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Media Update November 2011

30 Nov 2011

Government Announces Extension of Film Tax Relief

Earlier this month the government announced the extension of UK film tax relief until the end of December 2015.

Although many hoped for a later end date, this will be welcomed by the UK film industry at a time when attracting finance is increasingly tough.

The criteria for relief available to film production companies will remain the same. For a film to be eligible, it must be certified as British, either by passing a cultural test or under an agreed co-production treaty, and must incur at least 25% of the total production expenditure in the UK.

BFI Launches Film Export Fund

This month the BFI announced the launch of a new £200K fund aimed at enhancing export opportunities for British films featuring on the international festival circuit.

Applications under the fund can be made by a production company or sales agent once films have been accepted at a number of significant film festivals.

For further details on how to apply see the BFI website.

Decision on ECJ Referral in ITV Broadcasting Limited and Others v TV Catch Up Limited [2011]

This case concerns a claim by ITV and Channel 5 against TV Catch Up Limited, a company which operated a website allowing the public to watch live UK television on computers, smart phones and games consoles via live internet streaming.

The plaintiffs claimed that TV Catch Up were infringing the copyright in their films and broadcasts. The judge in this case, Floyd J, had provisionally ruled that he would refer two questions to the ECJ concerning "communication to the public" of films and broadcasts and "reproduction of a substantial part" of films and broadcasts in memory buffers and on screens.

In the light of the recent Football Premier League case he has now ruled only one question is to be referred to the European Court of Justice. This is:

• does the right to authorise or prohibit a "communication to the public" of films and broadcasts apply to a case where:

(i) the author had authorised his work to be included in a terrestrial free-to-air television broadcasts intended to be received in a certain member state's territory; and

(ii) a third party enabled individual subscribers, who could lawfully receive the broadcast on their televisions, to log on to a server and receive the broadcast via an internet stream?

It is expected that the ECJ's ruling on this question will have a considerable impact on the commercial live streaming of third party broadcasts as it will determine whether they can continue without the express consent of the broadcasters.

EU Commission's New Programme "Creative Europe"

"Creative Europe" is a new programme intended to replace the current MEDIA, MEDIA Mundus and Culture programmes with a budget of over 900 million Euros. It has been proposed by the Commission and is now under discussion by the Council and European Parliament.

If adopted it will run from 2014 to 2020.

The Commission's press release states that the benefits will include:

• More funding for artists and cultural professionals to develop their skills and to work across borders;
• More funding for transnational cultural activities within and outside of the EU;
• Support schemes tailored to the specific needs of the audiovisual and the cultural sectors in the EU;
• Easier access to private funding through guarantees which could generate more than € 1 billion in loans;
• Increase banking expertise in the cultural and creative sectors; and
• Develop Europe’s competitiveness in culture and film while safeguarding cultural and linguistic diversity

Movies on pay-TV Investigation

As part of its investigation into the supply and acquisition of pay-TV movie rights by Sky, as referred to it by OFCOM, the Competition Commission ("CC") has issued a "Notice of Further Possible Remedies" in which it is seeking views from interested parties before 5 December.

In its provisional findings, the CC held that

"Sky’s market power in the pay-TV retail market gives rise to barriers to the acquisition of first subscription pay-TV window (FSPTW) movie rights, and Sky’s control of the acquisition of FSPTW movie rights gives rise to it controlling almost all FSPTW movie content in the wholesale market. Sky’s control of the acquisition and distribution of FSPTW movie content on pay-TV adversely affects competition between pay-TV retailers."

The two new remedies on which the CC wants to canvas views are:

(a) requiring Sky to provide, to any qualifying over-the-top (OTT) movie service provider, access to its consumers who are currently able to receive its Anytime+  Subscription Video-on-Demand (SVOD) content (ie those consumers with a Sky Ethernet-enabled set-top box (STB)); and

(b) a supplementary remedy, requiring Sky to publish the expiry dates of its contracts relating to FSPTW rights with the six major studios, so as to increase the ability for rival bidders to engage in timely negotiations

More detail on the issues that the CC is seeking views on are set out in the Notice here.