EU OKs Paramount geoblocking deal

US studio Paramount has agreed a series of concessions with the European Commission (EC) over rights deals with Sky in the UK, in a move that could have widespread ramifications for the way content deals are struck in Europe.

Viacom-owned Paramount is one of six US studios being investigated by the European Union (EU) over contracts that stopped Sky from offering customers outside the UK and Ireland – but still within the European Economic Area (EEA) – access to its programming via satellite or on-demand services.

The US studio also had to ensure that broadcasters, aside from Sky, would be prevented from making their pay TV services available in the UK and Ireland.

The US studio has said clauses relating to the practice of so-called geoblocking would no longer be enforced or included in contracts.

Viacom and Paramount said they had “given binding commitments neither to enforce nor renew the types of clauses in premium pay TV licence agreements that were investigated by the European Commission and that restrict European Economic Area pay TV broadcasters from responding to unsolicited requests by consumers located in a different territory in the EEA. No admission of liability has been made.”

The EC added that the commitments “permit Paramount to continue to license films through premium pay TV output licence agreements in Europe on an exclusive territorial basis.”

The concessions are part of the EU’s attempts to introduce a Digital Single Market (DSM). The case was first brought by the EC last summer and affects US studios including Disney, NBCUniversal, Sony, Twentieth Century Fox, Warner Bros and UK-based giant Sky, which remain under investigation by the EC.

Paramount’s deal with the EU will remain in place for five years, with breaches resulting in a fine of up to 10% of the studio’s global turnover, equivalent to around US$200m.

Recent reports have claimed the DSM proposals, outlined in the EC’s DSM strategy last year, would erode the established territorial exploitation of TV and film rights in Europe.

John McVay, CEO of UK producers’ trade association Pact, has previously said the proposals would leave audiences with a “poorer range of content, higher prices and a devastating impact on cultural diversity both in production and distribution.”