The European Commission decided last week to give a new boost to Europe's on-line content sector. EU citizens should be able to enjoy easier and faster access to a rich variety of music, TV programs, films and games via the Internet, cellphones or other devices. The Commission said it encouraged the content industry, telecom companies and Internet service providers to cooperate in making more content available on-line, while at the same time ensuring a robust protection of intellectual property rights. The Commission also said it wanted to facilitate copyright licenses for on-line content covering the territory of several or all of the EU member states. According to Commission studies, a truly single market without borders for creative on-line content could strengthen the competitiveness of Europe's music, film and games industry, and allow retail revenues of the sector to quadruple by 2010 if clear and consumer-friendly measures are taken by industry and public authorities. "Europe's content sector is suffering under its regulatory fragmentation, under its lack of clear, consumer-friendly rules for accessing copyright-protected on-line content, and serious disagreements between stakeholders about fundamental issues such as levies and private copying," said Viviane Reding, EU commissioner for the information society and media. "We have to make a choice in Europe: Do we want to have a strong music, film and games industry? Then we should give industry legal certainty, content creators a fair remuneration and consumers broad access to a rich diversity of content on-line. "I will work on these issues with my colleagues in the Commission and propose a recommendation by mid-2008 on new ways for achieving a single market for on-line content. I ask, in particular, Europe's consumer associations to take a very active part in this debate. Because for on-line content, the demand and preferences of 500 million potential consumers are the strongest arguments for achieving new solutions at EU level." The Commission last week adopted a strategic document entitled "Creative Content On-line in Europe's Single Market." It is the starting point for new EU actions to support development of innovative business models, cross-border services and consumer-friendly offers. The retail sale and distribution of high value "creative" content on-line represents a major structural change in the European content market. While the on-line market share of music sales is reportedly reaching 25 percent in some European countries, such as the UK, the retailing of video content and the availability of on-demand TV programming via the Internet is a nascent market. Such high-value "creative content" also covers radio, on-line games, on-line publishing and educational content. New market developments also arise from Web 2.0, such as user-created content that consumers themselves may wish to "protect" from unauthorized reuse. In the document, the Commission identifies four main, horizontal challenges that merit further action at EU-level: Availability of creative content - Owners of creative content are sometimes reluctant to make it available for on-line distribution. Among the reasons for this are concerns over illegal downloads and on-line "piracy." In addition, throughout the EU there are major difficulties in negotiating and settling terms of trade between the rights owners and the on-line distributors of creative content. The Commission therefore said it strongly encouraged stakeholders to find innovative and collaborative solutions to exploit the market for on-line content. Multi-territory licensing for creative content - On-line environments such as the Internet and mobile services inherently allow content services to be made available across the single European market. However, the lack of multi-territory copyright licenses - allowing the use of content in several or all EU member states - makes it difficult for on-line services to be deployed across Europe and to benefit from economies of scale. While it is first for rights holders to appreciate the potential commercial benefits of multi-territory licensing, there is an underlying need, also from a consumer perspective, to improve on existing licensing mechanisms. Interoperability and transparency of digital rights management systems (DRMs) - Technologies that support the management of rights and the fair remuneration of creators in an on-line environment can be a key enabler for development of innovative business models. Lengthy discussions among stakeholders have yet to lead to the deployment of interoperable and user-friendly DRM solutions. The Commission said it wanted to establish a framework for DRM transparency for the interoperability of different DRMs, and to ensure that consumers are properly informed of any usage restrictions placed on downloaded content, as well as the interoperability of related on-line services. Legal offers and piracy - Piracy, including the unauthorized up- and downloading of copyrighted content, remains a central concern. The Commission said it intended to instigate cooperation procedures ("codes of conduct") among access/service providers, rights holders and consumers to ensure the widespread offer of attractive content on-line, adequate protection of copyrighted works, and close cooperation on the fight against piracy and unauthorized file-sharing. The market for on-line content is developing at a rapid pace. According to a Commission study (covering EU-25), the retail revenues from content on-line will more than quadruple from â‚¬1.8 billion in 2005 to â‚¬8.3b. by 2010. In addition, the Commission said it would set a "Content On-line Platform," a stakeholders' forum to initiate collaborative work with all stakeholders on issues where further discussions are needed. [email protected] The author is the head of the GSCB & Co. Law Firm International Department.