Digital Single Market (DSM) Initiative Makes Going Direct Inevitable

by Yoeri Geutskens on Oct 22, 2015 10:45:37 AM

Since 1992, the Single European Act has enabled an unhindered flow of people, goods and services to move freely throughout Europe. But this agreement has not been applied to digital services. Until now. The European Commission (EC) recently announced plans for a Digital Single Market (DSM). This new initiative aims to harmonize copyright rules, telecommunications practices such as roaming charges and a range of online services.

Predictably, it has drawn a lot of criticism. Several major content businesses are already complaining that the new regulations will outlaw geo-blocking within the EU, which would mean these organizations could no longer sell rights on a country-by-country basis. This poses some serious challenges because parties large enough to buy the rights on a pan-European scale are hard to find.

However, there is an entirely different way for dealing with the situation. Affected rights holders such as Hollywood movie studios and international sports bodies like FIFA, UEFA and the IOC can simply take matters into their own hands and turn the DSM initiative from a bone of contention into an inevitability by offering their content directly to consumers.

Initial investments will be required, but bandwidth in most European countries is performing well in global rankings, SaaS models now available can dramatically reduce capital expenditures, and most importantly, technology has progressed far enough to make this approach entirely feasible.

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Already, premium OTT platforms such as SeaChange Rave are enabling media companies to focus on what they do best while leaving specialized service providers to handle operations on a white-label basis. Moreover, going direct is allowing media companies to start building the kind of individualized relationships viewers demand, a benefit significant enough to offset any perceived downsides.

The only parties that the DSM initiative may not favor are (national) broadcasters who have so far been buying content rights and making investments in outmoded platforms.  But even for them, there is substantial upside. Their biggest expense has always been the rights themselves. Now, they can put this money back into their own pockets or invest it in other revenue-generating activities.

(Note: since broadcasting is inherently bound to geographical areas, content providers can still strike deals with broadcasters for transmitting events on a country-by-country basis, but those deals will have to be separated from any streaming rights.)

Ultimately, the net effect of the DSM initiative will be to prompt content rights owners to act in their own best interests. Going direct is the way the world’s going, and for those who want to ensure the future of their businesses, it’s time to get on board.

 

Yoeri Geutskens is Product Marketing Manager EMEA at SeaChange.

 

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