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status-publish format-standard hentry category-audiovisual"> <header class="entry-header page-header"> <h1 class="entry-title ">AER Comments on the Green Paper on Convergence</h1> <div class="entry-meta"> <span class="posted-on"><i class="fa fa-calendar"></i> <a href="https://www.aereurope.org/aer-comments-on-the-green-paper-on-convergence/" rel="bookmark"><time class="entry-date published" datetime="2013-09-23T14:31:36+02:00">23 September 2013</time><time class="updated" datetime="2019-07-29T14:36:29+02:00">29 July 2019</time></a></span><span class="byline"> <i class="fa fa-user"></i> <span class="author vcard"><a class="url fn n" href="https://www.aereurope.org/author/le-antonio/">Le-Antonio</a></span></span> </div> </header> <div class="entry-content"> <p>23 September 2013 – AER COMMENTS ON THE GREEN PAPER PREPARING FOR A FULLY CONVERGED AUDIOVISUAL WORLD: GROWTH, CREATION AND VALUE</p> <p>The Association of European Radios (AER) is a Europe-wide trade body representing the interests of over 4500 commercially funded radio stations across the EU27 and in Switzerland.</p> <p>AER is located at:</p> <p>Association Européenne des Radios<br /> 76, av. d’Auderghem,<br /> B-1040 Brussels,<br /> Belgium</p> <p>AER’s EU Interest Representative Register ID Number is 6822083232-32.</p> <p>AER’s main objective is to develop and improve the most suitable framework for private and commercial radio activity. AER constantly follows EU actions in the fields of media, telecommunications and private radio transmission, in order to contribute, enrich and develop the radio sector.</p> <p>AER will therefore comment the Green Paper “Preparing for a Fully Converged Audiovisual World: Growth, Creation and Value” (hereinafter AV Convergence Green Paper) from a commercial radio perspective. Although radios are not audiovisual, there are indeed some points in this Green Paper which are important for commercial radio – hence the fact that AER will only comment on certain points of the Green Paper.</p> <p><strong>I. Introduction</strong></p> <p>AER would first like to recall that, although audio only, radios are also broadcasters.</p> <p>Radio connects people: it is everywhere, mobile, simple-to-use, interactive, cost-efficient and complimentary. For commercial radio, these features are all based on a very efficient model: terrestrial broadcasting of free-to-air programmes, funded (almost) 100% by advertising.</p> <p>Radio is also the most intimate medium: its character is by nature local, regional or at the utmost national – and so is its audience: listeners are interested in their local news, their local service information, their local weather forecasts, their local traffic jams, the advertising of their local furniture shop, the comedy piece about a local politician, told in the local dialect of their local DJ. In case of manmade or natural disaster, listeners rely on radio as their most immediate and most trusted source of information (see European Commission Standard Eurobarometer Survey of Autumn 2011 (EB76) ).</p> <p>The AV Convergence Green Paper points out that “Convergence can be understood as the progressive merger of traditional broadcast services and the internet” . AER agrees with this definition of convergence. The AV Convergence Green Paper however addresses convergence mainly from a TV or from a “moving images with or without sound” perspective .</p> <p>For AER, this is a very important point: radios are local, regional or, at the most, national actors. With the development of new technology, radio must however increasingly integrate new platforms and develop new offers to reach its audience: programmes are being broadcast, streamed, webcast and offered on demand. However, even in an online environment, commercial radios are targeted at local, regional or national audience.</p> <p>As shown in the AER comments, radios’ specificities are very different than audiovisual businesses’. This difference, illustrated in the content of this position paper, explains <strong>why radio is not in the scope of the Audiovisual Media Services Directive (AVMS Directive), and why this should remain the case in the future.</strong></p> <p><strong>II. Comments on the AV Convergence Green Paper:</strong></p> <p><strong>Question 1:</strong><em> What are the factors that enable US companies to establish successful presence in the fragmented EU market despite language and cultural barriers, while many EU companies struggle? What are the factors hindering EU companies?</em></p> <p>When considering the overall EU market, there are very few US or non-EU companies in the radio market. For radio, language and culture barriers are key factors. The strength of radio indeed lies in the well planned and produced mixture of talk, stories, entertainment, news, music and surprises (through sound only). The factors hindering EU radios are rather linked to decreasing advertising revenues, high authors’ and related rights’ fees, difficult competition or high investments necessary to integrate digital platforms, as shown in the rest of the comments in this position paper – depending on the country, some of these factors are more important than others.</p> <p><strong>Short remarks regarding competition between public and private radios:</strong></p> <p>Competition between private and public radios is indeed one of the factors affecting commercial radios across Europe the most. As this is addressed in the AV Convergence Green Paper, AER would like to take this opportunity to recall some important points:</p> <p>First, AER reiterates its support to the European dual system based on a mix of publicly- and commercially-funded radio broadcasting. However, unfair competition may hinder this model.</p> <p>EU Member States should show a strong political will and implement the rules put forward by the European Commission in the Broadcasting Communication in 2009. This should lead to the effective establishment of the following principles:</p> <p>1. Clear and meaningful definition of the public service remit by a legal act<br /> 2. Market impact assessment prior to an extension of the remit<br /> 3. Transparency: separation of public and commercial activities as well as cost allocation to profit centres<br /> 4. Independent control mechanism for<br /> – ex-ante evaluation of activities as well as for<br /> – the supervision of entrustment and for<br /> – the evaluation of the financial behaviour<br /> 5. Sanctions for breach of competition rules</p> <p>The rules set in the Broadcasting Communication are, in the best cases, partially applied by EU Member States, or, in the worst cases, merely ignored. They however constitute essential requirements to avoid distortions of competition in the various EU Member States. These rules were adopted in 2009 after a two-year consultation process, in which the EU Member States actively took part. However, one of the main new safeguards for competition is not implemented or applied in some Member States: there is no ex-ante test before creating new public broadcasting services in Italy or France and the definition of the public service remit is often too vague and too close to the private media’s activities.</p> <p><strong>Question 3:</strong> <em>Are there obstacles which require regulatory actions on access to platforms?</em></p> <p><strong>Preliminary remarks on copyrights:</strong> radios are both right holders and rights users. At EU level, it is essential, in order to tackle the radio copyright problems in the online environment, that any new regulatory instrument not only addresses the rightholders’ and the retailer’s needs, but also solves the difficulties of <strong>radios</strong>. The latter pay over €2.6 billion across Europe per year for content, mostly music rights, and payment for these rights is negotiated on a regular basis .</p> <p>AER is optimistic that these issues will be solved with<br /> – the adoption of the currently discussed proposal of the European Commission for a directive of the European Parliament and of the Council on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses in the internal market , and<br /> – the Licences for Europe stakeholder dialogue initiated by the European Commission<br /> AER warmly welcomed both initiatives, which participate in a correct and necessary reform of an essential system for the sustainability of creativity and culture: copyrights. Please see answer to question 5 for complementary points on copyrights.</p> <p>Apart from ensuring easier access to rights for online content explained above, AER sees one main issue in this field: as radio’s future platform will be a mix of broadcast (analogue and digital) and online transmission, it is essential to ensure the presence of chips enabling reception of terrestrial broadcast radio in any “techie” device so that radio remains an obvious and easy-to-access medium: e.g., car radios, personal radios, mobile phones, tablets and computers. Radio programmes must be available in app stores and must be found also in Electronic Programming Guides (EPGs). Bottlenecks and vertical integration have to be avoided. This could be done by an effective EU competition policy as well as by a review of the existing must carry rules.</p> <p>It should also be underlined that the rules contained in the current version of the Telecom Package are very positive for radios. Indeed, as mentioned at article 5 of the Authorisation Directive in the Telecom Package: “Rights of use for radio frequencies […] shall be granted through open, objective, transparent, non-discriminatory and proportionate procedures”.</p> <p>Although not involving directly EU regulation, other very important points can be seen in the answer to question 8.</p> <p><strong>Question 5:</strong> <em>How will convergence and changing consumer behaviour influence the current system of content financing? How are different actors in the new value chain contributing to financing?</em></p> <p>Changing consumer behaviours or convergence will not affect the key elements of commercial radio content financing, at least in the short to medium term: it is and will remain funded (almost) 100% by advertising, on both analogue and digital means. As shown by national figures, most of the revenues still come from advertising on analogue broadcasting for commercial radio across Europe. Therefore, while the specific approaches and solutions offered to advertisers and commercial brands may evolve (and will differ between radio operators) the fundamentals of the funding model will remain broadly the same.</p> <p>Although most radios in the EU have been present online for the past 10 years, revenues from online advertising still form a relatively small part of their revenues. The main risk commercial radios are faced with is the reallocation of the (small) advertising budgets to other online operators. So, any advertising restriction will have a negative impact on commercial radio.</p> <p>AER would however recall that the following issues are key for commercial radios’ presence online:</p> <p>– Radio is online as much as offline: any framework should be technologically neutral and ensure blanket licences for all platforms – commercially funded radios’ business-model is still mainly based on free-to-air FM radio broadcasting. However, with the development of new technology, radio must increasingly integrate new platforms and develop new offers to reach its traditional audience: programmes are being broadcast, streamed, webcast and offered on demand. For each new technology, an additional layer of fee tends to appear, with additional administrative cost even if dealt with by the same body. To ensure clarity and fairness, online and offline fees should be carried out under a single blanket licence fee, in a transparent manner.</p> <p>– Radio needs country-of-origin principle-based solutions for online distribution – for radios, easy-to-handle licensing is seen as a very positive step towards a true EU internal market, via fair competition amongst collecting societies and legal certainty for radios in their online activities. Even in an online environment, commercially funded radios are targeted at local, regional or national audience. They would consequently make use only of one licence valid in all territories where their target audience can pick up the programmes (spill-over licensing). Compulsory multi-territorial licences do not reflect radio business models and would lead to additional unsustainable costs.</p> <p>– Radio needs collective management of rights – an important element for radio’s development on the internet is the ability to provide listeners with time-shifted / on-demand programmes and programme extracts. The music contained in programmes made available on-demand entails obtainment and clearance of exclusive related rights. The multiple rightholders have to be identified, asked for permission, and remunerated. This is a task that cannot practically be undertaken by radios. Collecting societies have the expertise to fulfill this task – they already do so in the offline and online world for linear uses. At least the licensing of such rights for on-demand programmes with only accessory parts of protected music (e.g. reports or interviews with some background music) should be enabled through mandatory collective management of rights.</p> <p>– Radio needs access to the global repertoire – For online uses, important parts of the global repertoire are being divided per publishers, and withdrawn from collecting societies’ offer across Europe, due to market movements. With this development, commercially funded radios are bound to address different entities in order to provide their audiences with a full range of music styles. This entails higher costs, more complexity and, eventually, inability to play certain music. For radio, it is essential to ensure that all collecting societies are able to license access to the global repertoire, to ensure easy access for radios and fair competition amongst collecting societies.</p> <p>– Management of all collecting societies should be streamlined, more efficient and more transparent, enabling fair competition on the part of the fees paid for the administration of the tariffs.</p> <p>Finally, non-discriminatory access to platforms and infrastructure is crucial for radios.</p> <p><strong>Question 7:</strong> <em>How relevant are differences between individual platforms delivering content (e.g. terrestrial and satellite broadcasting, wired broadband, including cable, mobile broadband) in terms of consumer experience and of public interest obligations?</em></p> <p>For radio, the main difference between content broadcast terrestrially and otherwise transmitted lies in the difference between content broadcast and content accessible online. The future of radio will more and more rely on an integration of both platforms, with broadcast remaining the main source complemented by online. Free-to-Air terrestrial broadcast indeed constitutes the only economically efficient one-to-many possibility to transmit radio services. However, consumers require online features to be available too. With the development of hybrid radio, integration of both aspects gets increasingly convenient.</p> <p>Please see further points in answer to question 3 and in the remarks regarding competition between public and private radios.</p> <p><strong>Question 8:</strong><em> What frequency allocation and sharing models can facilitate development opportunities for broadcasting, mobile broadband and other applications (such as programme-making equipment) carried in the same frequency bands?</em></p> <p>As explained in the answers to questions 7 and 3, radio’s main business model remains Free-to-Air terrestrial broadcasting of content, mainly on analogue radio (predominantly FM, but also AM in some cases) but increasingly on digital radio (including DAB, DAB+ or DMB).</p> <p>Therefore radio still requires use of spectrum as a primary user. The scale and nature of terrestrial radio mean that one-to-many broadcasting will remain the most efficient method of reaching listeners for the foreseeable future. It would certainly be impractical and inefficient to try and migrate the bulk of terrestrial broadcasting and listening to the internet. For this reason online distribution is likely to remain an important complementary platform rather than a replacement.</p> <p>Radio needs to be on every platform: radio’s future is a mix of broadcasting and internet transmissions – it is the most intimate and most trusted medium. Listeners need to rely on the ability to receive radio on these same terms in the future, by analogue and digital broadcasting as well as internet transmissions (Free-To-Air / Free-To-Access). Digital broadcasting will be done in Europe on bands III and / or band L, depending on the country. These means of transmission will all be part of the patchwork of transmission techniques for commercially funded radio in the future. However, as mentioned in the answer to question 7, online transmissions will only complement broadcasting. <strong>Radio’s access to bands II, III and L is therefore paramount to ensure a healthy future for radio.</strong></p> <p>Radio is local, regional or national: regulatory decisions should continue to be taken at the same level – spectrum for radio is currently efficiently managed by European States and this should remain the case: national radio frequency landscapes and national radio broadcasting markets are different, with divergent plans for digitisation, diverse social, cultural and historical characteristics and with distinct market structures and needs. <strong>Consequently, further coordination at EU level of spectrum management on the bands used by radio does not seem necessary, or appropriate.</strong></p> <p>Radio needs guaranteed access to spectrum: in the bands described above, market-based approach management (such as service neutrality or secondary trading) cannot be enforced – As most of them are SMEs, commercially funded radios are in no position to compete for access to spectrum with other market players.</p> <p><strong>No universal EU-wide switch-off date for analogue radio broadcasting services should be envisaged</strong> – across the EU, plans to migrate from analogue technology (FM/AM) to digital broadcast technology are being actively discussed and tested. <strong><em>Decisions on whether to proceed and the appropriate time-frame should be left to each national industry.</em></strong></p> <p><strong>Question 10:</strong> <em>Given the convergence between media, is there evidence of market distortion caused by the regulatory differentiation between linear and non-linear services? If yes, what would be the best way to tackle these distortions while protecting the values underpinning the EU regulatory framework for audiovisual media services?</em></p> <p>For commercial radios the main issue where the EU regulatory differentiation between linear and non-linear services can create distortions relates to advertising: radio is already very tightly regulated at national level on all aspects with different rules in each country (formats, quotas in content, advertising, right of reply, basic identification, masthead, imprint requirements, etc.). Its regulation, and hence the many mandatory elements a radio has to fulfill in order to be authorised to broadcast content, is tailored to its audience: it needs to be decided at the same level.</p> <p>Regarding advertising, a relaxation of certain rules, especially regarding mandatory messages in radio advertising, would be very helpful, without hampering these messages’ laudable political objective: inform consumers. Additional information in radio advertising is indeed bound to miss its aim: imposing information requirements in radio advertising does not appear to be an effective way to inform the consumer. Empirical data showed that warning messages were considered as “oppressive”, and lead listeners to “tune out” metaphorically, if not literally, in the worst case scenario.</p> <p>Information requirements in advertising are particularly burdensome for radios – radio is a non-visual linear medium, which concretely means that, when detailed messages are to be communicated in an advertisement, these are to be broadcast in an added time-space to the latter. This increases the amount of time, hence the price, of the considered commercial message. In addition, needless to say, it lessens the commercial impact of the advertisement (a usual ad lasts for 15-40 seconds). These combined effects impact broadcast media, and radio in particular, and constitute factors that can deter advertisers away from using radio.</p> <p>Information is perceived to be much more useful at a later stage than when advertising: through websites, in information brochures or at the point of sale – Information is more useful when the decision is taken to perform the purchase.</p> <p><strong>Question 11:</strong> <em>Is there a need to adapt the definition of AVMS providers and / or the scope of the AVMSD, in order to make those currently outside subject to part or all of the obligations of the AVMSD or are there other ways to protect values? In which areas could emphasis be given to self- / co-regulation?</em></p> <p>AER would like to recall that radio‘s audio character is by nature local, regional or at the utmost national – and so is its audience: listeners are interested in their local news, their local service information, their local weather forecasts, their local traffic jams, the advertising of their local furniture shop, the comedy piece about a local politician, told in the local dialect of their local DJ. In case of manmade or natural disaster, listeners rely on radio as their most immediate and most trusted source of information.</p> <p>The values protected in the AVMS Directive are protected by the very tight regulations set through a diversity of instruments at national level (on formats, quotas in content, advertising, right of reply, basic identification, masthead requirements, etc.), in an adapted manner to the local landscape. Its regulation, and hence the many mandatory elements a radio has to fulfill in order to be authorised to broadcast content, is tailored to its audience: it needs to be decided at the same level. <strong>Radio should therefore not be integrated in the scope of the AVMS Directive.</strong></p> <p><strong>Short remarks on media freedom and pluralism:</strong> commercial radio is a good example of successful media pluralism. Each country has its own media and radio landscape, depending on various local factors (which can be of historical, cultural, or political nature), but all countries in Europe have a range of stations with different owners offering a wide spectrum of content to the audience. Commercially funded radios evolve in highly competitive environments, not only with public broadcasters or community radios, but, first and foremost, with other privately owned and commercially funded radios . The extent of alternative sources of news and information across media has also increased fundamentally in recent years, particularly with the rapid growth of online media and internet penetration. As for the nature of their services, they adapt to their audiences’ needs and demands. So, commercially funded radios deliver comprehensive and varied radio content, from editorial and talk / debate to music formats .</p> <p><strong>Question 15:</strong> <em>Should the possibility of pre-defining choice through filtering mechanisms, including in search facilities, be subject to public intervention at EU level?</em></p> <p>AER supports the European Commission´s view regarding the pros and cons of personalised search. Search engines are important partners for radios as well as fierce competitors of AER Members. The dominant position of a market player must not result in a higher ranking or a preferential treatment of the services of this company. Competitors of search engines must be treated on a non-discriminatory and fair basis.</p> <p>AER therefore welcomes that the European Commission opens competition procedures in cases of potential abuse of a dominant position.</p> <p><strong>Question 16:</strong> <em>What should be the scope of existing regulation on access (art. 6 Access Directive) and universal service (art. 31 Universal Services Directive) in view of increasing convergence of linear and non-linear services on common platforms? In a convergent broadcast / broadband environment, are there specific needs to ensure the accessibility and the convenience to find and enjoy “general interest content”?</em></p> <p>As mentioned previously, radio is still mainly a broadcast medium and will remain so for the foreseeable future – even in the case of hybrid radio, combining broadcast and online features, broadcasting is the backbone of the infrastructure, as it is very robust. Broadcasters on radio provide useful and crucial information: in the event of natural disasters, emergencies and extraordinary situations, broadcast radio is often the first tool to provide live information and advice direct to the public. It also enables to avoid overburdening mobile networks. It would therefore be extremely important to ensure that as many “converged” devices as possible offer the possibility to receive broadcast radio. For instance, and as mentioned in the answer to question 3, it is essential to ensure the presence of chips enabling reception of terrestrial broadcast radio in any “techie” device so that radio remains an obvious and easy-to-access medium: e.g., car radios, personal radios, mobile phones, tablets and computers. This could be done by an effective EU competition policy as well as by a review of the existing must carry rules. In addition, it is essential that, when broadcast chips are present on a device, their use is enabled.</p> <p>When radio is listened online, the quality of services provided should be at least equal to broadcasting on-air: uninterrupted transmission of programmes. However, commercially funded radios in Europe are, in their vast majority, SMEs: they are in no position to financially compete for access to the internet with other market players. So, it is crucial for radios that this understanding of net neutrality is applied. Finally, and equally essential, it must be easy to find radios in an online environment: a must-be-found principle could be applied for online radio.</p> <p><strong>Question 18:</strong><em> What regulatory instruments would be most appropriate to address the rapidly changing advertising techniques? Is there more scope for self- / co-regulation?</em></p> <p>AER believes that, as exemplified by the European Advertising Standards Alliance and the national Advertising self-regulatory bodies as well as by the online behavioural advertising regulatory environment, self-regulation can usefully address consumers concerns and needs online regarding advertising, and faster than regulation.</p> <p>ENDS<br /> 23/09/2013</p> <p>Contact details:</p> <p>Julia Maier-Hauff<br /> AER Secretary General<br /> 76, av. d’Auderghem,<br /> B-1040 Brussels,<br /> Belgium<br /> Tel: +32 2 736 9131<br /> Fax: +32 2 732 8990</p> </div> <footer class="entry-meta"> <i class="fa fa-folder-open-o"></i> <a href="https://www.aereurope.org/category/audiovisual/" rel="category tag">Audiovisual</a>. <i class="fa fa-link"></i> <a href="https://www.aereurope.org/aer-comments-on-the-green-paper-on-convergence/" rel="bookmark">permalink</a>. <hr class="section-divider"> </footer> </article> <nav class="navigation 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