The minimum level of protection provided by broadcasting and on-demand services across the Union. The 2007 revision in particular brought harmonisation (and hence legal certainty) in a context where there were dissimilar rules on protection of minors in place for on-demand services in a large number of Member States 142 .

The respect of the subsidiarity principle in warranting flexibility to Member States to tailor national laws to cultural and historical specificities and to certain national challenges.

Efficiency

It is difficult to draw clear conclusions on the cost-benefit ratio of the rules, given that 1) costs may vary depending on the level of protection required by national laws; 2) clear and comparable data on the costs incurred by the providers are lacking and 3) as mentioned in section 4 under Limitations-Robustness of findings, qualitative elements are very prominent in the assessment of the impact of rules on consumer protection. Moreover, it is possible to identify scope for cost-efficiency also when looking not only at legal obligations but also at the possibility to leverage self and co-regulation arrangements.

The rule strictly restricts minors' access to any kind of harmful content and compliance costs 143 for broadcasters did not increase since the last revision in 2007, as those providers were already subject to this rule.

In on-demand services, the level of protection is lower than on TV broadcasting. This lower standard is no longer justified since younger consumers watch about half less television than the average consumer 144 . Lower requirement does not imply lower costs as on-demand services have in any case incurred costs to implement technical solutions to control access and ensure transparency regarding seriously harmful content across a high volume of diverse devices (e.g. tablets, smartphones or HDMI keys, which usually require ad hoc development and investments). Against this backdrop, the rule applied to on-demand services has been less cost-efficient than the rule applied to TV broadcasting services.

In addition, the differential regulatory treatment between on-demand services and traditional broadcasting under the AVMSD, may give the former a competitive advantage, in particular vis-à-vis Pay TV services, with which they share similarities 145 .

Finally, as indicated by media service providers 146 in the 2015 Public consultation and in the ERGA questionnaire, being subject to the AVMSD rules on protection of minors may give a competitive advantage to operators. Being identified as family-friendly contributes to the positive branding of an operator. This was confirmed by the British Board of Film Classification (BBFC) which reported that 86% of parents in the UK would encourage or make sure that their children watch online channels with clear age ratings 147 .

Coherence

The provisions of the AVMS Directive on protection of minors are coherent with other EU-level initiatives aiming at ensuring a level of protection of children in media services, in particular the Recommendation 2006/952/EC of the European Parliament and of the Council of 20 December 2006 on the protection of minors and human dignity, the Communication- European Strategy for a Better Internet for Children of 2012, and the self-regulatory initiative "CEO coalition to make the Internet a better place for kids". The AVMSD rules on protection of minors are also compatible with the UN Convention on the Rights of the Child (UNCRC) that was ratified by all the EU Member States. The AVMSD rules area also coherent and complement self-regulatory initiatives such as codes of conduct on minors' protection at national level in 9 Member States or other self-regulatory systems in 12 Member States.

6.5 Ban on hate speech

Article 6 AVMSD requires Member States to "ensure by appropriate means that audiovisual content provided by media service providers under their jurisdiction do not contain any incitement to hatred based on race, sex, religion or nationality".

Relevance

The AVMSD rules are relevant to the purposes of protecting consumers and human dignity. Those respondents (4 Member States and industry representatives) to the 2015 Public consultation who specifically expressed an opinion on the matter 148 confirmed the continued relevance of the rules. However, 4 Member States 149 indicated that the list of grounds under which hate speech is banned in Article 6 is excessively limited 150 .

In light of the public consultation and in the absence of any significant implementation issues, the rule on hate speech seems relevant.

Effectiveness

The effectiveness of Article 6 could be affected by the divergence of national rules. However, to date, there have been a limited number of cross-border cases regarding hate speech on TV broadcasting 151 . For on-demand services, it is hard to draw conclusions as not all Member States collect quantitative data in this domain. Where data has been collected, no cases of cross-border relevance were reported 152 . In this light, it can be concluded that the AVMSD rules have been effective, and that the divergence of national rules did not substantially affect the effectiveness of the Directive given that there were no cross-border cases.

EU added value

In 5 Member States 153 , the grounds for prohibiting hate speech match precisely those of Article 6, i.e. hate speech only on grounds of race, sex, religion or nationality. In the other 23 Member States, further grounds are foreseen. In particular, most Member States prohibit also hate speech based on sexual orientation 154 and disability 155 . The EU added value of the rule lies in the provision of a minimum guarantee against incitement to hatred based on race, sex, religion or nationality. It also provides the grounds for the EU to act. In addition, the derogation procedure, an important corollary of the COO principle (see section 6.3) that allows Member States to temporarily restrict the freedom of reception, builds on the grounds for prohibition of incitement to hatred as harmonised via Article 6.

Efficiency

The costs of monitoring hate speech in AVMSD essentially stems from the application of national law. The AVMSD as such does not imply any additional administrative or compliance cost while delivering the minimum guarantee mentioned above.

Coherence

The AVMSD rules are coherent with a number of international instruments including the Charter of the United Nations (Article 51), the Convention for the Protection of Human Rights and Fundamental Freedoms, the Additional Protocol to the Convention on Cybercrime, concerning the criminalisation of acts of a racist and xenophobic nature committed through computer systems.

Article 6 is however not fully coherent with Article 21 156 of the EU Charter of Fundamental rights, which prohibits discrimination under broader set of grounds that those for which hate speech is prohibited in audiovisual media services.

Article 6 is neither fully coherent with the grounds 157 laid down in the Framework Decision on combating hate crime 2009/913/JHA on combatting certain forms and expressions of racism and xenophobia by means of criminal law.

6.6 Commercial communications

The AVMSD contains rules applying to all audiovisual media services. These concern sponsorship 158 and product placement 159 as well as alcohol 160 and tobacco 161 advertising.

The AVMSD also lays down detailed rules applying only to television broadcasting. These set a maximum of 12 minutes of advertising per hour 162 for traditional broadcasting (so-called "12-minutes rule"), define how often TV films, cinematographic works and news programmes can be interrupted by advertisement 163 and set the minimum duration of teleshopping windows 164 .

Relevance of the current rules

The rules on audiovisual commercial communications contribute 165 to the overarching AVMSD objectives of supporting the internal market and ensuring consumer protection.

The relevance of the AVMSD rules restricting advertising for alcohol and fatty foods 166 (qualitative rules) remains unquestioned 167 by all stakeholders.

However, in the frame of the 2015 Public consultation the majority of TV broadcasters questionned the AVMSD quantitative rules (e.g. the 12 minutes/hour cap on advertising) and other rules such as those on product placement, sponsorship and self-promotion.

It also appears that in recent years, quantitative rules appear to be less relevant due to media convergence with users watching content on TV as well as mobile devices. In addition, viewers are more likely to switch to alternative offers, in particular without advertising. For example, in the USA where there are no minutage limitations, viewers overwhelmed with TV advertising, turned to other video offers (e.g. video on-demand) thereby disciplining the behaviour of TV broadcasters, who were forced to decrease the amount of advertising on their channels 168 .

Moreover, television advertising in the EU has been shrinking in 2013 as compared to 2012 169 , while the total size of online advertising market in the EU in 2013 increased by 11.6% compared to 2012. The Internet is likely to become the main advertising platform within the next two years, given its rapid development (+8,4% vs. 2012) and its market share in 2013 (27,4%) 170 . In Europe, online display advertising is the most dynamic form of advertising with video ads accounting for 16% of online advertising 171 .

Effectiveness

The effectiveness of the quantitative rules on the free circulation of services within the internal market is hampered by the fragmentation and gold plating of national rules. 

Firstly, for sponsorship announcements and product placement, national interpretations diverge on the notion of "potential undue promotional character" and of "undue prominence" 176 . Also, it is particularly complex to distinguish self-promotion from advertising when calculating the 12-minute limitation which also creates divergence between national laws.

When it comes to the 12-minute limitation 177 , at present, 13 Member States have stricter rules though those rules apply in most cases (10 Member States) to public service broadcasters' channels. The ceiling 178 of the 12-minutes rule was regularly exceeded in a number of Member States. This is primarily due to divergent national interpretations of various notions as mentioned above 179 . Consumers still have concerns about excessive advertising on TV 180 .

As to the effectiveness of qualitative rules, 24 Member States have adopted stricter rules for alcohol advertising (involving channels, advertised products or time slots) 181 . 2 Member States prohibit alcohol advertising on TV channels, while 22 others limit/ban specific content in the advertising (e.g. no advertising for spirits), channels (e.g. no alcohol advertising on public service broadcasting) or timeslots (period of the day during which no alcohol advertising can be broadcast).

The Commission's publicly procured study on minors' exposure to alcohol advertising 182 shows that on average, during one year (2013), a child in the EU saw 200 alcohol impacts 183 and an adult over 450 on television. A number of consumer organisations in favour of volume restrictions 184 highlight in the 2015 Public consultation that when specific protection measures are in place in an adequate form, they can have a beneficial impact. For example, in the Netherlands, where alcohol advertising cannot be broadcast between 06:00 and 21:00, the average number of impacts for alcohol advertising seen by minors aged 4-14 during peak hour 185 was lower than those in Germany, the UK or the Czech Republic 186 which do not apply watersheds. However, one pitfall of such scheduling limitations may be a shift of alcohol advertising just after peak time, at a time when minors, although less numerous, are still watching television quite massively. As the study on minors' exposure to alcohol advertising showed, when the time is not well adapted, minors may be exposed quite heavily to alcohol advertising just after the watershed 187 . Moreover, the analysis of a sample of commercial communications revealed that advertising frequently associates alcohol with sociability and depict drinking with humorous tone. However, although the study showed that 25% of the analysed advertisements could contain one of the elements described in the AVMSD, the study also highlighted that the advertisements were focused on associations that are possible to create within a few seconds (for example by portraying drinking among young, trendy people) but without creating causal links between the product and its effects, to which the AVMSD refers. As regards on-demand and online services, preventive measures have been put in place by the industry, although minors have the perception to have been exposed to alcohol advertising.

In the 2015 Public consultation, consumer organisations 188 pointed to the blurring lines between broadcast and on-demand services; to the voluntary character of some rules 189 and the lengthy procedures to review complaints in self-regulation arrangements; the focus on restricting the content of alcohol advertising rather than on restricting the volume of advertisement 190 ; the links between alcohol advertising and sponsorship in sport events. Stakeholders in different industries 191 also ascribe the ineffectiveness of the rules to the fragmentation due to divergent national legislations.

Moreover, as also affirmed by 6 Member States, 4 regulators and by most broadcasters 192 in the 2015 Public consultation, some of the AVMSD rules do not ensure a level playing field in times of media convergence and in light of the shift of advertising revenues online. Media services compete for the same advertising market but are not all subject to the same regulatory constraints (some because they are on-demand services subject to lighter AVMSD rules than broadcasting, others because they are not regulated by the AVMSD). The consequences of this differential treatment are even more remarkable when millennials are targeted 193 .

EU added value

The AVMSD rules on commercial communications harmonise some concepts (for example, the definition of advertising spots) and introduce minimum rules. This facilitated the circulation of audiovisual media services across the Union. For example, product placement used to be forbidden in the Television Without Frontiers Directive and was liberalised in the revision of the AVMSD in 2007. As a result, product placement is now allowed in all Member States within the limitations of the current Directive and with only limited stricter rules 194 . This brought legal certainty as to the possibility for programmes which include product placement to circulate across the EU. This confirms the EU added value of the rules.

Efficiency

As regards quantitative rules, while they generated administrative costs for regulators (up to EUR 1.2 million per year for one regulatory authority as regards all audiovisual commercial communication-related activities and overall up to EUR 1 million for all EU regulators as regards the quantitative rules very specifically 195 ) and compliance costs for broadcasters 196 , their effectiveness appeared to be sub-optimal.

While an objective of the last reform was to liberalise product placement, previously not allowed, the current AVMSD restrictions for product placement have not allowed this advertising format to unleash its full potential in terms of revenues. Some regulators and Member States 197 confirmed that the rules have led to legal uncertainty for stakeholders, discouraging them to invest in product placement. As a benchmark, in the US market, where there is no material regulation of product placement, this format represents almost 5% of the TV ad spend market. In the UK, it represents a share of only 0.1% 198 . If product placement rules were simpler, product placement revenues could see a 10%-15% increase 199 . Indeed, most broadcasters, in their replies to the 2015 Public consultation, agreed that product placement rules should be clarified and simplified.

As regards the hourly limitation, most broadcasters consider that the scarce flexibility of the 12-minutes rule and its exceptions prevent them from maximising revenues around peak periods 200 . As mentioned above, this limitation is regularly overpassed. According to a large commercial broadcaster, further liberalisation of insertion rules holds a potential of up to 6‐8% additional revenue (rough estimate). Most members of the association of television and radio sales houses estimate that more relaxed rules would generate a 1%-10% revenues increase. A large UK commercial broadcaster estimates a total loss of £3.3million in one year on their main channel as a consequence of the rules.

As regards sponsorship, more flexible rules could result in an increase in revenues up from 15% to 50%, according to some members of the audiovisual advertising sales houses (EGTA). Most broadcasters, in their replies to the 2015 Public consultation, agreed that sponsorship rules should be clarified and simplified.

It can thus be concluded that quantitative rules do not have a positive cost-benefit ratio. Costs stemming from some quantitative rules could be lower if rules were simpler or more flexible.

Also, at a moment where online advertising is overtaking TV advertising as the preferred media for advertisers, TV broadcasters are subject to stricter rules. In their replies to the 2015 Public consultation, advertisers, some broadcasters and several Member States claimed there is no level playing field between TV broadcasters and other media services, and in particular between TV broadcasters and on-demand service providers. This is even more relevant in those fields where these services compete for the same advertising market, i.e. when it comes to attracting the attention of millennials. 201  On the other hand, a few broadcasters, mainly from the UK, see the benefits of the status quo.

When it comes to qualitative rules, the costs have not been raised as an issue in the Public consultation mostly because the protection of the most vulnerable consumers cannot be questioned.

Coherence

There is a general coherence amongst existing EU rules in the field of audiovisual commercial communications. If an online service does not fall under the definition of an on-demand audiovisual media service under the AVMSD, it will be regulated under the ECD 202 as an information society service. Outside the domains covered by the AVMSD that regulate specific aspects of unfair commercial practices, the Unfair Commercial practices Directive 203 (UCPD) applies. The AVMSD is complementary to the ECD and the UCPD. The AVMSD is also in complementarity with the numerous self- and co-regulatory initiatives in the field of advertising at Member States and EU level. Most of these initiatives build on the AVMSD but also go beyond its remit (e.g. they address online marketing beyond audiovisual commercial communications).

6.7 Promotion of European works

TV broadcasters must, where practicable, reserve to European works a majority of their transmission time and at least 10 % of their transmission time or of their programming budget for European works created by producers who are independent of broadcasters. 204  

On-demand services providers, where practicable, must promote the production of and access to European works. However, the Directive gives examples of how this can be done in practice, leaving the choice of measures to Member States. The examples mentioned in the Directive are: i) financial contribution to the production and rights acquisition of European works; ii) a share in the catalogues and/or ii) prominence of European works in the catalogues. 205 Member States have chosen very different ways for implementation ranging from relatively loose requirements to a complex set of obligations sometimes combining all three mentioned examples (see Effectiveness sub-section).

Relevance of the current rules

The AVMSD rules on promotion of European works are still relevant in light of the rapid growth of the on-demand and the Internet industry which boosts availability and opens up new ways of accessing content 206 .

However, in the 2015 Public consultation on the AVMSD, some media and entertainment services, telecom operators, commercial broadcaster and operators from the digital and internet related industry while acknowledging the relevance of the rules, expressed the opinion that it should be primarily the demand by the audiences, rather than legal obligations, that should guide commercial broadcasters (as opposed to public service broadcasters who have to fulfil a public service mandate) when taking decisions on content offerings.

Effectiveness

For TV broadcasting, the First and Second Report on the application of rules on promotion of European works confirm that the majority of service providers comfortably fill the required quota for European works and independent works. Compliance with the AVMSD rules resulted in driving up the proportion of European works that were transmitted. In 2007, European works stood for 62.4 % of TV broadcasting service transmission time 207 .In 2011 and 2012 the average transmission time dedicated to European works by all reported channels was 64.1% 208 .

As regards quotas for independent productions, the EU-average proportion by all reported channels in all Member States was 33.1% in 2011 and 34.1% in 2012 while the EU-average compliance rates amounted to 80% for 2011 and 82% for 2012 209 .

As mentioned above, the current rules for TV broadcasters have resulted in European citizens being exposed to European works, on average 64.1 % of the average transmission time. This was particularly important in a context where viewer hours for European works have declined (down from 74 % in 2007 to 69 % in 2010) 210 .

For on-demand services, the effectiveness of the AVMSD rules on promotion of European works is reduced by a number of factors:

-The AVMSD does not impose clearly defined obligations on the promotion of European works in on–demand services. This has led to significantly diverging approaches and thus fragmentation in the level of obligations imposed across Member States 211 . Annex 4 provides an overview of the diverse national approaches adopted. Fragmentation and lack of data regarding shares of European works in on-demand catalogues 212 (14 Member States do not require providers to share these figures) hampers the circulation of services across the Union. It also created gaps in the supply and promotion of European content on those services.

-Whereas in some Member States on-demand services are required to either fill a mandatory share or give prominence to European works in their catalogues 213 , on-demand providers' investments in content production are lower than those of broadcasters 214 and on-demand catalogues may contain a lower share of European works than broadcasters' programmes do 215 .

-Some VoD service providers are established in one Member State but mainly target a different Member State 216 because they often choose to establish themselves in countries with the most favourable regulatory treatment ("forum shopping"). Thus on-demand providers do not contribute to the promotion obligations (particularly investment in creative production and distribution) in the Member States they target, when different from their country of establishment. This is the case for Be-Fr, FR and IT.

The differences in the rule applied to TV broadcasting and on-demand services have led to an unequal level of contribution to promotion of European works. The investment of the main TV groups in original programmes in 15 countries amounted to EUR 15.6 billion 217  in 2013, i.e. 24% of TV broadcasters revenues (EUR 85 billion) 218 while on-demand providers made a minimal or even no contribution to the production and the promotion of EU works. They invested EUR 10 million in original content i.e. less than 1% of their total revenues (EUR 1.5 billion) 219 .

In light of the above, it can be concluded that the rules on the promotion of European works for TV broadcasting services have contributed to the development of a European audiovisual industry. The rule applied to on-demand services may have not been as effective.

Moreover, the differential regulatory treatment between broadcasting and on-demand services might create undue competitive advantages/disadvantages for operators. On the one hand, fast developing on-demand services 220 are subject to light touch regulation and, due to the lower constraints on their editorial policies, are able to engage in "forum shopping". On the other hand, TV broadcasters do not enjoy as much flexibility – in a context of declining viewing hours for European fiction – which puts at risk their attractiveness and competitiveness. The results of the 2015 Public consultation confirmed a perceived lack of fair treatment between TV broadcasters and on-demand services in this regard: 61% of the contributors in this context (from Member States and industry) who expressed an opinion believe that the current rules are not fair.

EU added value

The AVMSD harmonises concepts such as the definition of "European work" 221 and the obligations to be met by TV broadcasters 222 as regards promotion of European works and independent productions. It should also be considered that the obligation to promote European works "where practicable", that was meant to ensure flexibility in the modulation of measures, has resulted in practice in exemptions and remarkable differences in the national transposition of the rules. The minimum harmonisation overall confirms the EU added value of the rules.

Efficiency

For TV broadcasting, administrative costs mainly depend on the system put in place by national regulators to monitor compliance 223 and on the number of channels operating in the Member State. For compliance costs in particular for commercial broadcasters 224 can be high as compared to producing and/or acquiring European content from other Member States than foreign content from third countries 225 . The Second Report on the application of Articles 16 and 17 (Annex 6) shows that small and thematic channels could face additional difficulties in fulfilling mandatory quotas. However, it should be noted that, according to Article 18 the obligations on Articles 16 and 17 do not apply to television broadcasts that are intended for local audiences and do not form part of a national network. As regards channels with a low audience share (below 0.3%), national authorities can grant these channels individual exemptions from the reporting obligation.

For on-demand services, compliance costs depend on national implementation. Whereas monitoring the application of the rules may be particularly costly 226 and reporting obligations for providers may be medium-high 227 , this does not necessarily translate in (an increased) availability of or investments on European content (see sub-section on Effectiveness).

Coherence

The rules are coherent with the MEDIA sub-programme of Creative Europe, which aims to support European film and other audiovisual industries. To this end, MEDIA provides funding for the development, promotion and distribution of European works in Europe and beyond. The AVMSD rules are also coherent with the EURIMAGES initiative of the Council of Europe, promoting the European audiovisual industry by providing financial support to European co-productions (feature films, animations and documentaries). In doing so, EURIMAGES encourages cooperation between professionals in different European countries.

The AVMSD rules on promotion of European works are also coherent with the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions which establishes a series of rights and obligations, both at national and international level, with a view to protecting and promoting cultural diversity. The AVMSD rules also underpin where appropriate Cultural Cooperation Protocols to trade agreements with EU partners as a mean to implement the above-mentioned UNESCO Convention. These Protocols warrant preferential treatment to co-produced audiovisual works by extending to them the classification as European works for the purposes of the AVMSD. This is done under conditions which are defined in the Protocols themselves and reflect the modulation of this mechanism according to differing situations and characteristics in terms of development of audiovisual industries and cultural exchanges with the countries concerned 228 .

The upcoming reform of the EU copyright rules will also take into account objectives related to the availability and promotion of European works. The Communication on Copyright adopted by the Commission on 9 December 2015 highlights that legal offers of European works online, including European audiovisual works 229 , have yet to realise their full potential. The Copyright reform aims to ensure wide availability of creative content across the EU and make sure that EU copyright rules continue to provide a high level of protection for rights holders while striking a good balance with other public policy goals such as ensuring cultural diversity in terms of wider access to a variety of cultural works across the EU.

6.8 Independence of regulators and cooperation amongst regulators

According to Article 30 AVMSD, Member States shall take appropriate measures to provide each other and the Commission with the information necessary for the application of the Directive, in particular in particular through their competent independent regulatory bodies. Article 30 of the AVMSD does not lay down any obligation for Member States to ensure neither the creation nor the independence of national regulators. However, it considers that independent regulators play a role in the cooperation amongst Member States for an effective application of the AVMSD. Also, according to the EU treaties and relevant case law 230 , Member States should adopt national laws enabling the impartial application of the objectives of EU law.

Relevance of the current rules

In the 2015 Public consultation, an overwhelming majority of respondents across various stakeholder categories 231 confirmed the relevance of having independent, well-resourced and suitably empowered regulators. The majority of respondents to the 2013 Public consultation on independence of regulators 232 expressed the same opinion. In the ERGA recommendations on independence of regulators, a vast majority of audiovisual regulators across the EU consider independence to be a pre-requisite for carrying out their role. This shows that, by not laying down requirements for independence of regulators, the currently rules are not relevant.

The current rules are also not relevant to the AVMSD objective to preserve free and pluralistic media and the functioning of the democratic systems in the EU and in the Member States. This was affirmed by public service broadcasters and human rights/media freedom NGOs in the 2015 Public consultation and in the 2013 Public consultation on independence of regulators.

In light of the above, there is scope for improving the relevance of the current AVMSD rules on independence of regulators to ensure an effective transposition and application of the Directive.

Effectiveness

There are structural weaknesses in a number of audiovisual regulators across the EU, combined with very diverse regulatory structures and potentially varying degrees of independence.

Since the adoption of the AVMSD, all Member States have progressively created a regulatory authority for the implementation of the AVMSD 233 . While most regulators fulfil what are considered the main criteria for independence 234 , important features for regulatory independence are missing in a number of Member States 235 . The Council of Europe Recommendation (2000)23 236 on the independence and functions of regulatory authorities for the broadcasting sector as well as a number of studies and reports 237 , consider that the following set of criteria would ensure an effective and independent implementation of legislation:

i) independence from third parties or from  external influence;

ii) transparent decision-making processes and accountability to relevant stakeholders;

iii) open and transparent procedures for the nomination, appointment and removal of Board Members;

iv) knowledge and expertise of human resources;

v) financial 238 , operational and decision making autonomy;

vi) effective enforcement powers;

vii)  the possibility only for judicial power to review the regulatory bodies' decisions.

Failure to fully align with each of these criteria does not necessarily imply a lack of independence. However, they provide a formal framework to ensure the highest possible level of independence. At present, the situation across the EU is as follows:

The negative impact of these factors on the achievement of various AVMSD objectives has been observed in several respects:

Some commercial broadcasters replying to the 2015 public consultation mentioned the recent examples of decisions by several regulators, which seemed to be problematic for their own independence and which affected negatively Public Service Broadcasters (PSB), commercial broadcasters and sometimes all players 256 .

The lack of specific requirements in Article 30 was evident in the Pre-accession negotiation process, as the Commission could not rely on a binding legal instrument to require the independence of newly created audiovisual regulators 257 . The Commission’s Country Reports pointed to problems with conflict of interest and the political nature of the nomination and appointment procedures in Bulgaria 258 and Romania 259 .

The shortcomings of Article 30 AVMSD were pointed out by an independent study commissioned by the Commission, the INDIREG Study on "Indicators for independence and efficient functioning of audiovisual media services regulatory bodies"(2011). The Final Report showed that in some EU countries the legal framework does not guarantee an independent exercise of powers by the regulators; in other EU countries regulators are only formally independent but this is not the case in practice. The study found that compliance with legal requirements is often not sufficient to deliver on objectives. There are subtle and indirect ways to exert influence on regulators, especially for governments, and these are difficult to measure 260 .The final Report of the most recent RADAR study of 2015 (updating the 2011 INDIREG Study) confirms the findings of the 2011 study.

In 2013, the Final Report of the High Level Group on Media Freedom and Pluralism 261 highlighted the shortcomings of Article 30. The report recommended, inter alia, that regulators should be independent and appointments should be made in a transparent manner, with all appropriate checks and balances. As a follow-up, the Commission launched in the same year the Public consultation on the independence of regulators.

In the 2015 Public consultation, a large majority of regulators, Member States, commercial broadcasters, digital and telecom operators and representatives of consumers considered the rules of the Directive not to be effective. 262 The respondents to the 2013 public consultation on independence of regulators noted that lack of independence could cause problems in particular in the domains of audiovisual commercial communications, jurisdiction and protection of minors. 263

Since the way regulatory authorities function can differ significantly from one Member State to the other, it can translate into different levels of user protection across the EU. In markets with weak regulators, consumer rights risk not to be sufficiently protected 264 .

Moreover, regulatory authorities lacking independence are not in a position to guarantee media freedom and pluralism 265 . In many countries where independence of national regulatory bodies is weak, challenges to media freedom and pluralism over the last years have been reported 266 . This was the case for Romania in the period from 2007 to 2012, where the Commission identified problems with ensuring media freedoms and with the independence of the audiovisual regulatory body 267 . The same happened in Hungary in 2010, where a number of provisions of a draft law raised concerns related to media pluralism. The Commission 268 , the European Parliament 269 , the OSCE Representative on Freedom of the Media 270 , the Council of Europe 271 and other international bodies and NGOs active in the area of human rights and civil liberties, and Member States have also all raised concerns related to both media freedom and the independence of the regulator. The recent amendment to the media law in Poland (The Broadcasting Act of 1992) could lead to the limitation of the powers of the Media Regulatory Authority. As such, it might raise issues related to media pluralism and to the independence of public service broadcasting in the country, which in turn may affect the independence of audiovisual regulators.

In this light, Article 30 does not provide sufficient safeguards to ensure an effective coherent application of the AVMSD across the European Union.

EU added value

As the AVMSD does not contain any formal obligation for Member States to create an independent regulatory body if one does not exist already nor does it indicate any characteristics for such body. Neither does the AVMSD set any requirement for Member States to have an independent regulatory body.

The absence of a formal obligation has contributed to diverse regulatory structures and varying degrees of independence. Yet, regulatory independence both from political bodies and commercial interests is essential to ensure effective internal market supervision, proper application of the rules of the Directive and guarantee media freedom and pluralism. In many countries where independence of national regulatory bodies is weak, challenges to media freedom and pluralism over the last years have been reported 272 . This was the case for Romania in the period from 2007 to 2012, where the Commission identified problems with ensuring media freedoms and with the independence of the audiovisual regulatory body 273 . The same happened in Hungary in 2010, where a number of provisions of a draft law raised concerns related to media pluralism. The Commission 274 , the European Parliament 275 , the OSCE Representative on Freedom of the Media 276 , the Council of Europe 277 and other international bodies and NGOs active in the area of human rights and civil liberties, and Member States have all raised concerns related to both media freedom and the independence of the regulator. The OSCE Representative also recently called for respect of regulator's independence in Latvia following the dismissal of the Regulator chairman 278 .

A captive regulator may treat differently the various players competing on the same market clearly distorting competition. There is also evidence that the independence of audiovisual regulatory authorities has an impact on the providers' willingness to establish in an EU Member State and serve audiences in several Member States 279 .

As a result, the lack of independence of the Regulators may undermine the functioning of the audiovisual internal market.

On these grounds, it can be affirmed that Article 30 AVMSD does not have in general EU added value.

It should however be considered that Article 30 did play a role in facilitating the setting up of the ERGA in 2014. ERGA has facilitated cooperation among existing independent regulators and the Commission on cross-border issues.

Efficiency

The efficiency of Article 30 AVMSD as regards independent regulators cannot be assessed given the absence of a specific obligation.

Coherence

Existing EU legislation in a number of domains (i.e. telecom, energy and postal regulatory frameworks, personal data protection) mandate the Member States to ensure the independence of national competent authorities (see the considerations under the section on Relevance). For example, the EU Framework Directive for electronic communications requires the Member States to ensure that regulators act independently and do not seek or take instructions from any other body in relation to the exercise of certain key regulatory tasks assigned to them. Only appeal bodies may suspend or overturn decisions by national regulatory authorities, and the head of a national regulatory authority and other members of the collegiate body fulfilling that function may be dismissed only if they no longer fulfil the conditions required for the performance of their duties laid down in advance in national law. This shows that the AVMSD is not coherent with existing EU frameworks in other domains.

The lack of coherence of the AVMSD with EU legislation in other domains was also pointed out by the Centre for Media Pluralism and Media Freedom which noted that the lack of harmonisation in the audiovisual domain is "particularly blatant compared to electronic communications framework that regulates issues which are closely related and complementary to those in the AVMSD". It further stresses that in times of convergence, it could be both valuable and reasonable to consider the establishment of the same requirements for audiovisual regulatory authorities as foreseen for the electronic communications regulators, particularly as in some Member States electronic communications and audiovisual media services are already under the supervision of the same regulator.

The AVMSD provisions are not coherent either with a number of relevant international instruments endorsing the principle of independence of regulators. This is the case for, amongst others, the Council of Europe’s Committee of Ministers’ Recommendation (2000)23 285 on the independence and functions of regulatory authorities for the broadcasting sector; the Declaration of the Committee of Ministers on protecting the role of the media in democracy in the context of media concentration 286 ; and Resolution No. 2 of the 7th European Ministerial Conference on Mass Media Policy 287 on cultural diversity and media pluralism in times of globalisation. Notably, the Council of Europe Recommendation (2000) 23 unequivocally states: “The rules governing regulatory authorities for the broadcasting sector, especially their membership, are key elements of their independence. Therefore, they should be defined so as to protect them against any interference, in particular by political forces and economic interests”.

6.9 Accessibility for persons with disabilities

Article 7 AVMSD requires Member States to encourage audiovisual media service providers to gradually provide for accessibility services for hearing and visually-impaired viewers.

Relevance of the current rules

All the respondents to the Public consultation of 2015 shared the opinion that accessibility of audiovisual content by all viewers, including those with visual and hearing disability, must be guaranteed. This confirms the relevance of Article 7 AVMSD.

Effectiveness

As indicated in the 2nd Application report on the AVMSD, the proportion of audiovisual media services accessible to people with visual or hearing disabilities has increased in some Member States since the 1st Application report on the AVMSD of May 2012. For example, the level of subtitling services has increased since 2010 (reporting period for the 1st Application Report), either due to the regulatory action by the Member States 288 or voluntary commitments by the audiovisual media service providers 289 . Voluntary codes for broadcasting services have been introduced in 7 Member States 290  and for on-demand in 5 291 .

Commercial broadcasting channels however lag behind as compared to public service broadcasters, which are subject to stricter rules in many countries. The average share of programmes broadcast in the Member States with subtitles by the two main public channels reached in 2012 between 56% and 61%, respectively, while the share for the two main commercial broadcasters amounts to only 44% and 48% respectively. 292

There is divergence in the conditions of accessibility for consumers leading thus to a fragmentation across the European Union. While subtitles are available in most Member States, the amount of content subtitled varies considerably between countries (from almost all programmes in the UK or France to only specific ones, such as news, in Lithuania).

The availability of access services for the visually impaired is much lower. The average volumes broadcasted with audio description range between 4% and 11%. Some Member States such as the Netherlands or Finland do not provide any audio description, while other Member States such as Slovakia (from 7 to 10 % of overall programmes) and UK (15 to 24 %) do. 293 The provision of sign language interpretation is the least available access service. On average it is below 5% of the overall programmes across all countries covered by the Commission's study of November 2013, on assessing and promoting e-accessibility. Member States such as Portugal or the UK perform better in this regard (between 7 and 16 % and 5 to 7 % respectively) than the majority, including some that according that study do not provide any signing (e.g. Germany or Luxembourg). 294 Overall, persons affected by disabilities still face significant barriers when accessing audiovisual content in the EU. 295

In the 2015 Public consultation, viewers and regulators 296 expressed dissatisfaction resulting from the fact that some programmes are only accessible on linear broadcast but not on-demand. A majority of regulators and many Member States, as well as commercial broadcasters, disability groups and manufacturers also considered that the rules are not sufficient to ensure accessibility. They argue that in the absence of a legal obligation, the EU cannot achieve a barrier-free access to audiovisual media content for all citizens. On the other hand, about half of the Member States believe that the AVMSD is effective for it leaves the flexibility required by the heterogeneity of the national markets and the challenges faced in each Member State.

Finally, evidence 297 shows that specific obligations in legislation and/or by the regulators deliver better results in terms of provisions of accessibility services. This is confirmed by the view point expressed by manufacturers in the 2015 public consultation. They reported that, despite their best efforts, the overall accessibility depends on the accessibility of other parts of that ecosystem, i.e. audiovisual content.

In light of the above, it can be concluded that the AVMSD had an incentive effect for Member States to take action to increase the accessibility to audiovisual media services across the EU.

EU added value

The current rules also allow for the development of co- or self-regulatory schemes which often complement national rules.

Furthermore, as confirmed in the 1st and 2nd Application Report on the AVMSD, the fact that the Commission monitors and reports on the state of the art in this domain constitutes an incentive to take action both for Member States and broadcasters.

In light of the above, it can be concluded that Article 7 laid the ground at EU level for an action of the Member States to increase the accessibility to audiovisual media services.

Efficiency

The efficiency of Article 7 cannot be assessed given that it sets out no obligations and as such there are no costs directly linked to it.

However, the lack of EU-level harmonisation has led to an uneven treatment for TV broadcasters and on-demand service providers. In most Member States, the latter are not subject to accessibility requirements and even content that was available with assistive services on TV is no longer accompanied by those assistive services when accessed as a catch-up service 305 .

At Member State level, national law has generated varying degrees of compliance costs. For TV broadcasting, the yearly costs of providing accessibility services represent less than 0.1 % of large broadcasters' revenues. 306 To the same extent, for TV channels of major broadcasters, the additional production costs of subtitles usually make up less than 1% of the production budget for the programme itself. However, for niche channels using archive and third-party programming, or for broadcasters in small countries, costs may reach 25-30% of the channel’s production budget. For many television broadcasters, live programming accounts for an increasing proportion of overall output 307 .

Coherence

The AVMSD is coherent with EU activities aimed at promoting the active inclusion and full participation of disabled people in society, in line with the EU human rights' approach to disability issues. As such, the AVMSD rules are coherent with the European Commission's European Disability Strategy 2010-2020 309 that builds on the UN Convention on the Rights of People with Disabilities (UNCRPD), and takes into account the lessons learnt from the European Disability Action plan 2004-2010 310 . As such, the AVMSD is coherent with EU initiatives promoting the active inclusion and full participation of disabled persons in society, in line with the EU human rights approach to disability issues.

The AVMSD is also coherent and complementary to other EU-level initiatives that aim at the inclusion of people with disabilities, in particular the proposal for a Directive on the accessibility of the public sector bodies' websites (DG CNECT). The AVMSD may not be fully coherent with the final outcomes of the proposal for a Directive on the harmonisation of the laws of the Member States relating to accessibility requirements of goods and services – the European Accessibility Act (DG EMPL)  311 . This proposal also covers audiovisual services. It provides an information requirement about the functioning of the service and about its accessibility characteristics and facilities as well as the general requirement of "including functions, practices, policies and procedures and alterations in the operation of the service targeted to address the needs of persons with functional limitations". If the proposal for a European Accessibility Act were to be finally adopted by the co-legislators in its present form, it would mean that audiovisual media services would be subject to stricter rules than those currently set out in the AVMSD. As a result, the rules laid down in the AVMSD would become irrelevant.

The AVMSD is coherent with the UN convention on the Rights of Persons with disabilities (UNCRPD) that was ratified by all EU Member States. The AVMSD rules are also coherent and complement national initiatives such as quotas of accessible programmes to be filled by providers or with state aid measures mentioned in the Effectiveness sub-section.

6.10 Events of major importance for society and short news reports

The AVMSD leaves to the Member States the prerogative to prohibit the exclusive broadcasting of events which they deem to be of major importance for society, where such broadcasts would deprive a substantial proportion of the public of the possibility to follow those events on free-to-air television 312 . The AVMSD mentions the football World Cup and the European football championship as examples of such events 313 . When a Member State notifies a list of events of major importance, the AVMSD requires the Commission to assess its compatibility with EU law. If deemed compatible, the list will benefit from 'mutual recognition'.

The 2nd Application report on the AVMSD mentions the adoption of a positive decision 314 on the list of events of major importance for society proposed by Italy in December 2011. In 2014, the Commission approved the Polish list. In 2015, the Danish list was approved.

According to a recent judgement by the Court of Justice, the Commission should only review what effect a Member State's designation of events as being of major importance has on the freedoms and rights recognised under EU law and if it exceeds those which are intrinsically linked to such a designation 315 .

To warrant the public's access to information on events of high interest, Member States must ensure that any broadcaster established in the Union gives access to short extracts of such events to the public which are transmitted on an exclusive basis. According to the AVMSD, Member States shall define the modalities and conditions for the provisions of such short news reports. 316 In so doing, Member States can also provide for compensation arrangements but compensation shall not exceed the additional costs incurred in providing access. In reply to a request for a preliminary ruling, the Court of Justice held that this limitation is in line with the Charter of Fundamental Rights, in particular the right to property. Although it restricts the freedom to conduct a business, such restriction is justified and in line with the principle of proportionality 317 .

Relevance of the current rules

Most respondents across all stakeholder categories in the 2015 Public consultation on the AVMSD stated that the rules are relevant.

However, for events of major importance for society, some commercial broadcasters have indicated that the system of lists is outdated as nowadays the market has the instruments to address the public's demand for major events. In light of the above, it can be concluded that the AVMSD rules are still relevant.

Effectiveness

Most respondents across all stakeholders categories (including most Member States and regulators) in the 2015 Public consultation on the AVMSD stated that the rules on events of major importance for society have been effective.

In the frame of the 2015 Public Consultation, one regulator, consumer associations, telecom and ICT industry flagged some elements reducing the effectiveness of the Directive: According to them, the notion of "events of major importance for the society" is not clear enough and consequently seems to be stretched and overused by national authorities in charge of creating the lists; the rules are less effective in times of media convergence as they do not apply to "new" services (mentioned by some Member States and public service broadcasters). Also, according to several consumer organisations, the rules do not support the specific AVMSD objectives related to consumer protection as they allow sport events listed as "of major importance" to be sponsored by alcohol producers.

The rules on short news reports have proven to be effective to date. Whereas there have been some issues with the transposition of the definition of the source of short news and the lack of time limits, these issues were addressed and solved with the Member States concerned and did not highlight problems with the effectiveness of the rules as such. This was confirmed by a majority of respondents across all stakeholder categories in the 2015 Public consultation.

In light of the above, the AVMSD rules on events of major importance for society and short news reports have proven to be overall effective for sustaining media pluralism and right of information.

EU added value

The AVMSD restricts broadcasters' freedom to conclude exclusive deals that would prevent citizens from accessing information and events of major importance for society. By warranting EU-wide mutual recognition to national decisions in this domain, the AVMSD has delivered EU added value.

The AVMSD requires Member States to ensure that any broadcaster established in the Union has access, on a fair, reasonable and non-discriminatory basis, to events of high interest to the public for the purposes of short news reports. The AVMSD rules thus constitute an important corollary to the free circulation of audiovisual media services offered by providers under the jurisdiction of Member States. This confirms the European added value of the rules.

Efficiency

In the framework of the Public consultation, stakeholders did not flag any lack of proportionality between the cost resulting from the application of the provision of events of major importance for society and the objective to ensure access to these events.

However, Public service broadcasters indicated that there is scope for simplification and speeding up of the notification procedure. Also, one Member States and a few public service broadcasters indicated that the rules create unequal market conditions amongst operators active in different Member States as the lists cannot be enforced against exclusive right holders outside the relevant territory.

For short news reports, in the 2015 Public consultation, some commercial broadcasters mentioned that there is scope for de-regulation as broadcasters already have access to short news reports under self-regulatory and contractual arrangements.

Coherence

The designation of events of major importance for society does not give rise to issues of coherence with other EU initiatives and activities. The AVMSD functions in a complementary framework with Member States' decisions on the designation of events of major importance for society.

The right to short news reports does not give rise to issues of coherence with other EU initiatives and activities. The AVMSD functions in a complementary framework with Member States' legislation regarding the modalities of exercising that right, including compensation arrangements, the maximum length of short extracts and time limits regarding their transmission.

6.11 Right of reply

Article 28 of the AVMSD warrants a "right of reply" that applies to television broadcasting (on-demand audiovisual media services are excluded from the application of this rule). Any natural or legal person, regardless of nationality, whose legitimate interests, in particular reputation and good name, have been damaged by an assertion of incorrect facts in a television programme must have a right of reply or equivalent remedies.

Relevance of the current rules

Most respondents across all stakeholders' categories in the context of the 2015 Public consultation on the AVMSD stated that the AVMSD rules are relevant. This confirms that the rules on the right of reply are still relevant.

Effectiveness

Most respondents across all stakeholders' categories in the 2015 Public consultation on the AVMSD perceive the AVMSD rules to be effective. A number of stakeholders however, called for extending the rules to cover all audiovisual media services in order for the rules to be truly effective. The implementation of the provision has never given rise to any situation where the achievement of objectives was challenged. In light of the above, it can be concluded that the rules on the right of reply are perceived to be effective.

EU added Value

By providing a common level of protection in television broadcasting, the AVMSD has brought a clear EU added value. It should however be considered that, in the 2015 Public consultation on the AVMSD, public service and commercial broadcasters highlighted that there is a case for extending the AVMSD rules on the right of reply to all audiovisual media services, to ensure alignment with national trends (which have followed soft law – see below under Complementarity - and applied the rules beyond television broadcasting) and hence better harmonisation.

Efficiency

Despite the Public consultation and the studies supporting the REFIT evaluation, it has not been possible to conclude on the efficiency of the right of reply. However, neither the results of the 2015 Public consultation nor other elements suggest that there are more cost-effective options to ensure a right of reply in television broadcasting.

Coherence

The rules on the right of reply are coherent with soft law measures in this field, in particular the 2006 Council and Parliament Recommendation on the Protection of Minors and on the Right of Reply 318 (which is also coherent with the Recommendation of the Council of Europe (2004) 161 on the right of reply in the new media).  The Recommendation is a "soft law" measure calling on the Member States to ensure the right of reply online or equivalent remedies. In including the right of reply in online media, the 2006 Recommendation extended the scope of a pre-existing 1998 Recommendation 319 .

6.12 Self/co-regulatory initiatives in the context of the AVMSD

The AVMSD encourages Member States to use self and co-regulation in the fields coordinated by the Directive, and particularly in the field of commercial communications in children's programmes 320 .

Relevance of the current rules

A large number of respondents from Member States, broadcasters, the Internet sector and consumer organisations to the AVMSD Public consultation 2015 and to the 2013 Green Paper on media convergence stated that the self and co-regulatory initiatives encouraged in the AVMSD are of continued relevance to ensure an appropriate level of consumer protection, in particular in the fields of audiovisual commercial communications, protection of minors and accessibility of audiovisual content. This confirms the relevance of the AVMSD rules encouraging the use of self and co-regulation.

Effectiveness

At present, the domains where self-and co-regulation is most frequently used at national level are audiovisual commercial communication (in particular addressed to children and concerning audiovisual commercial communications of alcohol and HFSS foods), protection of minors and accessibility of audiovisual content. While the majority of countries have self- or co-regulatory schemes in place for audiovisual commercial communications, in the field of the protection of minors from harmful audiovisual content, statutory regulation prevails. The majority of codes lacks specified targets and objectives which makes their proper evaluation difficult. Where monitoring processes are in place they are often not formalised and implemented systematically. Complaints are often used as an indicator to measure the performance of a self- or co-regulatory scheme; however they form a relatively ambiguous indicator. The existence of a legislative backstop is an important success factor in promoting compliance with a self- or co-regulatory code. Graduated sanctions which maintain an element of proportionality are usually considered to be an effective approach in enforcing a scheme 321 .

Already at the time of the last revision in 2007, Member States had put in place self and co-regulatory regimes in the fields covered by the Directive, such as for protection of minors. This saw a spur following the entry into force of the Directive as testified by the 1st Application report on the AVMSD, which mentioned that in all but two Member States self- or co-regulatory schemes existed, or encouragement provisions had been directly included in the media legislation. The 2nd AVMSD Application report mentions that since the previous Application report, four additional Member States 322 adopted new self-/co-regulation systems, mostly in the field of protection of minors (in particular in on-demand services) and accessibility.

In the field of alcohol advertising, a comparison of the 1st and the 2nd Application report on the AVMSD shows that the number of media services and Member States involved in self-regulation of marketing and advertising of alcoholic beverages 323 increased substantially from 2007 to 2010 and remained stable from 2010 to 2014.

Codes of conduct on audiovisual commercial communications of food and beverages high in fat, salt and sugars (HFSS) to children codes are already in place in all Member States but two. The 2nd AVMSD Application report mentions that as compared to the 1st Application report most Member States did neither update the current codes nor develop new codes of conduct 324 . There are still a number of Member States where there are no relevant measures in place 325 or the existing legislation only encourages the developments of such codes 326 . In many cases the existing codes do not specifically address audiovisual commercial communications of HFSS food products addressed to children (e.g. SK, CZ) but in general to the advertising of food products or focus on the promotion of a healthy diet. Only in eight cases codes have been updated or new codes were set up since the last Application Report. In two Member States, new legislation or co-regulatory measures are at a drafting stage (HR, MT). In two other Member States, new self-regulation is being developed (CY, FI).

According to estimates from the WHO’s Childhood Obesity Surveillance Initiative (COSI), around 1 in 3 children in the EU aged 6-9 years old were overweight or obese in 2010. This is a worrying increase compared to 2008, when estimates were 1 in 4 327 . This situation derives from varied behavioural risk factors including minors' exposure to food advertisements and other marketing tactics. An evaluation of the Platform for Action on Diet, Physical Activity and Health concluded that stakeholders’ initiatives in the field of marketing and advertising showed good progress, but that their impact could be further strengthened 328 .

As regards protection of minors, many Member States have in place codes of conduct on minors' protection 329 or other self-regulatory systems 330 .

As regards hate speech, self-regulatory arrangements are in place in a number of Member States (AT, BE, DE, EL, HU, IT, NL, PL, FI, DK) 331 whereas there is no information on the use of co-regulation.

The results of the 2015 Public consultation have provided some indications as to the effectiveness of these arrangements in various fields covered by the Directive 332 .

As regards commercial communications, in the majority of Member States, co-regulatory systems are in place.

Some commercial broadcasters, advertisers, the food and drink industry, the Internet, telecom ICT sector indicated that self and co-regulatory initiatives are an effective tool to be further promoted. However, consumer organisations and public health agencies in the Member States believe that the self- and co-regulation has not been effective in particular when it comes to alcohol advertising and advertising targeting children, in light of blurring lines between broadcast and on-demand services and the voluntary character of self-regulatory mechanisms. Also, self- and co-regulation systems are deemed to have excessively lengthy procedures to review complaints.

When it comes to protection of minors, self and co-regulation appears to be an effective tool given the satisfactory take up in the Member States (see above) and the fact that both the ERGA 333 and a large number of stakeholders from various sectors (broadcasters, the Internet and ICT industry, commercial broadcasters, consumer organisations) see this as an effective complement to regulation. ERGA also stressed the importance of self and co-regulation in filling regulatory gaps (i.e. to ensure protection in online services that are not in the AVMSD scope). ERGA has highlighted best practices in co-regulation, such as the shared responsibility between the Dutch Media Authority and NICAM (the Netherlands Institute for the Classification of Audiovisual Media 334 ). Most VOD service providers established in the Netherlands have voluntarily adapted the NICAM classification system to their services.

As regards services not covered by the AVMSD, video-sharing platforms have in place self-regulatory tools to protect users from illegal or harmful content. They have in place community guidelines which prohibit racism, calls to violence, or other forms of abusive and discriminatory content. Any user can report, or flag, content for review and possible removal. Guidelines are updated over time. Amongst the latest updates is Facebook's ban of content "praising terrorists 335 " or Twitter's ban of indirect threats of violence in addition to direct threats. Video-sharing platforms devote substantial resources to "moderating" UGC content (one third of total Facebook employees are in charge of content moderation and YouTube also relies on the support of a network of external organisations 336 ).  Activists have demonstrated that Facebook enacts different standards for content moderation i.e. nudity images are removed more quickly than incitement to violence 337 . YouTube primarily relies on the number of complaints received to review content 338 and this has shortcomings 339 . The Council of Europe reported that community guidelines are ineffective against hate speech 340 .

EU added value

Encouraging Member States to use self and co-regulation warrant that Member States take action in fields like advertising of HFSS foods to children which are not regulated at EU level. In addition self and co-regulation are in line with the EU better regulation agenda (for further details, see the sub-section on Coherence).

Efficiency

It is not possible to assess efficiency as such given that there is no obligation to the use self and co-regulation in the AVMSD. The efficiency of self and co-regulatory systems primarily depends on the way they are designed. The Member States and the industry have the flexibility to design and run self and co-regulatory mechanisms in the way they see it mostly cost-effective and adapted to the market and other circumstances. Indeed, in the 2015 Public consultation, most broadcasters, advertisers as well as the food and drinks sector emphasised the efficiency of self and co regulation in the commercial communications domain.

One quantitative reference that can be given to estimate the costs of administering a co-regulatory scheme is the cost of running the UK co-regulator for on-demand services AT VOD, which is estimated to be 3000 p/a per service provider affiliated. AT VOD itself, in its contribution to the 2015 Public consultation, highlighted the efficiency of co-regulatory systems.

As indicated in the 2nd AVMSD Application report, the majority of regulators exercise monitoring activities only in co-regulatory schemes. In the case of self-regulation, they rely on monitoring by relevant self-regulatory bodies, only few of which report to the regulator in cases of non-compliance. In those Member States where statutory rules were adopted, the monitoring and enforcement activities are carried out regularly by the regulatory bodies.

Coherence

The 2001 White Paper on European Governance 342 recognised the need to develop and improve self- and co-regulation in order to better achieve EU policy objectives. The 2003 Inter-institutional Agreement on better law making 343 defined these two forms of soft law. The importance of soft-law as alternative means of regulation was further recognised in the Commission Communication on Better regulation for Growth and Jobs in the European Union 344 which made it compulsory to consider it as an option in all impact assessments.

In this light, policies supporting self- and co-regulation are coherent with other EU initiatives that are part of the Better Regulation Agenda as well as with existing statutory and self/co-regulatory rules in the domains coordinated by the Directive.

6.Conclusions

The evaluation found that while the AVMSD objectives are still relevant, some of its rules are no longer fit to attain these objectives, primarily due to market developments and changes in viewing patterns.

The AVMSD, namely via its COO approach has been perceived to be an effective regulatory framework by most stakeholders. It seems to have accompanied the development and free circulation of audiovisual media services across the Union. The COO principle has brought legal certainty by subjecting media service providers in the EU to the legislation of one Member State only. By allowing for economies of scale, the COO principle in turn facilitates investment in the media sector 345 . These considerations are valid for both traditional TV broadcasting services and on-demand services. With the last revision, on-demand audiovisual media services have become subject to a harmonised set of rules at EU level and to a single jurisdiction as opposed to multiple, possible diverging, rules and jurisdictions in the EU.

The AVMSD has been partially effective in ensuring a satisfactory and coherent level of consumer protection. While in the first years following its latest revision in 2007, the minimum harmonisation achieved via the AVMSD has allowed the Member States to craft legislation taking into account their cultural and historical sensitivities and addressing the specific challenges they face, there are today a number of concerns as to the effectiveness of the rules on consumer protection.

As a result of changes in viewing patterns, with audiovisual services being increasingly consumed on-demand and online, consumers, in particularly the younger ones, are less protected.

Firstly, all viewers and particularly minors are less protected (specifically from content harmful to them) when watching audiovisual content on video-sharing platforms which are not covered by the AVMSD. Secondly, the lighter rules applicable to on-demand services have resulted in a lower level of cultural diversity in relation to on-demand services. Thirdly, the fragmentation resulting from minimum harmonisation has impaired consumer protection in some domains such as accessibility of services to hearing and visually impaired viewers.

The evaluation also found that self and co-regulatory arrangements may effectively complement the AVMSD in ensuring consumer protection. However, a proper monitoring mechanism and a regulatory backstop are needed.

From a level playing field viewpoint, the Internet services that are not regulated in the AVMSD but are increasingly competing with those regulated in the AVMSD are at a competitive advantage. The competitiveness of broadcasters is undermined by the fact that on-demand services are subject to lighter touch rules. This is particularly evident in the fields of commercial communication and promotion of European works.

The evaluation found that while the AVMSD has enhanced cultural diversity by supporting the promotion, visibility and distribution of European works in the EU, there is scope for enhancing cultural diversity in on-demand services as compared to broadcasting services.

The AVMSD rules, notably through its rules on broadcasting events of major importance for society and short news reports, has contributed to media freedom and pluralism. However, these values may be in danger given the differences in independence and effectiveness of national regulators across the EU. The AVMSD does not require Member States to have in place independent regulators. Yet, regulatory independence both from political bodies and commercial interests is essential to guarantee media freedom and pluralism. In many countries where independence of national regulatory bodies is weak, challenges to media freedom and pluralism over the last years have been reported 346 . This may hamper the effective application of the AVMSD and have a negative impact on pluralism, media freedom and the level playing field.

The increase in the level of harmonisation brought by the AVMSD has contributed to the general and specific objectives of the Directive. Indeed, when the AVMSD objectives were not attained in full, this was in many cases due to fragmentation across the EU caused by insufficient harmonisation. Particularly in light of an increasingly transnational audiovisual media services market, and with the advent of the online world, the issues addressed by the AVMSD require action at EU level.

The AVMSD has to some extent proven to be an efficient regulatory framework. In the context of the REFIT programme, the evaluation identified potential for removing unnecessary regulatory burden and provide simplification specifically of the procedures that support the application of the COO principle (i.e. the criteria determining jurisdiction and the derogation and cooperation procedures limiting freedom of reception and retransmission in specific cases) and the rules on commercial communications applicable to broadcasting services.

The country of origin principle guarantees legal certainty for providers and avoids additional costs linked to compliance with several legislations.. The AVMSD also created to some extent a virtuous circle of business opportunities. For example, by protecting the consumer and taking steps to promote EU works, providers have gained competitiveness or contributed to the competiveness of other industries (e.g. the content industry). Self and co-regulation also proved to be convenient and flexible means to implement the AVMSD rules.

The evaluation also found that the AVMSD is coherent with the general principles of EU law and with other EU legislation and policies. The lack of requirements on the independence of regulators is at odds with the rules in other domains, such as in Telecoms or energy.

Lastly, based on the fact that the quantitative evidence which led to the conclusions on effectiveness and efficiency is limited, the evaluation also found is that an effective system for monitoring the application of the Directive is lacking and it should put in place in the future.

7.Annexes

1.Procedural information concerning the process to prepare the evaluation including stakeholders consultations

2.Synopsis report on the results of the 2015 Public consultation on the AVMSD

3.Figures on market developments and viewing patterns

4.Implementation of the provisions on the promotion of EU works at national level.

5.Implementation of the provisions on protection of minors at national level

6.Implementation of the provisions on commercial communications at national level

7.2nd Application report of the AVMSD

8.Report on Articles 16 and 17 AVMSD (Reports on the promotion of European Works)

9.European Commission's non-regulatory initiatives on a safer Internet for minors

10.Analysis of the results of the data gathering questionnaire to ERGA

11. Effectiveness of self and co-regulation in the context of the implementation of the AVMSD

ANNEX 1 - Procedural information

Lead DG: DG Communications Networks, Content and Technology

Agenda planning: 2015/CNECT/006

Organisation and timing:

The evaluation took place between March and December 2015. The evaluation draws from evidence gathered prior to and during this evaluation period. Preparatory work on the evaluation of the AVMSD started as early as in 2013, following the acknowledgement in the 1stAVMSD Application report for the years 2009-2010of the need to the test the AVMSD against market developments.

The evaluation has been carried out by Unit G.1 "Converging Media and Content" of the European Commission, DG Communications Networks, Content and Technology. The evaluation was carried out in close cooperation with other Commission DGs in the context of the Inter-Service Steering Group on the AVMSD evaluation and review convened by the General Secretariat of the European Commission. The following DG participated to the Steering group: DG CNECT, DG COMP, DG JUST, DG GROW, DG TRADE, DG EAC, DG SANCO, DG RTD, DG NEAR together with the Secretariat-General and the Legal Service.

Five meetings [possibly to be completed] took place respectively on 12 March, 20 May, 25 November 2015, 14 January and 15 April 2016.

Stakeholder consultations (see ANNEX 2). 

The findings of the Commission's monitoring of the AVMSD pursuant to Article 33 347 of the Directive (1st Application report for the years 2009-2010 348 ; 2nd Application report on the AVMSD 349 for the years 2011-2013; reports on Articles 16 and 17 350 ).

Policy recommendations from other EU institutions, namely the EP 351 , the Council 352 , the European Economic and Social Committee 353 and the Committee of the Regions 354 .

Survey on AVMSD cost and benefits. The survey was developed in the form of a questionnaire by a Task force of Member States' audiovisual regulators convened in the spring of 2015 by the European Commission. The questionnaire was submitted to Member States' regulators within the European Regulators Group for Audiovisual Media Services (ERGA 355 ), as well as to the industry in relevant sectors and to consumer organisations. The questionnaire was sent in May/June 2015. The deadline for replies was 30 September 2015. The questionnaire asked what have been the benefits and downsides of certain AVMSD rules possibly accompanied by quantitative evidence in terms of annual revenues/direct and indirect costs of compliance. It covered rules on:

1.    Commercial communications

2.    European works

3.    Protection of minors

4.    The country of origin principle

The reference period for the quantitative questions was 2010 to 2014, inclusive.

The survey gathered a total of 107 replies with 40 coming from commercial broadcasters (38 %), 20 public broadcasters (19 %), 18 VoD providers (17 %), 12 from national associations focusing on the protection of minors (12 %), 10 from national associations representing independent producers (10 %), 4 from consumer association (4 %). One association representing broadcasters and one representing sales houses also participated. The stakeholders who replied are established in 19 Member States.

Studies and opinions of the European Regulators Group for Audiovisual Media Services (ERGA). In its 2015 Work Programme, ERGA committed to deliver analyses and reports on 4 main topics: the independence of audiovisual regulatory authorities; material jurisdiction in a convergent audiovisual world; protecting minors in a converged environment; tackling the issue of territorial jurisdiction in the EU context. Each topic was dealt with by sub-groups comprising ERGA members. The first three reports were adopted via written procedure (in line with Article 11 of the ERGA Rules of Procedure) in December 2015. The report on territorial jurisdiction will be adopted in the course of 2016.

Publicly-tendered studies 356  on alcohol advertising exposure, independence of audiovisual regulators, self- and co-regulation and standardisation:

­Study on Alcohol advertising exposure, to assess whether rules on audiovisual commercial communication for alcoholic beverages have afforded minors the level of protection required 357 .

­Study on the independence of audiovisual regulators, updating a previous study on independence of regulatory authorities. It will update on recent changes and developments in Member States and candidate countries as regards the independence and efficient functioning of the audiovisual media services regulatory bodies. The draft final report was delivered to the Commission in October 2015 and published 358 on 8 December 2015.

­Study on Self-regulation that will review existing self-regulation approaches in a range of Member States and aim at providing information about relevant evidence of existing schemes and their effectiveness. The Final report is due in Q2 2016.

­Study on standardisation that aims at collecting data regarding the complete standards landscape in the area of TV sets with added Internet connectivity. Furthermore, it will also cover national and industry specification requirements and the cost of adapting them. It should also provide an overview of the reasons for applying diverging standards and give an outline of research needs that exist in the sectors with a view to overcoming fragmentation challenges. The Final report is due in Q2 2016.

4 Studies on survey and data gathering to support the impact assessment of a possible new legislative proposal concerning the AVMSD commissioned in the context of Framework Contract EAC-22-201 359 . These studies cover the following areas: commercial communication, protection of minors, cultural diversity and media freedom/public interest and access for persons with disabilities. The draft final reports of the study will be provided to the Commission in Q2 2016.

Two reports of the European Audiovisual Observatory (EAO) ("Study on data and information on the costs and benefits of the Audiovisual Media Service Directive (AVMSD)" 360 and "on-demand markets in the European Union – 2014 and 2015 developments" 361 ) provided in the context of Framework Contract PN/2011-27/A6. These two reports focus on

-Measurement of audiences

-Online advertising in the EU

-The EU Subscription video-on-demand market in 2014

-The visibility of films in on-demand services

-proportion of European fiction works on a sample of TV channels

-on-demand audiovisual services including their revenues and investment in orginal programming

-linear audiovisual services including their revenues and investment in orginal programming

Desk research and literature review done in-house by DG CONNECT and by the contractors. The main sources used are:

The Commission has engaged extensively with all relevant stakeholders in a view of assessing the state of the audiovisual media market, and to determine how to improve conditions for establishing a Digital Single Market. Stakeholders were consulted in the following occasions:

In 2013, the Commission published the Green Paper 368 "Preparing for a Fully Converged Audiovisual World: Growth, Creation and Values" and invited stakeholders to share their views on the changing media landscape and borderless Internet in particular on market conditions, interoperability and infrastructure, and implications for EU rules. The outcomes of the Green Paper are reflected in the feedback document and executive summary of the replies published by the Commission in September 2014 369 .

In 2013, the Commission launched a Public consultation 370 on the independence of audiovisual regulatory bodies. The Commission sought the views of stakeholders on the need to strengthen cooperation between regulatory authorities and reinforce their independence.

A Public consultation on "Directive 2010/13/EU on Audiovisual Media Services (AVMSD) - A media framework for the 21st century" was launched on 6 July and ran until 30 September 2015. The public consultation, available in the 24 official languages of the EU, sought inputs on the functioning and impact of the AVMSD to date (feeding into the evaluation of the Directive) and on policy options for its future. 371  

Survey on AVMSD costs and benefits sent to Member States regulators within the ERGA as well as to industry and consumer organisations.

Policy exchanges and opinions of the Member States representatives gathered in the Contact Committee set up via the AVMSD 372 .

Discussions with Member States audiovisual regulators within the ERGA 373 .

Interviews with relevant stakeholders held in the context of the studies on alcohol advertising exposure, independence of audiovisual regulators, self- and co-regulation and standardisation as well as in the context of the Impact Assessment studies.

Structured dialogue with representatives of the affected industry (SMEs and large organisations) and consumers (“Media talks”). In the Media Talks, the Commission discussed specific domains of the AVMSD with relevant stakeholders. Media Talks took place in June and September 2015, as well as regularly throughout 2013 and 2014.

Recommendations, reports and policy discussions with other EU institutions, namely the European Parliament 374 , the Council 375 , the European Economic and Social Committee 376 and the Committee of the Regions 377 .

The consultation strategy followed a participatory and circular approach and strived for triangulation. In the consultation process public events were combined with more targeted consultations to achieve the required breadth and depth of stakeholder inputs.

While the 2013 public consultations were of a broader nature, the questions in the 2015 Public consultation were more focused on possible changes to the AVMSD. However, all main options were considered, in order to enable the Commission to either confirm or contradict previous findings. The questions took into account concerns or views expressed in previous occasions as well as the state of the art in the market and in viewing patterns.

A circular approach was followed as much as possible. For example, meetings of the Contact Committee, ERGA and Media talks with stakeholders were held ahead of the launch of the Public consultation. After the Public consultation deadline, the Contact Committee discussed the Public consultation in two occasions. The data gathered from the sources above were analysed respectively: in house, by external contractors, and in cooperation with other Commission DGs.

Moreover, stakeholders were consulted in multiple occasions by different parties, for example, by the Commission via the Public consultation, by relevant national regulators via the ERGA questionnaire and by external contractors in the context of the studies. This circular approach enabled a satisfactory triangulation of data, i.e. its reliability has been confirmed via findings coming from other sources. Also, whenever the same stakeholder provided information in different contexts, the Commission compared these pieces of information so as to assure their coherence and reliability.

ANNEX 2 - Stakeholder consultation

SYNOPSIS REPORT

Report on the Contributions to the Public Consultation on Directive 2010/13/EU on Audiovisual Media Services (AVMSD) - A media framework for the 21st century

06 July-30 September 2015

I.INTRODUCTION

The Public Consultation 378 on Directive 2010/13/EU on Audiovisual Media Services 379 (AVMSD) - A media framework for the 21st century, took place from 06/07/2015 to 30/09/2015.

The public consultation is part of the evaluation of the AVMSD under the Regulatory Fitness and Performance Programme (REFIT) of the Commission's Better Regulation Framework. Its objective was to gather evidence and views on the functioning of the AVMSD on policy options for its revision, announced in 2016 by the EU Digital Single Market strategy.

The AVMSD has paved the way towards a single European market for audiovisual media services. It has harmonised the audiovisual rules of the Member States and facilitated the provision of audiovisual media services across the EU on the basis of the country of origin principle.

Since 2007, when the regulatory framework was revised for the last time, the audiovisual media landscape has changed significantly due to media convergence. The review of the AVMSD is featured in the Commission Work Programme for 2015, as part of the Regulatory Fitness and Performance Programme (REFIT). In its Communication on a Digital Single Market Strategy for Europe 380 , the Commission announced that the AVMSD would be revised in 2016. The Commission identified the following issues to be considered in the evaluation and review of the AVMSD:

1.Ensuring a level playing field for audiovisual media services;

2.Providing for an optimal level of consumer protection;

3.User protection and prohibition of hate speech and discrimination;

4.Promoting European audiovisual content;

5.Strengthening the single market;

6.Strengthening media freedom and pluralism, access to information and accessibility to content for people with disabilities.

II.    EXECUTIVE SUMMARY

1. Main conclusions from the summary and analysis of contributions in each of the consultation sections (including potential distinction(s) among stakeholder groups)

The main elements that have been observed overall, across stakeholders' categories when it comes to Policy options for the future:

Convergence of views across stakeholders regarding the need for possible changes of the rules on the scope of application of the Directive, although there is no common pattern or clarity amongst stakeholders as regards the way forward, as well as on the independence of national regulators.

Support across stakeholders for maintaining the status quo as regards the country of origin principle; must-carry/findability; accessibility for persons with disabilities; major events for society, short news reports and right of reply.

No clear consensus among stakeholders on commercial communications, protection of minors and promotion of European works.    

2. Summary analysis of trends identified across different consultation sections (including potential distinction(s) among stakeholder groups and potential linkage between answers across topics).

Some general trends were observed in the replies received. There is a call from a fair share of representatives of the broadcasting sector to ensure a level playing field either by regulating new services and/or warranting more flexibility of existing rules. Consumer organisations' call for strengthening the AVMSD rules aimed at protecting viewers, particularly vulnerable ones. The internet, telecom and ICT industries call for refraining from new regulation, in order to preserve innovation. The content industry calls for strengthening the rules aimed at promoting European works, across all audiovisual media services.

III.    OVERVIEW OF RESPONDENTS TO THE PUBLIC CONSULTATION

The Public consultation drew a total of 438 replies. 376 replies were given by organisations whereas 62 replies were given by individuals.

The central governments of BG, CZ, CY, HR, HU and MT did not participate to the Public consultation.

Breakdown of respondents per stakeholder category 381  

Breakdown of respondents per country

Not all respondents replied to all questions. In particular, the sections of the PC dedicated to Events of major importance for society; Short news reports; and Right of reply gathered a considerably lower number of replies than the other sections of the PC.

IV.    Consultation topics

1.Ensuring a level playing field for audiovisual media services

1.1Services to which the AVMSD applies

While a majority of stakeholders across sector consider the rules still relevant, a majority of them consider the rules not to be fair. Stakeholders are split when it comes to the effectiveness of the rules.

As regards options for the future, 5 Member States and 1 regulator support maintaining the status quo. 2 MS and 5 regulators support the adoption of guidance at EU level. 1 MS calls for amending the ECD.

13 MS and 9 regulators (11 if we include also EFTA regulators) call for extending the scope of application of the AVMSD to new type of services (services that are not "TV-like" and/or services that are not under the editorial responsibility of a provider).

Public service and commercial broadcasters overall call for removing the "TV-like" requirement. A fair share of them calls for extending the scope of application beyond services that are under the editorial responsibility of a provider. The others call for maintaining the status quo.

Internet companies, cable, satellite, telecoms, press and publishing sector, advertisers and one NGO promoting fundamental rights call for maintaining the status quo.

Consumer organisations advocate for an extension of the AVMSD scope beyond "TV-like" and services under the editorial responsibility of a provider.

The views of citizens are equally split amongst those calling for maintaining the status quo and those calling for an extension of the scope of application of the rules.

Main conclusion: The option of extending the scope of application of the AVMSD is the one that proportionately gathered the largest share of support from stakeholders. There is however no unitary pattern as to what an extension would entail. Some parts of the industry are particularly vocal in calling for maintaining the status quo.

1.2Geographical scope of the AVMSD

Concerning the geographical scope of the AVMSD, views are split. Even though most of the stakeholders consider the current regulation still relevant, its effectiveness and fairness are debated.

5 Member States and 5 regulators are in favour of maintaining the status quo. 9 Member States and 12 regulators support an extension of the geographical scope to third country providers targeting EU audiences, underlining the importance of creating a level playing field. Of those in favour of an extension, 4 Member States and 8 regulators support linking the extension of the geographical scope to providers' significant market presence in the EU.

Public Service Broadcasters are mainly open to consider an extension of the geographical scope to taken into account today's digital and online environment. Commercial broadcasters are equally open to an extension if the Commission has evidence of problems with the current approach.

The majority of advertising companies supports maintaining the status quo. According to them, an extension of the geographical scope would be difficult to enforce.

NGOs and consumer organisations raised concerns regarding a perceived lack of level playing field resulting from the current approach. At the same time, a few organisations pinpointed to the fact that an extension of the geographical scope would increase the legal burdens and multiply the regulatory requirements, negatively affecting the EU audiovisual market. A number of ICT, Digital and Internet companies support maintaining the status quo because they reckon that changes in the geographical scope will potentially pose threats to media pluralism and innovation, making the European market less attractive and less competitive.

The satellite industry supports maintaining the status quo and points out that the Directive already applies to third-country service providers using a satellite uplink situated in or appertaining to a Member State. As a result, they claim that the AVMSD covers a very wide scope of European and non-European channels.

Main conclusion: The majority of respondents across stakeholders' categories favour an extension of the geographical scope but there is no consensus as to how to go about an extension.

2.Providing for an optimal level of consumer protection (Commercial communications)

Although the majority of respondents across stakeholders' categories consider that the existing rules are still relevant, their effectiveness and fairness is very much debated.

Among Member States, none is in favour of maintaining the status quo while 7 regulators support this option. 8 Member States and 2 regulators are in favour of more flexibility in general while some others (7 Member States and 5 regulators) would like to reinforce rules to protect vulnerable viewers, especially in the areas of alcohol and fatty foods. 10 Member States and 6 regulators also favour other options, going in different directions (either keeping some of the current rules while clarifying and simplifying other provisions, or introducing rules on signal integrity, or further extending some of the current rules to on-demand services or other online services).

Public service broadcasters mainly favour another option, with some calling for simplification and clarification, for the extension of the rules on audiovisual commercial communications to other players and for rules on signal integrity. Commercial broadcasters are mainly calling for more flexibility, especially on the quantitative advertising rules (12-minute advertising limitation, interruption rule, rule on isolated spots) and on sponsorship and product placement rules. Yet, a few broadcasters would prefer maintaining the status quo.

Advertisers favour either the status quo or more flexibility while the food and drink industry favours the status quo, especially on alcohol advertising and fatty food advertising. They consider that the current framework, complemented by self- and co-regulation, functions properly. Consumer organisations (representing viewers and the public health sector) favour tighter rules to protect vulnerable consumers, in particular on alcohol and fatty food advertising (e.g. via watersheds, stricter rules on product placement and sponsorship for these products or even a possible ban). Internet, telecoms and cable operators call for maintaining the status quo or for more flexibility in general. Among citizens, the views are varied and are also almost equally split between the different options.

Main conclusion: No clear consensus emerged amongst respondents across stakeholders categories when it comes to the preferred policy option on commercial communications. The respondents' views are almost equally split between the four options. However, those options are not necessarily mutually exclusive and could be combined to a certain extent.

3.User protection and prohibition of hate speech and discrimination

3.1 General viewers' protection under the AVMSD

As regards protection of minors and the current distinction between the rules applicable broadcasting and on-demand, views are split. 8 Member States consider that the distinction between broadcasting and on-demand content provision is not anymore relevant, effective and fair. 6 Member States have expressed the view that it is still relevant. The majority of Regulators (10) consider these rules to be no longer relevant. 7 Regulators believe that these rules are still relevant.

When it comes to the question of the effectiveness of the AVMSD in protecting children, the majority of Member States (7) and Regulators (8) who replied consider that the AVMSD has not been effective in protecting minors.

9 MS and 12 regulators did not provide an opinion on the AVMSD rules on incitement to hatred. 2 MS consider the AVMSD rules on incitement to hatred still relevant, effective and fair. 4 MS consider that further grounds for prohibition of incitement to hatred should be introduced in the Directive. The following are mentioned: incitation to violence; sexual orientation; religion; marital status; political beliefs; language; state of health; disability; physical or genetic characteristic; social status; nationality; gender. 1 MS also calls for aligning those grounds to Article 9 of the EU Charter of Fundamental rights. 4 MS consider that the rules for suspension under Article 3 should be reviewed in order to strengthen the protection from content inciting to hatred. 1 MS suggested that a revision of the directive should give consumers the right to know who the ultimate beneficiaries of audiovisual media services are i.e. who is trying to influence their decisions.

2 regulators believe that hate speech should be dealt with on all platforms. 1 regulator calls for aligning the grounds to Article 9 of the EU Charter of Fundamental rights. Another regulator opposes modifications to the AVMSD while another one suggests introducing transparency as regards the beneficiaries of audiovisual media services.

Most industry stakeholders (public service and commercial broadcasters, telecom operators, VOD providers, Internet and ICT) and consumer organisations did not express an opinion regarding the existing rules on incitement to hatred.

3.2 Protection of minors

No Member States and only 1 Regulator are in favour of maintaining the status quo. 4 Member States and 10 regulators favour more self- and co-regulation. 7 MS and 14 Regulators are in favour of more harmonisation, although their comments to do follow a unitary pattern (they refer to either harmonisation of classification, or common definitions/clarifications of key-concepts). 8 Member States and 9 Regulators call for removing the distinction between linear and on-demand services (levelling up). 6 Member States and 6 regulators call for extending the AVMSD rules on protection of minors to other online content.

A limited number of Member States and 7 regulators also favour other options or a combination of various options. They however follow different directions. They refer to: ensuring a higher level protection of minors when it comes to their exposure to pornographic, racist or anti-Semitic content; matching the regulation for linear and non-linear services by levelling up the rules; and continue working with industry to encourage self-regulation for other platforms; applying the rules on protection of minors to all audiovisual media services including those not under editorial responsibility by means of graduated protection; removing the distinction between broadcast and on-demand services and allow a more graduated approach to potentially harmful content.

Commercial broadcasters mainly favour self and co-regulatory measures (8) and the extension of the scope of the AVMSD (7). Amongst Public Service Broadcasters, some (8) favour self and co-regulatory measures, others (7) call for extending the scope of the AVMSD, or (7 ) suggest (standalone or combined) other options.

Internet companies, Telecoms, VoD mainly advocate for maintaining the status quo or favour complementing the AVMSD with self- and co-regulatory measures.

Consumer organisations (representing minors) favour further harmonisation and call for an extension of the AVMSD to Internet platforms.

Views expressed by citizens vary and equally split among the options with no clear trend.

Main conclusion: No clear consensus emerged amongst respondents across stakeholders categories when it comes to the preferred policy option on protection of minors.

4. Promoting European audiovisual content

Some Member States (4) and regulators (6) support maintaining the status quo. They all agree that current regulation for the promotion of EU works is sufficient and should not be amended. Other Member States (7) and National regulators (6) call for introducing more flexibility for Member States and service providers in their choice or implementation of the measures on the promotion of European works to adapt to their respective markets. Several Member States (6) and a few National regulators (3) call for reinforcing existing rules. Most of them support, in particular, strengthening regulation on non-linear services by clarifying and harmonizing provisions under Article 13 in order to avoid distortions of competition among players. Finally, some Member States (5) and National regulators (3) suggest other options. Some of them favour more flexibility in regulation while others call for reinforcing current rules and exploring solutions focused on the supply side.

Public service broadcasters generally back other options, namely to adapt rules for on-demand services to reflect recent changes in the audiovisual market. Some commercial broadcasters call for more flexibility while other favour repealing the rules as they believe the current market of European works is already successful.

The digital/Internet industry and VOD operators support maintaining the status quo. On the contrary, the Cinema, Film and TV industry primarily favours reinforcing the existing rules and some call for the imposition of financial contribution on on-demand services.

Telecom operators call in general for more flexibility and support measures based more on marked dynamics rather than on quota systems. The majority of right holders support reinforcing the rules and most of them believe measures mentioned on Article 13 should be made mandatory.

Views expressed by citizens are also split among the options with no clear trend.

Main conclusion: There is no clear consensus amongst respondents across stakeholders' categories as regards policy options on promotion of European works.

5. Strengthening the single market

The majority of respondents across stakeholders' categories consider that the current approach is still relevant, but there are doubts about its effectiveness (in particular as regards the functioning of the cooperation procedures) and fairness.

12 Member States and 15 Regulators support maintaining the country of origin principle accompanied by stronger cooperation practices and/or simplified jurisdiction criteria. A further 4 Member States express principled support for the country of origin principle. 5 Member States and 5 Regulators ask for moving to a different approach whereby providers would have to comply with some rules (e.g. on protection of European works) of the countries where they deliver their services. 4 Member States and 4 Regulators favour other options.

Public services broadcasters mainly call for maintaining the country of origin principle together with strengthening existing cooperation practices/revising the rules on cooperation and derogation mechanisms. To a lesser extent they ask for additional safeguards to avoid undermining the effectiveness of national rules. Commercial broadcasters mostly call for maintaining the status quo, while showing some support for stronger cooperation practices/mechanisms and simplified jurisdiction criteria. The satellite industry supports the country of origin principle and calls for strengthening existing cooperation practices/revising the rules on cooperation and derogation mechanisms.

Advertisers favour maintaining the status quo and, to a lesser extent, ask for strengthening existing cooperation practises. Internet, telecoms and cable operators mainly call for maintaining the status quo or other options. Consumer organisations (representing viewers and the public health sector) mostly argue for (limited) departures from the country of origin principle towards a country of destination principle. Citizens mainly favour maintaining the status quo together with revising the rules on cooperation and derogation mechanisms and simplifying the jurisdiction rules.

Main conclusion: Regarding the set of questions on strengthening the internal market, there is strong support for maintaining the country of origin principle across various stakeholders categories.

6. Strengthening media freedom and pluralism, access to information and accessibility to content for people with disabilities

6.1 Independence of regulators

Most of those who replied to this question considered that the current provisions of the Directive are relevant and fair but not effective. Consequently, the majority of respondents across stakeholders' categories supported the reinforcement of the AVMSD rules on independence of the audiovisual regulatory bodies. Those respondents favoured either laying down an obligation to ensure the independence of audiovisual regulatory bodies or providing for a set of criteria that regulators need to meet to ensure their independence. The latter option gathered a slightly larger support.

5 Member States and 6 regulators considered that the provisions in the Directive are relevant, effective and fair, while 6 Member States and 7 regulators pointed out that Article 30 AVMSD is not effective. A majority of public service broadcasters considered that the rules are relevant, effective and fair. A large majority of commercial broadcasters considers that the rules of the Directive are relevant but only a small minority of them considers that they are relevant, effective and fair.

4 Member States and 6 regulators called for maintaining the status quo. 6 Member States and 9 regulators from 6 Member States supported the option to impose an obligation on the independence of regulatory authorities. 6 Member States and 9 regulatory authorities from 7 Member States supported laying down minimum mandatory requirements for regulatory authorities. 2 Member States and 1 regulator supported other options.

Most public service broadcasters called for maintaining the status quo. Most commercial broadcasters called for strengthening of the current rules (by laying down in the AVMSD an obligation of the independence of regulatory authorities (9) and laying down criteria of independence (13)).  

VOD operator, digital and Internet companies generally called for maintaining the status quo, although some called for strengthening the rules. Cinema, film and TV producers, consumer organisations and NGO promoting fundamental rights mostly called for strengthening the current rules. Most of the citizens who replied to this question favoured reinforcing the rules.

Main conclusions: The majority of respondents across stakeholders' categories supported the reinforcement of the AVMSD rules on independence of the audiovisual regulatory bodies.

6.2 Must Carry/Findability (Prominence of content of general interest)

A large majority of Member States (20) and regulators (15) who replied called for maintaining the status quo. 4 Member States and 9 regulators call for introducing a provision on prominence of content of general interest in the AVMSD.

Public service broadcasters advocate for including a rule on discoverability of content of general interest in the AVMSD. Commercial broadcasters mainly call for a broader coverage of "content of public interest" than provided by public service broadcasters. Telecom providers generally call for maintaining the status quo and oppose new rules on findability at EU or at national level.

The Internet sector calls for maintaining the status quo, stressing that Internet platforms are not gatekeepers and that users retain control over the content they access. The press calls for ensuring a level playing field - for instance by ensuring non-discrimination on platforms - via an intervention outside the AVMSD. Amongst citizens, views vary.

Main conclusions: As regards findability, the option of maintaining the status quo is the one that proportionately gathered the largest share of support from stakeholders, followed by the one of introducing findability rules in the AVMSD. The remaining options received a fair share of support from stakeholders. Those options are however not necessarily mutually exclusive and could be combined.

6.3Accessibility for people with disabilities

A majority of respondents across stakeholders' categories expressed the view that the current rules are effective in providing fair access to audiovisual content to persons with hearing and vision disabilities.

As regards options for the way forward, while the Member States were split as regards maintaining the status quo (6) or laying down in the AVMSD requirements for accessibility (6), the majority of regulators who replied (6) called for laying down in the AVMSD requirements for accessibility. 2 regulators favoured maintaining the status quo. 1 Member State and 7 regulators called for self-/co-regulatory measures in this field.

Public service broadcasters and commercial broadcasters called for maintaining the status quo. Disability and consumer organisations, as well as the ICT and Internet industry called for harmonising accessibility requirements at the EU level.

Main conclusions: Most respondents across stakeholders' categories opted for maintaining the status quo, while around a quarter of respondents called for strengthening the rules.

6.4Events of major importance for society

An overwhelming majority of respondents across stakeholders' categories consider that the current rules are still relevant, effective and fair.

As regards the way forward, a majority of Member States (7) and regulators (18) who replied call for maintaining the status quo.

Whereas a slight majority of the public service broadcasters (11) who replied supports maintaining the status quo, 7 of them chose other option.

A majority of those commercial broadcasters, cable operators and VOD operators supports maintaining the status quo. A minority share of the industry calls for abolishing the system of lists. Others call for simplifying the notification procedure. Some others call for requiring the Member States to draw up lists.

A number of health-related NGOs and national agencies calls for addressing problems related to alcohol advertising, as the AVMSD allows sport events listed as "of major importance" to be sponsored by alcohol producers.

Main conclusions: A majority of respondents across stakeholders' categories call for maintaining the status quo as regards events of major importance for society.

6.5Short news reports

A majority of respondents across stakeholders' categories find the current rules to be relevant, effective and fair.

A majority of the Member States (11) and regulators (12) who replied called for maintaining the status quo.

Public broadcasters (8) were mainly in favour of the status quo. A majority of the commercial broadcasters (20) who replied to this question called for maintaining the status quo. Some commercial broadcasters however call for removing the current rules.

Whereas the Internet, telecoms and cable operators primarily did not take a position on this issues, those who replied called for maintaining the status quo.

Those stakeholders supporting other option called for either: extending the rules to on-demand audiovisual media services; harmonising the rules at EU level; or clarifying certain aspects of the existing rules.

Main conclusions: A majority of respondents across stakeholders' categories call for maintaining the status quo as regards short news reports.

6.6 Right of reply

The majority of respondents across stakeholders' categories consider that the current rules are still relevant, effective and fair.

8 Member States and 9 regulators (11 regulators, if EFTA countries are considered) are in favour of maintaining the status quo. 2 Member States and 6 Regulators called for extending the scope of the rules to on-demand audiovisual media services and online intermediaries.

Whereas a slight majority of Public service broadcasters called for maintaining the status quo, a number of them are in favour of extending the scope of the rules to non-linear services, in line with Council of Europe Recommendation (2004)161 on the right of reply in the new media environment. A large majority of commercial broadcasters call for maintaining the status quo.

Telecom operators, cinema, print and publishers stakeholders are in favour of maintaining the status quo. 

Whereas a majority of NGOs called for maintaining the status quo, a few of them advocated for an extension of the right of reply to on-demand audiovisual media services. Citizens mainly favour maintaining the status quo, although a few of them indicate difficulties with pursuing complaints.

Main conclusions: A majority of respondents across stakeholders' categories call for maintaining the status quo as regards the right of reply.

ANNEX 3 - Main developments affecting the EU market for audiovisual media services

The audiovisual sector mainly comprises large companies which account for an absolute majority (more than half) of the workforce in 10 of these. Large enterprises in France employed upwards of 7 out of 10 people (71.5 %) within the programming and broadcasting activities workforce in 2010, while the share of large enterprises in the total workforce peaked at 78.5 % in Germany. Upwards of 80 % of the value added generated in Spain, Poland, Italy, France, Romania and the United Kingdom was attributed to large enterprises, their share of sectoral value added peaking in the United Kingdom (90.8 %). 382

By contrast, in the relatively small EU Member States of Estonia, Lithuania, Luxembourg and Slovenia, small and medium-sized enterprises (SMEs) employed the whole of the programming and broadcasting activities workforce in 2010. It was, however, more common to find that the majority of the workforce was engaged by large enterprises. 383

The overall size of the European audiovisual sector in 2014 was around EUR 105.790 million 384 . This implies an increase of 0.9% as compared to 2010. This increase primarily comes from on-demand audiovisual media services, whereas physical video registered a significant decrease.

The market is evolving. Connected Smart TVs in 21 EU markets 385 have moved from about 5 million installed devices at the end of 2011 to more than 39 million in 2014 and are foreseen to reach the level of almost 118 million in 2018 386 . In the same markets, the overall number of connected devices increased from 590 million in 2011 to 935 million in 2014 and is expected to reach almost 1,3 billion in 2018 387 . 

Audiovisual content is increasingly offered by new players. The number of Internet-based, OTT and VoD television providers targeting EU viewers has increased. In 2014, almost 2 563 VoD services were established in Europe, including catch-up TV services of broadcasters (932 services), branded channels on open platforms (408 services), VoD services providing access to a catalogue of programs (1 126 services) and news portals (97 services). The UK is the Member State hosting the largest number of VoD services (about 515), followed by France (412) and Germany (274) 388 .

Providers of video streaming services, including from third countries, have entered the market. Sometimes, they fall outside the EU jurisdiction because they are established abroad or because they offer new services that fall outside the definition of audiovisual media services laid down in the AVMSD. Internet platforms and social media (Facebook, Snapchat, Twitter) are increasingly offering, along other types of content, audiovisual material either uploaded by the users (User-Generated-Content, UGC), by themselves or by advertisers. This type of audiovisual content falls outside the scope of the AVMSD because it is not editorial (for UGC) or because, despite being editorial, it is offered by a platform whose principal purpose is not to offer audiovisual services. 47% of Europeans now use them at least once a week, i.e. +3 percentage points versus autumn 2013 and +12 versus autumn 2011. Almost a third of Europeans use social networks every day or almost every day (32%, +2 versus autumn 2013 and +12 versus autumn 2011). 2014 eurobarometer three-quarters of Europeans in the 15-24 age group use social networks every day or almost every day (75%), compared with 50% of 25-39 year-olds, 27% of 40-54 yearolds and 8% of those aged 55 or over; The daily or near-daily use of online social networks is particularly widespread in Denmark (55%), Sweden (53%) and the Netherlands (48%). It is less prevalent in Poland (24%), Germany (24%) and the Czech Republic (24%).

While TV viewing is still strong, viewers - particularly minors - increasingly consume content online.

The average TV viewing time for the whole EU population in 2013 was 223 minutes per day 389 . However, viewing habits differ widely among Member States. In some countries, like Austria, Finland and Sweden these numbers are lower: 2:42, 2:56 and 2:33 minutes per day respectively. In countries like Romania, Portugal and Hungary the viewing time reaches 5:42, 4:56 and 4:49minutes per day respectively.

Since 2012, television viewing has reached a plateau in average in the European Union. As time-shifted television viewing has been increasingly included in television audience measurement, this stability implies that live television viewing has declined 390 .

Europeans predominantly watch television on a TV set (94% at least once a week, -1 percentage point). Although Europeans are far less likely to watch television over the Internet, this practice continues to gain ground: 20% of Europeans watch television online at least once a week (+2% versus autumn 2013 and +3% versus the EB78 report of autumn 2012). Europeans in the 15-24 age group are the most likely to watch television via the Internet: 40% do so at least once a week. We note that the proportion of respondent who watch television via the Internet decreases gradually with age: 26% of 25-39 year-olds, 18% of 40-54 year-olds and 8% of those in the 55-plus age group watch television via the Internet at least once a week. Watching television via the Internet is particularly widespread in Sweden (48% do so at least once a week) and Finland (39%), but less so in Bulgaria (11%), Greece (12%) and Portugal (12%) 391 .

Television is the most frequently used source of European political news by all age groups, but respondents in the 55+ age group are the most frequent users of this medium (83%);

Audiovisual content consumption is increasingly moving online: According to IHS research firm, total on demand consumer revenues in the 28 European countries soared from EUR 919 million in 2010 to EUR 2.5 billion in 2014, an of 272% increase and a Compound Annual Growth Rate (CAGR) in the 5 year period of 28% 392 .

A recent Eurobarometer 393  report shows that as of August 2015 59% of EU internet users had accessed or downloaded audiovisual content at least once in the past 12 months, in particular the young (80%). 30% of them had paid for that content.

Younger viewers 394 watch about half less than television than the aver-age viewer:. Their average TV viewing in 2014 was 2:03 minutes per day. Also in this case, viewing patterns differ from country to country: in Slovenia, Finland and Sweden, for the age group 15-24, the viewing time is at 1:24, 1:17, 1:12 minutes per day, respectively. In Romania, Portugal and Hungary it remains at rather high levels: 3:34, 3:45 and 2:44 minutes per day, respectively. A key factor behind the decline of TV viewing on TV sets is the rapidly growing population of portable screens like smartphones and tablets.

Video viewing is now one of the earliest Internet activities carried out by young children. For example, YouTube is the second favourite site for children under 5 in the UK (Childwise, 2012).

According to the preliminary draft study report [not yet published] on "The exposure of minors to alcohol advertising on linear and non-linear audio-visual media services and other online services", amongst minors aged 4-17, watching video clips is the second-most prevalent online activity (reported by 61% of the surveyed) after listening music and watching films and cartoons.

99% of minors surveyed responded that YouTube is the online service they use the most to watch video clips while Netflix is the second most commonly used service among these age groups for that purpose (40.2% and 30.7% of minors in 14-17 and 9-13 age groups respectively indicated that they visit this online service).

Audiovisual content is increasingly offered in innovative (namely shorter) formats. Mobile video traffic grew to 55% by the end of 2014 395 . It is estimated that nearly 3/4 of the world’s mobile data traffic will be video by 2019 396 . Presently, 400 hours of video are uploaded to YouTube every minute (see 2.1.2).

Also, according to the EAO Study on measurement of fragmented European audiences, while the number of videos viewed tend to increase, the time spent on one given video tend to slightly decrease in certain countries (for example, the number of minutes spent on a video has decreased in all countries from a sample analysed by ComScore, from -5% in the Netherlands, to -36% in Italy.)

Online advertising is increasingly prominent and is set to overtake TV advertising. While TV remains the preferred media for advertising (32% of the market), the Internet is likely to become the main advertising platform within the next two years, given its rapid development (+8,4% vs. 2012) and the market share already captured in 2013 (27,4%) 397 .

In 2014, Internet advertising spend was higher than TV advertising spend in a number of EU countries: CZ, DE, DK, NL, SE, UK.

According to the EAO Study on online advertising in the EU 398 , the total size of the online advertising market in the EU in 2013 was €27.2 billion, an increase of 11.6% compared to the total of €23.2 billion in 2013. On the other hand, television advertising in the EU lost in 2013 more than EUR 300 million out of EUR 27.748 million overall investments (-1,1% vs. 2012) 399 .

According to the EAO, online drives the advertising market: the global European advertising market modestly grew of 1.4% in 2014. Without online ad spend, the market would have decreased by -2.4%.

In Europe, online display advertising is the most dynamic form of advertising (+14,9% investments 2013/2012) and captured 33,8% (about EUR 9,2 billion) of all online advertising in 2013. Video ads account for 16% of online advertising.

There are asymmetries in content offerings and financing. The emergence of new players, primarily offering services on-demand, paired with viewers increasingly moving online, has an impact on content offerings and financing.

The year 2014 witnessed the closing of local/regional channels in the EU (-14,1% in 2014 vs. 2013). However, national and international TV channels (targeting other Member States and/or third countries) continued to develop (+7,4% vs. 2013).

EU TV channels are increasingly internationally oriented: in 2013, 1 989 TV channels established in the EU targeted other Member States and third countries (+ 24,6% vs. 2012) and represented 42% of the total national and international channels established in the EU (19,3% in 2012) 400 .

Within this transnational market though, the established EU broadcasting market is increasingly facing competition of on-demand providers, some of which are not established in the EU.

Netflix and Amazon Prime, increasingly prominent in the EU market also at the expenses of established European broadcasters, invest in original content. However that is not necessarily European content.

Netflix expects to invest nearly $5bn on acquired and original content in 2016 with a progressively increasing trend over the next years. In 2015 Netflix is expected to debut at least 48 originals. They also announced series shot in the EU, like Marseille or The Crown. This latter is however a marketing effort that is not related to contribution to the production of European content. Amazon announced that it will invest more than $100 million in the third quarter of 2015 to produce original content globally.

EU broadcasters counterbalance this trend. In 2009, they invested around 1 / 3 of their revenues in EU quality content. In that year, out of the EUR 34,5 billion programme spend in the EU by broadcasters approximately EUR 15,6 billion was spent on acquiring rights, EUR 5,8 billion on sports rights and EUR 9,8 billion on film and TV acquisitions.

ANNEX 4 – Implementation of the provisions on the promotion of EU works at national level

Article 13

ANNEX 5 – Implementation of the provisions on the protection of minors at national level (from the 2015 EAO Iris bonus "comparative tables on the protection of minors in audiovisual media services)

The protection of minors in audiovisual media services in a converged environment

Comparative table of legal obligations across Europe