The European Parliament has rejected proposed legislation intended to prevent territory-by-territory licensing of programming across the European Union. Only news and current affairs will be prevented from unjustified geo-blocking. It is a set-back for the digital single market strategy of the European Commission, intended to provide free movement of services within the European Union.

Rights holders, particularly for movies and sport, have tended to maximise value by distributing within distinct markets on a territory-by-territory basis.

This has typically required service providers to restrict access to certain ranges of internet addresses associated with particular territories, a practice known as ‘geo-blocking’.

The European Commission has argued that viewers should be able to access online services from anywhere within the European Union.

The Sat Cab regulation proposed to facilitate cross-border access to programming by extending the country of origin principle from satellite and cable to online distribution.

Effectively, this would mean that broadcasters could clear rights for programming in the member state in which they are established and make it available online throughout the European Union.

The suggestion horrified Hollywood and many sports rights holders. This would potentially devalue rights that have historically been assigned on a territory-by-territory basis.

The European Parliament voted against most of the proposed Sat Cab regulation, upholding the opinion of its Committee for Legal Affairs to reject the country of origin proposal for all but news and current affairs programmes.

Many rights holders will welcome this, although it may continue to frustrate consumers.

Some broadcasters might have benefited from being able to distribute programming online throughout the European Union.

The European Broadcasting Union, which represents public service media organisations and has backed the proposals, expressed disappointment at the vote. Its head of European Affairs, Nicola Frank, said: “The Sat Cab Regulation was originally devised to enhance the circulation of content in Europe and enable both consumers and Europe’s audiovisual sector to reap the benefits of the Digital Single Market.”

“Today’s vote goes against these intentions, maintaining a fragmented European audiovisual market and turning down enhanced access to European culture for citizens,” she said. “The procedure is not over and we hope that upcoming milestones in the adoption of this Regulation will lead to a better outcome.”

Meanwhile, the United Kingdom is pursuing the process of leaving the European Union. Quite what this means for the distribution of programming remains unclear. However, without a seat at the table it may be more difficult to influence pan-European policies.

Nevertheless, the question of whether the European Union should effectively be considered as a single territory for rights purposes will continue to run.