The effectiveness of audiovisual regulation inside the European Union: the television without frontiers directive and cultural protectionism.

• Author: Middleton, Joe

1. INTRODUCTION

   In early January of 2002, Jean-Marie Messier, the chief executive of French audiovisual giant Vivendi Universal, held a press conference to discuss his company's latest acquisition: American-based USA Network's media business. (1) During the conference, a French journalist asked Messier whether this latest $10.8 billion purchase marked a shift toward the Americanization of French cinema. (2) While the answer to the question is debatable, Messier's response undoubtedly marks a shift in the attitude of the private audiovisual sector in France, and perhaps in the European Union as a whole. "The Franco-French cultural exception is dead," he declared, referring to the notion that media product is cultural product, and thus must be dealt with differently than other trade goods. (3) The response was an immediate and overwhelming criticism of Messier and the initiation of an investigation, by France's highest administrative court, of Vivendi's shareholder register to determine whether Vivendi's Pay-TV arm, Canal Plus, was more than 20 percent owned by non-European Union shareholders. (4) After a turbulent summer at the helm of Vivendi, Messier stepped down under fierce criticism in early July. (5)

   The drama may be lost on American film and television consumers. The American audiovisual industry has long enjoyed a position of dominance in the global market which has, in many respects, insulated American consumers from the kind of conditions inside the French and broader European markets that have resulted in a sort of audiovisual dysfunction amongst the family of European Union regulatory policies and Member State practices. The patriarch of this family, the Television Without Frontiers Directive (6) (the "Directive") is under renewed scrutiny from the Commission which, in November of 2002, published a five-year evaluation of the Directive's effectiveness (7) expected to stimulate a new debate in the coming months on possible amendments to the law. (8) Messier's bell-tolling episode and the resulting political fallout in many ways encapsulates the underlying issues for audiovisual regulation inside the European Union. The French view of media as culture is in no way aberrant; it is pervasive throughout the European Union. (9) On the other hand, the United States, whose audiovisual industry earned over $530 billion in 200l (more than 5 percent of the U.S. GDP) and exported $90 billion in audiovisual product overseas in the same year, (10) has consistently argued that while media products have a cultural component, they should be treated as goods rather than services for purposes of trade law. (11) This position is at odds with the Directive, which requires, among its other provisions, (12) quotas for the broadcasting of European programming and independent European production (13)--quotas which would clearly be illegal under the General Agreement on Tariffs and Trade ("GATT"). (14)

   But in the wake of the Commission's five-year report, both the effectiveness and the purpose of the Directive are being questioned not just by the U.S. audiovisual industry, but by those inside the European Union as well. (15) Messier's position embodies concerns within the European Union that liberalization of audiovisual regulatory policies is necessary in order to develop a more competitive European audiovisual sector. With the collapse of the public broadcasting model across much of Europe (including France) and its gradual replacement by commercial and pay-TV networks broadcasting a large quantity of American programming suffused with American culture, it seems likely that in order to address the cultural concerns embodied in the Directive, a more competitive European audiovisual industry is needed. One viewpoint is that the audiovisual sector need only be nurtured under European Union regulation in order for it to become more competitive. (16) Another is that liberalization is the only way to compete. (17)

   This is, essentially, the question the European Union must now resolve: whether protection of European culture is best accomplished by strengthening the Directive or by liberalizing regulation. The last proposals to amend the Directive in 1996 ultimately failed to shore up the loopholes its critics complain make it ineffective. Quota provisions were kept at a mandatory 50 percent rather than increased as some member states had called for, a proposal to eliminate the "where practicable" clause from article four was rejected, leaving implementation of the quotas themselves arguably non-mandatory, and an exception for sporting events, news, and games was retained, thus effectively allowing broadcasters to continue satisfying their quota requirements by broadcasting fare with, what some have argued, is relatively little cultural worth. (18)

   Despite the implementation of the Directive, it seems that whatever threat to European culture lurked in American audiovisual sector in the mid 1980's is still there. Indeed, as media consumption inside the European Union has continued to grow, the only question seems to be in what form will American dominance of film and television next manifest itself. Given this dominance, how can the European audiovisual sector hope to remain a viable cultural force? One of the emerging threats to the effectiveness of the Directive--and if the preamble to the Directive is to be taken at face value, to European culture itself--is exhibited in the Vivendi-Universal fiasco of the past summer: the emergence of what Ian Hargreaves has called an "oligopoly of global media companies, based upon the American entertainment industry." (19)

   Another threat is posed by the rapid development of new technologies not envisioned by the 1989 law. Television on demand, satellite broadcasting, and webcasting all threaten to eviscerate the meaningfulness of television broadcast quotas as these forms of media consumption compete more and more with traditional broadcasting. (20) The Commission is now considering two possible approaches to the technology problem: one is to simply keep the law confined to traditional television broadcasting and update various provisions such as the "where practicable" language of article four, the other is to recast the Directive so that it applies to all broadcast technologies. (21)

   Regardless of the Commission's recommendations, it is questionable whether the Directive can ever be effective. The market forces that are leading to the conglomeration of media companies in both the United States and the European Union cannot be effectively addressed by broadcasting legislation alone. Indeed, it is not clear that they should be. Furthermore, if the Commission recommends confining the Directive to the traditional television market, it is unclear that it can remain an effective tool for cultural preservation while the consumption of other forms of media--much of it dominated by non-EU culture--becomes more and more prevalent. Even if the Directive were overhauled to apply to novel media markets, and even if the new regulations go beyond the loopholes of the current law to create a truly effective regulatory scheme, it is doubtful that the legislative process can keep pace with technological development in the future. Furthermore, given the broad range of regulatory bodies which will have the task of implementing the directive inside individual member states, the dysfunction is likely to continue. (22) In short, the Directive may be a failed proposition.

2. HISTORICAL BACKGROUND: THE AMERICAN POISON.

   To appreciate the current situation, one must consider the circumstances leading to the implementation of the Directive in the mid and late 1980's. It was during this period that the "American cultural threat" developed; American media exports, particularly television exports, now began to appear frequently in Europe. Many countries in Europe still had no experience with commercial broadcasting, having initiated and operated their television broadcasting services under a public model, and were wary of American style commercialism. (23) In many ways, the 1980'S became a coming of age era for commercial television in Europe. In Germany, the ZDF network was essentially forced to purchase cheap American programming--despite its assertion that German viewers preferred other fare--as a budget reduction coupled with inflationary woes forced the broadcaster to fill its air-time with American re-runs and feature films. (24) This scenario became increasingly common throughout the European Economic Community. (25)

   In France, the chorus of voices objecting to American media imperialism was just beginning to organize. In 1981, The Committee for National Identity placed an ad in Le Monde advocating that a pre-existing 50 percent quota for French films on television be raised to 60 percent. (26) Later that year, French Film director Gerard Blain characterized American media products as "the American Poison," and asserted "it is by films made in Hollywood that America infuses its venom into the spirits of people, that it insidiously but deeply imposes its stereotypes and literally saps their life force." (27) In the United Kingdom, on the other hand, a trend toward the liberalization of regulatory policies was beginning. Richard Collins has observed, "for the most part, the U.K.'s European audiovisual policy has been conspicuous by its absence." (28) British officials often seemed to see the problem not as one of cultural imperialism on the part of the United States, but as one of ineffective competition or unassertiveness on the part of the U.K.'s audiovisual sector. "Why do we pay the Americans to show their TV schlock when they could be asked to pay to air ours?" asked British television executive Patrick Dromgoole. (29) In later years, the U.K. would export more television to the United States than any member state in the European Union. (30) The disparity between the British and French approaches...