U.K. Film Industry Braces for Brexit Backlash

United Kingdom (U.K.) content producers may soon feel the effects from last years’ “Brexit” through greater limits being placed on their access to European VOD (Video on Demand) consumers. Following the leak of a June 8 2021, memo that says “the EU (European Union) is preparing to reduce the amount of British TV and film content shown around Europe” there is concern that unfettered availability of U.K. content is about to end. The memo suggests that while U.K. films and programing are still classified as “European works” as described in the EU’s “audio-visual media services directive,” U.K. content has been crowding our other member content, which the memo argues should receive priority. If implemented, the impact will be reduced access to the U.K.’s second-largest film content market and a significant loss of revenue that will be difficult to find elsewhere.

The reason for this action, according to the leaked document, is the concern of EU regulators that the amount of U.K. content is disproportionate to that of member countries and displaces content from smaller EU members. The EU audio-visual media services directive also states that the majority of terrestrial (e.g., over-the-air) airtime must be given to European content. The same directive requires at least 30% of VOD content shown in the EU must be of European origin. According to The Guardian, other European countries are taking this quota even further, such as France, who set their quota at 60%, with VOD’s expected to invest 15% of their production budgets on European works.

Some in the U.K. sees this action as “revenge for Brexit” while others think it is long overdue.

They see the U.K. as both Europe’s biggest media producer and its biggest threat to “cultural diversity.” Tension between the EU and the U.K. has been growing since Brexit because the U.K. has “left the single market and customs union.” The EU single market was created to ease trade throughout the region by establishing common rules and regulations across member countries. By leaving the EU the U.K. is no longer bound by EU rules and regulations, but the EU is no longer obligated to offer the U.K. the same deal it had while a member state.

Among those are the regulations regarding the “rules of origin.” What this means is people can now question whether something came from the U.K. This is already a point of contention with shows like “The Crown,” which is mislabeled as British but is in fact Anglo-American. According to the EU directive, “This convergence of media requires an updated legal framework in order to reflect developments in the market and to achieve a balance between access to online content services, consumer protection and competitiveness.”

None of this was unexpected. When talk about the U.K. leaving the EU began years ago, the British government was warned about the financial risks the screen industry could face. U.K. film and TV shows generate over £2B annually in combined rights licensing and VOD revenue and the loss of their second largest market would be a significant hit to the industry. Examples of the effect streaming had on the music industry resulting from the shift in distribution from physical recordings such as records and tapes to downloading was seen as a precursor to the impact consumer preferences will have on sales and revenues. Add to that EU regulatory changes and it potentially creates a perfect disruptive storm at a time when the industry can least afford it.

Hong Kong – That Was Then, This Is Now

On June 11, 2021, Hong Kong’s government expanded its film regulations to more closely reflect mainland China’s censorship rules. The regulations, which went into effect immediately, were issued under the stated purpose of protecting “national security” and attempting to provide balance “between protection of individual rights and freedoms on the one hand, and the protection of such legitimate societal interests on the other.” What this means is content that includes “any act or activity which may amount to an offense endangering national security” or “which is objectively and reasonably capable of being perceived as endorsing, supporting, promoting, glorifying, encouraging or inciting such act or activity” will be prohibited from being shown on any platform in the Hong Kong Special Administrative Region (HKSAR).

Since returning to Chinese mainland control in 1997, Hong Kong has enjoyed relative autonomy from the Beijing government, including maintaining its own film classification system. The Office for Film, Newspaper and Article Administration (OFNAA) administers the Film Censorship Ordinance (FCO) through the Film Censorship Authority (FCA). The FCO classifies content into three categories:

• Category I – approved for persons of any age
• Category II – has two sub-classifications:
o IIA – Not suitable for children, and
o IIB – Not suitable for young persons and children
• Category III – approved only for persons age 18 and above

While categories and age groups have not changed, the FCA has been granted expanded authority to ban films on the basis of endangering national security. Plus, the FCO instructs censors to be “vigilant” in carrying out their new responsibilities. Prior to June 11th, “National Security” was not a consideration of Hong Kong’s content classification system. Key language of the new rules centers on how films or documentaries present themselves. Specifically, Item 17 under Section “V. Approaches in Classification,” adds the following:

17. The fact that a film purports to be a documentary or purports to report on or re-enact real events (as opposed to a fictitious event) with immediate connection to the circumstances in Hong Kong necessitates an even more careful consideration of its contents by the censor, as the local audience may likely feel more strongly about the contents of the film or be led into believing and accepting the whole contents of the film, and the effect on viewers would be more impactful. The censor should carefully examine whether the film contains any biased, unverified, false or misleading narratives or presentation of commentaries, and the tendency of such contents to lead viewers to imitate the criminal or violent acts depicted.

The document does not define the words “biased,” “unverified,” or the phrase “false or misleading narratives or presentation of commentaries,” nor does it specify how these terms should be identified or quantified. This vagueness is the crux of criticism about the new rules. Many complaints suggest the new rules are intended to stifle freedom of expression within Hong Kong. It certainly adds another obstacle for content creators and distributors to navigate in releasing content into that market.

Assessed content that violates the new standards will result in
(1) a higher category rating;
(2) a requirement that edits or cuts be made to the film;
(3) a combination of the first two, or
(4) a complete exhibition ban.

Censors’ decisions may still be appealed to the Board of Review with an anticipated response within 14 days. However, that timeframe may be extended by the HKSAR Secretary of Commerce and Economic Development for any reason. Certificates of Approval and written determinations including reasons for mandating changes are required in all cases. This differs from mainland China’s regulations as its decisions are final and cannot be appealed.

Other differences between mainland China and Hong Kong remain, such as how LGTBQ+, sexuality, horror and thematic content are assessed and classified. None of those criteria was rewritten by the new “national security” regulations. While other regions, notably the Middle East, Ireland, New Zealand, Australia, Indonesia, and Germany include “national security” in their content regulations, the difference is in how those regulations are defined, applied, or whether they are enforced at all. Countries or regions that classify content commonly refer to graphic violence, graphic sexuality and similar reasons when banning films – all of which are clearly defined. In this case, filmmakers worry that given the lack of specificity in how the new regulations are to be applied, content that is permissible in Hong Kong today may be banned tomorrow, thus bringing Hong Kong’s classification board more in line with mainland China’s censor board. Only time will tell if and when Hong Kong’s regulations mirror the mainland’s or will be replaced by them.

From a practical standpoint, these new regulations will have a significant impact on content creators, directors, distributors, and exhibitors planning to distribute film and television content in Hong Kong. The common approach to determine which types of content are appropriate for various age groups and maturity levels is still the best one; however, the “national security” concerns undoubtedly raise the stakes. Hong Kong isn’t the first region where political concerns over depictions of governmental actions result in changes to film classification rules. This is an indicator of more things to come.

Hungary’s New Anti-LGBT Law

In what can be seen as another step towards stifling LGBTQ rights in the only non-democratic government in the European Union, Hungarian lawmakers on June 15th 2021 passed a law that bans the use of any material in schools that can be construed as promoting homosexuality and gender change.

In its original version, the law was only intended to combat the menace of pedophilia. However, due to last minute changes submitted by the members of the ruling Fidesz party just days before the final vote on the law, prohibition on the distribution of content portraying or promoting homosexuality or gender change to minors and on LGBTQ sex education were also added on.

Over the years, Hungary has introduced a slew of measures aimed at curtailing the LGBTQ influence on its citizens under right-wing Prime Minister Viktor Orbán. In 2018, gender studies courses were banned in universities throughout the country. In 2020, Hungary amended the constitution to include that marriage can only occur between a man and a woman. It also effectively barred same-sex couples from adoption.

The newly passed law further builds on these regulations.

Any depictions of homosexuality or featuring gender reassignment cannot be made available to minors. Sex education classes in schools that focus on LGBTQ sexuality are prohibited for students and can only be organized by registered NGO’s thus excluding the more liberal NGO’s. Content seen as popularizing LGBTQ sexuality on television can only be aired during the 10pm – 5am window. And films and advertisements carrying same-sex physical acts or gender change surgery should be categorized as Category V – which translates to not recommended for minors.

A commercial TV network in Hungary noted that as a result of the new law, movies and shows like Billy Eliot, Philadelphia, Modern Family, and some instalments of the Harry Potter franchise too would fall into the same category as the goriest horror movies – allowing them to be broadcast only after the watershed.

The new law was roundly criticized throughout the European Union, with 17 member states putting out a joint statement that urged the European Commission to act against discrimination of LGBTQ people in Hungary.

German Chancellor Angela Merkel condemned the new law in a statement to the German parliament where she stated that she believes the law is incorrect and incompatible with her beliefs and indicated that she would be ready to vote against it politically. Netherlands Prime Minister Mark Rutte also stated that perhaps Hungary should leave the EU if it cannot uphold its values.

But Orbán remained defiant in the face of such criticism, when during an interview on public radio he mentioned of his fellow European Council members – “They behave like colonialists. They want to dictate what laws should take effect in another country, they want to tell us how to live our lives and how to behave. ”

The European Commission on its part said that it will initiate legal proceedings against Hungary, indicating a tough stance that also could lead to reassessment of EU funds – if it views Hungary veering towards authoritarianism. Belgian Prime Minister Alexander De Croo echoed the sentiment against Hungary’s new law in a tweet: “Europe is more than a cash machine, it’s also about fundamental values.”

Amendments to the Electronic Media Law in Luxembourg

Since people increasingly access and depend upon content distributed through electronic communications networks, the Luxembourg legislators introduced the Act of Feb. 26 2021 that modifies the Law of 27 July 1991 on electronic media, otherwise known as the “Electronic Media Law.”

The new Act intends to balance the right to access online content services with consumer protection and ensure better protection of minors, which previously applied only to linear media like television services.

The changes outlined in the Act are relevant and applicable to Audiovisual Media Services (AVMS) providers as well as social networks and video-sharing platforms (VSP) like YouTube, Vimeo, etc. that allow uploading of user generated videos. The Act came into effect on 12 March 2021. AVMS are essentially linear or non-linear programming services administered by service providers through electronic communication networks. These services have evolved drastically in the past decade, especially around non-linear programming with the rise in popularity of several on-demand service providers like Netflix, Disney, Amazon Prime Video, etc.

What are the features and changes of the new Act for AVMS providers?

Country of origin

  • AVMS providers established outside of the European Union, will have the benefit of “the country-Laof-origin principle.” This will allow the providers to submit a notification to Luxembourg authorities using satellite uplink facilities in Luxembourg.
  • There are no changes with respect to the jurisdiction rules and the criteria used to determine whether an AVMS provider falls under Luxembourg jurisdiction.

Information and Reporting responsibility

  • The ministry maintains a register of AVMS and VSP providers who are subject to Luxembourg jurisdiction, where they also note the criteria on which the jurisdiction is decided.
  • Any changes that are likely to affect the Luxembourg jurisdiction in accordance with the criteria set in the Electronic Media Law must be communicated to the minister responsible for media.
  • The Act gives the Independent Luxembourg Broadcasting Authority (ALIA) the right to ask the AVMS providers for any information it deems to be essential by a fixed deadline. Any delay in doing so would attract penalties ranging from 200 euros to 2000 euros per day that the information is delayed.
  • To ensure that people with disabilities always have access to public communications through AVMS services in the event of any natural calamities, AVMS providers are required to submit an action plan to ALIA initially by Sept. 30, 2022, and every three years thereafter, which outlines how this will be achieved.

Content and Advertising

  • AVMS may not incite violence or hatred against persons based on any of the grounds for discrimination referred to in Article 21 of the Charter of Fundamental Rights of the European Union or result in public provocation to commit a terrorist offence.
  • Ban on advertising electronic cigarettes and refill containers.
  • Product placement is now allowed with a few exceptions such as in programmes for children, news programs and religious programs. It is imperative however that the audience is made aware of the existence of any such product placement at the start and end of the programme and after each break.

Promotion of European works

  • AVMS providers are now obligated to ensure that their catalogues include at least 30% European programmes that are made prominent in their offerings.

Annual fees

  • AVMS providers must pay a fixed fee of 200 euros from this year to ALIA.

What are the features and changes of the new Act for VSP providers?

Notification

  • The concerned minister needs to be notified at least 20 days in advance before the start of a service by the VSP provider who falls under the Luxembourg jurisdiction.
  • Commitment to allow monitoring of its service by providing unencrypted access to ALIA.

Protection

  • VSP providers must protect minors from content, including advertising that could impair their physical, mental, or moral development.
  • Providers should also protect the general public from content, which constitutes as a criminal offence under EU law, namely public provocation to commit a terrorist offence and offences relating to child pornography, racism, and xenophobia.

Commercial communications

  • User generated content must be monitored by VSP’s for any kind of product placement or sponsorships.
  • Mechanisms that could be employed by the VSP to facilitate this monitoring could include features where the content generator could declare the presence of any product placement, content rating systems, age verification controls and parental controls.

The Act also stipulates that if the signal used for satellite broadcasting is introduced in Luxembourg with uninterrupted communication leading to the satellite and back to earth, then the resulting copyright levies would only need to be paid in Luxembourg and not in any other EU country.

The new law aims to create a level playing field where the traditional linear programming services are not the only ones to bear the burden of compliance. By bringing the new age non-linear programming services into the fold, the European and Luxembourg legislators have shown an admirable desire to adapt to the ever-evolving technological shift in media.

FCAT Demise Makes Releasing Content in India More Challenging

India is the fourth largest film market on the planet. Besides Hollywood releases, the country’s Bollywood industry churns out film and TV shows at a prodigious rate, adding $2.4B annually to the Indian GDP. As readers of this blog are aware, India is one of 53 countries that have governmental film review or censorship boards. India’s regulator is known as the Central Board of Film Certification (CBFC). The CBFC reviews content intended for release for compliance and cultural appropriateness. If they find something they don’t like, they can mandate cuts, edits, change classification ratings and, in extreme instances, ban titles altogether. Up until April 4, 2021, content creators who did not agree with the CBFC rating or decisions could appeal to the Film Certification Appellate Tribunal (FCAT) for redress.

Not anymore.

The New Delhi-based FCAT has existed since 1983. Jurisdiction of the FCAT was authorized under the Cinematography Act of 1952. Its role was to serve as a check to decisions of the CBFC, who some view as too susceptible to pressure from political and special interest groups. FCAT had the reputation of overturning mandated changes or certification denials by the CBFC, which some believe may have been behind the change in law eliminating FCAT.

India’s film classification process can be time consuming. All content, including video assets, ads, posters, trailers and “other required materials,” must be submitted to every regional office in the country where exhibition is desired. Once the CBFC has received all materials and all fees are paid, an “Examination Committee” is formed to conduct the review. Committee membership size depends on the length of the film, and attempts are made to have a diverse team conduct the review.

Each committee member reviews the film and makes a written recommendation for changes, deletions and classification rating. If, after the committee makes its recommendations, the CBFC chairman disagrees, they have the authority to assign the film to a “Revising Committee,” that can overrule the decisions of the Examination Committee. If the chairperson disagrees with the Revising Committee decision, the chairperson can refer the film to a new Revising Committee.

Whatever the final determination from either the Examination or Revising committees, the filmmaker can either make the required changes and resubmit the conforming title to the CBFC for final certification, or they could appeal to the FCAT. The FCAT would then review the film and hear from both the filmmaker and the CBFC before making a final determination. Decisions of the FCAT are final.

The elimination of the FCAT creates a real challenge for filmmakers that could be a significant bottleneck for content release, as well as having a stifling effect on storytelling. Before, there was a board of people knowledgeable about the industry. Now, the creator’s only redress is to the country’s High Courts, who may have no expertise in film or TV whatsoever.

Going to court means hiring a lawyer, which may or may not be affordable. It means getting in the court queue, which may take months, and hoping that to whichever judge or court the case is assigned, has or is willing to develop some knowledge of the certification process, purpose, and effects of arbitrary or unreasonable decisions. It means traveling to and showing up in court with no clear idea of how long the hearing may last or when follow-up hearings may be scheduled.

Any appeal of the court’s decision must follow the same process, which adds further cost, creates uncertainty around changes to the content and release date. Content creators may decide to either make the changes to avoid the additional cost and hassle (thus negatively impacting their creative vision and integrity) or decide to withdraw their application for release altogether. None of these options is particularly appealing in any creative or financial sense, and time will tell what effect this new process will have on filmmaking and content distribution in India.

Generally, video content intended for release in India goes through this process. Rather than head into this important market unprepared, a better strategy would be to utilize Spherexratings™ and Spherexgreenlight™ services to identify potential content issues before submitting ratings applications to India. In this case, getting ratings right from the start will save time, money and headaches so consumers can enjoy your content more quickly.

To learn more, contact Spherex today.


1 Value of the film industry in India from financial year 2014 to 2019, with forecasts until 2024, Statista, 19 Mar 2021
2 Explained: The role, significance of film certification tribunal, now abolished, The Indian Express, 8 April 2021
3 Certification: The Certification Process, CBFC, Item 7

Accelerate Your Global Title Releases with Spherexratings™

In two previous posts, “Worldwide Content Classification – What Happens When You Get It Wrong,” and “Worldwide Content Classification – How Hard Can It Be?” we’ve laid out the challenge facing content creators and distributors who want to market their content globally. In this post, we will discuss how to avoid making mistakes that can be costly either economically, legally or reputationally, and get your content released in international markets faster than ever before.

To recap, according to IMDBPro, each year an average of 356,000 titles are released. Currently, there are about 31,000 movies, TV movies, TV series and TV miniseries in some stage of production around the world. Every one of those titles destined for general release anywhere on the planet must be viewed and rated by some regulatory body, agency or platform and be assigned a country-specific age-rating. This gives consumers some indication of appropriateness of the type of content they are about to watch. Whether anyone likes it or not (usually not), this is not an optional thing; it is required.

Over the past few weeks, industry trades have published dozens of articles, like here, here, here, here and here, highlighting the problems content creators, producers, distributors and even writers are experiencing trying to get a script or film approved for production or release in major global markets. These are not unique stories. Those who have the responsibility for obtaining ratings know how exacting that process is. What these stories highlight is the complexity and importance of correctly navigating differing country regulatory, legal, and cultural requirements.

But who has time for this? Who wants to hire staff to chase down ratings in 20 countries, whether it is a series of titles or a one-off? Wouldn’t it be great if there was a way to manage this entire process in one place, where titles can be reviewed once, and that one time could generate ratings in top markets around the world? Wouldn’t it be great if the people you worked with had demonstrable knowledge of the cultural realities and regulatory requirements of 200+ countries and territories worldwide? And wouldn’t it be great if the entire process, from application to review to submission, could all be managed online?

Now for the good news: introducing Spherexratings™.

Spherexratings is a professional service that assists studios, producers, distributors, and platforms in obtaining valid, in-country maturity ratings for film, TV, and streaming content. Built upon nearly a decade’s experience in studying and assessing cultural requirements in nearly every country on Earth, Spherexratings provides a combination of artificial intelligence (AI) and machine learning (ML) and human assessment to rate video content quickly and efficiently.

Using proprietary processes and technologies developed through creating, managing, and cultivating metadata tools for the Media and Entertainment (M&E) industry, Spherex’s ratings team works with content creators to collect all title information required to rate it. Not only are these data helpful in obtaining multiple country ratings, but they can also be used to create the metadata necessary to optimally market and position content on any distribution platform or search engine worldwide.

Spherexratings’ client-oriented interface provides complete access to the evaluation process and allows full tracking of the title from the time it is first made available for rating through the ratings and approval process for individual countries. Customers can see and respond to both human and AI-based feedback and recommendations at all review stages.

The Spherexratings process is straightforward: provide secure access to the title, answer a series of questions about the title to build a metadata base, including common data such as title, synopsis, release details, cast and production team details, and more and Spherex takes it from there. Upon process completion, legal, country-specific documents are provided to demonstrate the content has been properly rated and distribution of the content can proceed. Once rated, clients can manage all future ratings from the same interface.

Available today, Spherexratings will fundamentally speed up the ratings process for content creators and reduce the amount of time they spend managing it. Spherexratings is the industry’s first global “rate once, manage forever” rating system for video content.

For more information or to schedule a demonstration, click here, complete the online form and someone from our Spherexratings team will contact you. We look forward to making your global content release (and your professional life) a whole lot easier.