Video streaming companies are on alert for potential disruption to the way their platforms function in Europe as a result of Brexit, they told S&P Global Market Intelligence.
The U.K.'s departure from the European Union and subsequent withdrawal from the Digital Single Market could result in copyright restrictions on content ranging from paid music to video apps. The Digital Single Market policy ensures free movement of persons, services and capital for the smooth functioning of online activities across Europe.
Under current EU-wide rules, the likes of Netflix Inc. and Amazon.com Inc.'s Prime Video must allow users in European member states to access their services from any country in the region. Implemented in the U.K. in 2018, the so-called Portability Regulation effectively dodges pan-European copyright rules by creating a "legal fiction" that allows paid content providers to offer region-locked services in Europe.
A transitional agreement between the U.K. and the EU ensures these rules remain in effect until the end of 2020 at a minimum, beyond the current Brexit deadline of Oct. 31 this year. It is unclear what route the U.K. will take on content portability after the transitional period.
Once the country is out of the Digital Single Market, the onus will be on video services to maintain the current arrangement, according to law firm Bird & Bird. As a result, they will have to obtain rights clearances for their content across Europe "in order to comply with their obligations to U.K. subscribers."
Those who fail to do so risk infringing copyright in European territories and alienating customers attuned to the current setup, Bird & Bird wrote in a legal guide.
The U.K. could address these hurdles in its Brexit negotiations with the EU, according to industry association techUK, which counts Google LLC, Facebook Inc., Apple Inc. and Amazon among its 800 members. Until then, uncertainty remains over the future of localized U.K. content services and whether they can be offered in Europe, it said.
"Our members have made it clear that they wish for alignment with current EU laws on portability," a techUK spokesperson said in an interview with S&P Global Market Intelligence. "Any friction would not be welcomed."
Acknowledging concerns raised by stakeholders, the government agreed that the U.K. would need to strike "reciprocal arrangements" with the EU in order for streamers to continue offering their cross-border services after Brexit. Any changes to copyright regulations would then need to be incorporated into U.K. law.
Subscription and broadcast video-on-demand providers who spoke to S&P Global Market Intelligence said they were prepared for any changes to copyright rules post-Brexit, despite uncertainty around the nature of the U.K.'s exit.
Netflix's local catalog will be available to Brits in Europe with access to popular shows including "The Crown" and "Stranger Things," for which it holds pan-European rights. Members are unlikely to notice changes due to localization, the company told S&P Global Market Intelligence.
Comcast Corp.'s U.K. pay TV unit Sky Ltd., which operates the Now TV and Sky Go video-on-demand services, said it has "relevant contingency plans in place across the business and [remains] committed to all our markets."
Commercial public service broadcaster ITV PLC said it is monitoring the situation and will ensure that customers are "informed on what this means for their [ITV Hub+] subscription" as soon as any changes to content portability rules post-Brexit are confirmed. The ability to watch from within the EU is one of the chief benefits offered to those who sign up to the premium tier of its broadcast VOD app. As for fellow PSB the British Broadcasting Corp., its popular iPlayer VOD service is only available in the U.K., and so will not be impacted. ITV and the BBC are also assessing whether its upcoming joint content service, BritBox, will be impacted.
Apple declined to comment on the implications of any legislative changes on its upcoming Apple TV+ streaming service and iTunes store. Amazon did not respond to a request for comment on the potential impact to its Prime Video content.