1. AUDIOVISUAL MEDIA SERVICES DIRECTIVE Key Issues for the Television Business EPP Group hearing, 29 June 2006

2. ► Media groups active in 28 European countries ► Operating over 270 free-to-air and pay-TV channels and distributing 540 channels and 170 new services ► Every line of the directive affects our businesses

3. BUSINESS CONTEXT -New competition with powerful competitors -Rights costs increasing, but revenue flat – good content costs money -Multiplication of broadcasting technologies -“Consumer is king” : personal use - Reinventing business models - and regulatory ones?

4. THE ACCELERATING PACE OF NEW TECHNOLOGIES AND BUSINESS MODELS : the example of VIDEO 1950196019701980199020002010 CINEMA TELEVISION VHS ANALOG CABLE ANALOG SATELLITE DIGITAL SATELLITE DIGITAL CABLE DVD The question should not be « What will TV be in 2010 ? » but « What will TV be in 6 months ? » WEB TVoDSL VOD PODCAST SVOD 3G DVB-H XXth century XXIst century

5. The Future: Digital All EU states to be fully digital Slide 5  Finland and UK : market leaders  Majority around 2012 For consumers Increased choice Interactivity and niche interests For broadcasters In France after DTT launch  from 6 to 25 terrrestrial channels

6. New media, new players  Advertising budgets moving away from TV?  And from global players  Competition from telecom operators… European telcos:  €210 billion turnover Time Warner 2004 revenue $ 42.1 billion EU Advertising market 2004 $ 29.8 billion (incl. Pubcasters) 1990 103 channels 2003 1100 channels Slide 6 New media, new players  Multiplication of channels New media, new players

7. So how should this new environment be regulated ? FOUR SPECIFIC ISSUES  Scope & Non-linear services : technological neutrality  Country of Origin : cornerstone of EU policy  Advertising rules : more flexibility for responsible broadcasters  The rights holder is king

8. SCOPE & NON LINEAR SERVICES  We favor the limited scope extension to non- linear services : core principles should be applicable to everyone  We plead for technological neutrality : same use, same rules  Let’s give time to new services to find their balance before regulating them completely

9. COUNTRY OF ORIGIN  Cornerstone of EU policy  Need to have one jurisdiction  Only way to encourage transfrontier television  Competition and consumer choice

10. ADVERTISING - Only way to provide free, legal and attractive content to the consumer - Broadcasters need more flexibility, and are responsible enough not to abuse of it : insertion, minutage - Let’s provide space for new advertising techniques but let’s not deprive broadcasters of revenues : we know how to create attractive contents

11. RIGHTS PROTECTION The consumer is king, so is the rights holder  Our main issue : the quest for rights  Viewers get access to information from broadcasters, not middlemen  Bad example : short reporting

12. “The aim is for Europe´s audiovisual content industry to flourish under one of the most modern and flexible set of rules in the world ” Commissioner Reding, 13.12.05