European soccer governing body UEFA and the Spanish LaLiga, German DFL, Italian Serie A, and English Premier League (EPL) national competitions have signed a letter alongside more than 600 organizations from the film, entertainment, and sports industries protesting proposed legislation that would ban geo-blocking across the European Union (EU).
The letter claims such a ban would “seriously jeopardize the creative and economic sustainability” of Europe’s film, sport, and audio-visual sectors.
The EU will vote next Wednesday (13 December) on whether to widen existing geo-blocking laws to include sports streaming.
How will it affect sports streaming?
Depending on the broadcasters’ response, the price to watch a top-flight EPL or Serie A game could rise for the average viewer if the EU banned geo-blocking, which restricts access to online content based on the user’s geographical location.
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“Sports organizers argue that territorial exclusivity is key to their business models,” comments Peter Scrimgeour, analyst at GlobalData Sport. “The ban will result in sports rights fees being dictated by the lowest-value territory within the EU.”
Lower-income countries in Eastern Europe, for example, pay less for TV services than those in higher-income Western Europe.
The rights for a Spanish soccer match are worth more in Spain than in Hungary – and companies use geo-blocking technology to prevent cross-border shopping for these rights.
Should this happen frequently, there may be a price dump in sports streaming, with the lowest-value countries determining the licensing fee for the entire EU.
Why is geo-blocking so controversial?
In 2018, the EU banned geo-blocking for most streaming services, arguing that it violated the EU’s principle of a single digital market.
Audiovisual content, however, was excluded. Media companies and sports broadcasters contended that their business models depend on territorial exclusivity to guarantee a return on investment.
The joint letter claims that a ban on geo-blocking would have a “direct and negative impact on consumer welfare: a significant reduction of options in terms of content, distribution and access options, as well as an increase in prices”.
While foregrounding aspects such as linguistic diversity and consumer welfare, streaming companies are preoccupied with profit margins above all.
“With MEPs wanting EU rules on geo-blocking to include streaming services, many sports organizers fear the geo-blocking ban will have a negative impact on their revenue streams,” says Scrimgeour.
For this reason, geo-blocking is unpopular among many streaming users.
From Netflix to sports sites, many users install VPNs – which disguise the IP address to convince the streaming platform the device is located in another country – to gain access to a different country’s streaming rights.