EU Paramount/Sky ruling may end geoblocking within Europe
Tue 26 Jul 2016
The European Commission announced today that it has accepted compromises offered by Paramount Pictures as remedial measures for anti-trust practices in deals that the company struck with Sky TV in the UK. The deal mandates that viewers outside Britain and Ireland be able to access formerly ‘geoblocked’ Paramount content broadcast by Sky UK.
The concession, which covers both online and satellite service, will stay in place for five years, and the ruling will affect five other media companies currently under scrutiny by the EU for the same issues. Breaches of the agreement would result in a fine of up to ten per cent of global turnover for Paramount – over $200 million.
The press release states that Paramount’s licensing agreement with Sky required the TV company ‘to block access to Paramount’s films through its online pay-TV services (so-called “geo-blocking”) or through its satellite pay-TV services to consumers outside its licensed territory (UK and Ireland) and (b) required Paramount to ensure that broadcasters outside the UK and Ireland are prevented from making their pay-TV services available in the UK and Ireland.’
The EU will continue its investigations into Sky’s other deals with five other companies which it began to investigate a year ago – namely NBCUniversal, Disney, Sony, Twentieth Century Fox and Warner Brothers.
It may be no coincidence that in the last two weeks CBS (which licenses Star Trek to Paramount for the purposes of the movie franchise*) has struck a deal with Netflix to stream new episodes of the much-awaited 2017 Star Trek reboot globally within 24 hours of network broadcast.
Naturally the EU’s ruling only covers states within the European Union, but it’s a hammer-blow to the regional licensing frameworks which have been hamstringing global diffusion of popular American content since the 1950s.
For Netflix, the decision compounds its victory in the Star Trek deal, and arguably paves the way for new global licensing practices that will benefit both it and its competitors. Netflix has courted much controversy this year, since it launched a crackdown on users who avoid geoblocking via VPNs, by adding known VPN IP addresses to a blacklist and preventing ‘international’ access to its various global catalogues – with the better-stocked U.S. catalogue the most sought-after.
* Paramount Television owned Star Trek television rights between 1967-2005, whereafter CBS took them over, licensing ST to Paramount Pictures. Both are owned by Viacom, the final responsible party in this section of the EU investigation.
Correction: Amended details of current ownership of Star Trek TV Vs. Movie rights, see end note above