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New Audiovisual Law, better late than never. some keys

"The LGCA seeks to update audiovisual regulation in the face of the emergence of new agents, the diversification of audiovisual formats and the fragmentation of the audience"

With a delay of more than a year and a half in the transposition of Directive (EU) 2018/1808 on Audiovisual Communication Services, and a complaint from the European Commission before the Court of Justice of the EU for said delay, we finally have a new General Law on Audiovisual Communication (Law 13/2022, of July 13 - LGCA), with which it complies, also, with one of the actions of the Government's Recovery, Transformation and Resilience Plan, in the component “Spain, Audiovisual Hub of Europe”.

The LGCA, heir to the aforementioned Directive, seeks update the audiovisual regulation before the irruption of new agents, the diversification of audiovisual formats and the fragmentation of the audience, creating new categories of services, equating some obligations between the different providers, modifying the financing regime of RTVE, paying special attention to the protection of users -especially minors- and guaranteeing cultural, linguistic and gender diversity, through the promotion -and financing- of European works.

Its processing has not been easy and, as has always happened in this sector, combining the conflicting interests of traditional operators, new agents such as platforms, audiovisual producers, the film community, user associations and, also, nationalist parties, has generated more of a controversy. There are not a few voices crying out shadows in the new law. Without wanting to go over the whole standard, let's see some of the juiciest amendments to the new legal text.

New subjects. While the audiovisual law in force until now focused on DTT -especially open- the new law reaches not only open linear and pay television, but also streaming payment platforms, to the video sharing services across platforms and even to users of special relevance who use video sharing services through the platform (the so-called "influencers”). All of the above, provided that they are established in Spain according to the criteria of the LGCA, must be registered in the new State Registry of audiovisual communication service providers.  

In this regard, it should be remembered that the audiovisual standard is based on the country of origin principle, enshrined in the Directive, according to which a service provider will be under the jurisdiction of the Member State in which it is established. This means that the regulatory changes imposed by the LGCA on the platforms that provide audiovisual services in streaming apply to those established in Spain but not to those that are not, as is the case with Netflix, Amazon, HBO or Disney, unless they offer services specifically aimed at Spain -as occurs with all of the above- in which case, and as an exception to the principle of country of origin, they will be applied some obligations which I will mention later.

Promotion of European Work. According to the issue fee, the obligation for audiovisual communication service providers is maintained linear tv to reserve, of the annual broadcast time of its programming, at least: (i) the 51% to European audiovisual works; of that percentage, at least 50% reserved for works in Spanish or in one of the official languages ​​of the Autonomous Communities; and, as a novelty, of this subquota, RTVE will reserve a minimum of 15% to audiovisual works in any of the official languages ​​of the Autonomous Communities, taking into account the population and reserving, at least, 10% for each; and (ii) 10% to European works by independent producers (50% produced in the last 5 years).

In the case of audiovisual communication service providers tv on demand must reserve at least one 30% of its catalog to European works; half (15%) must be works in official languages ​​in Spain and, of that subquota, the 40% must be audiovisual works in one of the languagesOfficials of the Autonomous Communities, taking into account the population and reserving at least 10% for each of them.

This last percentage of 40% and the previous one of 15% of RTVE, as well as all the fifth additional provision entitled "Promotion of the official languages ​​of the Autonomous Communities” and that includes the creation of a fund to help dubbing and subtitling in co-official languages, it must be pointed out to the ERC marker during the processing of the general State budgets, despite the fact that this parliamentary group finally voted against the LGCA.

Regarding the European work advance financing obligation, RTVE must allocate the 6% of your countable income (same as up to now) to the advance financing of European audiovisual works, under certain conditions, among which the reservation of the 70% to independent production, in Spanish or in any of the official languages ​​of the Autonomous Communities, with an express reservation of the 15% of 70% for Autonomous Communities, and the minimum of 30% of that 70% for works audiovisual directed or created exclusively by women.

In the private sphere, a relevant novelty is the extension of financing obligations for European audiovisual works to providers of the television audiovisual communication service, not only linear, but also requestand the providers of these services not established in Spain, based in other Member States, provided that they direct part of their services specifically to an audience in Spain, that is, platforms such as Netflix or Amazon.

Regarding these providers, their obligation to contribute to the advance financing of European works will depend on their Computable income for the provision of audiovisual services in Spanish territory: (i) will be the 5% of such income, if they are over 50 million euros; must be used for independent production, in official languages ​​and works directed or created by women in the same percentages mentioned for public television; (ii) the 5% of computable income, if these are located between 10 and 50 million euros; with a 70% reservation for independent production in official languages; and (iii) will remain exempt if the computable income is less than 10 million euros.

Financing for European audiovisual work can be direct or through the purchase of exploitation rights for the finished work or by contributing to funds for the protection and promotion of cinematography.

Independent producer. Special mention deserves the controversy surrounding the definition of "independent producer", modified during the parliamentary procedure, and which has generated a real shock in the film community. The main associations in the sector, the Film Academy, directors, producers and actors, among others, spoke out strongly against the modification of the definition of independent producer introduced last night by the PSOE, by which a production company linked to an audiovisual group can be considered as independent with respect to those contents that it produces on its own initiative, or on request, for a group other than the one with which it is linked. Film and television professionals have already announced a next step in Brussels and the Government is trying to calm the waters by announcing that the future Film Law will strictly specify what these production companies can do to be considered independent.

Apart from the discussion about whether the current definition of independent producer will generate more concentration –if possible- in the hands of the large audiovisual groups (platforms and television), which threatens the principle of cultural diversity, if one enters the technical detail of the issue, the final result is striking. Indeed, in my opinion, from a purely grammatical point of view, the last item in the definition of independent producer in the article 112.1 LGCA is incorrect. Said article says that an independent producer is “the natural or legal person who is not linked in a stable way in a common business strategy with an audiovisual communication service provider obliged to comply with the provisions of articles 117 to 119 and who assumes the initiative, coordination and economic risk of the production of programs or audiovisual content, on its own initiative or by request, and in exchange for a consideration makes them available to saying audiovisual communication service provider. This definition is practically the same as the previous law, changing the order of some elements. Having used those same elements with the same language, the change hastily introduced in the last phase of the parliamentary procedure (substitute "un" for "said"), simply does not fit, since the previous definition did not intend in any way to introduce an exception and was consistent in the way of describing in an orderly manner the elements of the independent producer. I understand that the intention was to touch as little as possible a text that was supposed to be agreed upon, but the reality is that something as important as independent production in the audiovisual sector has been somewhat run over by last minute mismanaged interests. They lead us to wait for the Film Law, we'll see.

Limits on advertising. In advertising, we highlight that the new LGCA, in line with the Directive, replaces the maximum of 12 minutes of commercial communications (advertisements) per clock hour for a maximum of 144 minutes of advertising between 6:00 and 18:00, and 72 minutes between 18:00 and 24:00. The change does not occur with respect to the total calculation, which is the same, but in the distribution of advertising by time slots, which is made more flexible. In this regard, some association denounces that this change can generate a saturation in the slots with the highest audience affecting the rights of viewers and the interests of advertisers.

Regarding the video exchange platform service, although the rule establishes obligations regarding express commercial communications, the truth is that evade liability for creators of covert commercial content.

Influencers. Another noteworthy novelty are the obligations for users of special relevance who use video sharing services through the platform, the so-called “influencers”. The new law, taking up a recommendation made at the time by the CNMC, obliges the inscription of these users of special relevance in the Register of Providers of the Audiovisual Communication Service and to take certain measures to protect minors provided that: (i) some significant income through this economic activity; (ii) the an influencer is the editorial manager of the contents; (iii) the activity reaches the general public being able to have an impact on him; (iv) it intends to inform, entertain or educate through the distribution of audiovisual content; and (v), like the rest of audiovisual communications services, the activity is carried out on networks of electronic communications and the user of special relevance is established in Spain.

Financing of RTVE. The LGCA also incorporates modifications to Law 8/2009, on the financing of the Spanish Radio and Television Corporation, to establish that the financing of RTVE be carried out with contributions from all the agents present in the audiovisual market that compete for the same audience, finally eliminating the telecommunications operators. That is, free-to-air linear television audiovisual communication service providers (3%), pay-per-view (1,5%), on-demand (1,5%) and video sharing service providers through platform (1,5%), regardless of whether they are established in Spain or in another Member State of the European Union, provided that they direct services to Spain (the latter, obviously, in relation to the gross operating income of the audiovisual activity in Spain).

Finally, despite the spirit of protecting users that informs the new LGCA, the obligation that television stations had to report their programming three days in advance has been lost, which leaves the way open to  counter programming.

In short, the new LGCA aims to more balanced markets and contributes to establishing rules that are more in line with the global audiovisual panorama. Despite a somewhat abrupt parliamentary process at times, the law has had the consensus needed throughout the different phases of its gestation, under the Community Directive. Yes ok the LGCA must still be completed with development regulations and the adoption of certain measures, such as the creation of the new Registry, which leads, according to its ninth final provision (Entry into force), to a postponed application of several of the new measures, the audiovisual sector must assume the new rules as soon as possible, to live with them and with the new challenges that come.

Xavier March

Partner at Garrigues, co-responsible for the Media industry.

Article originally published in the Blog Fide in the withfideinitial

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