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The future of European regulatory audiovisual policy

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The future of European regulatory audiovisual policy

In 2003 the Commission launched a wide public consultation on the "Television without Frontiers" (TWF) Directive and its possible revision. This Communication presents the main results of the consultation and, on this basis, announces a number of initiatives which will be adopted in the short and medium term. Besides this, the Communication draws attention to recent developments in the audiovisual field and analyses the different Community policies which affect the sector.


Communication from the Commission of 15 December 2003 on the future of European regulatory audiovisual policy [COM(2003) 784 final - Not published in the Official Journal].



In 2001 the European audiovisual market represented nearly 95 billion EUR, with a 5.2% increase compared to 2000. Of the two main industrial areas, TV and cinema, the first one represented about two-thirds of the market in 2001, while cinema, including video, covered about 15% of the market. The DVD sector was the most dynamic sector, since in 2002 its turnover from retail sales equalled sales of traditional VHS cassettes.

Development of the TV market slowed in 2001. This was mainly due to unsatisfactory results from traditional commercial free-to-air broadcasters suffering from a global crisis in the advertising market. However, the overall pay-TV sector confirmed its dynamism with a yearly increase of about 13%. Preliminary indications for 2002 confirm these trends. At the end of 2002 digital broadcasting reached almost 18% of European households. This covers mainly satellite transmission, while only in a few countries has digital transmission via cable become popular.

The trade balance in the audiovisual sector, and in particular for broadcasting, theatrical release and video distribution rights for films, is negative due to a large imbalance with the United States - more than 8 billion dollars in 2000.

Almost all EU households are equipped with TV sets, and many have two sets or more. As regards average television daily viewing time, Austria remains the country where people watch TV the least (153 minutes per day), while Spain is the country where TV is most popular (262 minutes).

The EU confirmed its leading role in the production of feature films, with 630 productions in 2002, compared to about 450 units in the United States. However, it must be pointed out that a significant part of the European production does not attract a critical mass of audience (i.e. audiences of 100 000 persons or more). In terms of financial investment in film production, US filmmakers continue to enjoy production budgets several times higher than those for European products. The recent wave of European co-productions could be an answer to such an imbalance (250 co-productions in 2002).

As regards recent technology developments, three technical innovations -- besides digital television -- could contribute favourably to the development of the audiovisual sector. These are: high definition TV, flat panel displays, and interactive television.


The European audiovisual sector is not only affected by the Community's support mechanisms (MEDIA programme) and content regulation ("Television without Frontiers" Directive - see below). A great number of Community policies have a significant impact on media enterprises. This justifies the need for a coherent approach at Community level which takes into account all the policies concerned.

The following Community policies play an important role in the development of the audiovisual sector:

Competition: competition rules are designed to prevent illegal restrictions of competition and to guarantee healthy competition, without distorting the internal market. The EC Treaty prohibits state aids that distort competition by supporting certain enterprises as opposed to others. However, state aid in favour of "services of general economic interest" -- including public broadcasting services --is permitted. In this connection, a Commission Communication of November 2001 has made it possible to clarify the criteria for implementing competition rules in public broadcasting services. With the adoption, in September 2001, of another communication on the cinema industry, the Commission has also made public the criteria for declaring state aid to cinema and TV productions compatible with the EC Treaty.

Media pluralism: measures to ensure media pluralism typically limit maximum holdings in media companies and prevent cumulative control or participation in several media companies at the same time. The aim is to protect freedom of expression and to ensure that the media reflect a spectrum of views and opinions. The Commission's Green Paper on services of general interest of May 2003 noted that protection of media pluralism is primarily a task for the Member States. At present, European legislation does not contain any provisions in this area. However, a number of Community law instruments contribute directly or indirectly to the aim of preserving media pluralism. This is the case of Community competition law and certain provisions of the "television without frontiers" Directive (in particular through its provisions on the promotion of European works, and of works by independent producers).

Copyright: the legal framework establishing these rights is set out in Directive 2001/29/EC on the harmonisation of copyright and related rights in the information society. More recently, the Council and the Parliament adopted a directive on measures and procedures to ensure the enforcement of intellectual property rights. The objectives are to harmonise national laws on the means of enforcing intellectual property rights and to establish a general framework for the exchange information between the responsible national authorities.

Electronic communications networks and services: in 1999 the Commission launched a major review of the existing telecommunications law with a view to making the sector more competitive and more in line with technological progress and the requirements of the market. This resulted in the adoption of a new regulatory framework for electronic communications in 2002, to be applied as of July 2003. The directive on electronic commerce, adopted in 2000, harmonises certain aspects enabling information society services to benefit fully from internal market principles.

Consumer protection: like other economic sectors, the audiovisual sector is subject to Community rules governing consumer protection. These include notably the general provisions on false and misleading advertising, as well as the recent proposal for a framework directive on unfair business-to-consumer commercial practices.

Trade policy: on audiovisual services, the European Community and its Member States have not made commitments and have taken exemptions to the most favoured nation clause in the last multilateral trade negotiations round (the "Uruguay Round"). Thus the EU benefits from room to manoeuvre which secures the possibility both of maintaining existing national and Community measures but also to further develop national and Community policies and instruments, in response to developments in the sector.


The Television without Frontiers Directive (TWF Directive) is the cornerstone of the EU's audiovisual policy. The Directive lays down the minimum standards which regulation of the content of television broadcasts by the Member States must guarantee. These minimum standards essentially comprise the obligation to adopt measures:

  • to promote the production and dissemination of European television programmes;
  • to protect consumers as regards advertising, sponsorship and teleshopping, including in respect of unfair commercial practices;
  • to ensure that events of major importance for society are not broadcast on the basis of exclusivity in such a way that significant sections of the public are prevented from following the event;
  • to protect minors and public order;
  • to protect the right of reply.

Most of the contributions received by the Commission in the framework of the consultation process recognise the relevance of the regulatory framework of the TWF Directive and the positive contribution of this instrument to ensuring the free movement of broadcasting services in the European Union. The main results of the consultation are as follows:

  • while most of the Member States consider the rules to be appropriate, other Member States and consumer protection associations express their concerns about the diversity of national laws and the risk of the establishment of broadcasters in the states with the least stringent legislation;
  • certain Member States raise the problem of specific advertising. This is a practice whereby broadcasters, using a channel intended for viewers in their country of origin, reach audience areas in different countries -- usually neighbouring countries -- via the same channel, but with programmes in which the initial advertising screens are replaced by advertising screens specifically targeting people in these additional audiences. Although this practice is in keeping with the principle of the freedom to provide services and freedom of establishment as expounded by the Court of Justice, it is denounced because of the distortion of competition which it involves and the threat it constitutes to pluralism and cultural diversity;
  • right to information (provisions on events of major importance): the consultations have shown that there is no urgent need to revise this provision. Although different improvements were suggested, no consensus emerged on whether to define at a European level the notion of "a substantial proportion of the public", or the need to review the directive with regard to reference dates;
  • production and broadcasting quotas: most of the contributions were in favour of the status quo as regards the promotion of European works (Article 4). Some requested the strengthening of the requirements, while others proposed replacing the existing requirements with other instruments such as investment obligations or specific support programmes for European production. As regards quotas for the production of European works (Article 5), the vast majority were in favour of the status quo. However, some stakeholders called for the introduction of a harmonised definition of the notion of "independent producer";
  • advertising and sponsorship: most of the positions expressed are in favour of the existing provisions. However, some called for a simplification of the rules governing the insertion of advertising and teleshopping spots, particularly with regard to sports programmes and the rule whereby 20 minutes must elapse between each advertising spot. The bans on TV advertising of tobacco products and medicines obtainable only on prescription are generally supported. As regards provisions on duration, certain Member States would like some degree of flexibility, as would most commercial broadcasters and some advertising agencies. As for the new advertising techniques, a substantial majority takes the view that the Commission should specify how the rules of the directive apply to these new techniques;
  • protection of minors: there is a general consensus among the stakeholders that the provisions laid down in the directive on the protection of minors are adequate and clear. However, some stakeholders have highlighted the problems of applying these provisions, notably their application to the online environment.


In the light of the results of the consultation procedure, the Commission concludes that the current situation of the market does not require a re-examination of the Directive in the short term.

However, in the medium term, a thorough revision of the Directive might be necessary to take account of the technological developments and changes in the structure of the audiovisual market. With regard to this possible revision, the Commission will proceed in a two-step approach.

Short term

In the short term the Commission intends to adopt an interpretative Communication on the directive's provisions relating to television advertising. This Communication will clarify in particular to what extent these provisions apply to new advertising techniques and will hence ensure greater legal certainty. The Commission will also publish a proposal for updating the recommendation on the protection of minors and human dignity.

Medium term

A number of issues need further thought which could lead to amendments of the TWF Directive at a later stage. These issues will be analysed by the Commission, either by taking the advice of experts or via independent studies. The following subjects will be discussed:

  • regulation of audiovisual content;
  • the level of detail in the regulation of advertising;
  • right to information and right to short term reports.

The studies will concern the following issues:

  • comparative study of the impact of control measures on the television advertising markets in Member States and certain other countries;
  • study on the impact of measures concerning the promotion of the distribution and production of TV programmes provided for under the TWF Directive;
  • study on co-regulatory measures in the media sector;
  • study on the regulatory treatment of interactive television.


Commission interpretative communication on certain aspects of the provisions on televised advertising in the "Television without Frontiers" Directive [COM(2004) 1450 - Official Journal C 102 of 28.4.2004].

This Communication aims to clarify how the provisions of the TWF Directive apply to certain forms and techniques of commercial communication such as split screen, virtual advertising and interactive advertising. The Communication concludes that the new techniques and forms of advertising are not per se incompatible with the directive and explains to what extent their use is compatible with the existing legal rules.

Proposal for a Recommendation of the European Parliament and of the Council on the protection of minors and human dignity and the right of reply in relation to the competitiveness of the European audiovisual and information services industry [COM(2004) 341 final - Not published in the Official Journal].

This proposal should complement Council Recommendation 98/560/EC, which concerns the same subject, taking account of recent developments and the changing media landscape. The proposal covers four aspects: right of reply in all media; responsibility and awareness; combating discrimination; rating or classification of audiovisual content.

Last updated: 28.06.2004