Audiovisual Industries and Diversity: Economics and Policies in the Digital Era [1 ed.] 1138384453, 9781138384453, 9780429427534

Table of contents :
Cover
Half Title
Series Page
Title Page
Copyright Page
Dedication
Contents
List of Figures and Tables
Foreword
Acknowledgements
Editors’ Introduction
1 Audiovisual Industries and Diversity in the Digital Age: Overview of an Ongoing Debate
2 Protecting and Promoting Audiovisual Diversity: The UNESCO Convention on Cultural Diversity and the Challenges of the Digital Environment
3 Cultural Diversity in the Country of Cultural Exception
4 From Global Media Giants to Global Internet Giants: Reflections on Media Diversity
5 Re-evaluating the Long Tail: Implications for Audiovisual Diversity on the Internet
6 Online Platforms and Cultural Diversity in the Audiovisual Sectors: A Combined Look at Concentration and Algorithms
7 Digital Trade and Cultural Policy Nexus: A Challenge for the Promotion of the Diversity of Cultural Expressions in the Creative Economy
8 European Union Trade Agreements and Cultural Exception in the Digital Age
9 Cultural Policy in the Time of Digital Disruption: The Case of Creative Canada
10 Cultural Diversity and Regulation in Brazil: The Debate about the On-Demand Audiovisual Market
11 Audiovisual Diversity in the Digital Era: Trends and Prospects
List of Contributors
Index

Citation preview

Audiovisual Industries and Diversity

This book reflects critically on issues of diversity, access and the expansion of digital technologies in audiovisual industries, particularly in terms of economics and policies. It brings together specialists in cultural diversity and media industries, presenting an international and interdisciplinary collection of essays that draw from different fields of studies – notably Communication, Economics, Political Science and Law. Among the topics discussed are the principle of diversity as a goal of cultural and communication policies; the assessment of the UNESCO Convention on Cultural Diversity; free trade agreements and the conception of the cultural goods and services they advance; the challenges faced by the production, circulation and consumption of cultural content through the Internet; the role algorithms play in the organization and functioning of online platforms; Netflix; and the hegemony of global media. The approach is a critical understanding of audiovisual diversity that aims to transcend specific issues, like media ownership, ideas portrayed or modes of consumption as such, to focus on a more balanced distribution of communicative power. This volume is an essential read for scholars and researchers in Communication Studies, Economy of Culture, International Relations and International Law as well as policymakers, journalists specializing in media and culture, and managers of public and private institutions involved in the development of cultural and communication policies. Postgraduate students will find it a key reference point. Luis A. Albornoz is Associate Professor in the Department of Journalism and Audiovisual Communication, Carlos III University of Madrid, Spain, and Researcher at the Argentinian Scientific and Technical Research Council (CONICET). He is also founding partner and former president (2007–2013) of the international scientific association Latin Union of Political Economy of Information, Communication and Culture (ULEPICC). Mª Trinidad García Leiva is Associate Professor in the Department of Journalism and Audiovisual Communication, Carlos III University of Madrid, Spain. She has been a visiting researcher at the Centre for Cultural Policy Research, University of Glasgow (2009), and the Programme in Comparative Media Law and Policy, Centre for Socio-Legal Studies, University of Oxford (2005). She is Co-Director, with Professor Albornoz, of the research group on Audiovisual Diversity.

Routledge Studies in Media and Cultural Industries

1 Community Filmmaking Diversity, Practices and Places Edited by Sarita Malik, Caroline Chapain and Roberta Comunian 2 Reconceptualising Film Policies Edited by Nolwenn Mingant and Cecilia Tirtaine 3 Asia-Pacific Film Co-productions Theory, Industry and Aesthetics Edited by Dal Yong Jin and Wendy Su 4 Audiovisual Industries and Diversity Economics and Policies in the Digital Era Edited by Luis A. Albornoz and Mª Trinidad García Leiva

Audiovisual Industries and Diversity Economics and Policies in the Digital Era Edited by Luis A. Albornoz and Mª Trinidad García Leiva

First published 2019 by Routledge 52 Vanderbilt Avenue, New York, NY 10017 and by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Routledge is an imprint of the Taylor & Francis Group, an informa business © 2019 Taylor & Francis The right of Luis A. Albornoz and Mª Trinidad García Leiva to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging-in-Publication Data Names: Albornoz, Luis, editor. | Garcâia Leiva, Ma. Trinidad (Marâia Trinidad) editor. Title: Audiovisual industries and diversity : economics and policies in the digital era / edited by Luis A. Albornoz and Ma Trinidad Garcâia Leiva. Description: London ; New York : Routledge, 2019. | Series: Routledge studies in media and cultural industries ; 4 | Includes bibliographical references and index. Identifiers: LCCN 2018059429 (print) | LCCN 2019003428 (ebook) Subjects: LCSH: Multiculturalism in mass media. | Cultural pluralism in mass media. | Mass media— Social aspects. | Mass media—Economic aspects. Classification: LCC P96.M83 (ebook) | LCC P96.M83 A93 2019 (print) | DDC 302.2308—dc23 LC record available at https://lccn.loc.gov/2018059429 ISBN: 978-1-138-38445-3 (hbk) ISBN: 978-0-429-42753-4 (ebk) Typeset in Sabon by codeMantra

For our loved ones. Words will never be enough to thank them for their patience and caring support.

Contents

List of Figures and Tables Foreword Acknowledgements Editors’ Introduction 1 Audiovisual Industries and Diversity in the Digital Age: Overview of an Ongoing Debate

ix xi xxiii xxv

1

M ª T rinidad G arc í a L eiva and L uis A . A lborno z

2 Protecting and Promoting Audiovisual Diversity: The UNESCO Convention on Cultural Diversity and the Challenges of the Digital Environment

25

L uis A . A lborno z

3 Cultural Diversity in the Country of Cultural Exception

50

P hilippe B ou q uillion

4 From Global Media Giants to Global Internet Giants: Reflections on Media Diversity

68

J anet Was ko

5 Re-evaluating the Long Tail: Implications for Audiovisual Diversity on the Internet

85

P hilip M . N apoli

6 Online Platforms and Cultural Diversity in the Audiovisual Sectors: A Combined Look at Concentration and Algorithms H eritiana R anaivoson

100

viii Contents 7 Digital Trade and Cultural Policy Nexus: A Challenge for the Promotion of the Diversity of Cultural Expressions in the Creative Economy

119

M ich è le R ioux and F elipe V erdugo

8 European Union Trade Agreements and Cultural Exception in the Digital Age

136

L ilian R ichieri H anania

9 Cultural Policy in the Time of Digital Disruption: The Case of Creative Canada

152

C harles H . Davis and E milia Zborals k a

10 Cultural Diversity and Regulation in Brazil: The Debate about the On-Demand Audiovisual Market

169

L eonardo G abriel D e M archi and J oão M artins L adeira

11 Audiovisual Diversity in the Digital Era: Trends and Prospects

185

L uis A . A lborno z and M ª T rinidad G arc í a L eiva

List of Contributors Index

201 205

List of Figures and Tables

Figures 7.1 A comprehensive approach for developing a cultural policy 2.0 125 7.2 Convergence triangle between Culture, Creative and Telecommunications industries 130

Tables 2.1 Share of exports of cultural goods between developed and developing countries (excluding China and India), 2004–13 (in %) 28 2.2 Share in exports of cultural services of developed and developing countries, 2004–2012 (in %) 29 10.1 Suggested CONDECINE tax brackets for SVoD titles (in US dollars) 180

Foreword

Somewhere, Over the Rainbow, Diverse Diversity Mª Trinidad García Leiva and Luis A. Albornoz are among the leading communications and cultural studies scholars of our day, alongside their colleagues in the distinguished Diversidad Audiovisual research group based at Carlos III University of Madrid.1 This new collection, Audiovisual Industry and Diversity: Economics and Policies in the Digital Era, which you are either holding in your hands or scrolling through on your screen, is a remarkable collaborative work. The editors have curated a wide array of papers, derived from either neoclassical or critical political economy and designed to increase the democratic potential of the digital. Authors from the Americas to Western Europe provide us with a generously cosmopolitan account of issues that are both contemporary and long-standing. Some of the excellent chapters gathered here are in thrall to neoclassical economics. These agile and fascinating accounts borrow from the theory of the firm to explain both public conduct and the public interest. They do not engage democracy, history, anthropology, sociology or political theory, and Marxism is definitely hors de combat. Other chapters, by contrast, eschew the neoclassical in favour of interdisciplinary and empirical work. Readers have the opportunity to interpret these varying methods, theories and commitments through their own lenses and see whether it is feasible or desirable for the neo-liberal approach to culture to intersect with more social ones. That’s diversity, right? As the editors say, that word ‘diversity’ is an immensely complex one. At the time of writing, I work in three countries – Australia, Colombia and Britain. All three places have cultural and communications policies dedicated to diversity in very different ways. Australia boasts a national television network for indigenous peoples, largely funded by the state. This is a recognition of both the historical dispossession of the nation’s original inhabitants by its colonists and the failure of both commercial and public broadcasters to engage with relevant labour, themes and interests (Dibley and Turner 2018).

xii Foreword Colombia lacks such a system, but in any event, it defines diversity entirely differently. Most of Australia’s indigenous population would not be classified as such in Colombia; they would be deemed mestizo, or mixed race, as per the vast majority of Colombians. This is because many of the folks in question do not live in traditional lands, speak their own languages or derive from a ‘purely’ indigenous familial genealogy – requirements for people to be defined as indigenous in Colombia and hence in need of particular arrangements to sustain and develop national diversity (Colombia 2007; La Furcia 2016), as per new community-radio policies devised to further pacific community engagement in the post-conflict era (Vanegas 2017). Conversely, Britain’s discourse of diversity is about empire and regionalism. Institutions such as the British Broadcasting Corporation (BBC) are mandated to ensure that UK residents who are descended from those enslaved or dispossessed by British invasion, colonization and control are represented both behind and in front of the camera, along with the different regions of the nation. This excludes from notions of diversity both England’s second-largest language group (Poles) (Booth 2013) and sizeable and growing Chinese and Latin American communities (the latter principally from Brazil and Colombia) (Miller 2018). There is no need to include them within policy matrices of diversity, it seems. (A propos, the same notion applies to MI5’s ideas of inclusiveness and representativeness.) Not everyone welcomes diversity, however it is defined. In the United States, former Cold Warriors rapidly transmogrified into opponents of cultural diversity, easily and seamlessly displacing anxiety over Sovietism with anxiety over difference (Williams and Delli Carpini 2011: 72) in order to market their wares of bigotry and suspicion. The concept has also attracted critics from the international left, who regard it as a means of holding cultures in static and racialized forms that return their definition to outmoded forms of domination (Amin 2014: 84) and preclude transnational class consciousness (Cohen 2001: 112). For Arturo Escobar (1995), the incorporation of cultural differences in policy can only be meaningful when the economic oppression and inequality that divides the world and polities is itself addressed. That references the problem of ‘cosmopolitan tastes for cultural diversity’ that render ‘culture an object of external consumption rather than internal meaning’ (Calhoun 2007: 11). And from some perspectives, the digital epoch is seen as an homogenizing tool that threatens difference (Nye 2002: 98). So, the term is geographically and historically contingent – a product of the political, economic, military and cultural turmoil produced by empire, capital and religion. As our most important cultural economist, David Throsby, says of the concept:

Foreword  xiii For some it is a source of tension and hostility between social groups, even leading to vilification and violence. For others it represents a joyful recognition of the richness and multiplicity of human life, an avenue to greater dialogue, mutual understanding and creativity. (Throsby 2010: 171) In this latter, positive sense, we can regard the discourse of diversity as the latest expansion of modernity, as an extension of human rights and democracy beyond traditional subjectivity, thanks to struggles by social movements and a recognition that diversity encourages adaptation and hence cosmopolitanism (Ginzburg 2012: 114). For Ghandi, cultural diversity gave sovereign states legitimacy and profundity (Parekh 1997). Throsby (2010) recognizes it as both an economic tendency that generates value through labour, goods and services, and a transcendent intangible whose value is non-monetary, as per the environment, even as it may enable unknown future activities that could become profitable (such thinking is akin to the exception culturelle, minus the latter’s protectionist nationalism). The question then becomes how to shield this diversity from the predations of states, corporations and other forces of homogenization, whether they operate deliberately or accidentally. Here the nation becomes paradoxically crucial – on the one hand, it supports dominant languages and lifestyles; on the other, it is the site of appeal in support of difference, both at home and abroad (Gellner 1983: 125). Far from allowing an end to politics, cultural diversity will supposedly emerge again and again to require the complex negotiation of difference (Walzer 2004: 106). Habermas and Derrida (2003) see the strength of Western Europe in its very hybridity, which has arisen both because and in spite of an imperial nationalism that has affected the rest of the world so grievously. To understand digital diversity, we must clearly deal with media culture. As per diversity, the very term ‘media’ is forever under erasure. ‘Medium’, the singular form of the word, has been in English usage since the seventeenth century. It refers to something lying between two objects that links them. In that context, I use ‘media’ as a portmanteau term to signify a multitude of cultural and communicative machines and processes that connect people, models, modes, institutions, meanings and power in the material world. The appearance of a reproducible culture through media technologies of vision and sound adds both centralized control of production and the potential for decentralized interpretation. For its part, the word ‘culture’ derives from the Latin verb colere, which describes tending and developing agriculture (Benhabib 2002: 2; Adorno 2009: 146). With the advent of capitalism’s division of labour, culture came both to embody instrumentalism and to abjure it via the industrialization of farming, on the one hand, and the cultivation of

xiv Foreword individual taste, on the other. Eighteenth-century German, French and Spanish dictionaries incarnate a metaphorical shift from agricultural cultivation to spiritual elevation. As the spread of literacy and printing saw customs and laws passed on, governed and adjudicated through the written word, cultural texts supplemented and supplanted physical force as guarantors of authority. With the Industrial Revolution, populations urbanized, food was imported and textual forms were exchanged. An emergent consumer society produced such events as horse racing, opera, art exhibits and balls. The impact of this shift was indexed in cultural labour: poligrafi in fifteenth-century Venice and hacks in eighteenth-century London wrote popular and influential conduct books. These works of instruction on everyday life marked the textualization of custom and the development of new occupations. Anxieties about cultural imperialism also appeared via Islamic debates over Western domination (Mowlana 2000; Briggs and Burke 2003). George Yúdice’s brilliant distillation of the debates (2009) provides the best summary in English I know. Immanuel Kant ideologized these commercial and imperial changes in a foundational way. He argued that culture ensured citizens would abide by ‘conformity to laws without the law’. Aesthetics could generate ‘morally practical precepts’, schooling people to transcend particular interests via the development of a ‘public sense, i.e. a critical faculty which in its reflective act takes account (a priori) of the mode of representation … to weight its judgement with the collective reason of mankind’ (Kant 1987: 160). Kant envisaged an ‘emergence from … self-incurred immaturity’, independent of religion, government or commerce (Kant 1991: 54). The media emerged within culture as secular alternatives to deistic knowledge (Schelling 1914) focussed on dual forms of ‘self-realization’ (Weber 2000) and pleasure – truth versus beauty. This was an heuristic distinction in the sixteenth century (Williams 1983: 38). It became substantive as time passed, with new technologies understood as markers of differences and similarities in taste and status within groups. The connection of the media to social identities has led to extreme reactions to emergent media technologies and genres. During the Industrial Revolution, anxieties about a suddenly urbanized population raised the prospect of a long-feared ‘ochlocracy’ of ‘the worthless mob’ (Pufendorf 2000: 144). Theorists from both right and left argued that newly literate publics would be vulnerable to manipulation by demagogues. That tendency continues today. Bourgeois economics may assume that rational consumers determine what is popular in the media, but such chirpy optimism is often countered by populist and psy-function concerns that the public can be bamboozled by media texts. From more critical perspectives, Marxism has frequently viewed the media as a route to false consciousness that diverts the working class from recognizing its economic oppression; feminist approaches

Foreword  xv have moved between condemning the media as a similar distraction from gendered consciousness and celebrating it as a distinctive part of women’s culture; and cultural studies has regarded it as a key location for the symbolic resistance of class, race and gender oppression, alike (Hall and Jefferson 1976; Smith 1987). Across an array of political and epistemological positions, there has therefore been an emphasis on the origin, number and conduct of audiences to the media: where they came from, how many there were and what they did as a consequence of being present. Such concerns are coupled with a focus on content: what were audiences watching when they… And so both audiences and texts are conceived as empirical entities that can be known via research instruments derived from sociology, psychology, literary criticism, demography, linguistics, communications, anthropology, accountancy, economics and marketing. The contemporary study of these topics is all too often characterized by a rent-seeking amnesia. Latter-day activists, policymakers, executives, professional associations, employer groups, unions, regulators, courts and academics frequently forget, deny or are ignorant of continuities as well as discontinuities between old, middle-aged and new media institutions, policies, genres and social problems. In their cliché Schumpeterian discourse, the digital remakes everything anew, with gatekeepers presumptively removed from cultural control and ordinary people magically endowed with the will, capacity and time to take control of their own lives and the social world as citizen journalists and cultural producers. There is a regrettable absence of conceptual clarity and empirical evidence to support this Edenic fantasy/phantasy. Why are the BBC and Russia Today, their news reports discussed by millions of people, not ‘social media’ when a solitary web page attacking feminism and read by no one is ‘social media? Yet such assumptions are ubiquitous. And television is said to be over in such ill-considered volumes as La fin de la télévision (Missika 2006) and La televisión ha muerto (De Silva 2000). These claims are dubious. In 2017, 223 million television sets were sold around the world, a decrease of five million from the year before. But 2018 predictions are for 236 million TVs, and 2020 predictions are for 259 million (Statista 2018). International sales of 60+ inch sets increased 60 per cent in the third quarter of 2018, a growth of 40 per cent from the previous year (Kurz 2018). Worldwide, subscriptions to television via satellite and cable increased by 8 per cent to 800 million dollars in 2012 (Friedman 2013). That’s rather a lot, wouldn’t you say? In 2013, the average Briton watched about four hours of linear television a day on a TV set and just three and a half minutes on tablets, smartphones and laptops (Cellan-Jones 2014). In 2017, broadcast took up over three and a half hours per day per UK person – a very similar

xvi Foreword number (Ofcom 2017). British advertisers and broadcasters spend 7.5 billion pounds a year on making, buying, promoting and distributing televisual content. Across age, class and other forms of subjectification, the population spent more time watching television in 2017 than in 2012. The post-adolescent young dedicated more hours to TV than the average: an increase of 1.4 per cent year-on-year. The decline in viewing by children aged 4–15 (3 per cent year-on-year) can be explained not by cybertarianism but by the political economy, by corporate, rather than consumer, choice: ‘children’s TV has not been a priority for the largest commercial broadcasters’ for many years (Broadcasters’ Audience Research Board 2017). In the United States, Nielsen (2017) estimates that 119.6 million homes have TVs. Major growth comes from Latin@, African American and Asian households. And despite the palaver about ‘cord cutting’, the proportion of television sets receiving signals from broadcast, cable, satellite or telephony – and, yes, broadband – is 96.5 per cent. There is a change. Some people are watching programmes a week or more after they are broadcast or tuning into Amazon and Netflix and doing so on other devices. But those viewers are predominantly the young and the affluent – people who have time on their hands in contrast to folks who are busy with family obligations and keeping a job (Nielsen 2017). Overall, the Internet era has seen the most consistent growth in TV viewing across the nation since figures began (Madrigal 2018), while television news remains the preferred means of following current affairs across the country (Mitchell 2018). In Latin America, advertising investment in television continues to increase; governments still use television to promote generalized propaganda as well as their daily agendas; football on screen remains wildly popular; and fiction, most notably telenovelas, dominates prime time, drawing large audiences aged between 25 and 60. While younger viewers watch TV on a wider variety of screens and technologies, and do so at differing times, the discourse of television remains an important referent in their audiovisual experiences. In addition, across age groups, divisions persist between a minority with routine high-quality access to the digital world of technology and information, and a majority without alternatives to the traditional audiovisual sphere, for whom cell phones, for instance, are at most devices for communicating with friends and family members – and if people use them for more than that, costs in many parts of the region are prohibitive (Bianchi 2015; Orozco and Miller 2017). Indian residents are likelier to own television sets than have access to indoor plumbing, and politicians devote their advertising money to television ahead of all other options. The number of Indian TV households grew by eleven million in 2012 (FICCI/KPMG 2013). And in Australia,

Foreword  xvii ‘all age groups continue to spend the majority of their screen time with the in-home TV set’ (Nielsen Australia 2013). And the supposed capacity of the Internet to break through cultural gatekeepers and permit unfiltered expression of the popular will can easily lead to threats and the attempted humiliation of journalists, sportspeople, politicians, women, the disabled and ethnic minorities – in fact, the entire spectrum of diversity – via extraordinarily abusive rants and threats (Shakespeare 2009; Liddiard 2014; Ellis and Goggin 2015: 12–14; Löfgren Nilsson and Örnebring 2016).

What Is to Be Done? The chapters in this volume offer a wealth of theory and history about experiments in private gain and public policy as means to ensure or contain diversity. Having gleaned an immense amount from reviewing them, I’d like to conclude with some proposals for a way forward, predicated on diversity as a welcome expansion of our incomplete modernity and the media as core industrial and political entities. In his problematization of the bourgeois levers of supply and demand determining the price and value of goods and services, the distinguished philosopher-economist-educrat Amartya Sen says that a disabled person may have ‘the same demand function over commodity bundles’ as an able-bodied one without deriving the same utility from them, due to having particular needs. So, setting prices by demand in ways that ignore different subjectivities means we all pay the same amount for different qualities of experience. The capacity to increase income or transform it into social power may be similarly unequal (Sen 2000: 69, 88, 119). This argument lies at the heart of Sen’s support for focussing social policy not just on inequalities derived from wealth and income but on capability as well (Sen 2009: 253). Following on from his account, a serious engagement with the actually existing demography of our world should be our guide. So the fact that Polish is England’s second language, and Colombians and Brazilians are cleaning the capital’s offices every morning before diversicrats have even rolled out of bed, needs to be part of UK media policy just as much as a residual guilt over the nation’s imperial horrors. In addition, we should measure both on-screen and off-screen indicators of diversity. Tune to any broadcast in such multicultural US states as California or Florida, and you’ll see the ‘salt-and-pepper quota’ at work – an aged, straight-acting white guy; a Latina; a blonde woman; a black weatherman – in order to address the viewing audience’s diversity. But go off set, and you’ll find newsrooms and production facilities dominated by white folks, determining news agendas and job prospects alike (Bock et al. 2018).

xviii Foreword Next, we must address the fact, often engaged in this volume, that there are big, new multinational corporations such as Amazon, Alphabet (known popularly as Google), Facebook and Twitter. Like capitalist entities in general, they strive every day and in every way to avoid democratic regulation, specifically via an impulsive, childish, self-interested drive to elude being defined as what they really are: communications companies (Hindman 2018). We have several options for regulating multinational media corporations and the trans-territorial challenges they pose for citizen action in the name of diversity: ‘soft law [the protocols of international organizations], hard law [nationally-based legislation], codes of conduct [transnational norms], and voluntary self-regulation [ho ho ho]’ (Baram 2009). Forget the last. So, we need work such as that presented here to inform policy debates on media diversity and to do so minus the flawed utopia of digital dreamers. Our work should instead be endowed with an account of material history and contemporaneity that is open to the actual lived experiences of populations and their desires. And we need to be realistic about what has made and will make for digital innovation. For example, if we lift the lid on today’s smartphones and electronic tablets, what do we find? Click wheels, multitouch screens, global positioning systems, lithium-ion batteries, signal compression, hypertext markup language, liquid crystal displays and so on. Did these elements, so neatly combined by the corporations whose names and icons are emblazoned inside our jackets and pocketbooks, emerge from a desire to meet consumer needs? No. These donations to corporate profits came from the US Defense Advanced Research Projects Agency, the European Organization for Nuclear Research, the US Department of Energy, the CIA, the National Science Foundation, the US Navy, the US Army Research Office, the National Institutes of Health, the US Department of Defense – and research universities (Mazzucato 2015). ‘Somewhere, Over the Rainbow’, and all the beloved songs from the Wizard of Oz, were penned by socialists (Meyerson and Harburg 1993). These were no Stalinists, overwhelmed by a banal socialist realism, but clear-eyed optimists, who hoped for a better world in the wash-up of the Depression. They imagined a world of socialized risk, where the core characters of the story would collaborate – not compete – in order to make a better life. That was the world I grew up with – the hugely successful socialism embodied in little things like public schools, telephone exchanges, railways, mail services, power supplies, water and research. Therein lies a key, or at least a clue, to media diversity in the digital age. Toby Miller Institute for Media and Creative Industries Loughborough University London

Foreword  xix

Note 1 Thanks to the editors for the opportunity to think through these issues and to César Tapias for giving me a handy reference.

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Acknowledgements

This book is one of the results of the research project Diversity of the Audiovisual Industry in the Digital Era (CSO2014-52354-R), financed by the Spanish Ministry of Economy and Competitiveness, even though its final elaboration and editing took place in the context of the project Audiovisual Diversity and Online Platforms: Netflix as a case study (CSO2017-83539-R), financed by the Spanish Ministry of Science, Innovation and Universities. Both research projects have framed many of the activities developed by the research group Audiovisual Diversity (www.diversidadaudiovisual.org), based in the Department of Journalism and Audiovisual Communication of Carlos III University of Madrid (UC3M). Among those activities that contributed significantly to our understanding of the links between diversity and audiovisual industries, we want to outline the following international seminars because of their impact and productivity: ‘The Audiovisual Sector in the Digital Era: policies and strategies for diversity’ (2014) and ‘Audiovisual Diversity on the Internet: economics and policies’ (2016). We are very grateful to those who participated and contributed to these initiatives over the years as well as to the researchers, experts and institutions that became true partners along the way. As regards those organizations and research groups that showed interest and gave support to our work we would like to mention the scientific association Latin Union of Political Economy of Information, Communication and Culture (ULEPICC); the Getafe UNESCO Centre (Spain); the Spanish National Commission for Cooperation with UNESCO; the Secretary of the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions; Interarts Foundation (Spain); the Centre d’études sur l’intégration et la mondialisation at Université du Québec à Montréal (CEIM-UQÀM, Canada); the Organization of Ibero-American States for Education, Science and Culture (OEI); and the Observatório da Diversidade Cultural (ODC, Brazil). We are in debt to our dear colleagues Dr Rodrigo Gómez (Universidad Metropolitana-Cuajimalpa) and Dr Janet Wasko (University of Oregon), who provided generous advice and practical tips to move this book forward, and to the authors of the chapters and the foreword, who squeezed

xxiv Acknowledgements their agendas and found time to contribute. Our gratitude also goes to our colleagues in the research group TECMERIN (Television-Cinema: Memory, Representation and Industry) at UC3M, in which the Audiovisual Diversity research team is integrated, and to Felisa Salvago-Keyes of Routledge, who was very kind to consider the early proposal of this endeavour and helped to conceive the work that the reader has before his eyes.

Editors’ Introduction

Diversity is a buzzword. But… what does it refer to exactly, why is it desirable and what has it got to do with audiovisual industries? Answering these questions is not simple, not only because it feeds discourses that often head to opposite directions. Despite the popularity it has nowadays, it is an evasive principle due to its complex nature and polysemy: diversity has had (and still has) a varied social and political use that is not entirely evident. Therefore, the centrality of the concept of diversity in the field of communication and culture in the first two decades of the twenty-first century demands clear definitions as well as critical explanations of the intentionality behind the different meanings it receives and the multiple contexts in which it is used. As Denis McQuail (2013) would argue, the basic theory of diversity as a principle, valuable for the field of communication and culture, remains largely unchanged. However, it needs to be rethought in terms of its relevance and possible applications to a new media ecology where online developments set the pace. Furthermore, to understand the complex links between diversity and audiovisual industries (cinema, recorded music, radio, TV and video games), a comprehensive vision that connects with the tradition of studies on media diversity, media economics and cultural and communication policies is needed. Different works that published in the last years bear witness to the interest of scholars from different disciplines for the diversity issue in the field of culture and media (for example, De Beukelaer et al. 2015; Valcke et al. 2015; Richieri Hanania and Norodom 2016; Albornoz and García Leiva 2017a). If a comprehensive perspective of the diversity of/in audiovisual industries is to be pursued, it must cover the various phases of their functioning. It is not a question of just inspecting diversity by analyzing some audiovisual contents’ characteristics (for example, language used, format chosen or ethnic representations) or by considering the number and type of audiovisual operators. To the contrary, an overarching perspective must cover the different phases involved in the functioning of audiovisual industries, ranging from the creation-production of contents to their consumption.

xxvi  Editors’ Introduction Taking this idea as a point of departure, another important thesis that can be put forward is that diversity in the functioning of audiovisual industries is not something that comes naturally, which is why its safeguarding is a matter of general interest. Public powers have therefore the obligation to protect and promote diversity, especially after the disruption experienced with the expansion of digital networks and devices. Whether digitalization offers an opportunity for cultural diversity in terms of democratization, creativity and socialization, for example, or, on the contrary, represents a leap ahead in existing threats, such as business concentration, is an ongoing debate. For instance, the digital era offers possibilities for cultural enrichment while at the same time unfolds new challenges (Albornoz 2015; Albornoz and García Leiva 2017b). The emergence of global agents and powerful intermediaries (like Netflix, Google or YouTube), with logics and practices of business concentration and legal and financial engineering, for example, may hinder the diversity of/in cultural industries.

Diversity, Pluralism and Exception As McQuail (2013) pointed out, the positive consideration of diversity is a new phenomenon in the recent history of Occident since the State and the Church traditionally considered it to be a challenge. And even though some support to the notion of diversity can be traced back to the Declaration of the Rights of the Man and of the Citizen (1789), McQuail notes that it is only over the course of the nineteenth century that in Western Europe and North America the more modern meaning of this notion was progressively consolidated. Such consolidation was fed by two main approaches: one that associates diversity with the functioning of free market (liberal tradition) and links with the free ‘marketplace of ideas’ metaphor, and another linked to the political, religious and linguistic differences and tensions present in a society (political-democratic inspiration). The concept of diversity took on its own weight, becoming a principle in itself, only in the twentieth century. The notion put across two opposite versions in the field of media (McQuail 2013): a ‘negative’ one, which considers diversity as a natural outcome of the functioning of media markets and their complex systems of production and distribution, and a ‘positive’ one, which refers to the establishment of regulations in social and cultural areas. The latter, precisely, gave place to the idea of diversity as a guiding principle for communication and cultural policies in many states. In its recent historic evolution, the principle of diversity was organized not only concealing differences of emphasis and of application from one media system to another (McQuail 1995) but also interlinked, not always in an easy way, with other notions, including that of media

Editors’ Introduction  xxvii pluralism – relative to the functioning of mass media in democracy – and that of cultural exception – typical of the international free trade agreements. With respect to the notions of diversity and pluralism applied to the functioning of media, it should first be noted that often, and in different countries, these polysemic and multidimensional concepts have been (and still are) used as synonyms. Therefore, whether in communication studies or in the area of policy formulation, they are used interchangeably. Nevertheless, beyond their general use as synonyms, in the case of Latin languages, it is possible to establish some differences. Pluralism referred to the media is usually related to the concept of democracy: the existence of a plurality of voices, which express a plurality of points of views on public matters, is a necessary condition to achieve an informed citizenship and, consequently, the correct functioning of the democratic system. However, the notion of diversity has a direct relation to the universe of cultural expressions, including symbolic contents conveyed by cultural industries. In keeping with this differentiation, Franck Rebillard and Marlène Loicq (2013: 8) uphold that the question of pluralism is closely related to the idea of freedom of expression (and to the right to information, we would add) and refers to a public problem, whilst the question of diversity is linked to the visibility of different political and social cultural statements in the name of equality and refers to a cultural problem. In any case, ‘the focus of pluralism and of diversity has followed several paths, conditioned by the sociocultural and political contexts in which they are developed’ (Rebillard and Loicq 2013: 7). That is to say, these two notions have been used in communication studies depending on national contexts and epistemological traditions. According to Kari Karppinen (2013), media pluralism and diversity are not only values that few would oppose, but they are also concepts that overlap to some extent in a variety of ways. Even though he recognizes that the concept of media diversity is more frequently used in the United States, because media pluralism is the term favoured in European policy debates, Karppinen assumes a conceptual hierarchy whereby diversity refers to the empirical fact of plurality, while pluralism refers more explicitly to a value orientation. We align with Article 6 of the 2001 Universal Declaration on Cultural Diversity, by the United Nations Organization for Education, Science and Culture (UNESCO), which synthesizes this relationship by expressing that media pluralism – together with freedom of expression, multilingualism, equal access to art and scientific and technological knowledge, and the possibility for all cultures to have access to the means of expression and dissemination – is one of the guarantees of cultural diversity. The notion of cultural exception is indeed nowadays a specific term in International Law, found in numerous international commercial

xxviii  Editors’ Introduction agreements. Through a specific legal treatment of the cultural sector based on the cultural (symbolic and identity giving) and economic nature of their goods and services, the cultural exception formula allows many states to prevent domestic cultural productions from becoming integrated in the list of goods and services to be liberalized, thereby being able to maintain or adopt cultural policies. It is true that the expression cultural diversity has eclipsed the notion of cultural exception in debates on culture and communication. While some delighted in this eclipse and condemned cultural exception, others perceived progress in this conceptual transition (for example: Frau-Meigs 2002, Musitelli 2006). The reasoning of the latter is that if cultural exception has a defensive (and negative) connotation against the rules of free exchange of goods and services, cultural diversity has a positive nature in which the protection of diverse cultural expressions coexists with their promotion. On the contrary, for scholars such as Armand Mattelart (2006: 90) this terminological change could endanger the effective specifications of the principle of diversity in the area of cultural industries. Along the same lines, Philippe Bouquillion, Bernard Miège and Pierre Moeglin state that: cultural diversity does not legally represent the same guarantees as exception. Particularly, the reference to cultural exception shows a clear desire to remove the general principles of the market from the cultural industries, while the reference to diversity suggests that the normal organisation of the market should help to preserve this diversity, which facts tend to contradict. (Bouquillion et al. 2013: 186) It is a fact that currently the notions of cultural diversity and of cultural exception coexist. The latter is, in our view, not just a legal formula used to safeguard the established principle of cultural diversity but also an argument frequently used by certain professional sectors and in some countries, such as France.

Diversity and Audiovisual Industries Cultural industries are one of the means for materializing cultural diversity in the contemporary world. Due to their social prominence, they constitute an outstanding space for the production, circulation and consumption of symbolic goods that have the capacity to help build and influence collective as well as individual perceptions of the world. Audiovisual industries have a prominent role since much of our cultural experience is strongly marked by the consumption of audiovisual goods and services. The audiovisual sector, additionally, has been both the main

Editors’ Introduction  xxix target of diversity policies during the last decades and a polemic battlefield in international trade negotiations. Audiovisual diversity is a complex notion that, following the examination of the diversity principle in communications policy made by Philip Napoli (1999), can be broken down into three basic components and their corresponding subcomponents: • •

•

Source diversity: diversity of producers and distributors of content, and diversity of the workforce hired by them. Content diversity: diversity of formats or types of programmes; demographic diversity, based on racial, ethnic and gender differences of the people involved in the programmes; and diversity of ideas (points of view and social, political and cultural perspectives) presented. Exposure diversity: diverse exposition of audiences to audiovisual contents offered. This component depends directly on the selection made by citizens. And it is susceptible to being broken down into two subcategories: diversity of horizontal exposure, which is related to the distribution of audiences through all available content options (audience fragmentation), and diversity of vertical exposure, which is related to the diversity of content consumed individually by those who integrate an audience (individual consumption patterns).

In addition, it should be noted that the analysis of the diversity of any audiovisual system leads to differentiating between supplied diversity and consumed diversity (Van Cuilenburg and van der Wurff 2001): •

•

Supplied diversity: it is related to the diversity of audiovisual goods and services that a set of suppliers makes available to other agents and/or citizens. Therefore, a provider can be both an audiovisual content producer and any other intermediary of the audiovisual sector (for example, a distributor). Consumed diversity: it is related to the diversity of those audiovisual goods and services that are effectively accepted and enjoyed by agents and/or citizens. The act of enjoyment depends, among other factors, on both the availability of goods and services, and the selection made by agents and/or citizens. Within the capitalist societies, the states and the market, through their policies and strategies, and different instruments (for example, exhibition quotas for cinema and TV, programming editorial lines, subsidies for production and promotion), have the ability to promote the choice of certain audiovisual contents and services, influencing the creation of audiences.

Taking these elements into consideration, it is evident that the degree of diversity of any audiovisual system covers different dimensions and

xxx  Editors’ Introduction depends on a multiplicity of factors. And even though the exact meaning of diversity as a normative principle will most probably remain elusive and controversial, we argue that in order to analyze diversity in the audiovisual sector, the following must at least be taken into account: •

•

•

The production, distribution, promotion and exhibition/broadcast of contents are not concentrated into a reduced number of stakeholders that, additionally, can be characterized as evidencing differences in terms of ownership, size and geographical origin. The contents show differences of variety, balance and disparity in relation to values, identities and looks.1 These should reflect the multiplicity of groups that coexist in a given society (internal diversity) as well as the cosmogonies and expressions of foreign cultures (external diversity). Citizens and social groups should have access to a wide range of contents of their choice and should even be able to create and disseminate them if they want.

This way of understanding diversity not only aims to reaffirm a holistic perspective on the functioning of the audiovisual industries in the context of dynamic, changing societies but also seeks to focus on the question of power within the diversity/cultural industries relation. Thus, the issue of audiovisual diversity should not only consider the study of the ideological dimension of the symbolic goods available. It should also cover the analysis of ownership in relation to the material infrastructures of the production, distribution and intermediation of symbolic goods as well as the study of the possibilities of subordinated groups to elaborate and put into circulation their own contents beyond mere consumption. In short, a critical understanding of audiovisual diversity should refer more to power relations that give (or do not give) place to differences rather than to differences themselves. Our conception aims to transcend specific issues like media ownership, ideas portrayed or modes of consumption as such to focus on a more balanced distribution of communicative power.

About This Book Against the backdrop of promotional discourses, which predicted that the Internet would be a source of diversity on its own – because endless choice within abundance would resolve asymmetries – reflections on the relations between diversity, audiovisual industries and digitization present a complex challenge to deal with. We hope this edited collection will make a contribution in such a direction since it reflects on the centrality that the notion of diversity has acquired in recent decades in relation to audiovisual industries, especially in terms of economics and policies, and in the digital environment.

Editors’ Introduction  xxxi Before explaining the three parts in which the book is organized, a remark is to be made regarding the geographical perspective of the monograph when dealing with the appropriateness of the coverage of topics considered. Even though it could be argued that the volume would benefit from including geographically more varied points of view (for example, how are the topics discussed addressed in Asian, African or Arab countries), since diversity arguments are to be found in policy formulation throughout the world, challenges posed by the new digital environment are international as well as transnational. This collection focusses mainly on these, paying special attention to new transnational players (such as audiovisual online platforms), international governance efforts (notably the implementation of the 2005 UNESCO Convention and its adaptation to the digital era) and national policy responses. Without neglecting the important specificities of other realities, we argue that the core discussion and issues related are covered through the cases chosen and that this book offers a representative review of countries and regions where the issue of audiovisual diversity currently plays an important role in cultural or media policies. The added value of this volume is therefore its focus on a new digital environment that transgresses national and regional boundaries of diversity issues. The objective of its first part is to clarify important notions, approaches and debates to better understand the relationships between diversity and audiovisual industries in the digital era. Taking as a point of departure this introduction, Chapters 1–3 prove that even though diversity concerns are not new, it seems that the current digital scenario is contributing to an increasing prominence in academic and political debates. Chapter 1, by Mª Trinidad García Leiva and Luis A. Albornoz, for instance, provides an overview of the reflections that have emerged in recent years in those main fronts of reflection and ­scientific-technical knowledge (international organizations, governmental bodies, civil society and academic research). Albornoz, in Chapter 2, reflects on the unbalanced international flows of audiovisual goods and services in the context of the adaptation of the 2005 UNESCO Convention to the digital environment, considering also some of the challenges that cultural policies face. In Chapter 3, Philippe Bouquillion pursues a critical approach to the notion of cultural diversity, explaining how and why in some countries, such as France, it has coexisted with that of cultural exception. Bearing in mind structural limits imposed on diversity by economics, the second part of the book aims to characterize the performance of new key audiovisual players, addressing issues regarding reintermediation processes between producers and end consumers, especially via online platforms, corporate media power and corporate concentration, as well as the distribution and visibility of audiovisual productions. Whereas Janet Wasko, in Chapter 4, discusses the importance of studying the

xxxii  Editors’ Introduction power of global media and the Internet giants, and the implications of this analysis for the issue of media diversity, Philip Napoli, in Chapter 5, revisits the concept of the ‘long tail’ to re-evaluate its implications for audiovisual diversity on the Internet. Heritiana Ranaivoson, in turn, reflects in Chapter 6 on the role played by online platforms in providing diversity using a combined look at concentration and algorithms. This volume also deals with the fact that even though the diversity principle currently has positive connotations as regards audiovisual policy, this has not prevented its use in many different contexts pursuing dissimilar and even opposing outcomes. This is why the third part revolves around the implementation of measures that support audiovisual diversity and the adaptation of policies, at national and international levels, to digital challenges. Michèle Rioux and Felipe Verdugo, in Chapter 7, and Lilian Richieri Hanania, in Chapter 8, assess the 2005 UNESCO Convention on cultural diversity and analyze the role played by free trade agreements in cultural governance. Charles H. Davis and Emilia Zboralska, in Chapter 9, and Leonardo De Marchi and João Martins Ladeira, in Chapter 10, deal with the reformulation of cultural tools and measures at the national level. Whereas the former analyze the latest review of the Canadian policy toolkit and policy objectives, the latter investigate the regulation of cultural diversity in Brazil, looking into the on-demand audiovisual market. Finally, building on the findings drawn by the contributors to this book, the editors’ concluding chapter summarizes main trends and discusses practical proposals to improve the diversity of/in audiovisual industries.

Note 1 In relation to the differences that audiovisual contents may present, to define variety, balance and disparity we turn to Andrew Stirling (1998, 2007), who understands diversity as a mix of these three components. Variety is related to the number of different types of existing elements in a given set, balance considers the different degrees in which the defined types are represented and disparity is related to the degree of dissimilarity or dissimilarity that the different types previously defined have. Therefore, a system is more diverse the greater the number of categories it possesses, the more balanced these are and the more dissimilar they are from each other.

References Albornoz, L.A. (ed.) (2015). Power, Media, Culture. A Critical View from the Political Economy of Communication. London: Palgrave Macmillan. Albornoz, L.A. and García Leiva, M.T. (eds.) (2017a). El audiovisual en la era digital. Políticas y estrategias para la diversidad. Madrid: Cátedra. ——— (2017b). Diversidad e industria audiovisual: el desafío del siglo XXI. Mexico City: FCE.

Editors’ Introduction  xxxiii Bouquillion, P., Miège, B. and Moeglin, P. (2013). L’industrialisation des biens symboliques. Les industries créatives en regard des industries culturelles. Grenoble: PUG. De Beukelaer, C., Pyykkönen, M. and Singh, J.P. (eds.) (2015). Globalization, Culture and Development. The UNESCO Convention on Cultural Diversity. London: Palgrave Macmillan. Frau-Meigs, D. (2002). Excepción cultural, políticas nacionales y mundialización: factores de democratización y de promoción de lo contemporáneo. Quaderns del CAC, 14: 3–18. Karppinen, K. (2013). Rethinking Media Pluralism. New York: Fordham University Press. Mattelart, A. (2006). Diversidad cultural y mundialización. Barcelona: Paidós. McQuail, D. (1995). La acción de los medios. Los medios de comunicación y el interés público. Buenos Aires: Amorrortu. ——— (2013). La diversité de l’information dans toute sa diversité : évolution d’un concept pour les médias et les politiques publiques. In Rebillard, F. and Loicq, M. (dirs.). Pluralisme de l’information et media diversity. Un état des lieux international. Brussels: De Boeck, 19–38. Musitelli, J. (2006). La convention sur la diversité culturelle: anatomie d’un success diplomatique. Revue Internatinoale et Stratégique, 62(2): 11–22. Napoli, P.M. (1999). Deconstructing the diversity principle. Journal of Communication, 49(4): 7–34. Rebillard, F. and Loicq, M. (2013). Introduction. L’approche du pluralisme de l’information en France et la recherche internationale sur la media diversity. In Rebillard, F. and Loicq, M. (dirs.). Pluralisme de l’information et media diversity. Un état des lieux international. Brussels: De Boeck, 7–15. Richieri Hanania, L. and Norodom, A.T. (eds.) (2016). Diversity of Cultural Expressions in the Digital Era. Buenos Aires: Teseo Editorial. Stirling, A. (1998). On the Economics and Analysis of Diversity. SPRU Electronic Working Paper, 28. Brighton: University of Sussex. ——— (2007). A General Framework for Analysing Diversity in Science, Technology and Society. Journal of the Royal Society Interface, 4(15): 707–19. UNESCO (United Nations Organization for Education, Science and Culture) (2001). Universal Declaration on Cultural Diversity. Paris: UNESCO. ——— (2005). Convention on the Protection and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO. Valcke, P., Sükösd, M. and Picard, R. (eds.) (2015). Media Pluralism and Diversity. Concepts, Risks and Global Trends. Basingstoke: Palgrave Macmillan. Van Cuilenburg, J., and Van der Wurff, R. (2001). Impact of moderate and ruinous competition on diversity: The Dutch television market. The Journal of Media Economics, 14: 213–29.

1 Audiovisual Industries and Diversity in the Digital Age Overview of an Ongoing Debate Mª Trinidad García Leiva and Luis A. Albornoz Introduction This chapter provides an overview of the reflections that have emerged in recent years regarding challenges and opportunities facing diversity within the audiovisual industries in a context defined by digital networks and devices. It is a complex problem that has been gaining the attention of international organizations, governments, civil society groups and academics from around the world. In recent decades, we have witnessed exchanges in the need to preserve and promote the diversity of cultural goods and services, and States have seen their powers to formulate policies in this direction reinforced under the umbrella of the Universal Declaration on Cultural Diversity (UNESCO 2001) and the Convention on the Protection and Promotion of the Diversity of Cultural Expressions (UNESCO 2005). The diversity of and in the cultural industries – in which the audiovisual sector comprising cinema, radio, television, recorded music and video games plays a predominant role – is the main focus of this latest international agreement. While the expansion of digital technologies offers opportunities for enriching the diversity of cultural expressions – by reinforcing their dissemination and widening their access to a broader public, for ­example – it also presents new challenges. In this respect, we might highlight the emergence of very powerful global actors whose logics and practices (strong concentration, financialization, fiscal optimization, circumvention of national support mechanisms) can damage cultural diversity. As can be seen in the discussions taking place within the United ­Nations Organization for Education, Science and Culture (UNESCO) today, many governments are keen to examine the impact of developing digital technologies and promote the modernization of cultural policies and tools in the digital age. It is a debate destined to gather momentum as the markets for digital goods and services become further developed. The need has therefore arisen to identify the different agents that populate the

2  Mª Trinidad García Leiva and Luis A. Albornoz digital landscape and determine how they work and the type of relationships and social practices that are established between them. Numerous voices are now being raised to denounce the growing power of the GAFAs (Google, Apple, Facebook, Amazon) on the Internet and consequently the challenge this media-cultural power implies for the ­sovereignty of public authorities and national audiovisual regulation agencies. The report published by the agency FaberNovel GAFAnomics: New Economy, New Rules (2015) provides an account of the dominance that these four giants of the Net enjoy today: Internet users spend an average of 55 per cent of their day using one of their services online (e-mail and e-commerce, social networks, music or video consumption, etc.). The case of Apple reveals the scope that these business conglomerates can have. Although its devices are manufactured in Asia, this American multinational displays a high degree of vertical integration, selling terminals (Macintosh, iPod, iPhone and iPad), operating systems (OS X, iOS), a browser (Safari), software (Open Office, iWork, iLife, etc.) and content (the iTunes virtual store). In March 2017, Apple ranked first among the 100 largest companies in the world by market capitalization (with 754 billion US dollars). Notably, Apple is ahead of Google in the ranking, and the five largest companies are based in the United States, three of them belonging to the technology sector (PwC 2017). More specifically, the GAFAs enjoy a very significant presence in the audiovisual field, and it is possible to consider them as agents with as much or more importance than the traditional communication groups within the cultural communication system (Miguel and Casado 2016). In this respect, by 2014 it was estimated that iTunes, which, as well as a virtual store, is also a media player, controlled approximately 70 per cent of the market for music recording downloads and that Facebook was the vehicle for more than half of the traffic on social networks (Hardy 2014: 127). While YouTube is a subsidiary of Google (acquired in 2006, the year of its creation), Amazon launched Amazon Instant Video in 2012, which allows movies or series purchased or leased through its platform to be viewed or downloaded on the iPad, and acquired the video streaming service Twitch in 2014.

Areas for Reflection Since the adoption of the Universal Declaration on Cultural Diversity, addressing, integrating or incorporating ‘diversity’ has become common ground for formulating and justifying public policies in the field of communication and culture in general, and the audiovisual industries in particular. It is not only the debate taking place within organizations such as UNESCO (Stenou 2007) and initiatives by different social organizations (especially coalitions created in several countries to promote cultural

Audiovisual, Diversity & Digital Age  3 diversity) that have contributed to this but also to a great extent the adoption of the 2005 Convention at the 33rd session of the UNESCO General Conference. It is now possible to distinguish between three main fronts of reflection and scientific-technical knowledge regarding the impact of digital ­technologies on audiovisual diversity: (1) international organizations, among which UNESCO stands out; (2) governmental bodies; and (3) civil society, including within this academic research. International Organizations UNESCO Leading the Way Since the beginning of the twenty-first century, UNESCO has been at the centre of the international debate on cultural diversity and has produced a large number of documents, including those directly related to the implementation of the 2005 Convention. These documents are an essential source of consultation, especially those emanating from the meetings held by its governing bodies: the Conference of Parties and the Intergovernmental Committee.1 The fourth session of the Conference of Parties (Paris, June 2013) marked the starting point for the discussion on the impact of the new ­digital landscape on all cultural expressions. As one of the outcomes of this meeting, States and representatives of civil society were invited to submit reports on aspects of digital development within the scope of the 2005 Convention as well as proposals for actions to be undertaken. In response to this call, the seventh session of the Intergovernmental ­Committee (Paris, December 2013), where a preliminary debate took place on digital technologies and their impact on the 2005 Convention, contributions were received from different entities. Of particular note in this regard were documents related to the impact of digital technologies on the ­diversity of cultural expressions presented by the delegations of ­Canada/Quebec (2013) and France (2013), and by the following civil society ­organizations: the International Network of Lawyers for the ­Diversity of Cultural Expressions – RIJDEC (Guèvremont et al. 2013), the Canadian Coalition for Cultural Diversity – CCCD (Jaabouti and Pool 2013), the UK Coalition for Cultural Diversity (UKCCD 2013) and the Audiovisual Diversity research group (http://diversidadaudiovisual.org) via the international scientific association Unión Latina de Economía Política de la Información, la Comunicación y la Cultura (ULEPICC 2013). A year later, the French and the Canadian delegations requested that a specific item be included on the agenda of the eighth session of the Intergovernmental Committee (Paris, December 2014) regarding the challenges digital technologies pose for cultural diversity. These delegations accompanied this request with a joint working document entitled

4  Mª Trinidad García Leiva and Luis A. Albornoz Etat de situation et suite à donner aux enjeux du numérique (UNESCO 2014). Together with the information document prepared by editor Octavio Kulesz (2015) at the request of the Secretary of the Convention, it served as the basis for the debate on the impact of digital technologies on the 2005 Convention that took place at that time. This document – also used as informative input during the fifth session of the Conference of Parties – analyzes the periodic reports sent to the Secretary of the Convention by the signatories of the treaty, 2 focussing on contemporary digital trends, and addresses issues such as access to culture in the digital age, the role of the ‘new giants’ of the cultural market or cultural policies in the era of big data and social networks. While there was a consensus at this meeting in highlighting the disruptive nature of digital technologies in the field of cultural industries and policies, several government delegations (the United Kingdom’s, for example) expressed discord over the need to adapt the Convention to the digital age. As Antonios Vlassis points out in his chronicle of the meeting, three arguments were put forward: (1) adapting the Convention to the digital age is premature or futile due to the changing nature of technologies; (2) UNESCO is not the right institution to manage a technical challenge of such economic importance and other international organizations should be responsible for prescribing norms related to this challenge; and (3) developing countries have a different conception of the digital challenge and believe that there is a risk of an adaptation of the Convention addressing only the interests and concerns of developed countries. (Vlassis 2015: 9) For its part, the French National Commission for UNESCO (CNFU) took advantage of the presence of those attending this eighth session of the Intergovernmental Committee to present the work Diversité culturelle à l’ère du numérique, Glossaire critique (2014), coordinated by Divina Frau-Meigs and Alain Kiyindou. It is a ­p edagogical work that addresses the definition of 60 key terms in the digital ­e cosystem: from aggregator and algorithm to private life/personal and virtual data. As a corollary to the exchanges held during this meeting on digital technologies, the Intergovernmental Committee requested that the ­Secretary of the Convention continue to work on the issue of how the digital ecosystem affects cultural diversity by analyzing the quadrennial periodic reports and submitting a document to the next session of the Conference of Parties on the work done in this regard. It was also agreed that a draft operational guideline would be presented at that session

Audiovisual, Diversity & Digital Age  5 on digital technologies and the diversity of cultural expressions, which would especially take international cooperation into consideration. The fifth session of the Conference of Parties (Paris, June 2015) was preceded by two preliminary information exchange meetings to celebrate the tenth anniversary of the 2005 Convention. The first was devoted to cultural policies in the digital era and stimulating creativity and social participation through new technologies. The second addressed international cooperation and trade of cultural goods and services. Subsequently, over the course of this session of the Conference of Parties, which took as a basis the working document entitled Digital issues and their impact on promoting the diversity of cultural expressions (UNESCO 2015a), the government delegations once again discussed the impact of digital technology on the diversity of cultural expressions. Different positions emerged from the debate. The Swedish delegation classified the digital issue as a ‘historical fracture’, pointing out that it is necessary to determine what effects there are for our Convention and to refine our view (…) The digital age is vast. If we map the landscape, it is possible to see where UNESCO can be useful. The challenge is of great importance, and it can involve many actors. (Vlassis 2015: 6–7) Finally, the Conference of Parties decided to request that the Intergovernmental Committee continue working on this issue by drafting operational guidelines3 and submitting the results of its work to the sixth session of the Conference of Parties to be held by mid-2017. The Secretary of the Convention was also requested to include the analysis of digital issues in both the first global report on the implementation of the treaty, which was entitled Re/Shaping Cultural Policies. A Decade Promoting the Diversity of Cultural Expressions for Development (UNESCO 2015d), and in the biennial follow-up report on the impact of Articles 16 (Preferential Treatment for Developing Countries) and 21 (International Consultations and Coordination) of the 2005 Convention. The consideration of a preliminary framework for the drafting of ­practical guidelines during the ninth session of the I­ ntergovernmental Committee (Paris, December 2015) gave rise to a rich debate. The ­document Towards Operational Guidelines on Digital Issues ­(UNESCO 2015b) sets out the need to define the form and content of draft ­operational guidelines, paying particular attention to the p ­ rinciple of technological neutrality defended by the 2005 Convention,4 and states that its signatories retain the right to adopt public policies in support of their cultural industries in the digital environment. Moreover, the document summarizes trends detected during the discussions held by

6  Mª Trinidad García Leiva and Luis A. Albornoz the governing bodies of the 2005 Convention in the two preceding years regarding the new digital ecosystem and its relationship with cultural diversity (UNESCO 2015b: 3): • • •

•

• • •

Digital technologies have brought profound changes to the value chain for the creation, production, distribution and enjoyment of cultural goods and services. The arrival of new digital actors in the value chain for cultural goods and services is transforming the trade channels that were hitherto specific to cultural industries and are challenging their foundations. The digital environment has considerably enriched the range of cultural content, where infrastructure, stable Internet connections and the necessary skills are available, thus permanently improving and simplifying the accessibility of cultural expressions. The digital environment calls into question the regulatory and financial (particularly tax) provisions established to ensure the availability of cultural goods and services, for which new policies and measures are required. Communication infrastructures need to be implemented and adapted in order to bridge digital divides and inequalities. The issue of freedom of expression in digital environments is a source of growing concern. Net neutrality.

In addition, the document outlines priorities to be considered within the context of implementing the 2005 Convention in the digital age (UNESCO 2015b: 3–4): • • • • •

Adapt national policies on cultural goods and services to the digital environment. Implement international cooperation mechanisms designed to promote the diversity of cultural goods and services in the global digital environment. Provide technical assistance for the establishment and application of policies and measures encouraging the production and dissemination of digital cultural content in developing countries. Promote the objectives of the Convention within other international forums, particularly those responsible for trade, intellectual property rights and telecommunications. Develop infrastructure to facilitate the access of all individuals to a wide variety of content in the digital world.

It should be noted that the working materials of this ninth session of the Intergovernmental Committee also included the report Challenges and opportunities for the diversity of cultural expressions in the digital era

Audiovisual, Diversity & Digital Age  7 in East Asia by Hye-Kyung Lee and Lorraine Lim (2015), and a proposal by the government delegations of France, Canada and Belgium (2015) to develop operational guidelines to address the digital problem via a single, cross-cutting operational guideline. This proposal reaffirmed the principle of technological neutrality by maintaining that cultural goods and services have an intrinsic value that is not linked to the technical means of their production and dissemination. Based on this mandate from the Intergovernmental Committee, the Secretary of the Convention was tasked with preparing preliminary draft operational guidelines on digital issues. To this end, the Secretary had the support of two experts from the Convention’s Expert Facility, Véronique Guèvremont (Canada) and Octavio Kulesz (Argentina), who had contributed to the debates of the governing bodies of the Convention over the previous years. The preliminary draft operational guidelines on the implementation of the Convention in the digital environment, discussed and adopted in the tenth session of the Intergovernmental Committee (UNESCO 2016a, 2016b), follow the structure of the Convention’s monitoring framework presented in the aforementioned global report Re/Shaping Cultural Policies (UNESCO 2015d). Its structure is as follows: General considerations, Guiding principles, Parties strengthen systems of governance for culture in the digital environment, Rebalancing the flow of cultural goods and services, Integration of culture in sustainable development frameworks, Role of civil society, Gathering and sharing information and good practices, and Role of the Secretary of the Convention. As regards guiding considerations and principles (UNESCO 2016b: 5–6), it is of interest to underline that the guidelines aim to reaffirm: (1) the Convention’s principle of technological neutrality; (2) recognition of the dual nature (cultural and economic) of cultural goods and services, whatever the means used; and (3) the Parties’ sovereign right to formulate, adopt and implement policies and measures for the protection and promotion of the diversity of cultural expressions in the digital environment. The guidelines also aim to promote: (4) equitable access and balance in the flow of cultural goods and services in the digital environment, and (5) international cooperation for development. Together with the compilation of these draft operational guidelines, the Secretary of the Convention commissioned a study on the impact of digital technologies on the diversity of cultural expressions in Spain and Hispanic America, which was funded by Spain. The report, entitled The impact of digital technologies on the diversity of cultural expressions in Spain and Hispanic America (Kulesz 2016), focusses on five countries – Argentina, Colombia, Ecuador, Mexico and Spain – and pays particular attention to the book, music and film industries. One of its conclusions refers to the need to maintain a dual approach when considering the relationship between digital technologies and the diversity of cultural

8  Mª Trinidad García Leiva and Luis A. Albornoz expressions. That is to say, on the one hand, to continue paying attention to the universal/common aspects, involving a wide range of opportunities, challenges and policies, and, on the other, to examine local/specific components defined by the particular situation and priorities of each country (Kulesz 2016: 3). The operational guidelines on the implementation of the Convention in the digital environment were finally approved by acclamation in the sixth session of the Conference of Parties (UNESCO 2017a) in June 2017, recalling that they do not go beyond what the treaty stipulates but provide a transversal reading of it with regard to digital issues and related technologies. The then Director-General of UNESCO, Irina Bokova, stressed in her speech on the occasion of the Conference that: The digital revolution forces us to rethink the tools of the 2005 Convention. It also makes it possible to measure the full force of this Convention, and the boldness of its text, conceived and written from the outset on the principle of “technological neutrality” - that is to say, applying everywhere, on all media. These guidelines will enable us, beyond the general principles, to be more precise and more effective, to address the new challenges of the production, consumption and sharing of cultural goods and services on the Internet. (UNESCO 2017b) The eleventh session of the Intergovernmental Committee, which took place in December 2017, was important for establishing a 2018–19 work plan which includes some activities to implement the operational ­guidelines on the diversity of cultural expressions in the digital age ­(UNESCO 2017c): namely produce an open road map, including a collection of good practices in implementing the guidelines. In this session the second edition of the global report on the implementation of the treaty was also presented: Re/Shaping Cultural Policies: advancing creativity for development (UNESCO 2017d). The document assesses the impact of reported policies and measures, providing evidence towards how countries contribute to implementing the Convention’s target, and addresses the difficulties encountered in doing so. As regards digital ­issues, these are dealt with in the chapter entitled Cultural policies in the age of platforms by Kulesz (2017: 69) and are summarized in the following key findings: • •

The cultural value chain is rapidly being transformed from a pipeline-like configuration to a network model, and few countries have a strategy to deal with these changes. The volume of data circulating on the Internet is growing exponentially, and revenues are increasing.

Audiovisual, Diversity & Digital Age  9 •

•

•

In the Global South, despite the advantages resulting from mass adoption of mobile broadband, many countries lack i­nfrastructure and are unable to consolidate a market for cultural goods and ­services in the digital environment. The public sector may entirely lose its agency on the creative scene if a targeted approach to addressing the rise and market concentration of large platforms or the monopoly on artificial intelligence is not adopted. A new type of relationship between the public sector, the private sector and civil society based upon interactivity, collaboration and the co-construction of policy frameworks has not yet emerged.

Finally, it is pertinent to point out that in parallel with the work carried out by the governing bodies of the 2005 Convention, a series of texts is also being published as part of the UNESCO Series on Internet Freedom, aimed at capturing the complex dynamics of Internet governance and providing in-depth analysis and recommendations to its Member States and other stakeholders. Published titles include Fostering freedom online: the role of Internet intermediaries (MacKinnon et al. 2014), Principles for governing the Internet: a comparative analysis (Weber 2015) and What if we all governed the Internet? (van der Spuy 2017), texts which serve as contributions to the exhaustive study Keystones to Foster Inclusive Knowledge Societies: Access to information and knowledge, Freedom of Expression, Privacy and Ethics on a Global Internet (UNESCO 2015c). Other Organizations Aware of the Digital Challenge: The ITU, IOF and OEI In addition to the work carried out by UNESCO, it is worth noting that of other international organizations, including the International Telecommunication Union (ITU), the International Organization of La Francophonie (IOF) and the Organization of Ibero-American States (OEI). With regard to the ITU, one of the lines of action designed within the action plan (ITU 2004) proposed at the World Summit on the Information Society (WSIS) held in Geneva (2003) and Tunisia (2005) was entitled Diversity and cultural identity, linguistic diversity and local content. The annual follow-up on the implementation of this plan, as recorded in successive reports by the WSIS Forum, 5 highlights how this line of action has evolved towards concerns related to sustainability. The question is how digital culture and technologies can contribute to sustainable development. The result of a review of the Tunis Commitment (ITU 2006a) undertaken in 2015, and the Tunis Agenda for

10  Mª Trinidad García Leiva and Luis A. Albornoz the Information Society (ITU 2006b), has resulted in the WSIS’ goals ­being brought into line with the new 2030 Agenda for Sustainable ­Development adopted by the General Assembly of the United Nations in September 2015 (see ITU 2015). Since then the ITU has shown interest in the links between cultural diversity and linguistics in the online environment, awarding WSIS Prizes in such regard, during WSIS Forums. For its part, the IOF organizes and carries out the political and multilateral cooperation actions approved by the respective Summits of Heads of State and Government, which are reflected in ten-year strategic plans. The protection and promotion of cultural and linguistic diversity through the use of information technologies, and concern for the construction of ‘digitally more solidary’ societies, appear in both its Cadre stratégique décennal 2005–2014 (OIF 2004) and the strategy approved for the period 2015–2022 (OIF 2014). In this regard, Objective 2 of this strategy aims to strengthen the anchoring of culture in development initiatives and increase the participation of young people and women in artistic, cultural and digital creation. As strategic decisions are made operational through action programmes designed for four-year periods, the IOF currently manages the actions entitled Diversity and Cultural Development, and Digital Culture. In addition, the report the IOF commissioned to Québec politician Louise Beaudoin (2014) on the 2005 Convention and its effects and relations with the digital age, and the seminar held by the Parliamentary Assembly of Francophony in Quebec in November 2016, entitled La diversité de expressions culturelles à l’ère du numérique, are worth mentioning. As for the OEI, it is of particular interest to note its role in the drafting and approval of the Ibero-American Cultural Charter (SEGIB/OEI 2006), a legal instrument intended to foster the development of internal diversity in the countries that sign it and create new formulas for coordination in the field of culture, especially in matters such as copyright, heritage and the cultural industries. The document, originally promoted by the OEI, was approved at the 10th Ibero-American Conference on Culture (Valparaíso, 26–27 July, 2007) and adopted by the 17th Ibero-­ American Summit of Heads of State and Government (Santiago de Chile, 8–10 November, 2007). The Cultural Charter incorporates an action plan that includes among its development measures the drafting of a document of proposals to develop the Charter in the field of new technologies. As part of the tenth anniversary celebrations of its adoption, the 25th Ibero-American Summit of Heads of State and Government (Cartagena de Indias, October, 2016) promoted the creation of a working group to reflect on the Charter’s contributions to the promotion of an Ibero-American Agenda for linguistic diversity – although without addressing its links to the digital environment. In addition, we can also mention the World Intellectual Property Organization (WIPO), a body that is aware of new modes of consuming

Audiovisual, Diversity & Digital Age  11 cultural goods and services in the digital environment. It has one particular concern in this respect: that of extending intellectual property laws, including remuneration for copyright, to the new environment, especially via remuneration for artists. An example of this interest is its active participation in the debate on defining operational guidelines on digital issues for the 2005 Convention. Government Bodies: The Strength of Francophony With respect to government bodies, it is worth noting the contribution of some countries, such as France and Canada, who have expressed a sustained interest in the digital issue, and the stance adopted by the ­European Union (EU). The importance that France and Canada attach both to the 2005 Convention and to the debate on the impact of digital networks in the cultural and audiovisual field has been very evident over the past decade, whether through official reports or the commissioning of independent experts. In the case of France, we find the voluminous report Mission Acte II de l’exception (Lescure 2013), promoted by the Ministry of Culture and Communication, and the Mission d’expertise sur la fiscalité de l’économie numérique (Collin and Colin 2013), promoted by the Ministry of Economy and Finance, and the Ministry of Productive Recovery. More recently, there has been the Mission l’économie numérique de la distribution des œuvres et le financement de la création (Farchy et al. 2016), commissioned by the Ministry of Culture and Communication, which has been very active over this period in promoting reflection and drafting proposals.6 For its part, Canada has supported the work coordinated by David Poole and Sophie Le-Phat Ho (2011) entitled La transition vers le numérique et l’incidence des nouvelles technologies sur les arts, commissioned by the Canadian Public Arts Funders (CPAF); it has also promoted the actions of the Arts Council, which announced its goal of creating a digital platform to independently distribute Canadian audiovisual works, to be implemented and managed by the Coalition of Canadian Independent Media Art Distributors (CCIMAD). As for the Department of Canadian Heritage, in September 2016 it instigated a public consultation entitled Canadian Content in a Digital World with the objective of launching an important cultural policy review. Through this consultation, Canadians were invited to share their ideas, solutions and vision on how to strengthen the creation, discovery and export of Canadian content in a digital world. This input, collected in the What We Heard Across Canada Consultation Report (Ipsos Public Affairs 2017), will inform the next steps to modernize the Canadian cultural policy toolkit.

12  Mª Trinidad García Leiva and Luis A. Albornoz We can also highlight the active role played by the Government of Quebec, which has always stood out due to its formulation of policies to promote and protect its cultural specificity. Examples of this include the Plan Culturel Numèrique du Québec 2014–2021 (QUEBEC 2014), funded with 110 million Canadian dollars as part of the so-called Stratégie numérique du Québec and through the Institut de la statistique du Québec’s Observatoire de la culture et des communications in conjunction with the UNESCO Institute for Statistics (Montreal, 9–11 May, 2016). In the Latin American context, two countries stand out due to their pioneering political approaches to how the Internet operates in defence of cultural diversity: Chile and Brazil. With Act 20.453 of July 2010 Chile was the first country in the world to enshrine the principle of technological neutrality in law. The Act, which presents difficulties in its implementation, as criticized by the platform Neutralidad Si!, establishes that companies providing access to the Internet: may not arbitrarily block, interfere, discriminate, hinder or restrict the right of any Internet user to use, send, receive or provide any content, application or legal service through the Internet, or any other type of activity or legal use through the Net. (CHILE 2010) For its part, Brazil was the first country in the world to create a kind of ‘Constitution’ for the Internet. The principles, guarantees, rights and obligations of Internet users and service providers were established in Act 12.965, which came into force in mid-2014 and is better known as the Civil Internet Framework. The Civil Framework (BRAZIL 2014) addresses priority points in the protection and promotion of cultural diversity on the Internet by regulating neutrality, privacy, data protection and freedom of expression on said platform (Albornoz 2015: 169–173). The specific regulation governed by the Civil Framework came into force in mid-2016 with Decree 8.711/2016. As for the EU, it adopted the Convention on the Diversity of ­Cultural Expressions in 2006 after having actively participated in the ­negotiations leading to its adoption as it is perceived as a r­ elevant and effective tool for promoting diversity and cultural relations ­(Richieri Hanania and Ruiz Fabri 2014). These objectives are of the utmost importance, both for the European Community (EC) and for its ­Member States, as they are reflected in the constitutive treaties of the EU. Although the implementation of the treaty has had mixed effects on European audiovisual policy (García Leiva 2016), concern has increasingly manifested itself regarding the challenges and possibilities offered by digital technologies, especially in transforming the audiovisual media landscape.

Audiovisual, Diversity & Digital Age  13 This is demonstrated, for example, by the Green Books Unlocking the potential of cultural and creative industries (EC 2010a) and Preparing for a Fully Converged Audiovisual World: Growth, Creation and Values (EC 2013). In fact, Europe 2020 (EC 2010b), the name given to the EU’s strategy for economic growth and job creation for the period 2010–2020, established seven flagship initiatives, including the so-called Digital Agenda for Europe (EC 2010c). The main purpose of this initiative is to achieve sustainable economic and social benefits from a single digital market based on a fast and ultra-fast Internet and interoperable applications. For its part, the Digital Single Market Strategy for Europe (EC 2015) has updated this agenda on the premise that information and communication technologies are no longer a specific sector but rather the foundation of all modern innovative economic systems. In this respect, the Internet and digital technologies transform the lives of citizens by integrating themselves within all sectors of society. The strategy for achieving a single European digital market includes a number of measures, organized into three main pillars: (1) improving access to online products and services, (2) improving the conditions for digital networks and services to grow and prosper, and (3) boosting the growth of the digital economy. The second pillar includes, among other issues, reviewing the rules of the Audiovisual Media Services Directive (AVMSD) and evaluating the role of online platforms, especially in relation to transparency in search results and the use platforms make of the data they collect. Thus, among the new policy and legislation that the European Commission presented as part of the European Single Market, we find the proposal for an updated AVMSD, adopted in May 2016, which could affect the supply of audiovisual content offered by online platform catalogues (see chapter 2 in this book), and the agreement on new rules allowing Europeans to travel and enjoy online content services across borders, reached in February 2017, which is related to the modernization on EU copyright rules and to the proposal for a regulation on ensuring the cross-border portability of online content services in the internal market adopted in December 2015. The EU Portability Regulation has applied since 1 April 2018, making it easier for subscribers based in an EU Member State to access their online content services (for example, TV or music subscriptions) when they are temporarily located in another Member State. Civil Society Organizations Regarding civil society’s role in the study of and reflection on the diversity of audiovisual industries in the digital environment, it is worth noting the very active role played by some international organizations,

14  Mª Trinidad García Leiva and Luis A. Albornoz particularly the International Federation of Coalitions for Cultural ­Diversity, the U40 Network Cultural Diversity 2030 and the RIJDEC. On another front, at the European level the work of the ­i ndependent organization ERICArts – the European Institute for Comparative ­Cultural Research – should be highlighted for its monitoring and ­comparison of the cultural policies implemented by countries in the region over the last 15 years. With regard to this, the Compendium of Cultural Policies & Trends in Europe (www.culturalpolicies. net) stands out as a website with constantly updated information on ­national ­cultural policies in Europe. In addition to the aforementioned, the Independent Music Companies Association (better known by its acronym IMPALA), a non-profit organization established in Europe in 2000, defends the promotion of independent music in the interests of artistic, business and cultural ­diversity. In a context marked by the abusive conditions that YouTube attempts to impose upon independent artists,7 in January 2015 the association launched its Digital Action Plan of ten points (IMPALA 2015), which include increased pluralism and diversity in both the analogue and the digital environment. To this end, among other measures it proposes negotiating a stakeholder charter with the aim of increasing diversity in production, distribution, consumption and access. According to IMPALA’s executive president, Helen Smith: An industrial policy for culture is a pre-requisite to Europe’s digital economy. This involves reinforcing copyright and clarifying what operators like YouTube can and can’t do. Ensuring a successful digital single market also implies a host of other measures such as promoting diversity in a measurable way and devising a new regulatory, competition, social and fiscal framework for smaller actors. (Smith in Leoneli 2015) At the national level, we must not ignore the various coalitions for cultural diversity, observatories and private non-profit agencies that include defence of the principle of cultural diversity among their objectives. With regard to national coalitions, it is worth noting the activities of the Canadian Coalition, which developed the so-called challenges of digital technology among its eight working areas and in 2013 presented the document Impact of the digital era on the implementation of the Convention on the diversity of cultural expressions (Jaabouti and Pool 2013) to the Secretary of the 2005 Convention. This work was continued, in October 2016, with the publication of the report Culture et numérique: un état des lieux de la réflexion menée par les acteurs de la Convention sur la diversité des expressions culturelles (Badey and Boustany 2016).

Audiovisual, Diversity & Digital Age  15 Among the observatories that monitor how audiovisual industries function, including the audiovisual sector, the work of the Observatório da Diversidade Cultural (Belo Horizonte, Brazil) is to be mentioned. Coordinated by anthropologist José Márcio Barros (2008), this organization holds seminars on the issues affecting cultural diversity (there were seven editions held up until 2016) and activities for reflection on the new Civil Internet Framework. Also worthy of note are some of the activities carried out by the Observatorio de Comunicación y Cultura of Fundación Alternativas (Madrid, Spain), which include the publication of reports and organization of events such as the Forum of Cultural Industries, an annual debate on the challenges facing cultural industries in the digital environment. Reflection from the Academic Field With regard to research on diversity and audiovisual industries, there is a long tradition of communication studies that is reflected in works focussed on analyzing the dangers facing the production, distribution and consumption of cultural goods and services, especially in their digital form (see, for example, Bouquillion and Combés 2011; Bustamante 2011). Business concentration, technological dependence, homogenization of content and aesthetics, discrimination of the so-called third sector and the exclusion of certain groups are all highlighted as factors that undermine the diversity of audiovisual expressions and the plurality of voices. The bibliography at the end of this chapter offers some of the most important contributions in this respect, although it is worth pointing out some of the initiatives that serve as crucial references in research into the diversity of audiovisual industries in the digital age. First of all, important work is being carried out on culture, globalization and society by members of the Centre d’études sur l’intégration et la mondialisation (CEIM) at the University of Quebec in Montreal, headed by political scientist Michèle Rioux. At the request of the French Ministries of Foreign Affairs and International Development and Culture and Communication, the centre conducted the study Pour une culture en réseaux diversifiée: Appliquer la convention de l’UNESCO sur la protection et la promotion de la diversité des expressions culturelles à l’ère du numérique (CEIM 2015) in order to address the following questions: what are the challenges facing diversity in digital cultural expressions in different countries, particularly developing ones, or what measures and/ or policies should be implemented to ensure application of the principles of the Convention in the digital environment? Second, it is worth highlighting the work done by members of the Audiovisual Diversity research group via the research projects for Good Practices and Indicators (2012–2014), Diversity in the Audiovisual

16  Mª Trinidad García Leiva and Luis A. Albornoz Industry in the Digital Era (2015–2017) and Audiovisual Diversity and Online Platforms: Netflix as a case study (2018–2019). This is helpfully summarized in Albornoz (2012, 2013, 2015 and 2016), Albornoz and García Leiva (2017a and 2017b), García Leiva and Segovia (2014) and Marenghi et al. (2016). It was the members of the aforementioned research group that organized the international workshop Protection and Promotion of Audiovisual Diversity in the Digital Age (Carlos III University of ­M adrid, 3–4 October, 2013) and who, together with other specialists, conceived the aforementioned Declaration on the protection and promotion of cultural diversity in the digital age (ULEPICC 2013), presented by the ULEPICC at the seventh session of the Convention’s Intergovernmental Committee. Among other considerations, the text states that ‘the access and participation of individuals and social groups are the conditions for cultural diversity within the digital environment and must be the guiding principles of contemporary cultural policies’ and that further research is needed on the strategies developed by these intermediaries within the digital landscape in sensitive topics such as the alliances between the large culture-communication groups, the labelling of contents or the secret algorithms deployed in the search engines that guide the visibility of content. (ULEPICC 2013: 14) Following the holding of the international workshop Audiovisual Diversity on the Internet: Economics and Policies (Carlos III University of Madrid, 3–4 November 2016), and as part of the tenth session of the Convention’s Intergovernmental Committee, the research team prepared the document Implementation of the Convention in the Digital Environment. Support to the development of operational guidelines (ULEPICC 2016). Third, it is important to mention the activities carried out by the research centre Studies on Media, Innovation and Technology (SMIT), based at the Vrije Universiteit Brussel, where Heritiana Ranaivoson’s work stands out, and the network of researchers who form part of LabEx ICCA (Industries culturelles & création artistique), coordinated by Bertrand Legendre, which draws on the work of eight research teams from three different universities. Together they form an interdisciplinary research laboratory that focusses on the relationships between art, culture and digital markets. Among them, it is worth highlighting the Laboratoire des Sciences de l’Information et de la Communication (LabSIC) at University of Paris 13, which counts Philippe Bouquillion among its members. Together with Laurent Creton, he is currently leading the Observatoire des mutations des industries culturelles, as well as

Audiovisual, Diversity & Digital Age  17 research devoted to studying the role of digital platforms in the culture and communication industries. Finally, the formation of a new UNESCO Chair on the Diversity of Cultural Expressions, launched at Laval University in November 2016, must be mentioned. The mandate and future activities of the Chair, led by Véronique Guèvremont, will pay particular attention to the impact of digital technologies on the implementation of the 2005 Convention.

Conclusion As can be deduced from this overview of reflections on the challenges and opportunities facing cultural diversity in the landscape of a globalized and digitalized economy, there is a growing concern among different social actors regarding the role of the audiovisual industries and how to adapt the promotion and protection policies aimed at them. It is clear that while the digital scenario presents opportunities, it also poses serious dangers. This growing concern is consonant with the immense ignorance of how the digital environment works. It may, in fact, be argued that is the result of it. Both governments and society as a whole need rigorous diagnoses that uncover both the actions of the influential large business conglomerates and the opportunities that open up, to take just one example, for independent audiovisual creators in developing countries. However, there are two major obstacles to producing diagnoses that account for the strategies and actions with which companies shape the digital landscape and explain the impact of their initiatives on cultural diversity: the secrecy surrounding the actions of many commercial firms and the vertiginous change brought about by technological innovation. For example, it is not known what algorithms are used by the powerful online search engines, so decisive for the visibility of cultural goods and services. And while some governments do take action to find out this information, companies are protected by the fact that making it public would mean revealing the secrets of their success to their rivals for free, bringing with it lower-quality service. From a business perspective, transparency must be subordinated to the logic of competition. On the other hand, the digital scenario is characterized by its high degree of volatility and permanent transformation. This type of instability stems from a multitude of factors, including the huge resources invested in technological innovation by large business conglomerates and aggressive short-term business strategies. There is also an ever-uncertain demand for cultural content and the changing social uses of new technological devices. Thus, many studies on the behaviour and characteristics of agents that populate the digital scenario, often fixated on permanent change, ‘expire’ shortly after their publication.

18  Mª Trinidad García Leiva and Luis A. Albornoz At the international level, the most interesting debate regarding the triad of diversity, audiovisual industries and digitization is taking place in UNESCO. More specifically, it revolves around how to adapt the 2005 Convention to the digital age. In these first ten years of the youngest of the UNESCO conventions on cultural matters, the actions of Francophone countries stand out. It is they, with the delegations of France and Canada at the forefront, who are driving the adaptation of this international legal instrument. In turn, the actions of international organizations are fed by those of national and regional governments, and the involvement of university sectors. The government of France, for example, has not only commissioned a report on the necessary renewal of cultural policies in the digital era based on offering a legal alternative to pirated online cultural goods and services, and the co-responsibility of all actors in the digital economy for funding artistic creation (Lescure 2013), but has also integrated major foreign video platforms, such as Netflix and YouTube, into the ecosystems for ­financing the creation of new French works. Since September 2017 all video platforms, making videos available online either for free or in return for payment, established in France or elsewhere, are subject to the same fiscal rules with regard to that portion of their turnover achieved in France. In turn, in Latin America, Brazil and Chile are at the forefront of regulating new phenomena, such as technological neutrality and freedom of expression on the Internet. Last but not least, it should be noted that civil society has played a key role in constructing this debate. At the level of activism, national coalitions in favour of diversity, and especially the international federation that unites them, have become an incentive for public authorities and a permanent source of information. At the academic level, work by pioneering researchers on the issue of diversity and the cultural industries from the early 2000s – such as Napoli (1999), Bustamante (2003), Frau-Meigs (2002) and Mattelart (2006) – laid the foundations for the work and projects done by groups currently interested in the future of diversity in the field of digital communication and culture. It should not be overlooked, however, that these structured research groups seek connections with both international and civil society organizations in order to disseminate their results to society as a whole and to those responsible for defining cultural policies. There is no prospect of a quick or early settling of the debate on diversity in the audiovisual industries in today’s digital landscape. We can predict that discussions are likely to intensify over the next few years if we take into account that, to cite just two examples, free trade agreements are being negotiated that may affect trade in digital audiovisual goods and services (such as the Transatlantic Trade and Investment Partnership, TTIP), and several governments, with the EU at the head, appear to be willing to ask about the role and taxation of online platforms. While

Audiovisual, Diversity & Digital Age  19 multilateral discussions such as those taking place within ­U NESCO should not be lost sight of, it should also not be forgotten that countries such as the United States and Japan have not ratified the 2005 Convention on the Diversity of Cultural Expressions.

Acknowledgements This chapter draws on research undertaken for the project Diversity of Audiovisual Industry in the Digital Era (reference: CSO2014-52354-R), funded by the State Programme for R&D+I, focussing on the Challenges of Society, of the Ministry of Economy and Competitiveness of Spain. A previous version of this text was published in Spanish under the title La diversidad audiovisual en el paisaje digital: panorámica de un debate en marcha, in the book El audiovisual en la era digital. Políticas y estrategias para la diversidad (Madrid: Cátedra, 2017).

Notes 1 The Conference of Parties is the plenary and supreme decision-making body of the 2005 Convention and meets regularly every two years in June. The Intergovernmental Committee, under the authority of the Conference of Parties, promotes the aims and implementation of the Convention, and meets regularly every year in December. All documents from the sessions of the Conference of Parties and the Intergovernmental Committee – resolutions, working and information documents, etc. – are available on the UNESCO website dedicated to the 2005 Convention: http://es.unesco.org/creativity/. 2 The 2005 Convention stipulates in Article 9 (Information Exchange and Transparency) that every four years countries adhering to this international treaty must provide UNESCO with information on measures taken to protect and promote cultural diversity. 3 The 2005 Convention defines operational guidelines as the ‘set of texts elaborated by the Intergovernmental Committee and adopted by the Conference of Parties, providing general guidelines for the implementation and application of the provisions of the Convention’. 4 In accordance with the aforementioned document, according to the principle of technological neutrality the 2005 Convention must be implemented regardless of the technological environment, whether physical or virtual, in which cultural expressions are created, produced, disseminated and made available (UNESCO 2015b: 2). 5 The latest WSIS Forum (Geneva, 2–6 May 2016) was co-organized by ITU, UNESCO, the United Nations Conference on Trade and Development (UNCTAD) and the United Nations Development Program (UNDP). For further information see www.itu.int/net4/wsis/forum/2016/. 6 The numerous general and specific reports on digital cultural goods and services promoted by this ministry can be found at: www.culturecommunication. gouv.fr/Politiques-ministerielles/Etudes-et-statistiques. 7 One of the last episodes was denounced by artist Zöe Keating on her blog: YouTube asked her to sign a contract so that her songs would be available on Google’s new streaming music service, YouTube Music Key, or her YouTube channel would be blocked. See: http://zoekeating.tumblr.com/ post/108898194009/what-should-i-do-about-youtube.

20  Mª Trinidad García Leiva and Luis A. Albornoz

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22  Mª Trinidad García Leiva and Luis A. Albornoz International Network of Lawyers for the Diversity of Cultural Expressions (RIJDEC). Hardy, J. (2014). Critical Political Economy of the Media. An Introduction. Oxon and New York: Routledge. Impala (Independent Music Companies Association) (2015). Digital Action Plan. Promoting Europe’s Digital Single Market through Culture. IMPALA, Brussels, 27 January. Ipsos Public Affairs (2017). What We Heard Across Canada: Canadian Culture in a Digital World. Consultation Report. Ottawa: Government of Canada. ITU (International Telecommunication Union) (2004). Action Plan. World Summit on the Information Society. WSIS-03/Geneva/DOC/5-S. Geneva: ITU. ——— (2006a). Tunis Commitment. Document of the second phase of the World Summit on the Information Society. WSIS-05/TUNIS/DOC/6(Rev.1)-S. ­G eneva: ITU. ——— (2006b). Tunis Agenda for the Information Society. Document of the second phase of the World Summit on the Information Society. WSIS-05/ TUNIS/DOC/7-S. Geneva: ITU. ——— (2015). WSIS – SDG Matrix. Linking WSIS Action Lines with Sustainable Development Goals. Geneva: ITU. Jaabouti, J. and Pool, C. (2013). Impact of the Digital Era on the Implementation of the Convention on the Diversity of Cultural Expressions. Montreal: Canadian Coalition for Cultural Diversity (CCCD). Kulesz, O. (2015). UNESCO Convention on the protection and promotion of the diversity of cultural expressions: analysis of parties’ periodic reports and contemporary digital trends. Information document of the 5th session of the Conference of Parties to the Convention on the Protection and Promotion of the Diversity of Cultural Expressions (CE/15/5.CP/INF.9). Paris: UNESCO, 10–12 June 2014. ——— (2016). The impact of digital technologies on the diversity of cultural expressions in Spain and Hispanic America. Information document of the 10th session of the Intergovernmental Committee for the Protection and Promotion of the Diversity of Cultural Expressions (DCE/16/10.IGC/INF.4). Paris: UNESCO, 12–15 December. ——— (2017). Cultural policies in the age of platforms. In UNESCO, Shaping Cultural Policies. Advancing Creativity for Development. Paris: UNESCO, 69–83. Lee, H. and Lim, L. (2015). Challenges and opportunities for the diversity of cultural expressions in the digital era in East Asia. Information document of the 9th session of the Intergovernmental Committee for the Protection and Promotion of the Diversity of Cultural Expressions (CE/15/9.IGC/INF.7). Paris: UNESCO, 14–16 December. Leoneli, A. (2015). IMPALA launches 10-point Digital Action Plan. Rockol, 27 January. Lescure, P. (2013). Mission Acte II de l’exception. Contribution aux politiques culturelles à l’ère numérique. Paris: Ministry of Culture and Communication of France. MacKinnon, R., Hickok, E., Bar, A. and Lim, H. (2014). Fostering Freedom Online: The Role of Internet Intermediaries. Paris: UNESCO Internet Society.

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24  Mª Trinidad García Leiva and Luis A. Albornoz UNESCO (United Nations Organization for Education, Science and Culture) (2001). Universal Declaration on Cultural Diversity. Paris: UNESCO. ——— (2005). Convention on the Protection and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO. ——— (2014). Current state and action to address the challenges posed by digitisation (CE/14/8.IGC/12). Working document of the 8th session of the Intergovernmental Committee for the Protection and Promotion of the Diversity of Cultural Expressions. Paris, 9–11 December. ——— (2015a). Digital issues and their impact on promoting the diversity of cultural expressions (CE/15/5.CP/12). Working document of the 5th session of the Conference of Parties to the Convention on the Protection and Promotion of the Diversity of Cultural Expressions. Paris, 10–12 June. ——— (2015b). Towards Operational Guidelines on digital issues (CE/15/9. IGC/7). Working document of the 9th session of the Intergovernmental Committee for the Protection and Promotion of the Diversity of Cultural Expressions. Paris, 14–16 December. ——— (2015c). Keystones to Foster Inclusive Knowledge Societies: Access to Information and Knowledge, Freedom of Expression, Privacy and Ethics on a Global Internet. Paris: UNESCO. ——— (2015d). Re/Shaping Cultural Policies. A Decade Promoting the Diversity of Cultural Expressions for Development. Luxemburg: UNESCO. ——— (2016a). Preliminary draft operational guidelines on the implementation of the Convention in the digital environment (DCE/16/10.IGC/7). Working document of the 10th session of the Intergovernmental Committee for the Protection and Promotion of the Diversity of Cultural Expressions. Paris, 12–15 December. ——— (2016b). Decisions of the 10th session of the Intergovernmental Committee for the Protection and Promotion of the Diversity of Cultural Expressions (DCE/16/10.IGC/Dec.). Paris, 12–15 December. ——— (2017a). Resolutions of the 6th session of the Conference of Parties to the Convention on the Protection and Promotion of the Diversity of Cultural Expressions (DCE/17/6.CP/Res.). Paris, 15 June. ——— (2017b). Discours de la Directrice générale de l’UNESCO Irina Bokova, à l’occasion de la Conférence des Parties à la Convention de 2005 sur la protection et la promotion de la diversité des expressions culturelles (DG/2017/075). Paris, 15 June. ——— (2017c). Decisions of the 11th session of the Intergovernmental Committee for the Protection and Promotion of the Diversity of Cultural Expressions (DCE/17/11.IGC/Dec.). Paris, 15 December. ——— (2017d). Re/Shaping Cultural Policies. Advancing creativity for development. Paris: UNESCO. Van der Spuy, A. (2017). What if we all governed the Internet? Advancing multistakeholder participation in Internet governance. Paris: UNESCO. Vlassis, A. (2015). La CDEC et le numérique: du constat à l’action. Culture, commerce et numerique, 10(6): 5–7. Weber, R.H. (2015). Principles for governing the Internet: a comparative analysis. Paris: UNESCO.

2 Protecting and Promoting Audiovisual Diversity The UNESCO Convention on Cultural Diversity and the Challenges of the Digital Environment Luis A. Albornoz Introduction On 20 October 2005, in the framework of the 33rd session of the General Conference of the United Nations Educational, Scientific and Cultural Organization (UNESCO), representatives from 148 countries adopted the Convention on the Protection and Promotion of the Diversity of Cultural Expressions (hereinafter referred to as ‘the 2005 Convention’ or ‘the Convention’). On this occasion, the only government delegations voting against were the United States and Israel. They thus opposed this new international treaty, which may be considered as a novel instrument for international governance of cultural exchanges (Prieto de Pedro 2005; Bernier 2008). The text recognizes the dual commercial and symbolic nature of cultural production in expressing that ‘cultural activities, goods and services are both economic and cultural in nature, conveying identities, values and meanings, and must therefore not be treated as solely having commercial value’ (UNESCO 2005). While the 2005 Convention bolsters the principle of freedom of thought, expression and information, arguing that cultural diversity ‘is strengthened by the free flow of ideas, and that it is nurtured by constant exchanges and interaction between cultures’, it also points out the imbalances and inequities of the current cultural scene daily outlined by digital technologies. The preamble to the Convention states that the processes of globalization, which have been facilitated by the rapid development of information and communication technologies, afford unprecedented conditions for enhanced interaction between cultures, they also represent a challenge for cultural diversity, namely in view of risks of imbalances between rich and poor countries. The international scale is therefore a natural framework for the interpretation, development and impact of this binding agreement, signed,

26  Luis A. Albornoz until October 2018, by 145 countries and the European Union (EU), cultural industries being one of its main foci of attention in that they offer one of the main ways for the materialization of cultural diversity in the contemporary world. As we have pointed out (Albornoz and García Leiva 2017a: 28), due to its social presence and scope, cultural industries constitute a prominent space for the production and circulation of symbolic content capable of influencing our perception of the world and others through narratives and elaborate metaphors. But why shed light at the start of the twenty-first century on a treaty that enshrines diversity of cultural expressions? One of the keys to understanding the need to adopt such an international treaty lies in the increased and accelerated cultural flows that take place in the context of the so-called globalization process and in the conflicts arising from the attempt to eliminate any barriers affecting the free trade of cultural goods and services. The last decades have thus seen the so-called ‘trade and culture debate’ about audiovisual services (Richeri Hanania 2014), which glimpsed the possibility of doing away with the instruments that make up the structure of many states’ cultural policies. The dispute surrounding the liberalization of audiovisual services during the last phase of negotiations of the Uruguay Round (1986– 93/94) for the General Agreement on Tariffs and Trade (GATT) involved two positions over culture (Mattelart 1995; Arcos Martín 2010): at one extreme were those delegations – mainly Canadian and French – which, while recognizing the economic value of audiovisual goods and services, emphasized their symbolic value and intrinsic relationship with the identities of different social groups; at the other extreme, with Japanese support, the US delegation called for the complete elimination of restrictions hampering international trade, on the understanding that they violate consumer freedom. The divergence of positions resulted in countries’ non-assumption of specific commitments in the area of liberalization of audiovisual services, which allowed states to continue implementing policies and tools (screen quotas, subsidies, tax exemptions, etc.) for the audiovisual sector in their respective territories. Nevertheless, the audiovisual sector was included in the General Agreement on Trade in Services (GATS), whose purpose is to extend the multilateral trading system to the whole of the services sector (Torrent 2002). In the operating framework of the World Trade Organization (WTO), which came into force together with the GATS in 1995, audiovisual services is one of the sectors with the lowest number of commitments made by its members, and these are more numerous in cinema than in radio and television. The audiovisual sector is also characterized by a large number of exemptions to the most-favoured-nation treaty (non-discrimination) – exemptions that are seen, for example, in the case of film co-productions.

Protecting & Promoting Audiovisual Diversity  27 Just a few months after the WTO’s launch, the US delegation submitted claims to this body against Canada and Turkey over certain measures that these countries had implemented to protect some of their cultural products and services. In both cases the WTO’s decision-making bodies ruled in favour of the United States: Canada had to suspend measures prohibiting or restricting the importation of certain periodicals (WTO 1997a), while Turkey undertook to match the taxes on the income generated by the projection of domestic and imported movies (WTO 1997b). Against this background of confrontation over the commercialization of cultural goods and services, and the emergence of accelerated processes of concentration and financialization of communication and culture, both the 2001 Universal Declaration on Cultural Diversity (UNESCO 2001) and the 2005 Convention can be seen as the crystallization of the concerns facing certain public authorities, and experts and professional groups linked to cultural life. Nonetheless, it has become imperative to know how far this treaty has succeeded in transforming international flows of trade in cultural goods and services. Based on data from public and private sources, this chapter demonstrates the powerful control that developed countries’ cultural industries still exert today in the context of the adaptation of the principles of the Convention to the landscape drawn by digital technologies. The following pages also consider some of the challenges for cultural policies in the digital environment, giving special attention to the application of tax obligations to online distribution platforms of cultural content as well as to the regulation of audiovisual catalogues offered by them.

International Trade in Cultural Goods and Services While the 2005 Convention owes its existence to the need to ensure that states retain the sovereign right to adopt policies to protect and promote cultural diversity in their respective territories, there are other primary elements that make this treaty meaningful. Predominant among these is the need to put on an equal footing all countries in the sphere of international trade in cultural goods and services. Article 16 of the Convention, concerning preferential treatment of developing countries, states that: ‘Developed countries shall facilitate cultural exchanges with developing countries by granting, through the appropriate institutional and legal frameworks, preferential treatment to artists and other cultural professionals and practitioners, as well as cultural goods and services from developing countries’. A critical assessment of the impact of the Convention must not therefore ignore the extent to which the flow of cultural goods and services has been affected at the international level. The first UNESCO report on the monitoring of the Convention (UNESCO 2015) includes a chapter by Lydia Deloumeaux, a culture

28  Luis A. Albornoz statistics specialist from the UNESCO Institute for Statistics (UIS), containing data for the period 2004–2013 that analyzes how the signatories of this international treaty have facilitated the distribution of cultural goods (or physical products) and services (intangible) across developed and developing countries. According to it, total exports of cultural products doubled between 2004 and 2013: from 108.4 to 212.8 billion dollars. In the same period, developing countries improved from 25.6 per cent of total exports in 2004 to 46.7 per cent in 2013 (Deloumeaux 2015: 125). The significant growth of the influence of developing countries could lead some to think that it is a result of the successful impact of the Convention. However, this is due to other dynamics influenced mainly by the performances of China and India – countries which, relying on their strong economic growth, have increased their presence in the global cultural goods market. Taking these two exceptions aside, the vast majority of developing countries remain on the margins as exporters of cultural products, their participation being limited to a handful of cultural goods (Table 2.1). Regarding specifically audiovisual and music goods exports (a ­category that comprises musical instruments, recorded media, films and video games), the share of developing countries increased from 23.6 per cent in 2004 to 34.3 per cent in 2013. On the one hand, this increment must be understood in a context of sharp decline in sales of physical cultural goods due to digitization. On the other hand, it should be considered that today ‘recorded media and video games are produced mainly in developing countries, such as China – the world’s largest exporter’ (Deloumeaux 2015: 126). Certainly, to obtain a complete understanding of current international cultural exchanges, it is necessary to examine the exchanges that take place over the Internet, insomuch as most of the international flows of cultural trade are possible because of the performance of companies that operate through digital networks. In this sense, first, it is necessary to reflect on whether digital (and audiovisual) contents must be considered as goods or as services. Table 2.1  Share of exports of cultural goods between developed and developing countries (excluding China and India), 2004–2013 (in %)

Developed countries Developing countries

2004

2005

2006 2007

2008

2009

2010

2011 2012 2013

85.7

84.9

84.8

83.2

81.5

81.5

78.9

79.4

79.7

80.5

14.3

15.1

15.2

16.8

18.5

18.5

21.1

20.6

20.3

19.5

Source: UNESCO (2015: 125), based on UN Comtrade, Department of Economic and Social Affairs (DESA)/United Nations Statistics Division (UNSD), April 2015.

Protecting & Promoting Audiovisual Diversity  29 Additionally, measuring the international balance of flows of cultural services remains a challenge due to: • • •

•

The current lack of information on important developing countries – for example, China does not report detailed services statistics, and ­India’s services data is incomplete. The scarcity of data to assess cultural services properly – many developing countries do not have the capacity for collecting international services statistics. The difficulty in comparing data because of the diverse practices of collecting and reporting data at the national level – many countries record the same type of transaction differently – for example, the US and the British governments do not report any data on audiovisual services in the WTO and the OECD data sets, which are actually classified as licence fees or communication/telecom distribution services (Deloumeaux 2017: 133). The hijacking of data by a few big transnational companies – for example, Netflix, the most important audiovisual streaming service worldwide, does not provide detailed information about subscribers or their consumption of contents.

Therefore, despite the necessary precaution with which the data on international exports of cultural services should be taken, it is possible to confirm an almost absolute dominance by firms from developed countries during the period 2004–2012 (Table 2.2). In 2004, these countries represented 70.4 billion dollars of the 71.9 billion dollars of global exports of cultural services, and accounted for 126.4 billion dollars of the 128.5 billion achieved in 2012. More specifically, ten countries accounted for the 87.8 per cent of global cultural services exports in 2012: the United States came top, with 52.4 per cent, followed by the United Kingdom, France, Canada, Holland, Sweden, Germany, Luxemburg, Ireland and Belgium (Deloumeaux 2015: 129–30). Table 2.2  S hare in exports of cultural services of developed and developing countries, 2004–2012 (in %)

Developed countries Developing countries

2004

2005

2006

2007

2008

2009

2010

2011

2012

87.89

97.65

97.52

97.40

96.95

98.33

97.94

98.40

98.34

2.11

2.35

2.35

2.60

3.05

1.67

2.06

1.60

1.66

Note: Data covers 97 countries. Cultural services covers: information services, other royalties and license fees and audiovisual and related services as defined by the 2002 Extended Balance of Payment Classification (EBOPS). Source: UNESCO (2015: 129), based on data from UNCTAD/WTO International trade database, 2015.

30  Luis A. Albornoz Furthermore, the chapter included in the second 2005 Convention global report (UNESCO 2017a), also written by Deloumeaux, confirms that the balance in cultural trade for least developed countries did not improve from 2005 to 2014: these countries only accounted for a 0.5 per cent share of the total exports of cultural goods. In addition, most developing countries continue to play a minimal role in the international trade of cultural goods. In 2014, when exports of cultural goods reached 253.2 billion dollars, developing countries – taking China and India aside – accounted for a share of only 26.5 per cent of the global exports – an improvement of 11.5 points compared to year 2005 (Deloumeaux 2017: 128–29). More specifically, in a context of sharp decline in sales of physical cultural goods, audiovisual and music goods experimented a decrease of 28 per cent in global exports from 2005 (29.4 billion dollars) to 2014 (21.2 billion dollars). This decrease, explains Deloumeaux (2017: 130), ‘was due mainly to a significant drop of 34.6% in exports of audiovisual and music goods from developed countries’, while they ‘increased their exports of these goods by 9% in dollar value’. In this scenario, in 2014, the share of trade for developing countries’ audiovisual and music goods accounted for 23.3 per cent, an increase of less than eight points compared to the 15.4 per cent of 2005. Data available also allows us to point out that ‘if developing countries are taking an increasing role in exports of cultural goods, they are almost non-existent in cultural services’, since developed countries ‘are mainly importing cultural services from developed countries rather than developing ones’ (Deloumeaux 2017: 135). Leaving UIS data aside, we can focus our attention on the current situation of certain specific cultural segments at an international scale, such as the feature film or music recording industries. A study analyzing the results of the 2014 UIS Feature Film Statistics Survey (Albornoz 2016) notes the failings of the various dimensions of the film market in terms of diversity. While global production of feature films in 2013 reached 7,610 films, made by companies from 86 countries (up 64 per cent on 2005), the influence of a handful of countries has not waned: during 2005–2013, India; the United States; China; Japan; and, alternatively, the UK or France accounted for more than 50 per cent of global production. Moreover, looking at the segment of feature film distribution to theatres, we can see that the top-grossing films worldwide were distributed by six companies: Buena Vista (Disney), Sony, 20th Century Fox, Universal Pictures, Warner Brothers and Paramount Pictures. These majors continue to occupy a dominant position in several regions around the world, cornering the distribution of both Hollywood blockbusters and locally produced feature films with the potential to become commercial successes in their markets. These firms also tend to act in a coordinated fashion in foreign markets, adversely affecting the diversity of feature films offered to local audiences (see TDC 2006). Finally, the

Protecting & Promoting Audiovisual Diversity  31 analysis of the feature films most viewed in cinemas around the world during 2012–2013 showed an extremely high concentration of consumption in blockbusters produced or co-produced and distributed by the majors. These are in the main action/adventure films, often animated and aimed at children and adolescents, relying on multimillion-dollar budgets and international promotional campaigns. Thus, for example, of the 40 most viewed films at cinemas around the world (20 feature films from 2012 and 20 from 2013) just one – the French comedy Intouchables (2011) – did not have English as its main language. The case of the global recorded music market also shows a striking deficit in terms of diversity of sources. Analysis of the production and commercialization of recorded music reveals an extremely high degree of concentration, with three corporations dominating this industry internationally: Universal Music Group (UMG), Sony Music Entertainment (SME) and Warner Music Group (WMG). According to Music & Copyright trade publication (2018), these companies absorbed 67.8% of total recording earnings in 2017 (considering both physical and digital format): UMG controls 29.7% of the market, SME 21.9% and WMG 16.2%. For its part, the sector of firms falling under the heading of ‘independent’ record labels, responsible for the release of most of the new music and for the debuts of all sorts of artists in their respective countries, absorbed 32.2% of the recording market. Regarding the segment of music publishers responsible for ensuring that lyricists and composers receive royalties when their compositions are used for commercial purposes also displays an oligopolistic structure at the international level. Three companies that belong to the majors dominate 58.8% of the publishing market. In 2017, Sony, which includes revenues from Sony/ATV and Sony Publishing Japan, and has, since 2012, been administrating EMI Music Publishing’s repertoire, absorbed 27.3% of the market; Universal Music Publishing Group (UMPG) absorbed 19.5%, and Warner Chappell absorbed 12.0%. This brief review of the international commercial imbalances of the trade of cultural goods and services and data on the production and sales of feature films and recorded music provides no cause for optimism regarding the desirable impact of the Convention in terms of achieving more balanced flows of cultural goods and services on an international scale. For all that it is possible to identify certain hubs of cultural production and their respective areas of influence (China and India), the bulk of production, distribution and marketing of cultural goods and services clearly continues to be concentrated in the developed countries and led by transnational companies.

The Adaptation of the 2005 Convention Aware of the opportunities and challenges that techno-digital environment implies for the different actors in the field of culture, the signatory

32  Luis A. Albornoz countries of the 2005 Convention, together with civil society organizations, have been debating the impact of digital technologies in the field of cultural diversity since 2013, with the aim of developing operational guidelines to provide a general course of action for the implementation and enforcement of the provisions of the Convention in the digital field (CANADA/QUEBEC 2013; FRANCE 2013; Guèvremont et al. 2013; Jaabouti and Pool 2013; UKCCD 2013; ULEPICC 2013; UNESCO 2014; Albornoz and García Leiva 2017b).1 It has become a commonplace to point out that the global expansion of digital technologies has profoundly transformed the production, distribution and enjoyment of goods and services offered by the cultural industries. These changes undoubtedly entail potential enrichment of the diversity of cultural expressions: for example, reinforcing the dissemination of all kinds of content and expanding access to a wide audience in places where infrastructures and skills are available. At the same time, however, the digital landscape displays a whole series of challenges to be faced in terms of diversity. As pointed out in another text (Albornoz 2015: 165–66), the promotion of digital networks and media has revived a techno-­deterministic discourse that establishes a directly proportional relation between ­digital technology and cultural diversity: the more digital technology, the greater the cultural diversity. From this perspective, the issue of diversity is reduced to connectivity, and the role of states confined to guaranteeing a framework of legal security for companies providing goods and services. This discourse, however, shows its limitations when it ignores the specificities of each cultural industry and the marked influence of regions and countries in shaping their unique operations. The same is true when it recognizes phenomena like the emergence of powerful transnational online platforms that trade in cultural goods and services, whose particular logics and practices may adversely affect cultural diversity. In the same vein, the Statement about the Protection and Promotion of Cultural Diversity in the Digital Era (ULEPICC 2013)2 highlights the process of reintermediation effected in the digital ecosystem by these new agents in alliance with traditional cultural media conglomerates and condemns the difficulties of visibility faced by a section of cultural production. Considering this situation, the document postulates the need to produce knowledge about the strategies developed by these intermediaries within the digital landscape in sensitive topics such as the alliances between the large culture-communication groups, the labelling of contents or the secret algorithms deployed in the search engines that guide the visibility of contents.

Protecting & Promoting Audiovisual Diversity  33 Next, the Statement advances the necessary implementation of portals and search engines capable of promoting knowledge about new creators ‘paying special attention to the development of initiatives in countries with hard economic conditions and/or difficulties of access to the means of production and distribution in the international markets’ (ULEPICC 2013: 8). High business concentration at international level, tax evasion strategies, the processing of vast amounts of data about users or the circumvention of national support schemes for independent productions are worrying aspects of the action of online transnational platforms. Faced with a scenario that ‘calls into question the regulatory and financial (particularly tax) provisions established to ensure the availability of cultural goods and services, for which new policies and measures are required’ (UNESCO 2015: 3), government delegations and civil society entities have been voicing the need to examine the impact of digital technologies and to promote the modernization of policies and cultural tools in the digital era (Guèvremont 2013; Beaudoin 2014; Kulesz 2014; Rioux et al. 2015; Albornoz and García Leiva 2017b). After years of debate, the Conference of the Parties to the Convention approved in June 2017 the operational guidelines on the implementation of the Convention in the digital environment. Consisting of eight sections (including ‘Parties strengthen systems of governance for culture in the digital environment’ and ‘Rebalancing the flow of cultural goods and services’), the document was designed to be interpreted and applied in relation to the 2005 Convention as a whole, thus promoting a transversal approach. Among its general considerations the text states that: The distinctive nature of cultural activities, goods and services as vehicles of identity, values and meaning does not change in the ­digital environment. Consequently, the recognition of the dual nature of cultural goods and services (cultural and economic) is also applicable to cultural expressions in the digital environment or those produced with digital tools. (UNESCO 2017b: 2) The text’s guiding principles also reassert states’ sovereign right to implement ‘policies and measures for the protection and promotion of the diversity of cultural expressions in the digital environment’ as well as the need to promote equitable access and balance in the flow of cultural goods and services in the digital environment, in particular through the application of preferential treatment provisions for works created or produced by artists and cultural professionals, enterprises and independent organizations from developing countries.

34  Luis A. Albornoz It also urges countries that have adopted the Convention ‘to update their legislative and regulatory frameworks for public service, private and community media as well as independent media organizations’ in order to stimulate both the diversity of cultural expressions and the diversity of media in the digital environment (UNESCO 2017b: 3–4). Additionally, in line with Article 16 of the Convention, countries that are parties to this international treaty are encouraged to establish ‘preferential treatment provisions to facilitate more balanced flows of cultural goods and services from developing countries in the digital environment’ (UNESCO 2017b: 6). It remains to be seen how this reformulation will affect the future design and implementation of policies and tools dedicated to defending and promoting the diversity of cultural goods and services. For now, as noted in the second edition of the global report on the implementation of the Convention, ‘very few Parties have designed and implemented digital culture policies that go beyond initiatives undertaken to digitize or strengthen specific nodes of the value chain’ (Kulesz 2017: 69).

More Reactions to the New Digital Ecosystem As already noted, one of the main challenges that face those responsible for developing and implementing public policies in the field of culture and communication is their adaptation to the digital era. The political agendas of numerous local and national authorities express the need to address the situation through the implementation of two types of initiatives: on the one hand, to tax video-on-demand platforms, regardless of their business model; on the other hand, to demand that the different online platforms’ respective catalogues offer locally produced content that can have adequate visibility. Tax Obligations Faced with the increasingly lucrative streaming video market – led by Netflix, but in which there are also companies like Hulu, Amazon Prime Video or Verizon – tax authorities around the world are considering the need for online platforms to comply with tax obligations to ensure that profits are taxed in the markets where the economic activities take place. This concern is backed by the traditional operators of the audiovisual market who see that a challenging scenario, in which traditional and new players compete to capture the attention of consumers in unequal conditions, has emerged. In the words of Thomas Rabe, Bertelsmann’s CEO: If you think of media regulation, regulation of advertising markets or the application of competition law, then the playing field between tech platforms and media companies is not balanced. TV channels,

Protecting & Promoting Audiovisual Diversity  35 for example, are subject to much stricter standards than online video platforms. So Youtube and Co. can largely decide for themselves how much advertising they offer. For TV stations, there is a clear rule: six minutes every half hour. It gets even more absurd in France. Here are guidelines on when feature films may be shown. Today, in times of Netflix and Amazon Prime, this regulation is completely outdated. If you then also look at the taxation, then the distortion of competition is complete. (Germis 2018) Those responsible for implementing new levies or extending the existing ones to digital players see a new source of income for the public coffers in the valuation of digital services, accompanying the movement of consumers who, in some markets, are shifting their audiovisual expenditures from monthly cable bills, which are taxed, to online streaming services, which in many countries are not. For their part, regulators responsible for upholding these measures argue that this new (or extended) source of revenue would encourage equal conditions between local enterprises and transnational platforms acting in a given market and/or would promote the use of part or all of the proceeds to support the production of local content. At the local level, one of the first attempts along these lines was carried out by the Buenos Aires City government with its so-called Netflix tax in 2014: a 3 per cent deduction on the trading price of ‘online subscription services to access movies, TV and other types of audiovisual entertainment (“films and TV series”) to be transmitted via the Internet to televisions, computers and other devices connected to the Internet, as well as for the subscription to buy and/or rent digital content relating to music, games, videos or suchlike’ (AGIP 2014). However, the reluctance of the companies potentially affected and the opposition of the governmental authorities of Buenos Aires prevented the deduction from being implemented. In the United States, the Chicago authorities have been levying a ‘cloud tax’ for digital entertainment services since September 2015. Through this levy – an adaptation of the city’s existing amusement tax – of 9 per cent on products distributed by companies like Netflix, Hulu or Spotify, the city authorities calculated raising some 12 million dollars per year (Byrne and Elahi 2015). The initiative prompted a reaction from some subscribers who argue that the tax runs counter to the Internet Tax Freedom Act, which prohibits ‘discriminatory taxes’ affecting online exchanges. Pennsylvania – where the existing 6 per cent sales tax was extended to digital downloads, subscription services like Netflix and Hulu, music, e-books, apps, games and ringtones – and Pasadena, CA – which adopted a ‘video services’ tax in January 2017 – have followed suit (Grabar 2016).

36  Luis A. Albornoz To the pioneering initiatives of these urban centres, tax reforms of national scope are being added little by little. The case of some South American countries, a region in which Netflix began operations in 2011, is significant. Different governments are modifying their tax schemes to include providers of audiovisual digital contents in some way. For example, at the end of 2016, Colombia approved a tax reform by which VAT was increased from 16 to 19 per cent, and digital service providers were incorporated. However, its effective implementation has not taken off yet: the collection of the tax, which was supposed to begin by mid-2018, may be postponed by the Government for the companies to better comply with the new obligation. For its part, the Argentine Congress enacted a tax reform at the end of 2017 to extend the 21 per cent VAT to over-the-top (OTT) providers that offer services from outside the country to Argentinian consumers. Companies like Netflix have increased the price of their subscription since mid-2018 in the same proportion, transferring in that way the increase directly to the final consumer. In Paraguay, the Government promulgated the Audiovisual Promotion Law Nº 6106 in July 2018, which created the Paraguayan Audiovisual National Fund (FONAP) to promote the domestic content industry. It is foreseen that this fund will be financed 50 per cent by the tax withholdings generated by commercial operations performed over the Internet, having origin in audiovisual services from abroad. In Chile a tax reform, that includes companies such as Netflix or Spotify, is being debated. The aim is that they pay taxes for the provision of their digital services in the country: income tax, VAT and import duty (unless the countries from which the companies operate have a free trade agreement with Chile). A vivid debate on the regulation of video-on-demand (VoD) services is under discussion in Brazil since 2015. Unlike cases such as Argentina or Colombia, the money collected through the CONDECINE tax would go to a public fund, called Fundo Setorial do Audiovisual, for the development of the Brazilian audiovisual industry (see Chapter 10 of this book). In the European Union, Germany and France were the first countries to adopt national taxes on online audiovisual platforms. Both countries have notified the European Commission of the extension of certain taxes aimed at promoting European works to VoD distributors located outside their national territory (Cabrera Blázquez et al. 2016: 71–74). In the French case, at the end of 2016 the Parliament voted in the so-called YouTube tax: an amendment to the budget bill whereby online platforms offering free or paid audiovisual content must pay a 2 per cent tax on any advertising and sponsorship revenue generated in France, and 10 per cent in the case of pornographic or violent content. The measure affects both publishers of on-demand audiovisual services, like Universciné or iTunes, and video-sharing platforms, like YouTube or Dailymotion. The money collected will go into Centre national du

Protecting & Promoting Audiovisual Diversity  37 cinéma et de l’image animée (CNC) funds for audiovisual creation and production. At the time, the measure challenged François Hollande’s administration (2012–2017), which believed it would be very difficult to levy foreign-based companies and that it will not generate large amounts of money.3 Some of the platforms affected, grouped together in the ­Association des Services Internet Communautaires (ASIC), issued a press release stating their opposition to this initiative on the grounds that they broadcast videos of all kinds, and not only movies and TV series. Therefore, they argue that ‘platforms that host videos on subjects of all kinds: music, video-games, tutorials (DIY, makeup…), distance learning, “chat videos”, explanations on techniques and methodologies, private videos… have NO connection with the funding missions of French auteur cinema’ (ASIC 2016). Finally, with the approval of the European Commission, in September 2017, the new taxes to finance the production of French audiovisual works came into force. In fact, it concerns the extension to the digital environment of the tax created in 1993 for the commercialization of audiovisual content via VHS and DVD, which, in 2004, was extended to subscription video-on-demand platforms based in France and, since 2013, covered any platform with subscribers in the country. Thus, the entry into force of decree 2017-1364 integrates online audiovisual platforms into the French ecosystem of financing national and European audiovisual works. The underlying logic is simple and goes back to the creation of the CNC: tous les diffuseurs financent la création (García Leiva and Albornoz 2018). At the European level, in order to avoid unilateral measures to tax digital activities in certain countries, which could lead to a patchwork of national responses, in March 2018, the European Commission put forward two legislative proposals to ensure that digital business activities are taxed in a fair and growth-friendly way in the EU. Currently digital businesses pay an average tax rate of 9.5 per cent (Google has been paying less than 0.1 per cent in Ireland per year), whereas traditional companies pay more than twice that figure, an average of 23.2 per cent. The first initiative, a long-term solution, aims to reform corporate tax rules so that profits are registered and taxed where businesses have significant interaction with users through digital channels. A digital platform will be deemed to have a taxable ‘digital presence’ or a virtual permanent establishment in an EU country if it fulfils one of the following criteria: (a) it exceeds a threshold of 7 million euros in annual revenues in a Member State, (b) it has more than 100,000 users in a Member State in a taxable year or (c) over 3,000 business contracts for digital services are created between the company and business users in a taxable year. The second proposal, an interim measure, responds to calls from several countries – such as Germany, France, Italy or Spain – for a tax

38  Luis A. Albornoz applied to revenues which covers the main digital activities that currently escape tax altogether in the EU. The Commission’s idea is that those activities, which are currently not effectively taxed, would begin to generate immediate revenues. The interim tax revenues would be collected by the Member States where the users are located, and will only apply to companies with total annual worldwide revenues of 750 million euros, and EU revenues of 50 million euros – smaller start-ups and scale-up businesses would remain unburdened. The European authorities estimated that if the tax is applied at a rate of 3 per cent about 4,800 million euros would be raised among the EU-28 – foreseeably the bulk of the collection would be achieved in the large countries. In fact, the Commission suggests a hairpin that goes from 1 to 5 per cent, which would contribute up to 7,000 million euros in the case of the highest tax, but opts for a rate of 3 per cent after an analysis of the impact of that measure. The approval of these tax proposals, aimed at ending the existing disconnection between the place where value is created and the place where taxes are paid, requires the unanimous acceptance of European governments. It is worth saying that to be a reality, these measures must have the approval of Ireland (fiscal residence of the subsidiaries of Apple, Google and Facebook in the EU), Holland (Netflix) or Luxemburg (Amazon), countries that have designed attractive tax systems for multinational companies, characterized by work environments with internal (wages) and external (dismissal) flexibility costs. Therefore, it is evident that many states will not even intend to promote the debate. Ireland, for example, is in favour of not moving a file in this matter until an agreement within the Organization for Economic Co-operation and Development (OECD) is in place. Precisely, at the international level, as of September 2013, there is the conception of the Base Erosion and Profit Shifting (BEPS) project, run by the OECD and G20 countries, aimed at reducing the losses resulting from business tax evasion, aggravated, among other factors, by the rapid expansion of the digital economy. ‘New OECD empirical analyses ­estimate – while acknowledging the complexity of BEPS as well as methodological and data limitations – that the scale of global corporate income tax revenue losses could be between 100 to 240 billion dollars annually’ (OECD 2015: 16). The specific portion of BEPS that facilitates the taxation of streaming video is called Addressing the Tax Challenges of the Digital Economy, Action 1. In this sense, the BEPS project sets out to identify mechanisms designed to facilitate VAT collection in the countries where the consumers are in order to ensure equality of conditions between domestic and foreign providers. However, this ambitious project, which pursues ‘a modern international tax framework under which profits are taxed where economic activity and value creation occurs’ (OECD 2015: 9),

Protecting & Promoting Audiovisual Diversity  39 puts the implementation of the various measures devised in the hands of national authorities. Countries such as the United States, Canada or Argentina, which have stated their full support for the BEPS Action 1, have so far introduced no specific legislation to implement it (Harpaz 2016). The Tax Challenges Arising from Digitalisation – Interim Report 2018 (OECD 2018a) shows the complexity of the matter and embodies a commitment from all members of the OECD/G20 Inclusive Framework (116 members right now, representing over 95 per cent of global GDP) to undertake a coherent and concurrent review of the nexus and profit allocation rules that would consider the digitalization on the economy. Whilst there is an agreement to review the nexus and profit allocation rules, the report also highlights that there are points of divergence between countries over the future direction of the international tax rules from some countries that ‘are not convinced of the need for change’ to others countries that believe that ‘any future change should not be limited to “digital firms”, but should also apply to the economy more broadly’ (OECD 2018b: 7). However that may be, the tendency to implement specific taxes on cross-border and direct-to-consumer digital transactions that will affect online audiovisual platforms is not yet widespread, and, as we can infer from the examples given, its course faces obstacles of a different nature. Moreover, the introduction of tax obligations in the various different markets is expected to be accompanied by an increase in subscription prices: in practice, the burden will end up transferred to end consumers. Online Catalogues Another open front of debate has to do with the content catalogues offered by the different online platforms to their users/consumers. How far do they reflect the diversity of cultural expressions worldwide? Does it make sense to impose a content quota system to promote independent national production? How can we ensure that the promoted long tail (Anderson 2006) is not in practice a sort of ‘invisible long tail’ due to the lack of visibility for minority cultural expressions? Answering these questions is no simple task, and everything indicates that a process of learning by trial and error will be needed to find satisfactory answers. In this respect, without explicitly referring to the 2005 Convention but clearly stating that ‘strengthening the promotion of European works for on-demand services will lead to a broader and more diverse offer for Europeans’, and ‘this will have a positive impact on cultural diversity and bring more opportunities for European creators’ (EC 2016), the European Commission announced a new legislative proposal, amending the Audiovisual Media Services Directive (AVMSD) on May 2016. The then announced reform proposed the imposition of, on the big streaming video platforms, a minimum quota of 20 per cent of European

40  Luis A. Albornoz audiovisual content in their catalogues and the obligation to ensure adequate prominence of such works. It should be noted that any future modification of the AVMSD would not seem to alter substantively the operations of companies like Netflix, Amazon or iTunes, whose catalogues already offer nearly 30 per cent of European works. This was demonstrated by the European Audiovisual Observatory, which set out the results of research into the geographical origin of content catalogues in 91 selected VoD services available in the EU-28: •

•

The analysis of 75 VoD catalogues – such as iTunes, Wuaki or Chili – reveals that an average of 27 per cent of accumulated film titles originate in one or other of the EU-28 countries (45,703 EU film titles out of an overall 158,139 matched to their country of origin), against an average of 59 per cent of US-produced film titles (Ene and Grece 2015: 18–21). The study of 16 subscription video-on-demand (SVoD) services catalogues, such as Netflix, C More or Canalplay, showed that the average accumulated titles produced in EU-28 is around 30 per cent (5,324 film titles out of a total of 17,604 films which were matched with a country of origin), whereas the average produced in the United States is 60 per cent (Ene and Grece 2015: 22–25).

Though the VoD and SVoD catalogues offered by companies in EU countries apparently meet the future share of European audiovisual content early and trouble-free, the study reveals the widespread prevalence of US contents. The scant presence of contents produced in other regions and countries (14 per cent and 10 per cent for VoD and SVoD catalogues, respectively) is also clear; these catalogues therefore express a marked imbalance that stifles the presence of other countries producing audiovisual goods in European households. It should be noted that in reaction to the proposal to amend the AVMSD, the European Economic and Social Committee (EESC), a consultative body of the EU, has come out in favour of promoting the dissemination of European works for the sake of cultural diversity and of the major audiovisual service providers being required to propose a specific quota of these in their programming or catalogues. However, it proposes increasing the minimum quota of European works to 50 per cent, similar to the minimum quota for traditional broadcasting. It has also proposed providing for a minimum 20 per cent quota for suppliers with a ‘low turnover’ or ‘low audience’ (EESC 2016: 3). Finally, after more than two years of consultations and debates with the participation of stakeholders, the proposal for the reform of the AVMSD is ready. In order to support cultural diversity of the European audiovisual sector, the text – that will enter into force by the end of

Protecting & Promoting Audiovisual Diversity  41 2018, with Member States having 21 months to transpose it into their national legislation – specifies that at least 30 per cent of content, including VOD service providers’ catalogues, should be European. This quota refers not exclusively to content produced in the EU but content produced throughout the European continent and includes co-­productions with other countries that comply with certain rules. Guidelines regarding the calculation of such share of European works are still to be issued. In addition, those EU countries that so wish can set a minimum quota of 40 per cent of European production and can include a national content sub-quota – a measure that Germany already requires and that applies to Netflix in that country. Likewise, VOD platforms are required to contribute to the development of European audiovisual productions, either through direct investment in content or through contributions to national funds. The level of these contributions should be proportional to the VOD service providers’ revenues in the country where the fee is required. It is worth noting that the imposition of a minimum content quota, together with the possibility to demand a financial contribution to the production of European works, shall not apply to media service providers with a ‘low turnover’ or a ‘low audience’ – terms yet to be defined. It remains to be seen what mechanisms can be implemented to ensure an adequate ‘prominence’ of European works in catalogues offered by streaming platforms made up of thousands of TV series and movies, where the discovering of new titles is largely steered by secret algorithms that develop recommendations on the basis of the company’s interests (for example, promoting contents of their own) and their users’ consumer habits. Thinking about the defence of the diversity of cultural expressions in the audiovisual field, the European Commission’s proposal is reductionist and binary: it divides the world of audiovisual contents into Europeans productions and other productions, without questioning how that offer from abroad is nurtured or without attempting to influence its make-up. A policy that serves the interests of effective audiovisual diversity ought to ensure both internal diversity, through the presence of the different social groups making up the European cultural mosaic, and external diversity, by promoting the audiovisual presence of the different societies populating the planet. Another aspect of the reformulation of the AVMSD worth noting is the authorization to countries wishing to impose obligations on VoD providers to contribute to the financing of audiovisual creations through direct investments or tax payments that, totally or partially, would feed national funds to support cultural productions. This is a measure intended to put an end to the distortion of competition among traditional and non-traditional (for example telecommunication companies) audiovisual actors, which in many countries are

42  Luis A. Albornoz obliged to contribute to the creation and production of new content, and online platforms. In practice, this measure ends the ‘country of origin principle’, a traditional cornerstone of the European audiovisual regulation and one of the main incentives for US companies to invest in the EU’s audiovisual market. Until the reformulated AVMSD, VoD providers had to comply only with the rules of their country of establishment to operate across the EU. Undoubtedly, this decision arouses the suspicion of US companies and causes controversy. The EESC, for example, has spoken out against the possibility of EU countries being able to impose à la carte services that fall within their remit as well as those situated outside their borders and directed at their national audience, financial contributions in the form of direct investments in works or payments to national film funds, as this may distort competition depending on whether a Member State introduces such contributions or not and may penalize a Member State’s audiovisual services aimed at citizens settled in another Member State (EESC 2016: 3). In any case, companies such as Netflix have found in the co-production and commissioning of audiovisual contents, which are catalogued as ‘Netflix originals’, a way to calm the fears of the authorities in charge of the audiovisual sector and an effective self-promotion mechanism in foreign markets. Netflix publicizes that it generally targets around 20 per cent of its ‘originals’ to be local, in-language productions. In April 2018, the company said it has more than 100 different European projects, while it announced ten new European projects, including feature film Rimetti a noi i nostri debiti (Italy) and original series Mortel (France), The Wave (Germany), Luna nera (Italy), La casa de papel part 3 (Spain), The English Game (UK) and Turn Up Charlie (UK) (Spangler 2018).

The Battle for Diversity Continues While the commercial and diplomatic battle waged in the framework of the Uruguay Round has led to the inclusion of the audiovisual sector in the GATS, but shed no light on whether finally audiovisual services will be fully liberalized or not, it has also led to the articulation of different social actors, culminating in the elaboration of an international treaty that flags up the principle of diversity of cultural expressions, recognizes all goods and services as bearers of cultural identity, values and meaning, and reaffirms the key role of states in the field of culture and communication. One of the highlights of the 2005 Convention is certainly the consecration of the principle of international cultural cooperation and the explicit instruction to developed countries to grant preferential treatment for cultural goods and services from developing countries. Although the evident

Protecting & Promoting Audiovisual Diversity  43 aim to encourage more balanced cultural exchanges at the international level is a plausible one, we must not be naïve; rather we must recognize the limited capacities to act on behalf of the Convention. This is a text that arose from a tangle of diplomatic negotiations – about which the US delegation was actively against (Barreiro Carril 2017: 72–75) – and that is full of good intentions but few obligations for its signatories. Moreover, we should remember that, more than a decade from its entry into force, notable participants on the international scene, including the United States, Russia or Japan, have not yet signed this treaty. As we have outlined, an examination of the international trade in cultural goods and services, and the situation of the feature film and recorded music industries worldwide, reveals no evidence whatsoever of an impact of the Convention. The inequalities between countries, together with the control exercised by a few companies in this area, still remain. Likewise, the growing influence of the group of developing countries in certain specific segments is attributable to factors beyond the Convention. Apart from China and India, the developing countries have played a minor role in the export of cultural goods and services in the last ten years. As the second 2005 Convention global report points out, ‘Trade barriers, the scarcity of preferential treatment measures and the limited human and financial capacity continue to hamper the penetration, by developing countries, of markets for cultural goods in the global North’ (UNESCO 2017a: 125). The integral digitalization of cultural industries, together with the emergence of powerful audiovisual online platforms, poses a challenge both for the most recent of the UNESCO’s cultural treaties and for existing transnational and national regulations in the audiovisual field. The adoption of the operational guidelines on the implementation of the Convention in the digital environment (mid-2017) may be interpreted as further indication of the central place digital symbolic productions occupy in contemporary societies. It also represents another step towards awareness of the challenges imposed by the transnational digital environment for the multiple stakeholders acting in the cultural field. As a consequence of the growing consensus about the fact that regulations have not been updated to reflect the goods and services that are both purchased and delivered over the Internet in digital form (Mazerov 2012), one of the first, timid reactions is the attempt to impose tax obligations on online audiovisual platforms. This measure seeks at the same time that companies pay taxes where their contents are effectively consumed, and that traditional and new audiovisual players compete in a levelled playing field. One way to legitimize the state’s intervention and stimulate national industries is to allocate part (or all) of the proceeds collected via this new source of income to the public coffers in support of domestic cultural creation and production.

44  Luis A. Albornoz Similarly, there is a growing concern in some sectors about the place currently occupied by minority audiovisual productions or productions originated in culturally non-dominant countries and/or regions in the catalogues of the most important VoD platforms. The first issue to tackle is the fact that they do form part of the catalogues, hence the need for initiatives like the one led by the European Commission through the reform of the AVMSD, which seeks to impose a minimum quota of presence of European audiovisual content in the EU-28 markets. The second – even thornier – issue is related to the more or less (in)visible presence of these productions on the large VoD platforms’ catalogues. It is clear that in these days of recommendation algorithms and sophisticated development of user profiles for commercial purposes, the mere inclusion of a certain title in a catalogue is no guarantee of its effective visibility nor, consequently, of its potential enjoyment by audiences. The complexity of implementing public policies tending to protect and promote the diversity of audiovisual expressions in different scenarios, as well as to reduce the marked imbalance that characterizes the circulation of contents at international level, is evident. Despite the promotional speeches that serve as a wrapper for digital technologies – freedom of choice, diversity of options, elimination of unnecessary intermediaries and so forth – these seem to have driven a greater imbalance of audiovisual flows between developed and developing countries (as evidenced by the scant information on the commercialization of audiovisual services), a greater presence and concentration of business worldwide (for example: of the more than 500 OTT providers, five global companies capture 50 per cent of the total revenue) and a lack of information necessary to elaborate rigorous diagnoses (for example: no information available on the number of titles consumed on platforms like Netflix or Amazon at the country level). How to achieve ‘equitable access to a rich and diversified range of cultural expressions from all over the world’ (UNESCO 2005: Article 2) is still an enormous challenge, not only for developing countries but also for the most technologically developed countries. The battle for diversity will continue…

Acknowledgements This chapter draws on research undertaken for the project Audiovisual Diversity and Online Platforms: Netflix as a case study (reference: CSO2017-83539-R), supported by the State Research Agency (AEI), within the National RDI Program Aimed at the Challenges of Society of the Spanish Ministry of Science, Innovation and Universities, and the European Regional Development Fund (ERDF) of the European Union.

Protecting & Promoting Audiovisual Diversity  45

Notes 1 While the debate concerning the adaptation of the Convention to the ­digital environment was taking place within UNESCO, the US Government included non-linear audiovisual media services in the series of trade negotiations that has been leading in recent years: the Trans-Pacific Partnership, the Trade in Services Agreement and the Transatlantic Trade and Investment Partnership (see Vlassis 2014). 2 This document resulted from the international workshop Protection and Promotion of Audiovisual Diversity in the Digital Era, coordinated by professors Luis Albornoz and Ana Segovia at Carlos III University of Madrid (3–4 October 2013). The Statement was one of the information documents presented by civil society to the 7th session of the Intergovernmental Committee for the Promotion and Promotion of the Diversity of cultural Expressions (UNESCO, 10–13 December 2013). 3 Taking Netflix as an example, this company does not publicly report its income on markets outside the United States or provide detailed data on its subscribers’ consumption around the world. Furthermore, in August 2016, Netflix announced it was leaving the hexagon (relocating its offices in Holland, a country with a more benevolent fiscal framework), and it is highly unlikely the French tax authorities will ever succeed in making it pay the rate. According to journalist Guillaume Champeau (2016), the decision to leave France should rather be sought in ‘the parafiscal tax obligations, in particular in terms of contributions to the creation fund administered by the CNC, or compliance with the rules of cultural diversity imposed by the CSA [Conseil supérieur de l’audiovisuel]’ than in the 600,000 euros in corporate taxes, calculated according to profits made, which the company ought to have paid in that country.

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46  Luis A. Albornoz Anderson, C. (2006). The long tail: Why the future of business is selling less of more. New York: Hyperion. Arcos Martín, R. (2010). La lógica de la excepción cultural. Entre la geoeconomía y la diversidad cultural. Madrid: Cátedra. ASIC (Association des Services Internet Communautaires) (2016). L’Assemblée Nationale décide de taxer les jeunes créateurs pour gonfler le trésor de guerre du Centre National du Cinéma. Paris, 12 December. Barreiro Carril, B. (2017). La industria audiovisual como campo de aplicación de la Convención sobre la diversidad cultural. In Albornoz, L.A. and García Leiva, M.T. (eds.). Diversidad e industria audiovisual: el desafío cultural del siglo XXI. Mexico City: FCE, 60–89. Beaudoin, L. (2014). Convention sur la protection et la promotion de la diversité des expressions culturelles: Impacts et enjeux du numérique. Report petitioned by the Organisation international de la Francophonie (OIF). Paris, 28 April. Bernier, I. (2008). La Convention sur la diversité des expressions culturelles de l’UNESCO: un instrument culturel au carrefour du droit et de la politique. Bulletin de nouvelles sur la diversité des expressions culturelles, 8(19): 1–26. Byrne, J. and Elahi, A. (2015). Chicago extends taxing power to online movies, music, more. Chicago Tribune, 2 July. Cabrera Blázquez, F.J., Cappello, M., Grece, C. and Valais, S. (2016). VOD, Platforms and OTT: Which Promotion Obligations for European Works? (IRIS Plus 2016-3). Strasbourg: European Audiovisual Observatory. CANADA/QUEBEC (2013). Canada and Quebec’s reflections on the diversity of cultural expressions in the digital age. Informative document presented by the Governments of Canada and Quebec to the seventh ordinary session of the Intergovernmental Committee for the Protection and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO, 10–13 December 2013. Champeau, G. (2016). Netflix quitte la France, pas les Françaises. Numerama, 23 August. Deloumeaux, L. (2015). Striking a balance: flows of cultural goods and services. In UNESCO (dir.). Re/Shaping Cultural Policies: A Decade Promoting the Diversity of Cultural Expressions for Development. Paris: UNESCO, 121–33. ——— (2017). Persisting imbalances in the flow of cultural goods and services. In UNESCO (dir.). Re/Shaping Cultural Policies: Advancing Creativity for Development. Paris: UNESCO, 125–41. EC (European Commission) (2016). Proposal for a Directive of the European Parliament and of the Council amending Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services in view of changing market realities. Brussels: European Commission, 25 May. EESC (European Economic and Social Committee) (2016). EESC opinion: Review of the Audiovisual Media Services Directive – Proposal for a Directive of the European Parliament and the Council amending Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation or administrative action in the Member States concerning the provision of audiovisual media services in view of changing market realities (TEN/599 EESC-2016).

Protecting & Promoting Audiovisual Diversity  47 Ene, L. and Grece, C. (2015). Note 4: Origin of Films in VOD Catalogues in the EU. Strasbourg: European Audiovisual Observatory. FRANCE (2013). La Convention sur la protection et la promotion de la diversité des expressions culturelles de 2005 à l’ère numérique. Informative document introduced by the French delegation to the seventh ordinary session of the Intergovernmental Committee for the Protection and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO, 10–13 December 2013. García Leiva, M.T. and Albornoz, L.A. (2018). La tasa YouTube y la diversidad del audiovisual. El País (blog Alternativas), 26 March. Germis, C. (2018). Es gibt keine Wettbewerbsgleichheit mit Google & Co (interview with Thomas Bertelsmann’s CEO Thomas Rabe). Frankfurter Allgemeine Zeitung, 2 March. Grabar, H. (2016). The Netflix Tax Is Coming, and Why Not? Slate, 27 September. Guèvremont, V. (2013). Preliminary reflection on the implementation of the convention on the protection and promotion of the diversity of cultural expressions in the digital age. Report Introduced to the Fourth Ordinary Session of the Conference of the Parties of the Convention on Protection and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO, 11–13 June 2013. Guèvremont, V., Bernier, I., Burri, M., Cornu, M., Richieri Hanania, L. and Ruiz Fabri, H. (2013). La mise en œuvre de la Convention sur la protection et promotion de la diversité des expressions culturelles à l’ère numérique: enjeux, actions et recommandations. Réseau international de juristes pour la diversité des expressions culturelles (RIJDEC). Harpaz (2016). Coming Soon To A Television Near You: Netflix Tax. Forbes, 16 November. Jaabouti, J. and Pool, C. (2013). Impact of the Digital Era on the Implementation of the Convention on the Diversity of Cultural Expressions. Canadian Coalition for Cultural Diversity. Kulesz, O. (2014). UNESCO Convention on the protection and promotion of the diversity of cultural expressions: analysis of parties’ periodic reports and contemporary digital trends (CE/15/5.CP/INF.9). Document for the 5th session of the Conference of the Parties of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO, 10–12 June 2015. ——— (2017). Cultural policies in the age of platforms. In UNESCO (dir.). Re/Shaping Cultural Policies: Advancing Creativity for Development. Paris: UNESCO, 69–83. Mattelart, A. (1995). Excepción o especificidad cultural. Los desafíos del GATT. Telos, 42: 15–27. Mazerov, M. (2012). States should embrace 21st century economy by extending sales taxes to digital goods and services. Center on Budget and Policy Priorities, 13 December. Music & Copyright (2018). UMG and WMG make recorded-music market share gains, Sony outperforms in publishing. Music & Copyright’s Blog, 15 May. OECD (Organisation for Economic Co-operation and Development) (2015). Explanatory Statement, OECD/G20 Base Erosion and Profit Shifting Project. Paris: OECD Publishing.

48  Luis A. Albornoz ——— (2018a). Tax Challenges Arising from Digitalisation – Interim Report 2018: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project. Paris: OECD Publishing. ——— (2018b). OECD/G20 Inclusive Framework on BEPS. Progress Report July 2017–June 2018. Paris: OECD Publishing. Prieto de Pedro, J. (2005). Excepción y diversidad cultural. Madrid: Fundación Alternativas. Richeri Hanania, L. (ed.) (2014). Cultural Diversity in International Law: The Effectiveness of the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions. London: Routledge. Rioux, M., Deblock, C., Gagné, G., Tchéhouali, D., Fontaine-Skronski, K. and Vlassis, A. (2015). For a Diversified Networked Culture. Bringing the Convention on the Protection and Promotion of the Diversity of Cultural Expressions (CPPDCE) in the Digital Age. Montreal: CEIM, Université de Québec à Montréal. Spangler, T. (2018). Netflix, Amazon would be forced to maintain 30% European content quotas under proposed EU law. Variety, 26 April. TDC (Tribunal de Defensa de la Competencia, Spain) (2006). Resolution no. 588/05, 10 May. Torrent, R. (2002). La ‘excepción cultural’ en la Organización Mundial del Comercio (OMC): La base de la política audiovisual en Cataluña. Quaderns del CAC, 14: 19–27. UKCCD (United Kingdom Coalition for Cultural Diversity) (2013). UKCCD submission to the International Federation, IFCCD. Points for inclusion in report to Intergovernmental Committee Meeting on UNESCO Convention, 2005. Informative document introduced by the UKCCD to the 7th session of the Intergovernmental Committee for the Promotion and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO, 10–13 December. ULEPICC (Latin Union of Political Economy of Information, Communication and Culture) (2013). Statement about the promotion and protection of cultural diversity in the digital era. Information document of the 7th session of the Intergovernmental Committee for the Promotion and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO, 10–13 December. UNESCO (United Nations Educational, Scientific and Cultural Organization) (2001). Universal Declaration on Cultural Diversity. Paris: UNESCO. ——— (2005). Convention on the Protection and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO. ——— (2014). Etat de situation et suite à donner aux enjeux du numérique (CE/14/8.IGC/12). Work document of the 8th session of the Intergovernmental Committee for the Protection and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO, 9–11 December. ——— (2015). Re/Shaping Cultural Policies: A Decade Promoting the Diversity of Cultural Expressions for Development. Paris: UNESCO. ——— (2017a). Re/Shaping Cultural Policies: Advancing Creativity for Development. Paris: UNESCO. ——— (2017b). Operational Guidelines on the Implementation of the Convention in the Digital Environment. Paris: UNESCO. Vlassis, A. (2014). Le numérique, nouvelle frontière de la gouvernance mondiale des industries culturelles? Le cas du traitement des biens et services culturels

Protecting & Promoting Audiovisual Diversity  49 dans les accords commerciaux. Revue de la Faculté de droit de l’Université de Liège, 2: 283–300. WTO (World Trade Organization) (1997a). Canada: Certain Measures Concerning Periodicals. Appellate Body Report (WT/DS31/AB/R, 30 June 1997). ——— (1997b). Turkey: Taxation of Foreign Film Revenues. Notification of Mutually Agreed Solution (WT/DS43/3 G/L/177, 24 July 1997).

3 Cultural Diversity in the Country of Cultural Exception Philippe Bouquillion

Introduction Cultural diversity is generally considered to be a set of normative values whose aim is to promote the expression of all forms of culture. From the point of view of those who promote cultural diversity, all cultural expressions must be respected, including those that concern only limited groups of the population. These social groups can be defined by race, gender, sexual preference and social class. These groups are then called minority or minor groups. But cultural productions can also only be addressed to small parts of consumers. The social groups concerned are then considered as market segments. In this case, a policy of cultural diversity aims to facilitate the production of creations, targeting only small segments of the market (diversity produced), or to facilitate their dissemination, distribution and promotion (diversity consumed). Thus, the aims of a cultural diversity policy are threefold: to challenge the cultural standardization that the industrialization and commodification of culture can engender, to prevent the control of expression and hierarchization of the various forms of cultural expression and to reject the hegemony of one culture over others. The notion of cultural diversity has an extremely positive connotation. Over recent decades it has gradually been constructed as a central social value that should apply to all societies, and diversity policies have been put in place under the aegis of international organizations and of national and local public authorities, and private interests and associations. Despite this, the notion of cultural diversity and the way in which diversity policies have been constructed and implemented have drawn a number of criticisms. The issue of cultural diversity is both complex and broad in relation to societal (equality between races, genders, etc.), cultural (relations between cultures) and economic issues (industrializing culture). Indeed, the notion of cultural diversity is so broad that it becomes blurred. In 1974, Michel de Certeau pointed out the difficulties involved in making reflections on culture. He wrote that ‘any statement concerning cultural problems moves on a ground of unstable words, it is impossible to impose a conceptual definition on these terms: their

Cultural Diversity/Exception in France  51 meanings derive from functioning in disparate ideologies and systems’ (De Certeau 1974, cited in Mattelart 2005: 3). Thus, any attempts to precisely define cultural diversity and, in particular, to produce indicators for it seem doomed to failure or at the very least questionable. It is probably the vagueness of the notion that explains its success and re-emergence in the political sphere. Being fuzzy, it is possible to support very different and even contradictory strategies and interests in relation to it. This is the central axis of the criticism it has received from different researchers who have been keen to point out its ambiguities. Thus, the notion of cultural diversity is incorporated within power games. According to this point of view, diversity becomes less of a reality or a positive social issue. It perhaps mainly becomes a set of discourses and public policy proposals serving different interests – interests that may be contradictory. The theories and discourses on diversity can thus be considered from a Foucauldian perspective as ‘discourses of truth’ inseparable from systems of power. Instead of taking up the notion of cultural diversity, then, critical researchers have rather focussed on tracing the genealogy of these discourses in order to better illuminate them (see, for example, Mattelart 2008). Conversely, French economists have relied on the notion of cultural diversity to point out what they perceive as the failures of French cultural policies. They have stressed how the notion of cultural exception is also an issue in power relations. According to Françoise Benhamou (2006), public policies, strategies adopted by industrial players and cultural practices lead to a situation of overproduction, barriers to the distribution of products and the extreme concentration of consumption. From this perspective, cultural diversity becomes a means of legitimizing a new way of regulating culture, making it possible, through indicators, to better evaluate the impact of policies and reconcile limited public intervention with the establishment of a mode of structuring cultural industries based mainly on market globalization. The conception of diversity to which Benhamou refers is inspired in the biological approach. Diversity is, then, considered ‘as a vital resource for humanity, poorly assessed, threatened with destruction by human activities’ (Benhamou 2006: 252–53). This situation calls for ‘precautionary measures, the content of which requires a precise definition of what is to be protected, and indicators that biodiversity reflection helps to construct’. Benhamou proposes the establishment of indicators based on three dimensions: variety, disparity and genre balance. For example, diversity in publishing industry has been analyzed by applying these three criteria to titles, genres and languages of origin. From this perspective, it is suggested that greater emphasis be placed on market regulation and reducing the scope of public intervention. The main aim of this article is to highlight some ambiguities attributed to the notions of cultural diversity and cultural exception as

52  Philippe Bouquillion well as their incorporation with power issues, in particular important socio-economic and public policy issues for the cultural industries. We will do this by attempting to analyze the complex and often conflicting relations between the notion of cultural diversity and that of cultural exception, paying particular attention to the French context.

Cultural Diversity and Exception These two concepts have existed alongside one another for nearly two decades. We will try to show that the notion of diversity can be employed either to support the principle of cultural exception or, more frequently, to challenge it. In the former case, the notion of diversity is considered to be the complement to the exception; that is, diversity reinforces exception. In the latter case, emphasis is placed on the radical differences between the two notions, and diversity is then considered to be superior to exception. According to those who promote diversity, this notion would correspond to the flow of history, whereas cultural exception would be an archaism in the age of globalization. Before examining the concrete issues related to these two notions existing side by side, we must first review their history. Cultural diversity is a particularly polysemic notion due to its history. As Armand Mattelart (2002, 2005) argued, the issue of diversity gradually emerged from reflections on the dialectic between standardization and differentiation under the effects of globalization. The stakes involved in the notion of diversity thus concern the way we are ‘living together’ (Mattelart 2002: 4). When the United Nations Educational, Scientific and Cultural Organization (UNESCO) first took up the question of diversity, the notion of culture held by this institution far exceeded the cultural field. For instance, one of the themes raised by the issue of cultural diversity is the environment. As Armand Mattelart noted: The first UN Conference on the Environment held in Stockholm in 1972 brought the issue of cultural diversity and biodiversity closer together. The trial of the dominant model of growth ends with a plea to the major industrial countries to reconsider, for their own benefit, their model of excessive and outrageous consumption. (Mattelart 2002: 6) Subsequently, the aims of the UNESCO Medium-Term Plan for 1977–82 reflected a broad conception of the notion of culture including the way we are living together and the cultural identity of individuals, particularly those susceptible to marginalization (UNESCO 2004: 12–13). In the 1980s and 1990s, the themes of human rights and democracy also came to the forefront via the issue of diversity. These dimensions were adopted in the definition of the concept of culture formulated by

Cultural Diversity/Exception in France  53 UNESCO in 1982 at the World Conference on Cultural Policies held in Mexico City: In its broadest sense, culture can today be considered as the set of distinctive, spiritual and material, intellectual and emotional traits that characterize a society or a social group. It encompasses, in addition to arts and literature, lifestyles, fundamental human rights, value systems, traditions and beliefs. (UNESCO 1982) Thus, since the 1970s, culture has gained increasing attention on international forums. By way of example, it appears to carry some weight in the strategies of emancipation implemented by the so-called Southern countries: In the 1970s, the entry into the post-colonial era reversed the balance of power between the countries of the South and the North throughout the United Nations system. The return to culture, as a source of identity, meaning, survival, expression and dignity, is concomitant with the crisis of the single thought of modernization/development. Cultural diversity is promoted as the premise of an alternative path to universalism driven by the ideology of calculation (GNP) and the determinism of technical vectors. (Mattelart 2002: 6) In so doing, UNESCO has gradually become more involved in recognizing the legitimacy of States allocating financial support to their cultural institutions. This gradual recognition took place alongside reflections on the stakes of transnational cultural exchanges for national cultures. It also developed because of a growing recognition of the economic role of culture. For example, in the report published by the UNESCO ­Director-General for 1977–78, culture was envisaged as a factor for development, and particularly endogenous development (UNESCO 2004: 12). It has been a long path from diversity as a way of living together to diversity as the legitimization of national public intervention, and one sown with complex international negotiations, particularly within UNESCO. On the other hand, the notion of cultural exception emphasizes a narrower conception of culture. Culture is defined as ‘works of the mind’ or, in other words, productions by artists and those in the cultural industries. When the question of cultural exception first emerged, it referred to measures designed to exclude cinema and the audiovisual1 sector from the liberalization of trade in services. Serge Regourd recalled that the negotiations for this liberalization began in 1986 in the context of the so-called Uruguay Round negotiations in the General

54  Philippe Bouquillion Agreement on Tariffs and Trade (GATT). In contrast to the principle of international trade liberalization inherent in the creation of the GATT, within the European Community (EC) France had raised the notion of cultural exception to challenge the application of the principles of free trade to those works that carried a cultural identity and which, as such, are not reducible to the status of ordinary goods or services (Regourd 2004: 2–3). The central aim of the principle of exception was the defence of national cultural identity. Specifically, by referring to cultural exception, ‘the EC has not undertaken to liberalize the audiovisual and cinematographic sector. The EC has not consolidated access to its market, so that the EC remains free to take new policy measures’ (Regourd 2004: 85). The notion of cultural exception may also have a broader meaning in France. This includes all policy measures to correct the effects of the market as a result of international exchanges of cultural products. This question was raised long before the 1980s and 1990s. As early as the 1920s, measures had been taken to favour cinema. The European states, first Germany, then the United Kingdom and later France (Mattelart 2005: 30), developed protective rules for their cinema. The entry of American films into these territories has been restricted in particular. The centrality of cinema in these policies is explained by the fragility of this economy of prototypes with high production costs, by the capacity given to cinematographic productions to contribute to the construction of national identities and also by the mobilization of professionals and the echoes found in public opinion. The same need for protection appeared in France after the Second World War. For example, the so-called Blum-Byrnes agreement (Léon Blum was the French negotiator and James F. Byrnes his American counterpart) were signed in 1946, which enabled France to obtain loans to straighten out an economy destroyed by the war. This, in return, obliged France to open its cinematographic market. Once concluded, this agreement was revised in a more r­ estrictive sense in 1948, to the benefit of the French film industry. Since then, public actions in favour of other cultural industries have also developed, making France a country where culture and cultural industries are very much linked to the state and therefore to cultural exception. As a result, the rules of the common law of competition very often do not apply to these sectors. Moreover, with these two notions, two conceptions of cultural regulation come into conflict with one another. Both notions recognize the need to integrate cultural industries in the market and also the need for public intervention. However, diversity emphasizes the integration of cultural industries into globalized markets and internationally negotiated public interventions, whereas exception awards a leading role to the national framework with a very high level of public intervention, in particular in the hands of the national state.

Cultural Diversity/Exception in France  55 In order to better understand how these two notions are deployed in France, we must study the stakes involved in their deployment in public policy and by industrial players.

French Public Policies, Cultural Exception and Cultural Diversity Diversity in Cultural Diplomacy The French authorities clearly supported UNESCO’s actions when the Universal Declaration on Cultural Diversity of 2001 was published; they particularly shared the view expressed in Article 11: Market forces alone cannot guarantee the preservation and promotion of cultural diversity, which is a guarantee of sustainable human development. In this context, it is necessary to reaffirm the primordial role of public policies in partnership with the private sector and civil society. (UNESCO 2001: Article 11) Similarly, France supported the adoption of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions (UNESCO 2005), which reaffirms the principle of legitimizing a public cultural policy. The Convention has further elaborated this principle by specifying the nature of the measures that States can establish, including public service, for example. In addition, the text explicitly targets the cultural industries. In both documents, the reference to diversity strengthens cultural exemption. One of the French officials who contributed to the adoption of the 2001 Universal Declaration and the 2005 Convention informed us that it was an attempt to force the US delegation to accept the principle of cultural exception. However, in hindsight, the French negotiator understood that the Americans had trapped the French by making them accept the broad definition of culture, which weakens cultural exception, especially at a time when the themes of ‘creative industries’ and ‘creative economy’ have become more important, particularly in international negotiations on trade liberalization. Similarly, the reference to cultural diversity is present in French international cultural actions addressing external political issues involving culture. For example, in November 2015, on the tenth anniversary of the 2005 Convention, the Ministry of Culture and Communication (MCC) organized a meeting entitled De Palmyre à la révolution numérique: les défis de la diversité culturelle [From Palmyra to the digital revolution: the challenges of cultural diversity], which was notably devoted to preserving tangible and intangible heritage in war situations, and in the digital

56  Philippe Bouquillion environment. At the event, socio-economic decision-makers insisted on the need to defend copyright, in particular in the context of negotiations within the European Union (EU). Pascal Rogard, director of the Société des auteurs et compositeurs dramatiques (SACD) and president of the French Coalition for Cultural Diversity (F-CCD), declared: ‘cultural diversity is first a struggle and a political struggle’ (MC 2015). Thus, even if the cultural industries are not concerned, French decision-makers, and in particular stakeholder representatives, may try to divert the stakes in defence of their interests. French officials fear that the idea of cultural diversity in international or supranational organizations could be utilized to counter the notion of cultural exception. This fear is reinforced by the fact that the EU is now in charge of negotiations on international trade rules in place of the French authorities. The EU has on several occasions stated its support for the rights of member states to implement cultural policies. For example, the Audiovisual Media Services Directive (AVMSD) allowed France to continue to impose quotas for the distribution of French content on television stations and also obligations with regard to funding production. However, diverse senior officials, including José Manuel Barroso, president of the European Commission between 2004 and 2014, have not hidden their opposition to cultural exception. Barroso, faced with France’s desire to exclude audiovisual media from the Transatlantic Trade and Investment Partnership (TTIP) agreement, then under negotiation, declared, ‘It’s part of this anti-globalization agenda that I consider completely reactionary’. And he added that he believed in the protection of cultural diversity but not in the closure of Europe (Higgins and Castle 2013). Barroso has implicitly opposed exception and cultural diversity. Furthermore, the notion of cultural diversity in France has had little impact on internal cultural debates and issues, particularly on cultural policy. Public action, and in particular the MCC’s policy, seem to ignore the reference to cultural diversity. The employment of the notion of diversity only intervenes on questions that are rather marginal in relation to the main missions of the MCC, such as reflections on multiculturalism. For example, in June 2006, the MCC and the Ministry of Youth, Sports and Associations (INJEP is the acronym in French) organized a seminar on the application of the 2005 Convention in France. The meeting was related to the dialogue of cultures within French society and whether or not there existed a particular French way of conceiving this dialogue. Even before it took place, the presentation of the seminar reaffirmed the traditional position adopted by the Government on this subject: instead of multiculturality, French tradition seems to prefer interculturality, which is more concerned with interaction and dialogue between cultures (Injep 2006).

Cultural Diversity/Exception in France  57 Questions concerning minorities, the so-called minor languages and the coexistence of the various communities are largely considered as illegitimate or even anti-republican in France, for two reasons. On the one hand, France is marked by a Jacobin tradition – that is, centralization of power around the central state and the permanent construction of a national culture linked to the state in various ways: funding, supervision by regulations or academies, education, monopoly of the French language and so forth. Thus, for example, the teaching or promotion of regional languages or the languages of ancestors of immigrant populations is viewed with deep suspicion and as a threat to the unity of the French nation. On the other hand, we can see in France a gap between the policy in favour of legitimate culture (performing arts, plastic arts and heritage) and what is called in French policy ‘socio-cultural action’, that is to say, a set of measures targeting populations not familiar with the works of legitimate culture. The distinction between these two types of cultural actions was established when André Malraux founded the Ministry of Culture in 1959 under the Fifth Republic created by General Charles de Gaulle. Two different ministries were created, the Ministry of Culture and the Ministry of Youth and Sports. Progressively, the cultural industries were integrated within the scope of the Ministry of Culture. The importance of cultural industries within the actions of the Ministry significantly extended following the appointment of Jack Lang as minister in 1981 (he was in charge of the Ministry of Culture between 1981 and 1986 and between 1988 and 1992). Due to his historical legacy, issues related to the coexistence of communities seem external and, in any case, marginal in the policies adopted by this Ministry. This helps to explain why the French authorities mistrust the notion of cultural diversity. The Primacy of Cultural Exception The notion of cultural diversity and the logics it embodies are being challenged by the widespread implementation of the principle of cultural exception. This principle forms part of an ancient tradition of cultural public policy. In France, since at least 1959, culture has been regulated within a logic of sharing powers and responsibilities between the state and socio-economic actors. The main rules relating to the cultural industries have been negotiated with socio-economic actors in order to defend both the interests of the state and those of the industrial players, or at least some of them. Three main aspects can be distinguished in this French political tradition regarding the implementation of cultural diversity. First, the public authorities have a normative vision of how culture and cultural industries should operate. More specifically, public actions are designed by integrating the manner in which various industrial players

58  Philippe Bouquillion from the same ‘stream’ or sector interact or should interact. From the upstream (creation of products) to downstream (their commercialization), public action is designed to support the diverse sectors of the culture industry, and especially audiovisual media, the newspaper industry and publishing. For example, a large part of the funding granted to the film industry is distributed at the production stage because this level is where most costs and risks are concentrated. However, as the means of film distribution have historically developed, public subsidies have also promoted films’ access to distribution, both in traditional movie theatres and in all the new media that have appeared in recent years. Jack Lang’s appointment as Minister of Culture in 1981 provided a decisive new impetus for this industrial policy in the cultural industries. He developed a more intensive policy towards the cultural industries, and they were considered to be at the heart of France’s economic future. Without abandoning cultural objectives, the industrial aims of policies were strengthened. The objective was to build strong and exporting cultural industries. Doing so increased the economic importance of cultural exception for the French authorities. Until then, the Government wanted to be free from the rules of international trade to support its cultural industries. Audiovisual media have been at the heart of this policy, transforming television from a public monopoly to a commercial and industrial sector. The Government authorized private television operators and then privatized TF1, the largest of all television channels by audience. The aim in doing this was to foster television operators capable of supporting the audiovisual production sector. One of these, Canal + Groupe, has become one of the main funders of television and film production. Moreover, the other television operators are also subject to quotas for the broadcasting of French and European audiovisual and cinematographic works and are obliged to invest part of their turnover in the production of audiovisual and cinematographic works. Second, the policy adopted by the Ministry of Culture aims to develop a close link between economic and cultural objectives. Some of the measures emphasize more cultural objectives, while others deal more with economic objectives. However, all measures must have a certain cultural dimension, which gives them legitimacy. With such an interweaving of economic and aesthetic aspects, the defence of cultural identity and French economic interests are closely interconnected. Third, the notion of public service as defined and implemented in France is also a strong factor that anchors cultural policies in the principles of cultural exception. As Serge Regourd noted: The notion of cultural exception seems to have its roots in an old background of social representations relating to the “French exception” itself, representations already built on a specific conception of the relations between the state and the market – on a

Cultural Diversity/Exception in France  59 certain conception of The Republic, at the heart of the ­“republican pact” forged under the Third Republic and already postulating what General de Gaulle would later describe as a “certain idea of France” integrating a voluntary public action and refusal of submission to the American imperial power. In this context, the national interest is only one of the declensions of the general interest, itself constituting the framework of what will later be called “social ties”. […] France has constructed the doctrine of public service as a model of socio-political organization, one of the components of French identity. (Regourd 2004: 19) According to this argument, cultural exception is inseparable from the notion of public service and therefore from French and republican identity. However, the reference to public service does not contradict the importance of market rules in the regulation of cultural industries. The notion of public service helps to legitimize the cohabitation of market logic and public intervention within culture and cultural industries in France. This notion is a permanent construction in legal, political and ideological terms, as highlighted by Jacques Chevalier (1987), and it can be deployed and adapted to the circumstances. In particular, it can help to defend the public sector and public companies, like those public television channels that receive advertising revenues and are in competition with private television channels. Therefore, the notions of public service and cultural exception strongly support one another. In short, the notion of cultural diversity, little used in debates on internal cultural policy, was first conceived by the French political institutions as an element dedicated to supporting the existence of cultural policies despite the international free trade agreements on the international scene and as a reinforcement of the principle of cultural exception. Nevertheless, it must be noted that industrial players have also taken up the question of cultural diversity and also rely on a very instrumental vision of diversity.

Diversity According to Industrial Actors The notion of diversity has aroused great interest within the industrial sphere. Industrial players have utilized it to counteract the principle of cultural exception or, at least, some of its components. Broadly speaking, producers, and particularly those in the film and audiovisual sectors, have supported the exception more than distributors. The latter do not want to see their distribution and programming strategies constrained by rules, particularly by quotas, or be obliged to contribute to financing productions, especially when they are not at the heart of their distribution strategies.

60  Philippe Bouquillion Specifically, of all the French public policy measures, the most heavily attacked are the financing obligations for French audiovisual and cinema production, as well as the French and European content distribution quotas. These obligations are quite old, having been established in Act 861067 of 30 September 1986, on the Freedom of Communication. These obligations have made it possible to organize cross-subsidies in favour of cinematographic and audiovisual production. Indeed, when the French audiovisual market was liberalized in the 1980s, new private television channels with funding from advertising and even public channels tended to produce less original French content. These channels preferred to buy imported programmes or to broadcast streams in an attempt to lower their programme spending, especially on non-strategic programmes in terms of maximizing audience. The French authorities believed that the adoption of these obligations would promote the preservation of domestic production, and they have been the subject of several confirmations included in European directives, in particular the AVMSD Directive. In the 1980s and until the end of the 1990s, these obligations were well accepted by the French actors in the cultural industries. In fact, the distinction between producers and distributors was not important in France at that time. Industrial groups, both private and public, had vertically integrated the sector from upstream to downstream, or were willing to accept the financing obligations related to production. Thus, Canal +, a private broadcaster created in 1984 on the initiative of the political authorities and which was at that time the only major pay-TV channel, was interested in remaining – as its statutes compelled it to – the primary funder of French cinema. Ownership of exclusive broadcasting rights allowed this channel to attract subscribers through an exclusive offer. Similarly, public television channels agreed to finance production insofar as this helped to give consistency to their public service missions and thus maintain their specific characteristics in comparison with the private channels that were created at that time. 2 The first players to question the principle of exception were the traditional broadcasters or the audiovisual-oriented portals owners. During the second half of the 1990s, in parallel with the arrival of the Internet, major industrial players formed or strengthened by uniting production and distribution activities in order to offer their content on portals on a transnational scale. Cultural exception hampered the strategies of these actors, both foreign and French. For example, AOL Time Warner, world leader in the cultural industries and Internet access in 1999, intended to also offer its content to the French market, but there was no question of it respecting broadcast quotas of French or European audiovisual and cinematographic content or contributing to the production of French content. Similarly, the subsidies allocated to French audiovisual players were considered to be a distortion of competition. For Vivendi Universal, an industrial player with the same transnational ambitions,

Cultural Diversity/Exception in France  61 and at that time the world’s second-largest player in the cultural and media industries, exception was also a problem. Its leader, JeanMarie Messier, highlighted the notion of cultural diversity against that of cultural exception: ‘responding […] to the fear of certain producers and filmmakers from France who questioned an “Americanization of French cinema”, Vivendi’s boss has bluntly rejected all the criticisms: “The French cultural exception died”, he said, “and French anguish is archaic”’ (Rousselot 2001). Messier emphasized the power of a transnational, globalized industrial group to achieve cultural objectives, in this case cultural diversity, while cultural exception was considered to be a vestige of the past, from times preceding globalization. This statement was made during the announcement of Vivendi Universal’s takeover of a major player in the American cinema and television industry, USA Networks, allowing the emergence of a new transnational audiovisual industry giant, Vivendi Universal Entertainment (VUE). This transaction made the Vivendi Universal Group the world’s second-largest player in the cultural and media industries. The creation of VUE was seen in France as a threat to the national audiovisual industry and cinema since the strategy of this new transnational player was to provide American content to European, and in particular French, distributors (broadcasters, cable networks, satellite packages, online). With the creation of VUE the survival of Canal + seemed threatened. This pay-TV channel was created in 1984 under the direct initiative of the political authorities, and especially the then French President, François Mitterrand. Canal + remained the sole or extremely dominant pay-TV player in France for a long time, until the arrival of Netflix in 2014. From its creation onwards, heavy obligations were imposed on Canal + with regard to distribution and, above all, the financing of film production. It became one of the main sources of funding for the national film industry despite French movies becoming less strategic for the company as it attempted to attract and retain subscribers. In recent years, ­A merican films and perhaps even more American series, along with major sporting events, and especially football, have appeared more attractive than French films in capturing and retaining subscribers in France. The aforementioned financing obligations with regard to French productions have until now been a very heavy financial burden for Canal +. As a result, they have appeared more as a constraint than an opportunity. Thus, as soon as VUE was founded, French film producers feared that its management would put pressure on the public authorities to reduce or even eliminate its obligations. Intending to distribute American content in Europe, VUE no longer needed Canal +, at least its production activities. These attempts to avoid cultural exception and its obligations have not ceased, despite the industrial and financial failures of portals such as AOL Time or VUE itself.

62  Philippe Bouquillion The second type of actor who does not wish to be subjected to distribution constraints or obligations to finance production are the various players in the communication industries, which experienced a major boom in the 2000s, notably manufacturers of electronic materials (for example, Apple), search engines and online advertisers (for example, Google) or e-commerce players (for example, Amazon). Indeed, these actors have the common aim of adding, legally or illegally, cultural content to their main product. It is important for them not to be subject to dissemination or funding obligations, since until recently they have been compelled to contribute as little as possible to the financing of cultural or informational content. These actors have therefore taken up the question of diversity and linked it to that of creativity. In their communication strategies, they have attempted to show that creativity is more linked to the services allowed by their devices (exchange, choice, comparison, etc.) than the intrinsic characteristics of the content, especially the content produced by historical players in the cultural industries. This strategy has weakened the demands of cultural industry players to maintain regulations in their favour, including subsidizing production, quotas and, to a certain extent, property rights. Similarly, the predator strategies carried out by some of the actors in the communication industries have been legitimized in the name of creativity and diversity. They have become one of the most important players in the dissemination of various types of cultural products (music, TV series, films, information, etc.) without undergoing the same constraints as the historical actors. The notion of cultural diversity is therefore being associated with the creative industries. The strategic interest of actors in the communication industries is to foster confusion between the cultural and creative industries because this will prevent the historical actors in the cultural industries from being the central actors in creativity and creation, allowing the players in the communication industries to now occupy this position at the centre of innovation, diversity and creativity. A third type of actor has also contributed to the attack on cultural exception by utilizing the notion of diversity. These are new entrants into the French television market, including non-linear television players. While for a very long time the television market in France has remained rather closed and in the hands of traditional players, in recent times newcomers have entered the pay-TV and ad-supported television markets. The most recent entrant in the audiovisual market is Netflix. The public authorities have sought to maintain existing obligations and, if possible, extend them to new entrants. The stakes are high for audiovisual and cinema companies in France, both those who finance (broadcasters) and those who receive the funds (producers). The total amount of the audiovisual contribution, excluding cinema, is significant. 3 It totalled 837.6 million euros in 2013. This amount is also significant in relation to the turnover of audiovisual service providers. In 2013, the tax

Cultural Diversity/Exception in France  63 base was 6.34 billion euros. Similarly, this amount is far from negligible compared to the wealth produced by the French audiovisual industries as a whole. It accounted for almost 10 per cent of the added value generated by these industries – 9.3 billion euros in 2013 (APA/CNC 2014). Faced with these attacks, the French authorities conducted a consultation among audiovisual players. Although the principle of these obligations was established by the 1986 Act, certain elements necessary for the application of obligations must be regularly reviewed. This consultation resulted in the negotiation and signing of professional agreements between service publishers (October 2008) and organizations representing audiovisual creation (February 2010). Two issues are very important in this respect: the public authorities seek to obtain agreement from the traditional actors and from the new entrants in the audiovisual sector. For example, having the French historical telecommunications operator, Orange, on board was very important because it represented a new entrant’s adhesion to the existing obligations and, in this case, their extension to non-linear television services (TV on-demand, catch-up television). In 2016, the advertising turnover of catch-up TV was estimated to be 105 million euros, compared with 90 million euros in 2015 – an increase of 16.7 per cent (CNC 2017: 33) New entrants must be subjected to the obligations system so that the traditional actors continue to accept it and the system remains sustainable and legitimate. By the early 2000s, it had already been extended to digital terrestrial television, and on that occasion the contributions requested from channels had been increased. Indeed, resources from traditional players have tended to stagnate, whereas those from transnational actors on the Internet or electronic equipment manufacturers are always growing, as they develop legal or illegal audiovisual products without being subject to obligations to finance production. Until 2017, foreign actors active in France had not been subject to these obligations, including the major players in the communication industries, such as GAFAM (Google, Apple, Facebook, Amazon and ­M icrosoft), or those belonging to the audiovisual sector, such as Netflix. For example, Netflix has its European headquarters in the Netherlands, so it can legally operate in France without contributing to the financing of production and without respecting the quota of 60 per cent of original European works and 40 per cent of French works. However, on 25 May 2016 the European Commission adopted a draft revision of the AVMSD, which envisages compelling video-on-demand platforms to comply with the regulations not of the countries from which they broadcast but those of the receiving countries. Thus, Netflix, Amazon and other foreign platforms could become subject to French regulation when operating in France. The French authorities are very keen to extend the obligations to foreign players because their products and services occupy a growing market share and because these players invest more in American than in

64  Philippe Bouquillion French content. For example, the presence of domestic films on Netflix in France has recently declined: ‘While the American site offered about 200 French films out of 1,200 of its cinema catalogue throughout the year 2015, […] this figure has just fallen to 84 French films at the end of March 2016 (excluding animation)’ (Lechevallier 2016). If the concept of diversity is generally used to challenge public policies implemented in the name of the exception principle, in some cases cultural exception can be defended via reference to cultural diversity. But then, as we already pointed out in the introduction of this chapter, diversity is envisaged as a complement to cultural exception, this being one manifestation of the polysemous nature of this notion. The actions of the French Coalition for Cultural Diversity (F-CCD) 4 are emblematic of this use of the notion of diversity. In quoting Pascal Rogard in the first part of this chapter, we have already emphasized that a reference to cultural diversity is present in French international cultural actions aimed at addressing external political issues involving culture. Thus, the F-CCD is both a lobbyist on the French authorities and international organizations and a relay of official French positions and actions on the issue. The Coalition’s programme of action in favour of diversity is a defence of cultural exception: • Defend the liberty of expression and creation in a social and economic environment favourable to the emergence of creative talents and the expression of diversity of creation in all forms, and defend the capacity of states and state groups to set up, develop and adapt their cultural policies in every sector. • Keep culture outside the scope of international trade agreements and trade liberalizing commitments under the WTO framework. • Develop international legal standards outside the WTO framework to encourage cultural diversity and pluralism. (F-CCD website 2018)

Conclusion Cultural diversity is not necessarily or systematically a positive value, or a cultural opportunity. Diversity can also be an instrumentalized notion for political or economic ends. In France, the country of cultural exception, debates have very often been held on cultural diversity to discuss cultural public policies, which the notion of cultural exception symbolizes. We have traced the main features of these debates and strategies in the political arena, in the academic field and also among industry players. The notion of cultural diversity can lead to conflicting interpretations. In this respect, diversity can be viewed as forming part of the long series of notions or concepts that accompany mutations in culture, economy,

Cultural Diversity/Exception in France  65 society and politics, along with other notions such as creative economy, which it precedes in certain respects. In sum, it seems essential to adopt a critical approach to the notion of cultural diversity. Thus, criticism of cultural diversity, at least in its acceptance of market forces as the source of increased diversity in cultural productions, is also a criticism of the market globalization of culture. This may appear paradoxical, since diversity is seen as a defence of national productions and of the right of states to intervene in culture, especially as a result of UNESCO’s actions since 2001. However, in a country such as France, many economic actors and researchers use diversity to attack cultural exception. Tristan Mattelart (2008) showed what the notion of diversity owes to previous theories, especially those of cultural globalization. However, this criticism is all the more inadmissible because the notion of diversity is invested with great symbolic power, also used by ­militant groups defending oppressed minorities. In this contribution, we have chosen to focus on the complex relations, confrontations or convergence between the themes of diversity and cultural exception in relation to public policy towards the cultural industries, particularly from the perspective of defence or attack, and especially within supranational or international organizations. As a result, we have chosen to leave aside the issues related to another interpretation of diversity, the question of the defence of minorities or minority groups, especially ethnic or sexual. This choice does not result from pure arbitrariness on our part. This particular theme linked to diversity is less present in public policy than the one related to cultural industries. Civil society groups play a larger role than governments in addressing this particular issue. Furthermore, these two meanings of the notion of cultural diversity are relatively unrelated in France. Policies in favour of minority groups only superficially overlap with the debate on cultural exception and diversity, which is oriented towards issues relating to the economic and political framework and not specifically to the matter of minor or dominated cultures. In this respect, two definitions of the notion of culture are in play. On the one hand, the defence of minority cultures refers to a broad concept of culture, close to UNESCO’s 1982 definition of culture. On the other hand, the defence of cultural exception requires a narrow definition of culture – culture as the works of the spirit – because an exception to the free trade agreements is only possible for a small part of the economy. Moreover, during the revision, between 2009 and 2011, of the cultural field within the Institute European Statistical Office, the Department of Studies, Statistics and Foresight, which belongs to the French Ministry of Culture, lobbied Eurostat to stop the introduction of the concept of creative industries and prevent a significant broadening of the statistical field of culture (MC 2011). Thus, its defence of cultural exception leads the French authorities to not articulate these various meanings of the notion of cultural diversity.

66  Philippe Bouquillion

Notes 1 In France, professional practices, their modes of organization and funding in particular, and public policies clearly distinguish between cinema, television and radio sectors. However, when the term audiovisual is used in this contribution it refers to all of these sectors as one. 2 Two new commercial radio channels were created in France in 1986, while the largest public channel, TF1, was privatized in 1987. 3 Unless otherwise stated, the figures on channel spending are based on a report by the CSA (2013). 4 This association was created in 1997 to contest the prospect of extending international trade, and specifically the Multilateral Agreement on Investment (MAI) negotiated at the Organisation for Economic Co-operation and Development (OECD). The F-CCD comprises professional organizations in the cultural sector, including copyright management societies, but also unions of producers, journalists, artists and creators, public television channels and so forth, and is a member of the International Federation of Coalitions for Cultural Diversity.

References APA/CNC (Association pour la promotion de l’audiovisuel/Centre national du cinéma et de l’image animée) (2014). 10éme Baromètre de la création TV 2013. Benhamou, F. (2006). Les dérèglements de l’exception culturelle: Plaidoyer pour une perspective européenne. Paris: Éditions du Seuil. Chevalier, J. (1987). Le service public. Paris: Presses Universitaires de France. CNC (Centre national de la cinématographie et de l’image animée) (2017). L’économie de la télévision de rattrapage en 2016. Paris: CNC. CSA (Conseil supérieur de l’audiovisuel) (2013). Deux années d’application de la réglementation de 2010 relative à la contribution des éditeurs de services de télévision au développement de la production télévisuelle. Paris: CSA. De Certeau, M. (1974). La culture au pluriel. Paris: Christian Bourgeois. Higgins, A. and Castle, S. (2013). European Official Takes on the French. The New York Times, 16 June. Injep (Institut national de la jeunesse et de l’éducation populaire) (2006). Faire vivre la diversité culturelle en France. Paris: Injep. Lechevallier, P. (2016). Netflix n’aime plus le cinéma français. ZDNet, 28 March. Mattelart, A. (2002). La diversité culturelle entre histoire et géopolitique. Symposium International, 2001 Bogues Globalisme et pluralisme, Montréal, 24–27 April. ——— (2005). Diversité culturelle et mondialisation. Paris: Editions du Seuil. Mattelart, T. (2008). Pour une critique des théories de la mondialisation culturelle. Questions de communication, 13: 269–87. MC (Ministry of Culture, France). (2011). Valérie Deroin. Approche statistique européenne de la culture. Synthèse des travaux européens ESSnet-Culture, 2009–11. Paris: Etudes et statistiques. ——— (2015). En dix ans, la diversité culturelle a pris une nouvelle dimension, 27 November.

Cultural Diversity/Exception in France  67 Regourd, S. (2004). L’exception culturelle. Paris: Presses Universitaires de France. Rousselot, F. (2001). L’exception culturelle est morte, Libération, Paris, 18 December. UNESCO (United Nations Educational, Scientific and Cultural Organization) (1982). Mexico City Declaration on Cultural Policies, World Conference on Cultural Policies, Mexico City, 26 July–6 August. ——— (2001). Universal Declaration on Cultural Diversity. Paris: UNESCO. ——— (2004). L’UNESCO et la question de la diversité culturelle: Bilan et stratégies, 1946–2004. Paris: UNESCO. ——— (2005). Convention on the Protection and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO.

4 From Global Media Giants to Global Internet Giants Reflections on Media Diversity Janet Wasko Introduction It is difficult to ignore the growth of media industries in much of the world, as technological developments and favourable regulatory climates have encouraged expansion in media and communication businesses. But concentration and consolidation also has grown in these areas, with media, information and telecommunication combining to produce some of the most profitable sectors in many regions. This concentration is especially relevant in considering issues related to media and cultural diversity, as many scholars around the world have observed. This chapter focusses on the relationship of media power and diversity, drawing on a recent study that examined these media companies at global, regional and national levels. Global Media Giants (Birkinbine et al. 2017) considered media power in economic, political and symbolic terms, focussing on traditional media corporations as well as the new Internet giants or GAFA (Google, Apple, Facebook and Amazon). This discussion will consider the similarities and differences between media companies and Internet companies and the implications for cultural expression and audiovisual diversity. Some thoughts will be offered on the value of examining corporations individually, as well as considering them as part of media/information systems or from a systems perspective.

Media Corporations and Diversity Media corporations are significant for society because of their production and distribution of ideas and values. Thus, an understanding of corporate ownership is important to assess media diversity for it is important not only what media and information are produced but also why they are produced. Many forms of content and textual analysis deconstruct and critique media content, but producers’ motivations and goals are also useful in cultural analysis. This type of analysis is necessary to assess the validity of claims made that media content is ‘infinitely varied, ubiquitous, and representative of diverse tastes, audiences, and

Global Giants & Diversity  69 interests’  (Birkinbine et al. 2017: 4). For instance, by including an ­ ssessment of media ownership patterns and corporate strategies, we a can identify techniques such as synergy, cross-promotion and economies of scale and scope that may have an impact on media diversity. In other words, we need to consider how audiovisual and information products are affected by the structures in which they are produced and distributed. Some background on history of corporations is offered in the next section, followed by a discussion of how corporations have been studied. Historical Development of Corporations Corporations have become the dominant form for organizing collective and productive economic activity in many societies today, although this has not always been the case (see Korten 1995). Prior to the seventeenth century, corporations often represented not-for-profit institutions that contributed to the public good by building hospitals, universities and so forth. After the seventeenth century, businesses with similar interests came together to monopolize a specific type of product or trade, and the profit motive became the major goal of corporations. Companies such as the East India Company or the Hudson’s Bay Company were organized to finance colonial expansion, and they became significant enterprises in controlling various parts of the world. For example, the East India Company maintained control of India’s trade with its own private army. In the United States, the first corporations were similar to the early British model in that they performed public tasks under limited government charters. However, in the middle of the nineteenth century corporations began to take on a different role, as they moved away from state control in both the U.S. and Britain. The British model of corporations allowed companies to define their own purpose, with ‘limited liability’ as a legal principle. In the United States, corporations eventually began to be granted various rights. For instance, in 1886, corporations were declared to be ‘artificial persons’ under law with ‘individuality and immortality’. By the end of the nineteenth century, corporations had moved into important positions of power in many countries. In the United States, monopolies and cartels controlled key industries, such as railroad, steel, coal, oil and chemicals, as well as the telegraph, telephone and newspapers. Despite regulatory attempts to tame corporate excess, corporations continued to grow and evolve during the twentieth century. Boosted in the 1970s by a free-market ideology of neoliberalism, which especially increased privatization of formerly public or state-owned entities, forprofit corporations now play dominant roles in many economies around the world. Contemporary corporations are business structures and legal constructs that are still based on a charter granted by the state to a group of

70  Janet Wasko investors for a specific purpose, but they differ from companies owned by individuals or partnerships, which typically involve personal liability and risk. Corporations have limited liability, and thus shareholders are not responsible for a corporation’s liabilities (debts and other obligations). And since corporations are given ‘individuality’, they are legal persons, existing separately or independently from their owners. For instance, in the United States, corporations can own property, incur debts, enter into contracts, sue and be sued. In addition, corporations are ‘immortal’, existing beyond the lifetime of shareholders, managers or employees. Corporations are organized to seek profit, but they also raise capital by issuing stock or shares, which are purchased by stockholders or shareholders, who then hold equity or ownership in the company. Shareholders hope to receive dividends if the corporation makes a profit – which is what remains after expenses have been deducted from the revenues of a firm. Furthermore, corporations are considered ‘public’ when shares are traded on a stock exchange and thus available for sale to the public. It is important to note that ‘public’ corporations are not in the public sector but are part of the private sector. When the shares of a corporation are held by individuals and not sold on a public stock exchange, the corporation is said to be ‘privately-held’. While corporations are involved in many different types of activities, from manufacturing products to offering services, the goal of a corporation is to generate a profit and to increase shareholder value. It might also be noted that corporations may not always succeed in their goals. Their strategies may be faulty, other companies may be more successful or economic and political contexts may change. Whatever the reasons, corporations are not infallible, and they are shaped to a certain degree by the regulatory context within which they operate. Again, this chapter argues that it is important to understand media corporations as dominant players in the provision of media products around the world, and thus it is crucial to assess their role in the analysis of media access and diversity. The next section will consider various ways that media corporations have been studied. Studying Media Corporations Issues related to corporate ownership are often assumed to be at the heart of a political economic analysis of media, as well as general political economic analysis. In that media is increasingly operated by private corporations around the world, it is vital to know who owns these media companies and resources as well as how corporate ownership and control work. It is not only relevant to know which corporations own specific media outlets but who owns and controls those corporations. If media are controlled by corporations, we need to know who makes

Global Giants & Diversity  71 decisions – about what media are made available, what media content is offered, at what price and who is able to receive/access it. More attention has been paid to the issue of media ownership since the classic studies in the early 1980s in the United States (­C ompaine 1982; Bagdikian 1983). For instance, Eli Noam’s (2009, 2016) two books on media ownership present detailed analyses of media ownership, although as the titles suggest, they are more related to markets and not companies, and they do not fully address issues of political and cultural influences. Research on media ownership and control issues has also been offered in Latin America, Europe and Asia – only a few examples would include Mastrini and B ­ ecerra (2006), Doyle (2002), Thomas and Nain (2004) and Pusey and ­McCuthcheon (2011). Various studies also have considered specific media industries from a political economic perspective. Only a few examples might include Sinclair (1987), Wasko (2003), Jackel (2004), Meehan (2005), Kunz (2006), Thompson (2013) and so forth. Other studies have examined individual media corporations in terms of their economic and political power. For instance, Gabriela Martínez (2008) has focussed on Telefónica and Janet Wasko (2001) on The Walt Disney Corporation, while Scott Fitzgerald (2015) compared three media conglomerates, Time Warner, Bertelsmann and News Corporation. To adequately address the varied ways that media companies exercise power and influence diversity, it is important to consider media industries as a whole, as well as in-depth studies of corporations, not only analyzing economic power, but also political and cultural dimensions of these important institutions. Methods of Studying Media Corporations To get a sense of how media corporations are structured and how they behave, critical researchers rely on a range of research methods, including (but not limited to) document analysis, social network analysis and power structure research (see, for instance, Scott 1990, 2000; Burris 2015). Other methods draw from historical methodologies as well as other commonly used research techniques, such as interviews and surveys (see Deacon et al. 1999). Document analysis provides essential information about corporations from a wide range of sources. However, availability of information varies across national boundaries. For instance, in the United States the Securities Act of 1933 requires publicly traded companies to provide annual disclosures of their business activities, including assets and liabilities, financial performance data and information about the Board of Directors. These sources are often used to determine the holdings and business activities of media corporations, particularly in the United

72  Janet Wasko States for companies like Disney, Time Warner, News Corporation and Comcast, and, to some degree, National Amusements, which owns both Viacom and CBS Corporation. These types of documents are available in other countries, but there is a good deal of variation. Other methods for corporate analysis include the study of relationships and networks. Burris (2015) explains on his website, An Internet Guide to Power Structure Research, that the study of corporations often focusses on ‘the importance of formal and informal social networks as the means by which power is concentrated and institutionalized’. Clearly, there are opportunities for interconnections and overlapping areas of influence within a capitalist class or power elite, whether through formal business relationships, interlocking directorships, or more informal social connections, such as social club memberships. By analyzing these relationships using power structure or social network analysis, researchers can get a sense of how particular interests are represented within the corporation and, perhaps, understand why the corporation behaves in particular ways (for instance, lobbying efforts, executing certain strategies or producing particular content). If structural analysis rather than instrumental analysis is used, then there is more concern with those structures that limit or constrain the behaviour of the institution. For example, we might argue that the basic structural imperatives for corporations are associated with profit maximization. Whether a manager or owner (and often, managers are owners) makes decisions, profit is the goal. As Graham Murdock has explained, ‘it does not particularly matter who the key owners and controllers are. What is important is their location in the general economic system and the constraints and limits that it imposes on their range of feasible options’ (Murdock 1982: 125). Thus, a complete analysis of control is necessary, both of the individual corporation and the general structural context in which it exists. Murdock (1982: 125) calls for ‘analysis of the complex interplay between intentional actions and structural constraint at every level of the production process’. However, even though we can usually conclude that the benefits (profits) from a corporation flow to the owners, we cannot always make assumptions about who controls a corporation, as corporate owners and organizations may behave differently. As R.W. Connell points out: Studies of networks of directors and family ownership provide evidence not of organization itself, but of the potential for organization. From inferring that they could function as systems of power within business, it is a long step to showing that they do. This requires case-by-case study. (Connell 1978: 46)

Global Giants & Diversity  73

Analyzing Corporate Media Power The call for attention to the changing nature of power relations is one that is often heard from critical media researchers. Although there is general agreement on this point, there tends to be little attention given to actually defining power or (more specifically) media power. Given the importance of power to critical media studies, the study of power and power relations is continuously needed and could benefit from ongoing rethinking and renewal. The Global Media Giants project (Birkinbine et al. 2017) employed the case-by-case analysis proposed earlier by Connell (1978). The intention was to capture the diverse ways that media corporations exercise power and to specifically interrogate the notion of media power, particularly the ways that specific media corporations both hold power and how they exercise it. The main goal was to address how media corporations are both shaped by and exercise economic, political and cultural power. This was guided by the notion that power itself is always relational, at times predictable and other times contradictory. Among the various views of power, a radical perspective was used that explicitly critiques the unequal distribution of resources and the ways that inequality is reproduced. A major influence on issues relating to media power has been Des Freedman’s work in The Contradictions of Media Power (2014), in which he explains: [media power is] both a consequence and an increasingly significant component of continuing, and stratified, processes of social reproduction. It is not simply about either gently persuading or forcibly coercing individuals to do things they would otherwise choose not to do but about the material coordination of flows of information, communication and culture such that persuasion and coercion – as well as expression and interpretation – are most effectively able to take place. (Freedman 2014: 30) It is necessary, then, to consider specifically how companies facilitate the ‘material coordination of flows of information, communication, and culture’ through economic, political and cultural relations. Thus, media power can be examined within these three spheres, as suggested in the next three sections of this chapter. Economic Power Economic analysis of media companies reveals at least two distinct levels of economic power exhibited by media corporations: those factors

74  Janet Wasko that are internal to the corporation and those that are external. On the one hand, media corporations exercise economic power by those things that are internal to the corporation, including subsidiary companies, other properties (whether tangible or intellectual) and its workforce (from labourers to executives). All of these are internal to the corporate structure, and they collectively represent the corporation’s ownership or control of those factors that are necessary for the material coordination of flows of information, communication and culture. The scale of any particular corporation’s holdings provides one of the clearest expressions of its power to control the production, distribution and exhibition of communicative resources. As mentioned previously, various kinds of documents provide information about media corporations, and power structure or social network analysis can indicate key relationships. However, for some companies and in some regions, information may be difficult to access. For instance, smaller media companies are sometimes controlled by local media oligarchs, and their non-transparent ownership is often used to facilitate the non-transparent flow of money. These insights illuminate a central concern with the economic power of media corporations. What information can be gathered often can reveal the potential to control the production, circulation and consumption of media messages. However, when such information is not available, then the public loses its ability to scrutinize the activities of the corporation. Such concerns are not unique to media corporations, but the implications are much more profound when one considers a corporation’s ties to other institutions and relationships outside of its corporate structure. This leads to a second level of a media corporation’s economic power, which is related to those forces that are, to some degree, external to the corporation itself. These include a corporation’s involvement in the circulation of financial capital, including corporate investments that can dramatically influence operations as well as the strategies that a corporation is able to pursue. Other external factors include a corporation’s strategic partnerships, alliances, joint ventures or temporary agreements that extend the reach of the corporation beyond the boundaries of its corporate structure. What is important to consider about these external factors is that they can shape the contours of the possible strategies available to a corporation at any given time. It is clear that corporations have their unique histories, which are tied to ownership structures and the investment capital available to each corporation. Those companies with large capital reserves have a greater ability to acquire additional properties, especially those that may constitute a competitive threat or contribute to diversification and/or growth strategies. This was highlighted in many of the chapters in Global Media Giants (Birkinbine et al. 2017). A few representative examples would include Disney’s purchase of Pixar, Marvel and Lucasfilm from 2006 to

Global Giants & Diversity  75 2012; Bertelsmann’s continuous acquisition of publishing houses; Comcast’s purchase of competing cable companies; and Telefónica’s global expansion into Internet, digital television and other communication technologies. These examples represent a key dimension of media corporations’ economic power: the ability to expand, diversify and dominate markets. Perhaps the most important external factors contributing to a media corporation’s economic power, however, are its ties to the state and the political or regulatory environment in which it operates (and links directly to the discussion of political power in the next section). This factor is especially significant when considering issues relating to access and diversity within a neoliberalist context. Indeed, neoliberalism has been a defining feature of how economic power has been exercised around the world. While the term can be used to describe a range of practices, it is marked by an ideology that tends to separate market relations from social relations, as if they were two distinct spheres of activity. When the market is elevated above social relations and is no longer viewed as embedded within social relations, it serves the normative function of providing an ethic to which all social relations should ascribe. This was the basis of Karl Polanyi’s (1957) critique of the then-­ emergent neoliberal thought in the 1940s. But neoliberal thought has provided the backdrop for many significant domestic and international regulatory changes since at least the 1970s. One of the more concrete expressions of this ideology has been the increasing privatization of those institutions or resources that were once publicly owned, leading to powerful media giants moving into these markets (for instance, the example of Telefónica, mentioned earlier). In effect, the interests of capital and corporations have usurped the power of the state. As it applies to media corporations, we can examine the changes in the regulatory environment as well as particular corporations’ ties to the state as a way of assessing the extent of their political power. Political Power The political power of media corporations involves a wide array of issues and differs according to the setting and time period. Corporations often can be seen to be allied with governments but at other times appear to be antagonistic. Rarely, however, do media corporations serve as watchdogs of the state, but instead often become ideological counterparts that participate as partisans or political agents in supporting one leader or party that holds political power. The concept of pluralism becomes important in this discussion and has been understood differently by various scholars. Pluralism has been identified by some media researchers as ‘a condition of cultural and ethnic diversity, a dispersal of power, and greater freedom and diversity of

76  Janet Wasko expression and belief’ (Christians et al. 2009: 21). Meanwhile, others believe that pluralism is a component of diversity. Media power can be concentrated if a media system is not sufficiently pluralistic enough to present a broad range of views from the political spectrum of a society. Thus, when media monopolies or duopolies exist, media power becomes concentrated and has negative consequences for the democratic health of a country. Clear examples of this were discussed in the regional chapters of Global Media Giants, most specifically pertaining to Mediaset (Italy) and Televisa (Mexico). For certain periods in some settings, there have been various kinds of collusion between media corporations and governments. Bertelsmann’s role during the Nazi period is a paradigmatic example, but this condition has also existed even in democratic countries, such as Britain under Thatcherism. The case of News Corporation is significant in this respect, as the company has developed different practices and strategies around the world according to the particularities of each political system where it operates. In fact, it may be possible to argue that News Corporation is the global media giant with the most visible international political activity at local levels. Another example at the regional level is the behaviour of Grupo Prisa in relation to the Chávez regime as it provides an example of how a foreign and influential regional-Spanish multimedia group tried to wield political influence in Venezuela specifically and in Latin America more generally. Media power is a key element to understanding the quality of democracies and the vitality of civil societies, as well as the specific issues of access and diversity. After the emergence of social media platforms (Facebook, Twitter, Google+, etc.), which, to a certain degree, have enhanced the capacity of audiences as citizens to communicate horizontally through digital platforms and social networks, new relations, counterbalances and interactions in our media systems have been experienced. It is clear that the roles and the centrality of mainstream media corporations are being reshaped in this new era. However, it is also possible to argue that mainstream media still exercise power and often maintain some kind of centrality in media systems. At the same time, the new corporations that control social media and provide information and Internet-based services (Google, Facebook, Microsoft, Comcast, Telmex, Tencent, etc.) have developed new forms of control and surveillance through databases of information that can be obtained from social media platforms, e-mail accounts or from manipulation of Internet infrastructures. Thus, the efforts to regulate digital and informational rights (for instance, privacy and net neutrality) have become increasingly significant. Indeed, these situations present many new challenges for the regulation of communication systems. Because these companies control public information and are using it for commercial and private interests,

Global Giants & Diversity  77 new regulations and policies may be vital in preserving the democratic potential of these new technologies. However, media/communications corporations tend to support deregulation by any means possible (including intense corporate lobbying and other strategies), in an attempt to clear the way for private imperatives and profit maximization. Cultural Power Global media corporations are significant not only because of their economic and political role, but because of a wide range of potential cultural influences. Certainly, the issue of media influence or effects is a highly contentious topic among media researchers, as well as with policymakers and the public. Meanwhile, many media corporations often claim that their business should be thought of as simply entertainment, without political implications or strong effects. Nevertheless, it is difficult to deny that media corporations have significant cultural effects/influences, both at societal and individual levels. Generally, the media giants contribute to the commodification of culture as the manufacture and marketing of cultural commodities increasingly replace other ways that culture has been created and shared. Thus, media companies, at least potentially, shape dominant cultures and may contribute to the inhibition or demise of traditional or alternative cultures. It might be argued, as well, that the proliferation of media giants may tend to limit choices and contribute to a homogenization of culture, especially through the recent development of franchises, synergistic practices and more formulaic programming. In terms of content, it is clear that media products/messages communicate social norms and thus, ultimately, influence people’s lives. For instance, Eileen Meehan (in Birkinbine et al. 2017: 44) argues that ‘mere’ entertainment can persuade people to buy advertised goods, adopt consumerist lifestyles and buy only brand-named products. Of course, different companies use different strategies, which may lead to a variety of cultural consequences. For instance, Disney maintains a unified corporate meta-brand, with Disney products and services available and/or recognized all over the world, while Time Warner (as Scott Fitzgerald has observed) represents a ‘house of brands’ and focusses on trans-industrial practices. Fitzgerald also points out another relevant dynamic in his discussion of Time Warner’s recent emphasis on a strategy of quality programming: Cultural-symbolic and economic power here are inextricably linked: in what one Time Warner executive refers to as “the arms race in original programming,” the wider cultural significance of such products reinforces both the potential for commercial intertextuality and the position of Time Warner within shifting commodity chains. (Fitzgerald in Birkinbine et al. 2017: 68)

78  Janet Wasko Meanwhile, other corporations combine a wide variety of businesses and thus have different kinds of cultural influence. As Lee McGuigan and Victor Pickard observe in a discussion of Comcast Corporation, the company’s vast holdings offer it many opportunities to exert subtle forms of influence, a kind of soft power that extends its reach into symbolic and ideological spheres…. Its extensive holdings of cable networks, spanning various genres, enjoy national distribution and furnish many symbolic resources through which Americans construct their realities and public cultures. (McGuigan and Pickard in Birkinbine et al. 2017: 86) The quality of content is also an issue identified by media researchers. Jörg Becker describes how Bertelsmann produces as many items as possible, and that ‘the economics of high circulations mean that they must appeal to mediocre tastes’ (Becker in Birkinbine et al. 2017: 481). He traces the evolution of Bertelmann’s low-quality entertainment television activities and the effect on public broadcasting in Germany: ‘RTL started presenting an apolitical, low-quality entertainment television channel and the two public service broadcasting authorities (ARD and ZDF) allowed themselves to sink to the same low-quality standards in the battle for market share’ (Becker in Birkinbine et al. 2017: 481). The issue of globalization strategies and cultural consequences plays a key role in many media scholars’ discussions. Though much has been written critiquing the concept of cultural imperialism, from both critical and administrative positions, the influence of powerful transnational media conglomerates on local and national cultures is still a relevant question around the world even if the specific contours of this dynamic may vary within different national contexts. For example, in his analysis on Grupo Globo as well as in his other work on cultural imperialism, Joseph Straubhaar demonstrates how the forces of cultural imperialism and dependency on Time-Life blended with the specific actions of Brazilian managers who were responsive to popular tastes within the country. Not only do global media giants provide specific cultural products that include Western trends, fashions and ideas, but the ideas of cultural commodities or cultural market values are exported and reinforced by these gigantic companies through their examples, as well as their links to political agendas, public relations campaigns and international policy organizations. Political economists continue to be criticized for avoiding cultural concerns, despite a good deal of work that integrates political, economic and cultural analysis. The data and analysis offered by political economy

Global Giants & Diversity  79 researchers provide entry points for further cultural analysis, as well as foundations for a wide range of multi- and cross-disciplinary analysis. Overall, it is important to emphasize that power is always relational, and it is expressed in both predictable and contradictory ways. By ascribing to a relational definition of power, economic, political and cultural power can be seen to be woven into the fabric of media power precisely because media corporations are situated within these spheres, but they also have the ability to influence these spheres in different ways. And while global media giants continue to hold power over the material coordination of the flows of information, communication and culture, these companies exercise power in different ways depending upon their unique histories, including the effectiveness of the specific strategies pursued at any given time. In addition, the range of strategies available to a corporation is shaped by multiple factors, including the properties available within its corporate structure, the financial performance of its investments, the regulatory environment within which it operates, its ties to the state and the degree to which its power is legitimized or accepted by those living within reach of its symbolic universe. However, no matter how diverse these corporations may be, all of them have the pursuit of profit and survival as their central motives. This generally means that the range of strategies available to media and other media-related corporation is limited by those options that have the greatest potential for profit maximization.

Global Internet Giants: GAFA We turn now to a consideration of the Internet giants and how they affect the diversity of cultural expression and audiovisual content. As mentioned previously, social media platforms and other digital technologies have led to new relations and developments in our media systems. Indeed, the evolution of the Internet as the dominant media system has been referred to as the major disruption that is prompting the demise of legacy media. While the global media giants seem to be surviving at the moment, attempting to adapt to the new era, but increasingly competing with a new group of corporate giants. Four companies have emerged as the Internet giants, also known as GAFA: Google, Apple, Facebook and Amazon. Each of these companies dominates a specific area of Internet activity: Google holds a 90 per cent share of search business worldwide, Apple (or Alphabet, its holding company) controls 45 per cent share of worldwide smartphone web traffic and Facebook currently has a 75 per cent share of worldwide social media. Meanwhile, Amazon represents 6 per cent of online retail sales worldwide and continues to grow and move into diverse businesses.

80  Janet Wasko These companies not only have had significant impacts on media and entertainment, but also on related fields such as telecommunications and information technologies, as well as a wide array of other industries including health, retail, travel and leisure, energy and utilities, financials and mobility. The GAFA companies hold impressive positions in top global media owners’ rankings. In 2016, the Zenith report, which ranks the world’s largest media companies by media revenue, confirmed Alphabet (Google’s holding company) as the world’s largest media owner, with media revenues totalling 60 billion dollars, 166 per cent more than its nearest rival, Walt Disney. Another digital giant, Facebook, continues to move up in these rankings. Overall, five companies dominate media digital revenues and the global Internet advertising market. Their collective dominance of digital advertising means that these five companies have captured most of the gains from their rapid growth. Of course, the traditional media companies also have expanded their digital businesses, with varying degrees of success. Meanwhile, in terms of the future for the GAFA companies, many predict that by 2020, Google will dominate the digital information infrastructure, Apple will control the ‘Internet of things’ infrastructure, Facebook will rule the digital telecommunications infrastructure and Amazon will gain an even more dominant position in the physical and digital delivery infrastructure. Media Giants vs. Internet Giants It is possible to compare media and Internet giants, but we need to understand that they may be as much alike as they are different. Although specific strategies may be unique and contingent, all corporations have the pursuit of profit and survival as their central motives and thus choose options and adopt strategies that have the greatest potential for profit maximization. While these companies may share general goals and strategies, the Internet giants represent – at the moment, at least – some distinct differences from the typical media giants. Because of the low barrier to entry for some of these businesses, it has been argued that there is more competition and more flexibility. Because it is possible for the Internet to provide nearly endless amounts of content and numbers of channels, it has been promoted as a solution to the concentration issues that have haunted legacy media. However, many scholars and activists have warned that the Internet might be following traditional media with emerging forms of concentration in content production and consumption. It is still an open question as to whether the Internet will lead to less media concentration, or whether this new medium has created new problems that

Global Giants & Diversity  81 require new solutions. As one study of media and Internet concentration observed: The overall consequence is that we have a set of bigger and structurally more complicated and diverse media industries, but these industries have generally become more concentrated, not less…. [C]oncentration in no less relevant in the ‘digital media age’ of the 21st century than it was during the industrial media era of centuries’ past. (CMCRP 2013)

Internet Giants and Diversity While the Internet has been identified with an infinite range of channels and content, it has been argued that control by corporations – either media or Internet companies – with goals of growth and profit maximization – brings into question the potential for true diversity, despite the endless capacity for variation and diversity. There have been clear signs of concentration and commercialization across the Internet, similar to other media outlets. Only one example is the number of the most popular YouTube networks that have been acquired by some of the largest media corporations, including Disney, Time Warner, Comcast and so forth. Many other examples might be cited. This is especially important to keep in mind in the discussions of media access and diversity. As noted previously, media corporations often pursue that focus on the creation and distribution of cultural commodities that appeal to the largest number of viewers as the least-objectionable choices. In other words, the global media giants generally tend to create entertainment as opposed to providing a wide and diverse range of programming or fulfilling their critical watchdog function in a democracy. This can also limit the extent of true innovation within programming as successful programmes or formats are likely to be adapted to national (or international) audiences or the creation of copycat shows that follow predictable patterns, potentially limiting diversity. These strategies are increasingly followed by Internet companies. As Matt Saccaro, an editor for the digital news site NowThis, noted in his article ‘The Internet has a content diversity problem’: The Internet media world is a maelstrom of homogeneity. Every site’s editorial mission has become the same: Appease the Facebook user no matter what, even if it means becoming glorified content re-branders rather than legitimate news and opinion outlets, even if it means becoming a carbon copy of a thousand other websites all racing each other to the very bottom. (Saccaro 2014)

82  Janet Wasko

Final Thoughts on Studying Corporate Media Power We need to continue monitoring corporate power as it relates to media diversity, social equality and democracy. Research is needed that digs deeply into corporate ownership and control structures and their consequences, thus providing resources for policy discussions that seek to enhance media diversity and democracy. In addition, studying media corporations and media power should play a key role in basic media literacy efforts, whether it is formally taught in educational institutions or offered in other settings. We also might consider a variety of approaches to use in this analysis. Individual corporate analysis may obscure some issues that relate to more general tendencies. In other words, we need to expand our analysis beyond individual corporations to media systems, and even possibly embracing what has been called a systems approach to understanding society and life (for instance, see Capra and Virelli 2014). It is important to note that power is always shaped and defined by social relationships. Over time, these relationships are reproduced in certain ways, while at other times these relationships can be broken or may diverge from seemingly predictable patterns. And since communication is fundamentally a social process, understanding the contours of power as it is perpetuated throughout social, economic, political and cultural relationships lies at the heart of critical media studies. This chapter has referred to the work of media researchers connected to the Global Media Giants project, which interrogated how media corporations exercise power as well as reproduce their power over time. What emerged from the study was a complex and dynamic view of power. It is hoped that this type of work continues and may contribute to policy efforts and social change. Just as the specific strategies and practices of media corporations can change at any time, so too can the contours of media power. The implications for diversity and cultural expression may also change over time, influenced by a wider range of possibilities and potentials. Thus, the analysis of corporate media power still needs to be an important part of our analysis and understanding of media diversity.

References Bagdikian, B. (1983). The Media Monopoly. Boston: Beacon Press. Birkinbine, B.J., Gomez, R. and Wasko, J. (eds.) (2017). Global Media Giants. New York: Routledge. Burris, V. (2015). What is power structure research? An Internet guide to power structure research. http://pages.uoregon.edu/vburris/whorules/ CMCRP (Canadian Media Concentration Research Project) (2013). Media and Internet Concentration in Canada. Report, 1984–2012. Ottawa: CMCRP.

Global Giants & Diversity  83 Capra, F. and Luisi, P.L. (2014). The Systems View of Life: A Unifying Vision. Cambridge: Cambridge University Press. Christians, C.G., Glasser, T.L., McQuail, D., Nordenstreng, K. and White, R.A. (2009). Normative Theories of the Media: Journalism in Democratic Societies. Urbana: University of Illinois Press. Compaine, B.M. (ed.) (1982). Who Owns the Media: Concentration of Ownership in the Mass Communication Industry. New York: G K Hall. Connell, R.W. (1978). Ruling Class, Ruling Culture. Studies of Conflict, Power and Hegemony in Australian Life. London: Cambridge University Press. Deacon, D., Pickering, M., Golding, P. and Murdock, G. (1999). Researching Communications: A Practical Guide to Methods in Media and Cultural Analysis. London: Arnold. Doyle, G. (2002). Media Ownership: The Economics and Politics of Convergence and Concentration in U.K and European Media. London: Sage. Fitzgerald, S.W. (2015). Corporations and Cultural Industries: Time Warner, Bertelsmann, and News Corporation. Lanham: Rowman & Littlefield. Freedman, D. (2014). The Contradictions of Media Power. London: Bloomsbury Publishing. Jackel, A. (2004). European Film Industries. London: British Film Institute. Korten, D. (1995). When Corporations Rule the World. Boulder: Kumarian Press. Kunz, W. M. (2006). Culture Conglomerates: Consolidation in the Motion Picture and Television Industries. Boulder: Rowman & Littlefield Publishers. Martínez, G. (2008). Latin American Telecommunications: Telefónica’s Conquest. Boulder: Rowman & Littlefield. Mastrini, G. and Becerra, M. (2006). Periodistas y Magnates. Estructura y concentración de las industrias culturales en América Latina. Buenos Aires: Prometeo. Meehan, E. (2005). Why TV is Not Our Fault: Television Programming, Viewers, and Who’s Really in Control. Boulder: Rowman & Littlefield. Murdock, G. (1982). Large corporations and communication. In Gurevitch, M., Bennett, T., Curran, J. and Woollacott, J. (eds.). Culture, Media & Society. London: Metheun, 118–50. Noam, E.M. (2009). Media Ownership and Concentration in America. New York: Oxford University Press. ——— (2016). Who Owns the World’s Media? Media Concentration and Ownership Around the World. New York: Oxford University Press. Polanyi, K. (1957). The Great Transformation: The Political and Economic Origins of Our Time. Boston: Beacon Press. Pusey, M. and McCuthcheon, M. (2011). The Concentration of Media Ownership in Australia–From the Media Moguls to the Money Men? Media International Australia, 140: 22–34. Saccaro, M. (2014). The Internet has a Content Diversity Problem. The Daily Dot, 11 June. Scott, J. (1990). A Matter of Record: Documentary Sources in Social Research. Cambridge: Polity Press. ——— (2000). Social Network Analysis: A Handbook. 2nd ed. London: Sage. Sinclair, J. (1987). Images Incorporated: Advertising as Industry and Ideology. Kent: Croon Helm Ltd.

84  Janet Wasko Thomas, P.N. and Nain, Z. (2004). Who Owns the Media? Global Trends and Local Resistance. London: Zed Books. Thompson, J.B. (2013). Merchants of Culture: The Publishing Business in the Twenty-first Century. 2nd ed. Cambridge: Polity Press. Wasko, J. (2001). Understanding Disney: The Manufacture of Fantasy. ­Cambridge: Polity Press. ——— (2003). How Hollywood Works. London: Sage.

5 Re-evaluating the Long Tail Implications for Audiovisual Diversity on the Internet Philip M. Napoli

Introduction We are now over twenty years into the Internet’s history as a mass medium. The Internet has undergone some dramatic evolutionary changes during this time (the transition from dial-up to broadband, the emergence and dominance of social media, etc.). Of similar importance has been the evolution in how we perceive the Internet and its relationship with the broader media ecosystem of which it is an increasingly central part. For instance, it is interesting to look back and recall how there was a time when the Internet was seen as a technological cure-all to the problem of media diversity. In the United States, for instance, the growth and development of alternative sources of news and information online was used by the Federal Communications Commission in the mid-2000s as a key factor in justifying the relaxation of ownership regulations for traditional media – regulations that were motivated in large part by concerns about the diversity of sources and content available (Napoli 2009). This perspective was a reflection of the many ways in which the Internet and the associated digitization of content have the capacity to circumvent fundamental characteristics of traditional media, such as high barriers to entry, significant distribution costs and technological and editorial bottlenecks, that limited the diversity of content produced, disseminated and consumed. One could also argue that a powerful and influential driver of this perspective was Chris Anderson’s (2004, 2006) widely read article (and subsequent book), The Long Tail. The long tail concept helped bring to the foreground the specific mechanisms by which the Internet and digital content distribution were going to enhance audiovisual diversity on the Internet. In this regard, it served as a theoretical framework for understanding the relationship between technological change, industry practice and audience behaviour. The central premise of the long tail theory was that, in a media environment in which content was searched for and/or accessed online, the shelf space constraints of physical retail locations and the channel capacity constraints of analogue media would be alleviated. At the same time, digital platforms would be able to take advantage of their inherent

86  Philip M. Napoli interactivity to provide sophisticated search and recommendation systems that would increase the likelihood of audiences discovering more obscure content. These two conditions would create an environment in which a much greater array of content options would be provided to audiences, and – crucially – a much greater array of content options would be consumed; so much so that, in the aggregate, the low-popularity content (the long tail) would represent an equal or greater share of audience attention than the ‘fat head’ (the popular content). Fourteen years is a very long time in Internet time, and so it’s time to re-evaluate the long tail concept that has been so influential in researchers’, industry professionals’ and policymakers’ thinking about our media and cultural environment. In particular, it’s important to consider evidence that the promise of the long tail has failed to materialize and, given that, to consider some of the reasons why this has been the case. The argument put forth here is that the combination of research findings and industry practices suggests that the long tail phenomenon has not emerged as a defining characteristic of the digital age and that it should not be used as a heuristic by researchers and policymakers for understanding the contemporary media ecosystem. This chapter describes the interconnected technological, institutional and economic reasons why this has proven to be the case, and the implications for audiovisual diversity on the Internet.

The Long Tail: A Brief Intellectual History The long tail theory is, in many ways, an extension and modification of the well-known Pareto principle. The Pareto principle broadly stated that 80 per cent of effects emerge from 20 per cent of causes (Pareto 1964/1896). Within the media industries, the Principle had been well demonstrated by the fact that across many industry sectors, roughly 80 per cent of the revenue generated has tended to come from roughly 20 per cent of the content produced and/or that roughly 80 per cent of audience attention has focussed on roughly 20 per cent of the available content (Webster and Lin 2002; Brynjolfsson et al. 2011). With The Long Tail (2006), Anderson demonstrated how the Internet made it possible for this Pareto distribution of audience preferences to be better served as well as how the dynamics of searching for and consuming content online could alter this dynamic and relax, to some extent, the stranglehold that a relatively small proportion of available content had on the totality of available revenues and audience attention. The long tail concept proved influential both to academic research and industry strategy. According to a Google Scholar search, over 600 articles addressing the long tail concept have been published since 2005. Not all of these studies, it should be emphasized, focus on media. Indeed, despite the relatively narrow focus of Anderson’s analysis on the

Re-evaluating the Long Tail  87 media sector, the long tail concept has been applied to a wide array of industrial contexts, including tourism (Lew 2008) and financial services (Serrano-Cinca and Gutiérrez-Nieto 2013). Within the media industries, the long tail concept took hold as a guiding strategic principle. The concept became a common topic in industry trade publications and at industry conferences. Netflix, as one of Anderson’s (2006) exemplars of the long tail strategy, touched off an explosion of start-ups seeking to be ‘The Netflix for _________’, whether it be for magazines, music, video games, books, news, podcasts or any other discrete category of media content that could be digitally aggregated. The research findings were, from the outset, somewhat inconsistent, with some studies showing that the digital migration of content and consumer interaction was enhancing the size and viability of the long tail (see, for example, Brynjolfsson et al. 2011; McKinnon 2015), and others showing that, in fact, the dynamics of online consumption, search and recommendation could actually further favour the content in the head – in other words, the hits (see, for example, Elberse and Oberholzer-Gee 2008; Benghozi and Benhamou 2010; Zhong and Michahelles 2013; Mulligan 2014). Harvard Business School’s Anita Elberse emerged as a particularly vocal, though empirically grounded critic, first in her Harvard Business Review article, provocatively titled ‘Should you invest in the long tail?’ (Elberse 2008), and then, subsequently, in her book-length response, Blockbusters: Hit-Making, Risk-Taking, and the Big Business of Entertainment (Elberse 2013). Building upon Rosen’s (1981) work on the economics of superstars, Elberse (2013) provided empirical examples of how the dynamics of the digital media environment may actually favour content with mass appeal, so much so that industry stakeholders should pursue ‘blockbuster’ strategies (investing in expensive, high-risk, high-reward content) rather than long tail strategies (investing in a wide expanse of content options that serve the full range of audience interests). In a similar vein, a number of studies have found that strategic approaches that emphasize serving the long tail have not positively affected – or are not likely to positively affect – an organization’s financial performance, in contexts such as online news and video-on-demand (see, for example, Evens et al. 2010; Huang and Wang 2014). In an effort to reconcile these often contradictory findings, researchers have explored the specific structural, content and social factors that might drive audience attention towards either the head or the tail (for example, Kendall and Tsui 2011; for a review, see Napoli 2011a). Research has found, for instance, that the extent to which recommendation systems use inputs such as demonstrated popularity in making their recommendations can actually lead to greater concentration in consumption (Fleder and Hosanagar 2009). The dynamic here is essentially a Matthew effect (see, for example, Rigney 2013), in which users

88  Philip M. Napoli are directed to popular content, which, in turn, enhances the demonstrated popularity of that content, which, in turn, further increases the likelihood of that content being recommended (Webster 2014). Thus, modifications to the inputs of search and recommendation systems have the capacity to migrate consumption in one direction or the other (Hinz et al. 2011). This is, of course, a dynamic that could be intentionally exploited by any content aggregator who might have an interest in shifting audience attention towards the head rather than the tail (a prospect discussed in greater detail later). The key points to take away from this brief overview are that (a) the empirical findings about the extent to which the long tail dynamic emerges from environments with massive content variety and sophisticated search and recommendations systems, as well as the extent to which serving the long tail is an advantageous strategic approach, are, at best, inconsistent and (b) that the mechanisms intended to migrate audience attention into the long tail can be manipulated in ways that push attention back into the head. Given these findings, it’s difficult to consider the long tail phenomenon as a compelling strategic approach or an inevitable outcome in the contemporary digital media marketplace.

The Long Tail in Practice: The Evolution of Netflix and Other Content Aggregators These findings provide context for a range of industry developments that we’ve seen take place over the past few years. The evolution of Netflix, in particular, serves as an important case study in the evolution of the long tail as a viable business strategy. Netflix’s business model helped to inspire Anderson’s initial thinking about the long tail, so it’s instructive to revisit the state of Netflix as a starting point for assessing the current state of the long tail. The goal here is to first illustrate organizational migrations away from the long tail strategy, and then to consider the underlying reasons behind this trend. In the United States, Netflix’s digital title inventory has declined from roughly 11,000 titles in 2012 to approximately 5,500 today (Juel 2016; Clark 2018) – nearly a 50 per cent decline over the past four years. Clearly, from a strategic standpoint, the company has become less focussed on providing its subscribers with access to a tremendous library of selections. Also important is what we know at this point about the type of content that maintains a position in Netflix’s streaming library. Recent research tells us that the best predictors of whether a film ends up in the Netflix streaming library today are its age (with newer films much more likely to be available than older films) and box office grosses (with higher grossing films more likely to be selected than lower grossing films) (Hiller 2016).

Re-evaluating the Long Tail  89 In combination, these data present a scenario that bears a striking resemblance to the traditional video rental stores that Netflix effectively eliminated. According to Anderson (2006), the typical video store carried approximately 3,000 titles. And, of course, the video rental store business model overwhelmingly emphasized stocking newer titles (with older titles relegated to the back of the store) as well as stocking as many box office hits as possible, often focussing primarily on devoting shelf space to dozens of copies of the most recent box office hits. What we’re seeing then, with Netflix’s digital strategy, is a migration away from serving the long tail back to serving the fat head.

Factors Undermining the Long Tail Netflix’s evolutionary path is reflective of a set of factors that, both individually and in combination, make serving the long tail a less appealing proposition. As will frequently be illustrated later, the factors discussed here seldom work in isolation. Rather they facilitate and reinforce each other in ways that compound the disincentives for content aggregators to serve the long tail. And, as will also be illustrated later, these factors are affecting other content aggregators, compelling them down evolutionary paths that are similar to that of Netflix. Digital Licensing In developing his long tail argument, Anderson (2006) relied heavily on examples provided by online content providers such as Amazon and Netflix. As the argument goes, these content providers took advantage of the Internet as a way of reaching a large customer base and providing them with access to content without having to incur the enormous costs associated with brick and mortar stores in high traffic areas. What we can’t forget, though, is that when Anderson (2006) was putting Amazon and Netflix forward as exemplars of the long tail phenomenon in the mid-2000s, these companies were still dealing primarily in physical versions of media products. That is, their business model was still primarily oriented around providing physical books and DVDs by mail, with the online interface providing the mechanism for the search and recommendation systems to drive audience consumption into the long tail of the media products provided by these aggregators. Of course, Amazon and Netflix soon focussed their efforts on making large libraries of books and videos available in digital form, through e-books and online streaming of videos. From Anderson’s (2006) perspective, the migration from providing books and DVDs by mail to digital distribution should have made serving the long tail even easier, by further reducing the costs of distribution (by eliminating costs associated

90  Philip M. Napoli with purchasing, storing and mailing multiple copies). However, one of the greatest ironies of the long tail phenomenon has been the extent to which the transition from physical to digital goods, which theoretically should have provided further fuel to the long tail phenomenon, appears to have had the exact opposite effect. One key reason for this somewhat paradoxical situation has to do with licensing costs (see, for example, Manjoo 2014). One example of the way digital licensing can undermine the long tail can be found in the challenges faced by music streaming services such as Pandora. The success of services such as Pandora is highly dependent upon their being able to provide users with access to the long tail of music and their ability to attract a large user base. However, Pandora found that the more users it added, the more money it lost (Trefis Team 2015). In some ways, these developments fly in the face of what media economics has long told us is the beauty of the migration to the ‘pure public good’ model of digital distribution. What was happening with Pandora was that the per-stream license fees that they were paying for each song were less than what they were earning in advertising revenues from each listener to each song. This deficit applied only to non-subscribing listeners, who choose to hear ads rather than pay a subscription fee. Unfortunately, this category describes the majority of Pandora users. So, the more listeners the company added and the more songs they streamed, the more money they lost (Richter 2013; Trefis Team 2015). Similarly, ‘Netflix for e-books’ services such as Scribd have proven unsuccessful because the per-reader licensing costs associated with popular content from major publishers cost the company more than can be recouped in subscription fees (Albanese 2016). So, for instance, voracious readers of romance novels were costing Scribd well more than the company was earning through its monthly subscription fee. In the case of e-books, it seems that the only way a Netflix-style pricing and access model works is when the content available is limited primarily to self-published books, or when limited amounts of content are made available on a rotating basis, and availability is determined, at least in part, by the licensing terms that are agreed upon (Albanese 2016). Obviously, such models are a far cry from serving the entirety of the long tail. Netflix for magazines services such as Texture (previously called Next Issue) and Magzter have similarly struggled to gain access to popular titles under their monthly subscription plans (Brustein 2015). The issue is that content providers prefer the revenue model associated with à la carte sales/subscriptions, rather than bundling their content within a broader subscription package offered by a content aggregator. So, for instance, only 2,000 of the 5,000 magazines available through Magzter’s app opted to make themselves available under the bundled subscription model (Brustein 2015).

Re-evaluating the Long Tail  91 These dynamics help explain why Netflix is being much more selective in terms of what content it licenses and what it is willing to pay for these licenses. In Netflix’s cost-benefit calculus, the licensing fees being demanded by many content creators are simply too high to make licensing the content worthwhile. And in a media environment in which there remain multiple ‘windows’ through which to monetize content, there is insufficient incentive for content providers to make their content available to aggregators such as Netflix under terms that the aggregators would find acceptable (Manjoo 2014). This scenario is in many ways a reflection of what Knee, Greenwald and Seave (2011) contend is one of the fundamental rules of the media industries – that the creators/owners of quality content are consistently able to extract and retain most of the economic value of that content, leaving relatively little for those licensing/distributing that content. Further, the fact that so many content creators are, apparently, not finding it in their best interests to license their content to services such as Netflix and Scribd at prices these services are willing to pay (see Fox 2015) points to other interacting factors at work here, such as vertical integration and competition (see the following). In the Netflix case, for instance, content creators are often finding it preferable to distribute their content themselves through their own vertically integrated content aggregation services, or to license their content to one of the many competitors to Netflix that have emerged, at terms that are more favourable than those offered by Netflix (see the following). The issues that Netflix has faced in licensing digital versions of the many films and television programmes that are available through the company’s discs-by-mail service are highlighted by the story of Redbox. Redbox is a video rental service that operates self-service disc rental kiosks outside of supermarkets, drug stores and other big box retailers. Kiosks are in the opposite of the long tail business. Their kiosks can hold a limited number of discs and so tend to carry only the latest hits. Like Netflix, Redbox ran into challenges when negotiating with the movie studios, to the point that the studios were going to refuse to sell their films to Redbox (Masnick 2009). It is important to emphasize that, within the context of physical goods such as DVDs, the content is sold rather than licensed (as is the case with digital content). In response to this stalemate, Redbox threatened to simply purchase the DVDs necessary to stock their kiosks through retail outlets such as Walmart (Masnick 2009) and, according to some accounts, ultimately moved forward with obtaining nearly 40 per cent of its inventory from such retail outlets (Masnick 2010). This is allowable in the United States under what is known as the first sale doctrine. Once an individual or organization buys a physical copy of a media product, it is theirs to do with as they wish – rent, sell, give away and so forth. And, regardless of how much

92  Philip M. Napoli revenue you generate through each copy, none of that revenue needs to be shared with the content creator. As these examples illustrate, the counterintuitive reality of digital curation and distribution has been that the rights and access terms associated with physical versions of media products are, in many ways, more conducive to services catering to the long tail of audience preferences than are the rights and access terms associated with digital versions. Vertical Integration Another important factor that has undermined the prevalence of the long tail phenomenon is vertical integration. Vertical integration is, in many ways, a defining characteristic of the history of media. In the early days of film, motion picture studios vertically integrated into theatre ownership. The vertical integration of television production studios and television networks became a defining characteristic of the television industry. And now, online content aggregators/distributors such as Amazon, Hulu and Netflix have all aggressively vertically integrated into content creation. To some extent, this shift amongst digital content aggregators can be seen as a response to the aforementioned content licensing challenges. Content aggregators who are unable to obtain licenses to quality content at favourable terms can, as an alternative, produce such content on their own (see, for example, Fox 2015). And so, licensing challenges beget vertical integration. At the same time, vertical integration creates disincentives for meeting the licensing fees sought by content creators. As these platforms migrate into original content creation, their commitment to serving the long tail can be expected to diminish (see, example, Kelleher 2011). This commitment diminishes because (a) resources previously devoted to licensing content to fill the long tail are now being devoted to producing original content, and (b) the incentive to guide users into the long tail is undermined by the desire to guide users to the home-grown content. Looking at the first point, the decision to incur the substantial costs of producing original content represents an obvious shift in priorities from seeking to amass as large and diverse a content library as possible. As resources are diverted to content creation, fewer resources are available for licensing unaffiliated content. In terms of the second point, once a content aggregator vertically integrates into content creation, all of the unaffiliated, licensed content available on the service now represents competition to the home-grown content. And so, as Netflix’s library of licensed content decreases, the potential audience for its internally produced content increases. The irony of this situation is that Netflix rose to prominence and vanquished

Re-evaluating the Long Tail  93 its competitors on the basis of the quality of its search and recommendation system, and that system’s ability to migrate consumption into the long tail (Keating 2012). User confidence in – and reliance on – this search and recommendation system can now be leveraged to try to push viewership towards internally produced content. Anyone who subscribes to Netflix cannot help but notice, at this point, that no matter what you watch, you will be recommended The Crown, Orange is the New Black and Stranger Things – all programming that Netflix produces – even if you’ve already watched every episode of these programs. This is where the issue of the manipulability of search and recommendation systems discussed earlier comes into play. Given the massive costs that companies such as Netflix are incurring to produce original programming, they simply can’t risk the possibility that this content will occupy some remote position deep in the long tail. Therefore, this content will likely always receive favoured status in the search and recommendation systems that subscribers use to navigate their content options. And, of course, vertical integration can also flow from content creator to content distributor, with similar effect. For instance, programmers such as HBO and CBS have launched their own stand-alone streaming services (Bensinger 2016) into an increasingly crowded streaming marketplace (described later). These new entrants obviously seek to leverage the libraries of content they have produced over the years, which means none of this content will likely be made available to competing streaming services that might be aspiring to serve the long tail. Years ago, American media mogul Sumner Redstone famously declared that ‘content is king’ (Della Cava 2016). The point of this simple statement is that those companies that control access to premium content are in the best position to succeed. The industry developments discussed earlier continue to prove that adage correct. The recently approved merger of AT&T and Time Warner in the United States provides the most recent illustration, given that this merger is motivated in large part by AT&T’s desire to vertically integrating and own, rather than license, content. In this digital age, given the challenges associated with licensing content, content appears to be king as much as it has ever been, if not more so. Competition The lower barriers to entry that the Internet has facilitated across various media sectors also apply to the content aggregation business. Not only do the large content aggregators like Netflix, Hulu and Amazon compete with each other to obtain exclusive licenses to content, but if you use a device like Roku you will see dozens of additional aggregators, many of them focussing on serving specific niches better than any of these large-scale aggregators. Many digital video services describe

94  Philip M. Napoli themselves as ‘the Netflix for’ a particular type or genre of film. So, for instance, Flix Premiere describes itself as ‘the Netflix for forgotten films’ (Scipioni 2016), Shudder describes itself as ‘the Netflix for horror films’ (Woodward 2016), Mubi describes itself as ‘the Netflix for independent films’ (McAlone 2016) and Popcorn Time even describes itself as ‘the Netflix for pirated films’ (Matthews 2016). As a result, the long tail essentially gets chopped up and reallocated in discrete chunks across multiple aggregators, as these various aggregators each obtain exclusive access to different content collections. In this more competitive environment, no single provider is in a position to truly serve the entirety of the long tail in accordance with the ideal that Anderson (2006) originally put forth. Indeed, the existence of multiple competing aggregators offering discrete subcategories of the same general type of content is in many ways antithetical to the very idea of the long tail. The extent to which competing as a content aggregator doesn’t mean having to aspire to serve the entirety of the long tail creates conditions that are more conducive to more entrants, as the barriers to entry from a content offerings standpoint are lowered. A smaller library of content needs to be aggregated in order to enter the marketplace. Thus, as the other factors discussed here dissuade large content aggregators such as Netflix from serving the long tail, the result is a scenario that encourages more competition in the content aggregation space. This, in turn, further diminishes the extent to which any aggregators are likely to fully serve the long tail. In today’s competitive digital media environment, serving a niche is a much more achievable undertaking than serving all niches. Interactivity A key source of competitive advantage for online content aggregators such as Netflix and Amazon relative to their analogue competitors has been their interactivity. Interactivity is synonymous with more data, as interactivity results in audiences leaving trails of information about their content preferences and consumption patterns (Nocera 2016). More data means less uncertainty, and more predictive power in relation to audience demand for content. Less uncertainty and more predictive power means having a better sense, ahead of time, in terms of what is going to be popular and what is going to be unpopular (Napoli 2011a). It seems reasonable, then, to expect that this greater knowledge about how various content options will perform will facilitate greater selectivity in content aggregation. If all of the analytics, big data gathering and predictive algorithms that are increasingly serving as the backbone of the media sector (see Napoli 2011a) have any value whatsoever, then it should be easier to zero in on the content worth keeping and avoid the rest. From this standpoint, the strategic necessity of serving the long tail declines as information about audiences’ preferences increases over time.

Re-evaluating the Long Tail  95 Here again these factors are mutually reinforcing. For instance, the increasing challenges associated with licensing high-value content can also be seen as creating greater incentives for content aggregators to invest further in data analytics, in order to improve their effectiveness in recommending the most appealing content from their more limited libraries (see, for example, Salmon 2014). In addition, the availability of a growing store of data was a primary catalyst (along with content licensing costs) for Netflix to vertically integrate into content creation. Through its data on consumers’ viewing habits and expressed preferences, Netflix was able to determine the types of content most likely to succeed with its viewers (Smith and Telang 2016), making the migration into content creation a much less risky and more appealing enterprise. In this way, the consumer data derived from the interactivity inherent in digital distribution facilitates the vertical integration that undermines service to the long tail.

Conclusion This chapter has considered the long tail phenomenon from the standpoint of both its empirical record and its evolution in industry practice. As this chapter has illustrated, the empirical support for the long tail phenomenon is inconsistent at best. Further, recent industry practices suggest that strategic approaches to serving the long tail are being dramatically scaled back. This pattern is a function of structural, technological and economic conditions in the contemporary media environment, ranging from licensing costs to vertical integration to competition to interactivity and the associated greater availability of audience data. These conditions – both individually and in combination – have served to undermine the viability of the long tail phenomenon as a principle around which industry strategies and business models are constructed. The story of the rise and decline of the long tail is an important case study in the intersection of technological capabilities with institutional incentives and constraints. It is a scenario that evokes Winston’s (1986) enduring law of the suppression of radical potential, in which the ability of a new communications technology or service to reach its full potential is curtailed by established institutional conditions and interests. Netflix is, in many ways, a poster child for Winston’s (1986) law, evolving from aspirations of providing subscribers with digital, on-demand access to the entirety of Hollywood’s film libraries (Nocera 2016) to – according to recent statements from Netflix executives – merely aspiring to be HBO (Levine-Weinberg 2015). From the standpoint of audiovisual diversity on the Internet, there appear to be a number of implications to draw from this situation. The first is that technology does not appear to have dramatically reconfigured the incentives for serving niche audience interests to the extent that

96  Philip M. Napoli we might have hoped. As has been discussed elsewhere (see, for example, Napoli 2011a; Webster 2014), the economic incentives for producing niche content have continued to be offset by a range of disincentives. The discussion here has focussed specifically on content aggregation/ distribution, where many of the impediments and disincentives for serving niche audience interests appeared to have been dramatically reduced. Certainly, the scenario today is one of a greater diversity of audience interests being served than in the predigital age, but when we evaluate the current scenario against the capabilities of the available technologies (see Napoli 2009 for a discussion of this evaluative approach), there certainly appears to be an increasing gap as the long tail both retracts and fragments. Second, we should consider the dynamics discussed here within the context of the dynamics of the consumption of media and cultural products. As has been illustrated here, navigating the long tail of content (to the extent that it is available) is itself becoming a more fragmented and complex process, with content distributed across multiple aggregators/ platforms. From this standpoint, the ‘one-stop shop’ ideal of the long tail is in decline. Given that previous research has found the reduction of search costs to be a key driver of audience attention into the long tail (see, for example, Brynjolfsson et al. 2011), as the content aggregation space grows more fragmented – and thus more complex – it seems reasonable to assume that search costs will increase and the migration of audience attention into the long tail (in other words, diversity of consumption) will be diminished. And, of course, there is the added dimension of access to multiple content aggregators requiring multiple subscriptions, which adds a financial cost factor to audiences’ efforts to effectively navigate the full extent of the long tail. As the consumption/ exposure dimension of media diversity has achieved greater prominence in media policymaking circles (see Napoli 2011b), these dynamics may represent cause for concern. The conditions discussed here point the way toward some avenues for future research. First, it would seem that there’s much more to learn about the types of content that are advantaged and disadvantaged in the current content aggregation environment. The standard delineation between ‘popular’ and ‘niche’ content is far too broad. We need a more granular understanding of the nature of the content underlying these descriptors. Specifically, we need to understand if and how the relative availability of content types that may correspond with specific policy concerns or cultural values, criteria or groups/interests is being affected in different ways. Studies of content diversity on digital content aggregators such as Netflix and Amazon – particularly in terms of its evolution over time and the factors that might affect this diversity – are sorely lacking.

Re-evaluating the Long Tail  97 We also need to know much more about how media consumers navigate their available platforms and content options. Essentially, we need updates and extensions of the ‘program choice’ and ‘channel repertoire’ research traditions (for reviews, see Napoli 2003) that seek to provide generalizable insights into the interaction of audience and media factors in the dynamics of contemporary content consumption. This research needs to look beyond the macro-level patterns that have been the focal point of much long tail research to date, to also explore the individuallevel dynamics associated with the processes of searching for, learning about and consuming content. In the end, the long tail has come to represent more of an ideal-type than a reality for audiovisual diversity on the Internet. Its failure to fully take hold puts media policymakers in the difficult position of evaluating whether the improvements that digital content curation and distribution have brought to the realm of audiovisual diversity represent a sufficient realization of technological potential, or whether further intervention is necessary.

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Re-evaluating the Long Tail  99 ——— (2011a). Audience Evolution: New Technologies and the Transformation of Media Audiences. New York: Columbia University Press. ——— (2011b). Diminished, enduring, and emergent diversity policy concerns in an evolving media environment. International Journal of Communication, 5: 1182–96. Nocera, J. (2016). Can Netflix survive in the new world it created? The New York Times, 15 June. Pareto, V. (1964/1896). Cours d’economie politique. In Bousquet, G.H. and Busino, G. (eds.). Oevres completes de Vilfredo Pareto, 1. Geneva: Librairie Droz. Richter, F. (2013). Pandora’s royalty costs outgrow its revenue. Statista, March 8. Rigney, D. (2013). The Matthew Effect: How Advantage Begets Further Advantage. New York: Columbia University Press. Rosen, S. (1981). The economics of superstars. The American Economic Review, 71: 845–58. Salmon, F. (2014). Netflix’s dumbed-down algorithm. Reuters, 3 January. Scipioni, J. (2016). Flix premiere: The ‘Netflix’ for forgotten films. Fox Business, 6 April. Serrano-Cinca, C. and Gutiérrez-Nieto, B. (2013). Microfinance, the long tail, and mission drift. International Business Review, 23(1): 181–94. Smith, M.D. and Telang, R. (2016). Streaming, Sharing, Stealing: Big Data and the Future of Entertainment. Cambridge: MIT Press. Trefis Team (2015). Why the subscription business is important for Pandora and where is it going? Forbes, 4 September. Webster, J.G. (2014). The Marketplace of Attention: How Audiences Take Shape in the Digital Age. New Haven: Yale University Press. Webster, J.G. and Lin, S. (2002). The internet audience: web use as mass behavior. Journal of Broadcasting & Electronic Media, 46(1): 1–12. Winston, B. (1986). Misunderstanding Media. Cambridge: Harvard University Press. Woodward, D. (2016). Welcome to shudder, the Netflix of horror films. Yahoo News, 20 October. Zhong, N. and Micahelles, F. (2013). Google Play is not a Long Tail Market: An Empirical Analysis of App Adoption in the Google Play App Market. Paper presented at the SAC conference, Coimbra, Portugal.

6 Online Platforms and Cultural Diversity in the Audiovisual Sectors A Combined Look at Concentration and Algorithms Heritiana Ranaivoson Introduction Online platforms have become pervasive, unavoidable actors. These online companies play a greater and greater role in the economy, and in particular in the cultural sectors (Nielsen et al. 2013). In fact, these sectors have been at the forefront of online platforms’ development, for example, from Napster, which in 1999 allowed its users to share files (notably music) with each other, to Amazon, which started its activities in 1995 by selling books. The audiovisual sector saw the advent of one of the first major user-generated content platforms with YouTube in 2005, before people could connect to rent their apartment to other users on Airbnb or provide taxi services using Uber. Digitization is deeply modifying the way cultural sectors are functioning, with an ambiguous impact on the diversity of cultural expressions. More concretely, the development of online platforms has represented an unprecedented change in production, distribution, broadcasting, consumption of cultural goods and services, as well as in the remuneration of creators (Simon and Bogdanowicz 2012). Cultural sectors are getting increasingly organized as two-sided markets (Rochet and Tirole 2002), where new online companies play the role of platforms mediating between different categories of users – for example advertisers and readers – allowing others to interact and exchange goods, services or information over the Internet (Nielsen et al. 2013). They continue to evolve at a pace not seen in any other sector of the economy (EC 2016). Most renowned online platforms originate from outside of the cultural sectors. Traditional players in these sectors have reacted to the development of online platforms by providing their own platforms. This process is labelled as platformization (Mansell 2015), where all sectors (besides cultural ones) get tangled with one another. The competitive setting has thus changed, from a sectorial competition to a blurring of the boundaries between cultural sectors, with some actors being active

Platforms, Concentration & Algorithms  101 in several cultural sectors. Therefore, digital technologies are likely to threaten traditional players – creators, intermediaries – to the benefit of Internet giants and specialized platforms (Zhu and Seamans 2010). In addition, insofar as the cultural expressions diffused by online platforms are usually components of national, regional or local identities, several actors are increasingly worried regarding cultural dominance (Mattelart 2010). It is claimed that online platforms’ strategies are likely to lead to more homogeneity in content supply and consumption (Guèvremont et al. 2013). This threat to cultural diversity is at the core of this chapter. In the last decades, cultural diversity has become a cornerstone in the development of policies related to culture, and beyond. On the one hand, it can be seen as a common heritage of humanity (UNESCO 2005). On the other hand, at an individual level, cultural diversity increases the range of choices available (UNESCO 2005). It is a capacity for expression, creation and innovation (UNESCO 2001). From an economic point of view, consumers value diversity because they have different tastes, or because every consumer has a taste for diversity (Ranaivoson 2012). Thus, within the European legal space, cultural diversity is at the same time a constitutional value (De Witte 2008), an objective and a limit of the European integration (Barbato 2008; Schneider and Van den Bossche 2008). Furthermore, over the last ten years, it has become a key element of the European Union action in external relations (Vlassis 2016). Finally, cultural diversity constantly helps creating a political consensus at the EU level (Ward 2008). Nonetheless, while there is a common agreement on the necessity to promote and protect the diversity of cultural expressions, this requires knowing more about how to achieve such a result, in particular in the digital era, addressing the role played by online platforms. This chapter does it by focussing on the audiovisual sectors. Our approach consists in an overview of recent literature proposing a new and different angle to currently debated issues around online platforms and cultural diversity. In the remainder, Section Two provides a practical definition of cultural diversity that allows a reformulating of the questions. Section Three analyzes online platforms’ features and their impact on diversity at market level. Section Four focusses on algorithms as one of platforms’ crucial components, in particular how recommendation systems may bias the diversity displayed to users. Section Five concludes.

A Practical Definition of Cultural Diversity and the Questions Raised by Online Platforms It is difficult to assess diversity per se, and there is no clearly agreed specific definition of diversity of production or consumption in the audiovisual sector. Following Ranaivoson (2007), to analyze cultural

102  Heritiana Ranaivoson diversity, we propose to take as a starting point the so-called Stirling model, which considers diversity as a mix of variety, balance and disparity (Stirling 2007). The diversity of a system (for example, the programming of a channel) can only be assessed when its elements (for example, feature films) have been grouped into categories (for example, these films’ nationality). Once this categorization has been done, variety corresponds to the number of categories, balance to the way the elements are spread among categories (for example, the share of films released per nationality) and disparity corresponds to the level of difference between the categories (for example, between every pair of them or between the two most distinct). This model has already been used in various fields (see, for example, Stirling 2007; Rafols and Meyer 2010). As this definition is somehow too generic for our purpose, this chapter also distinguishes between supplied diversity and consumed diversity (Van Cuilenburg and Van der Wurff 2001). Supplied diversity corresponds to the diversity of what is made available. Consumed diversity refers to diversity as it is actually consumed, thus depending on both consumer tastes and supplied diversity. The third dimension of our definition relies on Napoli (1999) who characterized diversity as having three aspects that correspond to different parts of the communication process: source diversity, content diversity and exposure diversity. In his approach, they are related to one another in a unidirectional way, from source to exposure (­Hendrickx et al. 2018). Such linear view can be challenged in the case of online production and consumption of content, as we discuss later. In a similar approach, Van Cuilenburg (2007) makes a distinction between supplier, production and outlet diversity. Supplier diversity, as linked to the source, is explained as the number of different companies in a media market and the degree to which they are able to control the market. Production diversity is linked to the phase where content is created or produced. Outlet diversity refers to the different channels or windows that can be used in the distribution phase to transmit media content to the end user. Crucial for us is the distinction between the first two elements as we will see here that there is no univocal link between supplier diversity and content diversity. Based on this definition of cultural diversity, our initial question of the impact of online platforms on diversity can be refined. Two levels need to be addressed: macro- and micro levels. At the market level, what is the competitive impact of online platforms? To what extent does competition foster or prohibit diversity? In other words, what is the impact of supplier diversity on content diversity? At the algorithm level, how do online platforms influence consumer choices? Do algorithms promote or limit diversity? In other words, what are the links between supplied diversity and consumed diversity?

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Platforms and Competition Online Platform’s Main Features Our definition of platforms relies on their economic features. It thus covers all online platforms, notably the ones involved in the audiovisual sector: Netflix, iTunes, YouTube and so forth. Platforms mediate and coordinate between various stakeholder constituencies in two-sided markets (Hoelck and Ranaivoson 2017). Nowadays, platforms are even often multisided, mediating between more than two user groups (Evans, Hagiu and Schmalensee 2005). Cross-sided network effects are a defining feature of two-sided markets (Hoelck and Ballon 2015), which are exploited by platforms: increasing the number of buyers on one side attracts an increasing number of sellers on the other side (Rochet and Tirole 2006). Taking television as an example, the two categories of users in the two-sided market are on the one hand viewers and on the other hand advertisers. Broadcasters act as platforms whose role is to connect both categories of users. The edited and broadcasted content is a joint product, that is, on the one hand, content for the viewers and, on the other hand, these viewers’ attention for the advertisers. As an example of multisided markets, the video-sharing website YouTube is mediating between not two, but (at least) three market sides: users, video providers and advertisers (Hoelck and Ranaivoson 2017). Cross-sided network effects enable platforms to pursue a pricing strategy which is not feasible for merchant firms, that is, cross-subsidization (Hoelck and Ranaivoson 2017). Concretely, platform companies can charge prices at one side below marginal cost and derive profit on the other side(s) of the market. Platforms can attract with this pricing structure additional participants on the subsidized side of the market to foster participation on the profit-making side (Evans and Schmalensee 2007). As a response to the significant competitive advantage of being a platform, incumbents have adapted by striving for platform-based business models themselves (Hoelck et al. 2016). They have transitioned their companies progressively from classical downstream buyers or upstream suppliers of products or services to platform businesses. This is the platformization trend (Mansell 2015), as illustrated by projects in which for broadcasters launch their own on-demand, online audiovisual platforms, such as the cooperation named Salto between French public and commercial broadcasters to launch a competitor to Netflix in France. Online Platforms and Competition Cross-sided network effects can play out in a digital space to an extreme extent (Hoelck and Ranaivoson 2017), enabling online platforms

104  Heritiana Ranaivoson to achieve massive market power. First, it is difficult to introduce a new competing platform in a given market, since one market side is needed to attract the other side (‘chicken-and-egg’). Second, once a platform is successful in a given market, chances are high that it will dominate the whole of it due to the size of its market share (‘winner-takes-all’) (Parker et al. 2016). This leads to a tendency towards high entry barriers and concentration in digital platform markets. In addition, platforms can reinforce their position by strategic moves: by enveloping, by leveraging their market power and by vertical commoditization (De Voldere 2017). Such strategies may reduce competition and create high entry barriers (Eisenmann 2008; Hoelck et al. 2016). Platforms can envelop by extending another platform’s value proposition and offering it in a multiplatform bundle, by leveraging overlapping user bases and harnessing cross-sided network effects to swallow the other platform (Eisenmann et al. 2011). An envelopment attack can be used to enter other, not directly related, ecosystems, as Apple, Google and Amazon did to enter various cultural sectors (Hoelck et al. 2016). Platforms can leverage their market power in a silo competition against another platform next to it – that is providing a similar product or service – by increasing its grip on the downstream or upstream layers. This can be achieved via strategic growth, acquisition or strategic cooperation (Hoelck et al. 2016). This is, for example, the case with the development of exclusive content by video-on-demand (VoD) platforms such as Netflix’s popular series House of Cards. Thus doing, they increase their grip on upstream layer (content production), which makes them more attractive towards viewers (Ranaivoson et al. 2014). Finally, vertical commoditization consists of a platform diversifying into a related vertical market and offering the same service as a competitor for a highly discounted price or even for free. In more detail, the platform expands in an aligned upstream or downstream layer, by providing a product or a service in that layer. This new product or service, which is vertically integrated with the mother company, is not profit earning. It aims at decreasing the rivals’ profits and may even force them to leave the market, while increasing the value of its own major platform. Arguably, this is the path followed by Apple in the music and audiovisual sectors. While the development of platforms leads to greater market concentration, platforms should not necessarily be equalled with lack of openness (De Voldere 2017). Actually, the emergence of platforms has been accompanied by innovations, developed by third parties that make use of platforms, as well as by platforms themselves. This is a deliberate strategy on behalf of platform providers to create attractive, innovative services. However, the risk is that platform providers make use of their economies of scale or leverage market power in adjoining markets, in a direction that could reduce innovation by third parties in the longer term (Hoelck et al. 2016). Such ambiguity in the relationship between

Platforms, Concentration & Algorithms  105 platforms and innovation is crucial to understand the current tendency to neither prevent nor penalize online platforms’ dominance (De Voldere 2017). Actually, such dominance relies on innovation and can be challenged by potential competitors, in particular in markets that are not stable, like for most online content platforms. Besides, platforms in the same ecosystem often cooperate to foster each other’s growth. Thus, these platforms are in the paradoxical situation in which they have to balance between competition and cooperation (De Voldere 2017). On the one hand, each platform company has to consolidate its own market position; on the other hand, it has to support the creation and maintenance of a sustainable ecosystem. This leads to the inter-firm dynamic of ‘co-opetition’, that is the collaboration between firms with incomplete congruence of interests, often in the presence of market power asymmetries (Brandenburger and Nalebuff 1996). As a result, companies’ strategic incentives are directly at odds with the platform ‘ecosystem’ logic (Weyl 2008).

Concentration and Diversity: An Ambiguous Relationship Online platforms’ features tend to lead to a greater concentration, most probably at the expense of competition. However the impact on diversity is ambiguous because, as we show here, the impact of concentration on diversity is complicated. In other words, there is no simple link between diversity of suppliers and of content. A standard theoretical analysis of the links between competition and diversity concludes that more competition does not necessarily lead to more diversity; on the contrary, more competition tends to reduce diversity (Farchy and Ranaivoson 2011). In the audiovisual field, the question has notably been applied to the assessment of public broadcasters who are arguably under a lower direct competitive pressure than commercial broadcasters. Almost all empirical studies conclude that public channels are more diverse than private ones and/or that public channels are significantly distinct from their private counterparts (Farchy and Ranaivoson 2011). Thus, Aslama (2006) looks at diversity in programming for all Finnish television channels from 1993 to 2004 and finds that, over this period, public channels’ programming was more diverse than private ones. Besides, public channels differentiated themselves subsequent to the entrance of a new private channel in 1997. Van der Wurff (2005) finds that diversity is lower on private channels than public ones. Public channels, in fact, face obligations as a consequence of their status as a public service (that is, they should propose more thought-provoking programmes). His analysis is interesting in that he uses a large set of data on European markets from the end of the 80s to the 90s. However,

106  Heritiana Ranaivoson he relies on second-hand data, especially for categorization (Farchy and Ranaivoson 2011). Ward (2006) provides an international comparison of media (television and newspapers) in Croatia, Italy, Norway and the United Kingdom based on a very detailed analysis of the programming in those countries. The report finds that private and public channels do provide different kinds of programmes. Lund and Berg (2009), in their analysis of television markets in Denmark, Sweden and Norway, oppose soft and hard television genres, respectively fiction and informational, and show that public broadcasters propose harder genres than private broadcasters. Peruško (2009) applies an empirical analysis of genres in the case of Croatia, which shows the prevalence of ‘socially useful’ genres on public service channels (news, news interviews, current affairs magazines, documentaries, art and education programmes), as well as greater genre diversity. An exception is Powers et al. (1994), who investigate the effect of competition on Danish television news and find that competition led not only to a greater degree of diversity in news content, but also to improvements in the content of state television. However, the impact of concentration on diversity is more complicated notably due to conflicting effects of economies of scale and economies of scope. On the one hand, there is indeed an opposition between economies of scale and diversity (Dixit and Stiglitz 1977; Lancaster 1979). Economies of scale exist when fixed costs are large relative to variable costs. For example, this phenomenon incites movie producers to focus their efforts on a few blockbusters since an increase in their consumption will decrease their average production costs (by unit sold). The opposition between diversity and cost reduction is a standard result in the literature on monopolistic competition, starting with Chamberlin (1933). Findings of this strand of research suggest that in order to reduce production cost producers tend to provide less diverse products than what consumers want. On the other hand, economies of scope can also incite producers and distributors to offer a diverse range of products. They exist when fixed costs are large relative to variable costs and can be spread over different products. For example, the cost of setting up and maintaining an online retail platform can be spread over all items available on the platform. A diversified catalogue has several assets. It is notably a way to reduce competition: saturation of the market allows erecting barriers to entry (Lancaster 1979; Curien and Moreau 2005). Online Competition to Improve Diversity Digitization and the rise of platforms do not make the relationship between market structure and diversity of products less ambiguous. On the one hand, there is a much greater amount of content available to citizens, thanks to democratization of content production, reduction of

Platforms, Concentration & Algorithms  107 distribution costs to reach an audience that is potentially global and constant emergence of new services relying on innovative business models (Masnick and Ho 2012). Such services or new activities are at all steps in the value chain, from creation to distribution. In the same way, the long tail theory (Anderson 2006) explains how online platforms do not face physical limitations (schedule, storing) and can therefore expand economies of scale and scope. The theory states that digital technology, by promoting a greater supplied diversity, leads to a higher consumed diversity (Ranaivoson 2016). On the other hand, digital technologies are likely to threaten traditional media players (creators, intermediaries), as well as smaller ones, to the benefit of non-traditional media players (like Google, Amazon, Facebook or Apple). What is the impact of such concentration? Some authors point out that the online platforms’ commercial strategies are likely to lead to more homogeneity in content supply and consumption (Guèvremont et al. 2013). In the same way, Goel et al. (2010) believe that there is a risk that the online platforms’ increasing control over access to cultural works may threaten instead the visibility and promotion of marginal cultural works even compared to the current situation. It seems that competition, when relying on digitization, leads to more diversity. However empirical research remains scarce. Champion (2015) explores the media diversity in the emergence of multiplatforms for content distribution, focussing on media output of British newspapers, television broadcast channels and magazines over the 2013 and 2014 period. She concludes that in most cases, the additional volume produced was being directed towards new media platforms, meaning that multiplatform innovations do influence content diversity in a positive way. A quantitative study on media concentration by Smyrnaios et al. (2010) on articles from over 80 French-language news websites on a small number of topics suggests the multiplicity of news being a positive factor leading to pluralism. Faustino (2013) holds the view that competition will contribute to the information pluralism and the diversity of voices, based on his measurement of concentration in the Portuguese online news segment. This is because technological changes provide more possibilities in accessing content via various platforms, and digital media are reducing distribution costs, making content distribution more affordable. Finally, online platforms seem to provide more diversity. Thus, Jang (2017) finds that Netflix offers better producer diversity than linear television channels in South Korea, both in variety and balance, in spite of persistent strong bias towards English-speaking nationalities representation. In sum, it seems that, while online competition leads to more diversity, online platforms also provide more diversity. The outcome may seem contradictory, but it results from the fact that, for the moment, online

108  Heritiana Ranaivoson platforms have an interest in remaining open and fostering internal competition. Internal competition between their providers, for example, will take the aspect of having as broad catalogues or offers as possible. Openness will translate into ensuring that the platforms welcome the third party’s content or application in order to attract users. It is, however, quite difficult to assess what could be the situation in a few decades or even years if the markets got even more concentrated and the remaining dominant platform(s) would not have to make any effort in terms of internal competition or openness anymore.

Algorithms, Bias and the Role of Diversity After having considered online platforms as entities competing in markets, the focus is put on one of their crucial features: namely the algorithms they all use, and in particular their recommendation systems and how they can bias what is displayed to users. Recommendation systems have been studied since at least the mid-90s (Adomavicius and Tuzhilin 2005). There is, however, not much research on how algorithms, and in particular recommendation systems, can bias content. This is particularly relevant, with current discussions around the filter bubble (Pariser 2011) and fake news. Recommendation Systems: Why and How? The brain is responsible for filtering out the massive information absorbed by senses. In that process, heuristics are decision-making mental shortcuts that permit us to be able to make decisions and not to be distracted by trying to absorb all the information available around us (Lago 2016). One such strategy to cope with large amounts of information consists in relying on the so-called superstars (Adler 1985). An increase in the diversity of available options makes it harder to cope with the related increase in the load of information, as research in psychology shows (see Ranaivoson 2012 for an overview). A strategy for users can therefore be to limit the riskiness of their choice and opt for what they already know (Ranaivoson, 2016), all the more so since there is even more information available online on these superstars. Algorithms, in particular recommendation systems, can complement such heuristics. With digitization, some physical limitations have disappeared: space (for storing), time (for scheduling). Others remain: not only attention but also what can be displayed to users – for example, what the Netflix user will see when connecting to the platform. For these reasons, the item selection process can become cumbersome and complicated (Kunaver and Požrl 2017). With, on one side, users, with their different tastes and profiles, and, on the other side, available items, recommender systems aim at displaying for each user the set of

Platforms, Concentration & Algorithms  109 items that is most likely to maximize the user’s utility (Adomavicius and Tuzhilin 2005). ‘In its most common formulation, the recommendation problem is reduced to the problem of estimating ratings for the items that have not been seen by a user’ (Adomavicius and Tuzhilin, 2005: 734). This requires the recommendation system to extrapolate to all users and all items. They usually work without explicit action of the users. This is different from, for example, search engines. In a search engine, one explicitly looks for something, for example, by typing a word in a dedicated box. Recommendation systems automatically function when, for example, a page is accessed. Most recommendation systems follow the same steps (Kunaver and Požrl 2017): first they analyze the available information about the user; second, they create a user model which stores the information required by the recommendation process in order to select the most appropriate item(s) for the user; third, they present items to the user; fourth a feedback mechanism enables the recommendation system to track the user’s satisfaction with the presented recommendations and adjust the user model accordingly. This feedback can be implicit (based on the observed behaviour, such as whether the content was watched until the end, for example) or explicit (based on rating, for example). Adomavicius and Tuzhilin (2005) consider the implicit feedback not to be intrusive, as opposed to the explicit one. This qualification, however, overlooks potential privacy issues. Actually, with implicit feedback, the user is not informed that their behaviour is analyzed and used to make recommendations. Recommendation systems are usually classified into three categories based on how recommendations are made (Adomavicius and Tuzhilin 2005): content-based recommendations: the user will be recommended items similar to the ones the user preferred in the past; collaborative recommendations: the user will be recommended items that people with similar tastes and preferences liked in the past; and, hybrid approaches, which combine the two first ones. Recommendation Systems’ Biases Bias is a concept commonly used in research on media. It has no real equivalent in research on other cultural sectors, but it is interesting to expand this concept to other contents, and here in particular to audiovisual content. Media bias is a portrayal of reality that is significantly and systematically distorted, favouring one of the parties over the others (Groeling 2013). The conception can easily be applied to all types of content, except maybe for favouring one of the parties over the others, which more specifically applies to partisan bias. Following Stevenson et al. (1973), it is important to conceptualize bias as

110  Heritiana Ranaivoson imbalance or inequality of coverage rather than as a departure from truth. There are four biases: selection bias, presentation bias, overfitting and the filter bubble. Selection bias occurs when not all items in the target population are equally likely to be displayed (Groeling 2013). It is also known as ‘the unobserved population problem’. For online platforms, it can apply to items that simply do not belong to the catalogue. It can also be applied to items that do not have sufficient historical data. Tan et al. (2012) explain that selection-biased recommendation systems can reduce sales diversity because these systems tend to recommend products with such sufficient historical data, and only hits have enough historical data. Presentation bias consists in displaying an item in a manner that presents a significantly distorted view of reality (Groeling 2013). There is often an underlying problem of subjectivity. The tendency of some platforms to put forward their exclusive content is an example of such bias. The third bias is overfitting or overspecialization. According to Hinz et al. (2011) systems based on recommendations may shift demand from niches to blockbusters. Overfitting indeed corresponds to the situation when users are displayed items that are very similar to what they liked in the past – because the system can only recommend items that score highly against a user’s profile (Adomavicius and Tuzhilin 2005). Therefore, the recommendations are relevant (users are likely to like the recommended items) but not so useful due to the lack of novelty (Abbassi et al. 2009). There is a sort of trade-off for displayed items between items that are safe but not risky and items that the user may actually like, had they known about them (Abbassi et al. 2009). For example, it is not ­necessarily a good idea to recommend all movies by director Woody Allen to a user who liked one of them (Adomavicius and Tuzhilin 2005). Thus Alexander (2016) argues that Netflix’s predictive personalization system presents an alarming paradox in terms of diversity, as the viewers are less and less likely to encounter films and shows that might challenge, upset or provoke them. In contrast, Hongfei (2016) assumes that Netflix does better than its competitors – who rely on transactional VoD – ­because the latter can focus on content that people like the most – best content in popular genres – while Netflix is more diverse. We have always consumed media that appeals to our interests, but the fourth and last bias, the filter bubble, posits three specific dynamics (Pariser 2011): you are alone in it, the filter bubble is invisible and you do not choose to enter the bubble. The last point raises autonomy-related concerns (Borgesius et al. 2016). Pariser (2011) sees the filter bubble as a drawback of personalization, often overlooked by users: ‘in a personalized world, important but complex or unpleasant issues (…) are less likely to come to our attention at all’ (Pariser 2011: 18). The direct consequence of the filter bubble is that every user has access to less diverse content – points of views, ideas, stories and so forth. – than what is

Platforms, Concentration & Algorithms  111 available, or than what they think they have access to (Hendrickx n.d.). A very similar concept is the one of echo chamber, a metaphor for the situation in which users’ prior political views are reinforced on the Internet due to selective exposure to political content (Colleoni et al. 2014) as well as other beliefs. Despite all the fuss around the filter bubble, empirical research proving its existence is scarce (Hendrickx n.d.). Thus, Borgesius et al. (2016) conclude that – in spite of the serious concerns voiced – there is no empirical evidence that warrants any strong worries about filter bubbles, but the debate about them is nonetheless important. Haim et al. (2017), in a similar vein, note that empirical evidence on the existence of the filter bubble and its effects, especially in the context of news, is limited. Of the existing handful of studies, none has been able to prove genuine negative effects of filter bubbles. On the Interest of Having Recommendation Systems Promoting More Diversity Notably based on these biases and problems, the research and development of recommendation systems have moved from simply developing new recommendation methods to fine-tuning these methods and finding ways to use additional information about the user in the recommendation process, notably through the introduction of diversification into the recommendation process (Kunaver and Požrl 2017). Diversity is notably a solution to alleviate the filter bubble (Pariser 2011) and to remedy overfitting. More precisely, overfitting can be addressed by introducing some randomness or by not showing items that are either too different or too similar to something the user has seen before (Adomavicius and Tuzhilin 2005). This has to do again with providing recommendations that are more useful even if they are also riskier. Lowering search costs to enable shoppers to find more products that better fit their preferences (Hinz et al. 2011) may then lead to higher demand for niche products (Tan et al. 2012). Beyond recommendation systems having diversity as core in a platform strategy could be beneficial to the platform. A set of recent exploratory researches on Netflix show how it is doing better than its competitors: respectively, the French MyTF1 VOD and the British BBC1 on iPlayer (Hongfei 2016), Amazon Prime Video in the Turkish market (Kaysadi 2017) and South Korean linear television channels (Jang 2017). Netflix’s knowledge of its customers allows it to reflect its customers’ diversity of tastes, at least (Hongfei 2016). Its customer-centric personalization strategy positively impacts diversity in terms of variety, due to the diversity of targeted audience (Kaysadi 2017) to assimilate content according to the local market standards. Netflix’s direct customer ownership also contributes to enhancing diversity, especially from a consumer’s

112  Heritiana Ranaivoson perspective, by collecting a customer’s content preference and reflecting it into their content acquisition and production to provide a higher diversity of content from the consumer’s perspective (Jang 2017). There is the seeming willingness to not only acquire/produce worthy content in local markets but also promote the visibility of more identities on screen. It can also be justified when Netflix more and more includes shows whose casts are predominantly African American, Asian or Latino/Hispanic: for example, Blackish, 3%, or Chewing Gum (Kaysadi 2017). Related to this, Netflix’s international scope allows it to have both a local and a global approach – for example, Marseille, produced by Netflix, and which takes place in France with a French cast, is watched outside of France (Hongfei 2016). Netflix is even investing in (co)productions in the foreign markets which promise profitability due to size and market habits (Kaysadi 2017). There are already more than 90 international original productions from a variety of global markets – ­G ermany, Italy, Spain, the United Kingdom, France, Norway, Japan, South Korea, Brazil and so forth. The fact that Netflix is even set to produce a Turkish original series in a rather unusual genre (sci-fi, fantasy drama) in the Turkish market proves its determination and capacity to enrich its international catalogues in terms of variety (Kaysadi 2017). This could be seen as a form of diversity-by-design (Helberger 2011), where diversity is an objective already at the level of the conception and implementation of the algorithm. There are, however, limitations of such diversification approach. At the recommendation system level, there is no consensus of how diversity should be measured (Kunaver and Požrl 2017). Similar to problems identified by studies on the long tail, different measures of the long tail can lead to seemingly contradictory outcomes (Ranaivoson 2016). Besides, in the trade-off between diversity and profit, the latter remains more important. Instead of thriving for surprising content, a platform such as Netflix can sometimes be accused of investing in content that is more ‘guaranteed’ to be consumed. More and more shows are to be produced based on customer tastes, which are likely to create clusters around certain genres, themes, casts and so forth. This business approach does not guarantee wider variety of content types, and problematizes the notion of diversity in the long run (Kaysadi 2017). In such a situation, the illusion of diversity (for example, by pretending that the catalogue is bigger than it really is) may be worse than no diversity at all. Thus Netflix rearranges its ‘Recommended for You’ section in such a way that the viewer is given the impression that the catalogue is huge and very much tailored to what the viewer wants. This way an imaginary idea of long tail is easily reinforced (Smith-Rowsey 2016), when, in fact, most options exist within certain genres – Action, Adventure, Drama or Comedy – and in certain languages – English, Japanese or Korean (Kaysadi 2017).

Platforms, Concentration & Algorithms  113

Conclusion and Revised Set of Questions The aim of this chapter was to analyze the impact of online audiovisual platforms on cultural diversity. It has done so by relying on an overview of recent literature, focussed on audiovisual sectors. It first provided a practical definition of cultural diversity, which has allowed it to refine the research questions by distinguishing two levels: macro – considering the impact at market level – and micro – considering the impact of algorithms. One crucial objective is to combine both analyses, which remain separated in the literature. The chapter then moved to an analysis of what constitutes an online platform: namely that they exist because they can benefit from crosssided network effects between at least two types of users – for example, advertisers and viewers, subscribers and content providers, etc. Such effects, amplified by digital technologies, lead to greater market concentration. There is, however, no univocal link between concentration and diversity. For example, there can be a low supplier diversity together with a high content diversity. Empirical research on the impact of concentration or competition on online diversity remains scarce, but it seems that online competition leads to more diversity, while online platforms also provide more diversity. The outcome may seem contradictory, but it results from the fact that, for the moment, online platforms have an interest in remaining open and fostering internal competition. The chapter has finally analyzed algorithms’ impact on diversity. Taking the case of recommendation systems, it has explained that these algorithms are designed to help users make choices, by displaying for each user the items they are more likely to enjoy. This, however, leads to biases, meaning that the displayed items are imbalanced compared to existing items. Four items are described: selection bias, presentation bias, overfitting and the filter bubble. Section four concludes on how implementing diversity as an algorithm objective can help alleviate some of these biases. Overfitting consists in displaying to users items that are very similar to what they liked in the past. Such recommendations are often not useful, while introducing diversity may point to enjoyable surprises. The filter bubble is a situation when users have access only to a limited set of opinion, while not being aware of the situation. Diversity can be here crucial to give more autonomy to users. More generally, online platforms have an interest in providing more diversity to their users, in order to better reflect their tastes. The risk remains, though, that they rather aim at an illusion of diversity, only to give users an illusion of choice. This raises some policy issues about how platforms should be regulated, notably regarding the importance of having a level-playing field and the lack of transparency of their algorithms. The platformization of European audiovisual sectors raises various challenges as market

114  Heritiana Ranaivoson power gets more concentrated and a few stakeholders become gatekeepers. Each of them, however, has a strong power that would make local ecosystems too dependent on one or a few platforms. This can be solved by the provision of a fair, level playing field for the audiovisual sector, where all types of actors (small and big, European and international, new entrants and established players) face the same regulations. The lack of transparency is a less well-perceived problem. It concerns their algorithms and, beyond, data related to their activities. It is, for example, very difficult to monitor the consumption of online VoD services, just like traditional audiovisual and radio services are monitored. A framework is needed to ensure the platforms’ transparency and accountability, all the more so as some platforms play an editorial role, for example, in the influence they have on the display of content. For search engines, search results should not end up privileging services owned, administered or controlled, in whole or in part. Quotas can be of some sense only if they relate to the ‘displayed diversity’, and not only to the diversity of the catalogue as a whole. While I personally believe that online platforms benefit from diversity-by-design, that is to say, that providing and displaying more diverse content will help them being more profitable in the short and long terms, there is the risk that users are left with an illusion of choice and of diversity, an illusion likely to stay if there is no competitor able to emerge and to do better.

Acknowledgements The writing of this paper was made possible through a research grant from the Research Foundation – Flanders (FWO) for the project Diversity and Information Media: New Tools for a Multifaceted Public Debate (DIAMOND), contract S008817N.

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Platforms, Concentration & Algorithms  115 Aslama, M. (2006). The diversity challenge: changing television markets and public service programming in Finland, 1993–2004. Working Paper Series, 8. New York: McGannon Center. Barbato J.-C. (2008). La diversité culturelle en droit communautaire. Marseille: Presses Universitaires d’Aix-Marseille. Borgesius, F.J.Z., Trilling, D., Möller, J., Bodó, B., De Vreese, C.H. and Helberger, N. (2016). Should we worry about filter bubbles? Internet Policy Review, 5(1). https://policyreview.info/articles/analysis/should-we-worry-about-filterbubbles. Accessed July 6, 2018. Brandenburger, A. and Nalebuff, B. (1996). Co-Opetition: A Revolution Mindset That Combines Competition and Cooperation: The Game Theory Strategy That’s Changing the Game of Business. New York: Currency Doubleday. Chamberlin, E.H. (1933). The Theory of Monopolistic Competition. Cambridge: Harvard University Press. Champion, K. (2015). Measuring content diversity in a multi-platform context. The Political Economy of Communication, 3(1): 39–56. Colleoni, E., Rozza, A. and Arvidsson, A. (2014). Echo Chamber or Public Sphere? Predicting Political Orientation and Measuring Political Homophily in Twitter Using Big Data: Political Homophily on Twitter. Journal of Communication, 64(2): 317–32. Curien, N. and Moreau, F. (2005). Investir les marchés induits de la musique : une voie de sortie de crise pour les majors du disque face au piratage ? Revue Télécom, 136: 1–5. De Voldere, I. (coord.) (2017). Mapping the Creative Value Chains A Study on the Economy of Culture in the Digital Age Final Report. Brussels: European Commission, Directorate-General for Education and Culture Directorate D. De Witte, B. (2008). The value of cultural diversity in European Union law. In Schneider, H. and van den Bossche, P. (eds.). Protection of Cultural Diversity from a European and International Perspective. Antwerp: Intersentia, 219–47. Dixit, A.K. and Stiglitz, J.E. (1977). Monopolistic competition and optimum product diversity. The American Economic Review, 67(3): 297–308. Eisenmann, T. (2008). Managing proprietary and shared platforms. California Management Review, 50(4): 31–53. Eisenmann, T., Parker, G. and van Alstyne, M. (2011). Platform envelopment. Strategic Management Journal, 32(12): 1270–85. European Commission (EC) (2016). Communication from the Commission to the European Parliament, the Council, the European Economic and ­Social Com­ nal. ­Brussels: EC. mittee and the Committee of the Regions. COM(2016) 288 fi Evans, D.S., Hagiu, A. and Schmalensee, R. (2005). A survey of the economic role of software platforms in computer-based industries. CESifo Economic Studies, 51(2–3): 189–224. Evans, D.S. and Schmalensee, R. (2007). The Industrial Organization of Markets with Two-Sided Platforms. Competition Policy International, 3(1): 150–79. Farchy, J. and Ranaivoson, H. (2011). Do public television channels provide more diversity than private ones? ENCATC Journal of Cultural Management and Policy, 1(1): 50–63. Faustino, P. (2013). The online news concentration, digital newspapers and voices diversity in Portugal. Paper presented at the XXXVI INTERCOM Congresso Brasileiro de Ciências da Comunicação. Manaus: INTERCOM.

116  Heritiana Ranaivoson Guèvremont, V., Bernier, I., Burri, M., Cornu, M., Richieri Hanania, L. and Ruiz Fabri, E. (2013). Implementation of the Convention on the Protection and Promotion of the Diversity of Cultural Expression in the Digital Age: Challenges, Priority Actions, and Recommendations. Paris: UNESCO. Goel, S., Broder, A., Gabrilovich, E. and Pang, B. (2010). Anatomy of the long tail: ordinary people with extraordinary tastes. Proceedings of the third international conference of the Association for Computing Machinery (ACM) on Web search and data mining, February 4–6. New York: ACM, 201–210. Groeling, T. (2013). Media bias by the numbers: challenges and opportunities in the empirical study of partisan news. Annual Review of Political Science, 16(1): 129–51. Haim, M., Arendt, F. and Scherr, S. (2017). Abyss or Shelter? On the Relevance of Web Search Engines’ Search Results When People Google for Suicide. Health Communication, 32(2): 253–58. Helberger, N. (2011). Diversity by Design. Journal of Information Policy, 1: 441–69. Hendrickx, J. (n.d.). Is de filter bubbel #fakenews? https://soc.kuleuven.be/fsw/ diamond/Jonathan%20Hendrickx%20V3.pdf. Accessed July 6, 2018. Hendrickx, J., Ranaivoson, H., van der Burg, M. and Van den Bulck, H. (2018). Questioning the link between market structure and content diversity. Paper presented at the European Media Management Association Conference, ­Warsaw, June, 14–15. Hinz, O., Eckert, J. and Skiera, B. (2011). Drivers of the long tail phenomenon: an empirical analysis. Journal of Management Information Systems, 27(4): 43–70. Hoelck, K. and Ballon, P. (2015). Competitive dynamics in the ICT Sector: strategic decisions in platform ecosystems. Communication & Strategies, 99: 51–71. Hoelck, K., Cremer, S. and Ballon, P. (2016). Cross-platform effects: towards a measure for platform integration benefit. Paper presented at the Open and User Innovation Conference, Harvard Business School, August, 1–3. Hoelck, K. and Ranaivoson, H. (2017). Threat or opportunity? Cultural diversity in the era of digital platforms in the EU. Quaderns del CAC, 43: 17–28. Hongfei, N. (2016). Netflix’s impact on cultural diversity of TV series: a comparative case study in France and in the United Kingdom markets. MSc thesis. Brussels: Vrije Universiteit Brussel. Jang, J. (2017). Digital technology’s impact on diversity: a comparative case study of Netflix and linear TV channels in South Korea. MSc thesis. Brussels: Vrije Universiteit Brussel. Kaysadi, C. (2017). How do global SVODs impact cultural diversity? A comparative case study of Netflix and Amazon Prime in Belgium and Turkey. MSc thesis. Brussels: Vrije Universiteit Brussel. Kunaver, M. and Požrl, T. (2017). Diversity in recommender systems – a survey. Knowledge-Based Systems, 123: 154–62. Lago, L. (2016). Heuristics, the social networks, and algorithms. CEST – ­Bulletin, 1(6): 1–2. Lancaster, K. (1979). Variety, Equity and Efficiency: Product Variety in an Industrial Society. New York: Columbia University Press. Lund, A.B. and Berg, C.E. (2009). Denmark, Sweden and Norway: Television diversity by duopolistic competition and co-regulation. International Communication Gazette, 71(1–2): 19–37.

Platforms, Concentration & Algorithms  117 Mansell, R. (2015). Platforms of power. Intermedia, 43(1): 20–24. Masnick, M. and Ho, M. (2012). The Sky Is Rising. A Detailed Look at the State of the Entertainment Industry. Washington/Brussels: CCIA/ EngineAdvocacy/Floor64. ——— (2014). The Sky is Rising. 2014 Edition. Washington/Brussels: CCIA/ Floor64. Mattelart, A. (2010). Diversité culturelle et mondialisation. Paris: La Découverte. Napoli, P. M. (1999). Deconstructing the diversity principle. Journal of Communication, 49(4): 7–34. Nielsen, K.E., Basalisco, B. and Thelle, M.H. (2013). The Impact of Online Intermediaries on the EU Economy. Report prepared for EDiMA. Copenhagen: Copenhagen Economics. Pariser, E. (2011). The Filter Bubble: What the Internet is Hiding from You. New York: Penguin Press. Parker, G., Van Alstyne, M. and Choudary, S. (2016). Platform Revolution. How Networked Markets Are Transforming the Economy – and How to Make Them Work for You. New York: WW Norton and Company. Peruško, Z. (2009). Public interest and television performance in Croatia. ­Medijska Istraživanja, 15(2): 5–31. Powers, A., Kristjansdottir, H. and Sutton, H. (1994). Competition in Danish television news. Journal of Media Economics, 7(4): 21–30. Rafols, I. and Meyer, M. (2010). Diversity and network coherence as indicators of interdisciplinarity: case studies in bionanoscience. Scientometrics, 82(2): 263–87. Ranaivoson, H. (2007). Measuring Cultural Diversity: A Review of Existing Definitions. Paris: UNESCO. ——— (2012). Does the consumer value diversity? How the economists’ standard hypothesis is being challenged. In Vecco, M. (ed.). The Consumption of Culture, The Culture of Consumption. A Collection of Contributions on Cultural Consumption and Cultural Markets. Saarbrücken: Lambert Academic Publishing, 70–95. ——— (2016). The internet platforms’ impact on the diversity of cultural expressions: to the long tail, and beyond! In Richieri Hanania, L. and Norodom, A.T. (eds.). Diversity of Cultural Expressions in the Digital Era. Buenos Aires: Teseo, 183–207. Ranaivoson, H., De Vinck, S. and Van Rompuy, B. (2014). Analysis of the Legal Rules for Exploitation Windows and Commercial Practices in EU Member States and of the Importance of Exploitation Windows for New Business Practices (No. Final). Brussels: European Commission, Directorate-General of Communications Networks, Content & Technology. Rochet, J.C. and Tirole, J. (2002). Cooperation among competitors: some economics of payment card associations. The RAND Journal of Economics, 33(4): 549–70. ——— (2006). Two-sided markets: a progress report. The RAND Journal of Economics, 37(3): 645–67. Schmalensee, R. (1978). Entry deterrence in the ready-to-eat breakfast cereal industry. Bell Journal of Economics, 9: 305–27. Schneider H. and Van den Bossche, P. (eds.) (2008) Protection of Cultural Diversity from a European and International Perspective. Antwerp: Intersentia.

118  Heritiana Ranaivoson Smith-Rowsey, D. (2016). Imaginative indices and deceptive domains: how Netflix’s categories and genres redefine the long tail. In McDonald, K. and Smith-Rowsey, D. (eds.). The Netflix Effect. New York: Bloomsbury Academic, 49–63. Smyrnaios, N., Marty, E. and Rebillard, F. (2010). Does the long tail apply to online news? A quantitative study of French-speaking news websites. New Media & Society, 12(8): 1244–61. Simon, J.P. and Bogdanowicz, M. (2012). The Digital Shift in the Media and Content Industries. JRC Scientific and Policy Reports No. EUR 25692 EN. Brussels: European Commission Joint Research Centre Institute for Prospective Technological Studies. Stevenson, R.L., Eisinger, R.A., Feinberg, B.M. and Kotok, A.B. (1973). Untwisting the news twisters: a replication of Efron’s study. Journalism Quarterly, 50(2): 211–19. Stirling, A. (2007). A general framework for analysing diversity in science, technology and society. Journal of the Royal Society Interface, 4(15): 707–19. Tan, T., Netessine, S. and Hitt, L.M. (2012). Plenty is no plague, or is it? An empirical study of the impact of product variety on demand concentration. Faculty and Research Working Paper, Alliance Center for Global Research and Education, Insead & Wharton. UNESCO (2001). Universal Declaration on Cultural Diversity. Paris: UNESCO. ——— (2005). Convention on the Protection and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO. Van Cuilenburg, J. (2007). Media diversity, competition and concentration: concepts and theories. In De Bens, E. (ed.). Media between Culture and Commerce. Bristol: Intellect Books. Van Cuilenburg, J. and Van der Wurff, R. (2001). Impact of moderate and ruinous competition on diversity: The Dutch television market. The Journal of Media Economics, 14: 213–29. Van der Wurff, R. (2005). Competition, concentration and diversity in European television Markets. Journal of Cultural Economics, 29(4): 249–75. Vlassis, A. (2016). European Commission, trade agreements, and diversity of cultural expressions: between autonomy and influence. European Journal of Communication, 31(4): 446–61. Ward, D. (2006). The assessment of content diversity in newspapers and television in the context of increasing trends towards concentration of media markets. Final report on the study commissioned by the Group of Specialists on Media Diversity (MC-S-MD). Strasbourg: Council of Europe. ——— (2008). The European Union and the Culture Industries: Regulation and the Public Interest. Farnham: Ashgate. Weyl, E.G. (2008). Double Marginalisation in Two-sided Markets. Cambridge: Harvard University. Zhu, F. and Seamans, R. (2010). Technology shocks in multi-sided markets: the impact of craigslist on local newspapers. NET Institute Working Paper No 10–11. Örebro: Örebro University School of Business.

7 Digital Trade and Cultural Policy Nexus A Challenge for the Promotion of the Diversity of Cultural Expressions in the Creative Economy Michèle Rioux and Felipe Verdugo Introduction This chapter focusses on policy challenges in the field of culture caused by increased convergence between the cultural, creative and telecommunication industries. While the literature has treated the convergence of the sectors of culture and telecommunications (see Geradin and Luff 2004; Benghozi 2011; Burri 2012; Weber and Burri 2012; Beaudoin 2014; Gagné 2014; Musitelli 2014; Vlassis 2015) on the one hand and of cultural and creative industries (see Garnham 2005; Galloway and Dunlop 2007; Schlesinger 2007; Potts et al. 2008; Throsby 2008a, 2008b; Tremblay 2008; Oakley 2009; O’Connor 2009; Flew and Cunningham 2010; Bouquillion 2012, 2014; Newsinger 2015; Lee 2016) on the other hand, there are only a few contributions dealing with the consequences of new relations between cultural, creative and telecommunication domains for public policy and international measures aiming to implement the UNESCO 2005 Convention on cultural diversity (see Neuwirth 2013, 2015; Chen and Zhuo 2014; Flew and Swift 2014; Richieri Hanania 2016). This chapter contributes to fill in this gap by addressing how increased convergence at both conceptual and practical levels between cultural, creative and telecommunication industries calls for the development of comprehensive cultural policies better adapted to the current context of global trade of digital cultural products. The first section of this text deals with the transformations caused by the digital and creative shifts as well with public policy challenges in the cultural field. The second section analyzes the impacts of sectoral convergence on policy issues related to the protection and promotion of the diversity of cultural expressions in the digital globalized landscape.

120  Michèle Rioux and Felipe Verdugo

Transformations and Challenges for a Cultural Policy 2.0 Transformations induced by new information and communication technologies have very significant impacts on cultural sectors as they affect the nature and the modes of creation, production, distribution, dissemination and consumption of a vast variety of cultural goods and services.1 These transformations not only challenge economic models, but they also, and perhaps most importantly, pose an existential dilemma for the regulatory function of public entities (Musitelli 2014: 312). In order to adapt the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions (hereafter ‘the 2005 Convention’) to the digital age, Rioux et al. (2015) highlighted the necessity of a transversal operational guideline to address new issues related with massive deployment of digital networks and the induced industrial mutations. This proposal aimed at both policies and measures at national and international levels. The Intergovernmental Committee of the 2005 Convention approved, in December 2016, a draft of operational guidelines on the implementation of the Convention in the digital environment, which was submitted to the Conference of Parties for its definitive approval in June 2017. Indeed, these operational guidelines recognize that P ­ arties should strengthen their ‘system of governance for culture in the digital environment’ through policies and measures aiming ‘to address all ­areas -­creation, production, distribution, dissemination, as well as access and ­enjoyment- taking into account the profound changes to the value chain and the arrival of new actors’ (UNESCO 2016: 7). To strengthen governance systems for culture in the digital environment, one of the most important challenges remains the current blurring of sectorial boundaries. New practices derived from digital technologies have generated mutations leading to the emergence of a new industrial grouping with brand new contours: the creative industries. This group of industries was first defined in 1998 by the Department for Culture, Media and Sport (DCMS) of the United Kingdom. According to the DCMS (2001: 5), the creative industries include ‘those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property’, covering then the following 13 domains: Advertising, Architecture, Art and antique markets, Crafts, Design, Design fashion, Film and video, Interactive leisure software, Music, Performing arts, Publishing, Software and computer services and Television and radio (DCMS 2001: 5; UNESCO/UNDP 2013: 25). During the last two decades, the notion of creative industries has largely penetrated debates on culture and development, and has brought forth complementary notions, such as creative class; creative clusters; creative city; and, most importantly, creative economy. While creativity-based

Digital Trade and Cultural Policy Nexus  121 concepts still generate controversy in the academic field, where concurrent theoretical and critical perspectives assessing the creative economy and industries coexist (for example: Garnham 2005; Potts et al. 2008; Throsby 2008a; Tremblay 2008; O’Connor 2009; Potts and Cunningham 2010; Bouquillion 2014), they usually serve to describe an industrial sector in which the creative act is at the centre of the production and consumption processes. This shift has generated transformations in the cultural sector in at least two fronts. First, according to a number of academic and institutional sources, similar to the role played by information and communication technologies (ICTs) in the 1980s–90s, creativity represents the new driving force of innovation and economic growth not only in the creative sector but also in the economy as a whole. As explained by Potts and Cunningham (2010: 169–70), from this point of view, creative industries can either ‘introduce novel ideas into the economy that then percolate to other sectors (e.g. design-led innovation), or […] facilitate the adoption and retention of new ideas or technologies in other sectors (e.g. ICT)’. Therefore, the cultural sector, conceived as a part of the creative industries – placed either at their centre or at their periphery2 – finds itself in a key economic domain, which, thanks to externality effects, nourishes innovation processes of new economic dynamics and, therefore, enhances economic growth. As a consequence of this shift of perspective, cultural policies at local, national and international levels have increasingly become a fundamental element of economic and development strategies (Throsby 2008b: 229). The new relation between the cultural sector and economic growth, however, leads to a weakening of a market failure rationale of cultural policies, which was formerly a cornerstone of the arguments justifying state support for arts and culture. Therefore, cultural policies tend to evacuate their political and social foundations and are increasingly called to adapt to an economic environment marked by constant business and technological innovations and by strong international competition (Galloway and Dunlop 2007: 26–28; Flew and Cunningham 2010: 117–18; Bouquillion 2012; Flew and Swift 2014: 155–57). Second, the notion of creative industries boosts vagueness about what type of goods and services should be considered as a cultural content or product, as shown by ongoing and highly controversial debates on the activities to be included either in the cultural or creative domains. This is certainly far from being surprising as both the very concept of creativity and its scope may be subjects of strong debates. Acknowledging this conceptual problem, UNESCO Institute for Statistics (UIS) included nine domains in its 2009 Framework for Cultural Statistics: seven cultural domains: Cultural and natural heritage, Performance and celebration, Visual arts and crafts, Books and press, Audio-visual and interactive media, Design and creative services, and Intangible cultural heritage (transversal); and two related domains: Tourism, and Sports

122  Michèle Rioux and Felipe Verdugo and recreation (UIS 2016: 13–14). Based on the UIS classification, which integrates traditional cultural activities as well design, video games and advertising services, it must be recognized that the notion of creative industries has produced a broadening of the domains included in the cultural sphere by public authorities and international organizations as well as by statistics and indicators on cultural trade and revenues. For example, a recent report on global activities of cultural and creative industries commissioned by the International Confederation of Societies of Authors and Composers (CISAC) stipulates that visual arts generated 391 billion dollars of global revenues in 2013, placed second in the ranking of revenues of all the creative industries. Moving away from traditional definitions of visual arts, the report integrates design activities in the visual arts category (EY 2015: 15–19).3 This broadening of the activities included in the cultural sphere is of particular importance in the digital environment, where technological and business innovations challenge traditional classifications of a vast variety of products. According to the same report commissioned by ­CISAC, global revenues4 from digital cultural content reached 65.6 billion dollars in 2013, only being surpassed by revenues from digital advertising creation. Specifically, the digital cultural content category integrates not only digital music, digital books and digital movies and videos but also online and mobile games, which account for no less than half of all digital cultural content revenues (33.8 billion dollars) (EY 2015: 24). If  the inclusion of video games in the sphere of digital culture is not new, and there are strong arguments supporting this idea, 5 international debates on cultural diversity, trade and digital technologies have mainly focussed on the audiovisual, musical and publishing industries. Furthermore, market dynamics of more traditional cultural industries are very different from those of the video game industry. As explained by Flew and Swift (2014: 157), the ‘fast-paced, globalized and highly commercialized environments of game development is very different to that of more traditional arts and cultural sectors, or even film and broadcast media’. In this sense, the increased inclusion of the video game industry in the definitions of digital cultural contents may have important impacts on current and future developments of cultural policies, including those related to cultural diversity issues. Taking into account this new context, where, on the one hand, highly commercial and cutting-edge creative activities increasingly fall into the sphere of culture, and, on the other hand, the goals of cultural policies shift towards the reinforcement of economic growth by supporting the activities of creative industries (particularly those developing in the digital environment), there are risks of imbalance of public support to cultural and creative activities or industries, which may benefit those more adapted to new economic and technological dynamics. In this sense, public policies in the field of culture should henceforth ensure a

Digital Trade and Cultural Policy Nexus  123 coherent relationship between both different cultural and creative economic activities that embody a great variety of relations of cultural and commercial values (demanding then balance among social, political and economic policy goals) and physical and digital environments through which national and transnational flows of cultural goods and services circulate. This is far from being an easy task, and, to date, there is no onesize-fits-all solution for the diversity of challenges imposed by current transformations. In fact, if similar transformations linked to digital technologies affect most countries, policy responses aiming to protect and promote cultural diversity may be varied to fit the specific characteristics of local, national or regional contexts. Recognizing the fundamental role of public institutions to regulate, frame and take advantage of new technological and business practices, a recent research project dealing specifically with the case of Quebec and Canada6 proposed a comprehensive approach to develop a cultural policy 2.0 capable of coherently addressing current transformations and their impacts. As a general policy framework, this approach advocates for a balanced inclusion of the following ‘M’ features (see Figure 7.1): •

• •

Multilevel governance: policies based on a networked perspective involving all departments and ministries and articulated with a wide-ranging digital strategy in order to produce coherent and comprehensive governance, nationally and internationally. Multidimensional goals: policies that favour the interaction of political, economic and social objectives to accurately adapt to realities of the diversity of expressions in cultural/creative activities. Multi-stakeholder cooperation: policies oriented towards international dialogue and harmonization to address cross-border issues in a multi-stakeholder perspective that integrates states and international organizations, and transnational/non-governmental actors.

Building on these three general features, a cultural policy 2.0 can then address the following specific policy issues in order to engage into an adaptation process to the technological, economic, legal and social changes currently affecting the diversity of national and local cultural expressions (see also Figure 7.1): • •

Financing: appropriate financial means supporting creators as well as the financing of the means to ensure visibility and marketing of their works. This implies targeting and increasing financing means. Telecom/Internet regulation: net neutrality and regulation of technological convergence. This necessitates the development of a new policy framework that takes into account the impacts of Internet governance on the flows and visibility of diversified cultural content.

124  Michèle Rioux and Felipe Verdugo • •

•

• • •

Trade agreements: a proper articulation of trade and culture in trade agreements through general or specific chapter dispositions, taking into account the blurring of sectoral frontiers. Regulatory asymmetries: fair and adapted regulatory and fiscal frameworks for all actors (digital vs. traditional actors). This element is very important and must take into account the transnational dimension of the issue. Competition (monopolies/dominant positions): there is an increasing need for an active competition policy in a context dominated by groups of dominant corporations, the so-called GAFAs (Google, Apple, Facebook, and Amazon) and the Internet service providers. Copyrights and sharing practices: balanced approach between the benefits of protection of copyrights in the digital environment and the opportunities derived from the digital content sharing practices. Big data: appropriate understanding of the issues related to algorithms, notably for enhanced discoverability of cultural goods and services. Education and participation: related to this element are all measures that can affect the transmission, the awareness and the development of cultural digital literacy and skills.

Developing a cultural policy 2.0 is certainly a vast and complex task for all countries as each of these issues comprises several specific but interrelated challenges. The next section focusses then on the trade and culture nexus in order to depict cultural diversity policy challenges in the context of international trade of digital and creative products.

Convergence towards Creative Industries: A New Landscape for the Trade-Culture Linkage and the Diversity of Cultural Expressions Challenges to promote the diversity of cultural expressions in international trade induced by convergence between cultural industries and telecommunication services have been treated by a plurality of sources (Cameron 2004; Geradin and Luff 2004; Burri 2012; Weber and Burri 2012; Guèvremont et al. 2013; Beaudoin 2014; Gagné 2014; Vlassis 2015). If cultural and telecommunication economic activities were traditionally ruled by distinct regulatory and trade frameworks (where cultural products were generally treated as goods and telecommunications as infrastructure services), the fading of the dividing line between goods and services caused by digital technologies leads to interaction between traditionally isolated regulatory regimes and to debates over the classification of new digital products. The origins of the conceptual shift that pushed culture to the realm of services are found at the World Trade Organisation (WTO) under the General Agreement on Trade in Services (GATS),

Digital Trade and Cultural Policy Nexus  125

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Policy challenges Financing Telecom/Internet regulation Trade agreements Regulatory asymmetries Competition (monopolies/dominant positions) Copyrights & sharing practices Big data Education & participation

Figure 7.1  A  comprehensive approach for developing a cultural policy 2.0. Source: Own elaboration.

where audiovisual and cultural services were introduced for the first time in the classification schemes of international trade negotiations. Since then, an increasing number of regional trade agreements tends ‘toward a deeper integration than what was negotiated two decades ago’ (Rioux and ­Fontaine-Skronski 2015: 70). Increased use of digital technologies reinforces the integration of culture in the realm of services. Cultural contents that were formerly consumed in physical formats are increasingly accessed through downloading or streaming practices. Consequently, these dissemination practices blur distinctions between contents and the medium on which they are supported, leading then to classify digital cultural products in communication services categories (Weber and Burri 2012: 4). ­Audiovisual services seem to be the cultural domain most affected by this current trend. To be sure, the GATS had already classified Audiovisual services under the category of Communication Services, and this classification perspective was subsequently replicated by numerous regional trade agreements. Nevertheless, the weakening of limits between contents and their dissemination means has permitted a deeper

126  Michèle Rioux and Felipe Verdugo integration of audiovisual and telecommunication services into one single communication sector. As explained by Kelly Cameron (2004: 31), convergence between communication technologies allows ‘to use the same network – whether it is a telephone network, a cable television network, a wireless network, or a satellite network – for the provision of either telecommunications or audiovisual services’. Influenced by this evolution, recent regional trade agreements leave aside some provisions contained in the GATS’ Annex on telecommunications, where a distinction is made between basic services and value-added services (Rioux and Fontaine-Skronski 2015: 71–73). This distinction is no longer pertinent as basic telecommunications services have since been liberalized. Nowadays, audiovisual and other digital cultural sectors are increasingly treated in chapters dealing with e-commerce, a trend that might lead to the impossibility of exempting cultural digital products from liberalization commitments. There are at least 25 trade agreements ‘containing provisions on the non-imposition of customs duties on products delivered electronically’ (Guèvremont and Otašević 2017: 30). If in agreements negotiated by the European Union and by Canada ‘cultural clauses’ are integrated in order to limit the scope of the trade provisions on e-commerce, definitions of the cultural industries to be exempted are subject to interpretation. This is, for example, the case of the cultural clause negotiated by Canada, where different interpretations of the definition of cultural industries might prevent this clause from covering the vast variety of cultural products that can be transmitted electronically (Guèvremont and Otašević 2017: 30–32). Rostam J. Neuwirth (2013, 2015) and Zhijie Chen and Jing Zhuo (2014) argue that the notion of creative economy may help to overcome the governance challenges of current technological and industrial convergences, and, more specifically, to develop a more coherent and adaptive regulatory framework for the ‘trade and culture debate’ in the digital age. According to Neuwirth (2015: 27–33), three main reasons support this idea. First, the increasingly widespread use of the notion of creative economy suggests the existence of a growing international consensus on both its definition and the recognition of the economic potential of the cultural sector. Second, due to its gradual and steady evolution influenced by new business practices and technological innovations – where an increasing number of goods and services are considered as creative products – the notion of creative economy potentially allows for greater legal certainty in international trade by building on past and current developments of the ‘trade and culture debate’. Third, the inclusive and contradictory character of the notion of creative economy, which carries a new understanding of the relation of artistic, industrial and technological skills, may both contribute to reconcile the traditional dichotomy between culture and

Digital Trade and Cultural Policy Nexus  127 industry and prove advantageous in a market exposed to rapid changes where new categories and classifications are constantly emerging, particularly in relation with digital products. Indeed, as these authors point out, the notions of creative industries and creative economy might adapt better to the process of convergence between culture, media and ICT than to the notion of cultural industries. However, the broadening of industries or activities included in the sphere of culture induced by the notion of creative industries may pose important challenges to the implementation of the objectives of the 2005 UNESCO Convention. One of the key questions regarding the future of the promotion and protection of cultural diversity in the digital environment relates to how each Party of the 2005 Convention will define the cultural expressions deserving a special treatment in trade agreements based on the specific values they are assumed to bear. This fundamental question is not new and was already posed in negotiations aiming to build an indicative list of industries or sectors covered by the 2005 Convention, where ‘UNESCO Member States were unable to precisely enumerate cultural sectors or cultural industries constituting its scope’ (Richieri Hanania 2016: 579–80). Taking into account both the impracticability of exhaustive listing of products in a sector of rapid technological and regulatory transformations and the polyvalent meaning of the concept of culture, it is not surprising that there is a lack of consensus among 2005 Convention Parties regarding the boundaries of the notion of cultural expressions. This looseness in defining cultural expressions may actually represent a desired and positive tool, allowing Parties to choose sectors to be protected and promoted in the name of cultural diversity according to their specific needs and political priorities7 as well as to adapt to new and different cultural and economic international contexts. Despite the benefits of a desired looseness of the 2005 Convention’s scope, the merging of cultural sectors with a much larger and highly commercial creative sector may potentially contribute to the erosion of one of the founding arguments of this Convention. The 2005 Convention is based on the idea that ‘cultural activities, goods and services have both an economic and a cultural nature, because they convey identities, values and meanings, and must therefore not be treated as solely having commercial value’ (UNESCO 2015: 4).8 In the new context of creative industries and the creative economy, this founding argument can be more easily challenged due to the overwhelming importance of the commercial value of different creative products and the increased recognition at local, national and international levels of the cultural nature of a wide range of these same products – as illustrated by the case of the video game industry, whose economic potential and fast-paced globalized market dynamics differ from those of more traditional cultural industries. In this sense, by transforming the

128  Michèle Rioux and Felipe Verdugo balance between cultural and economic values of novel and traditional products related with the scope of the 2005 Convention, the context of the creative economy might both create contradictions within the inner logic and rationale of policies based on the 2005 Convention and intensify controversies surrounding which cultural expressions merit a special treatment in trade agreements in the name of cultural diversity. In other words, in the light of the controversies surrounding cultural contents and the medium on which they are transmitted (generated by industrial convergence between cultural and telecommunications domains), the broadening of the scope of the products considered as cultural contents (generated by conceptual convergence between creative and cultural domains) may instigate controversies surrounding traditional cultural contents and new forms of cultural and creative contents that carry new and varied balances between economic and cultural values (Rioux and Fontaine-Skronski 2015; Verdugo 2017). In the context of international trade, the increased hybrid character of digital products enhances classification ambiguities generated by the culture-creative-telecommunication convergences. Interactive films are a clear example of the hybrid character of new types of cultural digital products as they are increasingly shifting towards a video game rationale due to the development of digital technologies.9 Ambiguities created by the hybrid character of interactive films and video games may indeed have divergent consequences in future negotiations of trade agreements because they might weaken arguments in favour of applying a special treatment to audiovisual digital products or to a certain type of these products, reinforce arguments in favour of applying a special treatment to video games and hamper an appropriate and coherent classification of the audiovisual and interactive digital products (cultural or creative) chosen to be treated in a special manner. In this sense, the hybrid character of new digital creative products may pose challenges not only at a conceptual and political level linked to the definition of cultural expressions in the digital and creative environment but also at a legal level related to the elaboration of clear indicative lists of products to be excluded from liberalization commitments.10 Policy challenges and conceptual redefinitions associated with the creative shift, the broadening of the scope of cultural contents and the hybrid character of new types of creative and cultural digital products may hamper both future adoption and efficient implementation of cultural clauses aiming at reaching the objectives of the 2005 Convention. For example, the cultural clause included in trade agreements negotiated by New Zealand specifies that nothing in the agreement ‘shall be construed to prevent the adoption or enforcement by a Party of measures necessary to protect national treasures or specific sites of historical or archaeological value, or measures necessary to support creative arts of national

Digital Trade and Cultural Policy Nexus  129 value’ (FTA-AANZ 2009, Chapter 15, Article 1). Complementarily, a footnote of this clause defines creative arts as follows: “Creative arts” include the performing arts – including theatre, dance and music – visual arts and craft, literature, film and video, language arts, creative on-line content, indigenous traditional practice and contemporary cultural expression, and digital interactive media and hybrid art work, including those that use new technologies to transcend discrete art form divisions. The term encompasses those activities involved in the presentation, execution and interpretation of the arts, and the study and technical development of these art forms and activities. (FTA-AANZ 2009: 196) As recognized by Guèvremont and Otašević (2017: 34), New Zealand’s cultural clause represents indeed a good practice for promoting cultural diversity in the digital age because its wide-raging scope ‘covers not only traditional cultural goods and services but also digital products’. Nevertheless, notions such as creative arts and creative online content as well as their technical development increasingly embrace activities related not only to traditional cultural industries but also to highly commercial and cutting-edge domains, including design, video games, software and even telecommunications and broad research and development. As a result, this type of wording may actually be perceived by negotiating parties as a tool that could be used to introduce protectionist policies aiming primarily economic rather than cultural objectives (Verdugo 2017: 7–13). If protectionist policies serving primarily economic priorities in different creative domains may indeed be legitimate according to the basic principle of sovereignty, it is less clear whether or not it may be a legitimate claim to invoke the 2005 Convention in order to implement such policies. In short, the issue pointed out here is not the relevance of the 2005 Convention in future trade negotiations addressing creative products11 but rather the potential risks linked to the specific ways each Party will interpret and use this international treaty in a globalized market organized around both creative products striking a new balance between cultural and commercial values, and hybrid products that blur the defining lines and contours of a variety of creative and cultural contents in a world where precise classification remains key to an orderly trading system.

Conclusion This chapter has focussed on the transformations affecting the cultural sector that are caused by the digital and creative shifts in order to highlight some key public policy challenges. Sectoral interconnections represented by an increased convergence of different industries (cultural,

130  Michèle Rioux and Felipe Verdugo creative and telecommunications) call for coherent and adapted regulatory and policy frameworks that address cultural issues in a comprehensive perspective. One of the main challenges to elaborate digital cultural policies is the capacity to develop a comprehensive approach that encompasses three key networked governance features: the multilevel, multidimensional and multi-stakeholder features. Positioned in the interface of these three features, cultural policies can then address more specific issues according to the great number of challenges related to cultural domains. The linkage between culture and trade agreements represents one of these specific issues. The second section of this chapter analyzed consequently how convergence between cultural and telecommunications industries on the one hand and between cultural and creative industries on the other hand may affect the implementation of 2005 UNESCO Convention objectives in the context of international trade. The analysis developed can be summarized with the help of a triangle, where the three vertices represent the cultural, the creative and the telecommunications industries, and the three edges represent convergences between them (see Figure 7.2). If the literature dealing with the ‘trade and culture debate’ in the digital age has focussed on the culture-telecommunications convergence (one of the three edges), the presented triangle allows us to integrate

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Figure 7.2  Convergence triangle between Culture, Creative and Telecommunications industries. Source: Own elaboration.

Digital Trade and Cultural Policy Nexus  131 two convergences less explored by this literature: culture-creative and creative-telecommunications convergences, which give the possibility to place products related to these domains on the edges, on the vertices or inside the triangle, depending on the specific characteristics of the products. Using as a base the seven cultural domains of the 2009 UNESCO Framework for Cultural Statistics (UIS 2016: 13), trade classifications of good and services from domains such as Cultural and natural heritage, Performance and celebration, and Visual arts and crafts will probably remain placed close to the cultural vertex. Contrary to this expected consensus, digital products from Books and press, Audiovisual and interactive media, and Design and creative services domains are increasingly affected by conceptual ambiguities and a hybrid character that allow them to be placed at different locations of the triangle. In this sense, the current convergence processes lead to important definition and classification ambiguities. These may increase the difficulties to implement trade policies well articulated with the objectives of the protection and promotion of the diversity of cultural expressions. In order to overcome these difficulties, the development of both comprehensive cultural policies and coherent conceptual frameworks defining cultural domains should accompany the political willingness to protect and promote the diversity of cultural expressions in the context of globalized trade of digital products.

Acknowledgements The authors of this chapter acknowledge the financing of the research project Trajectoires institutionnelles de régulation de l’économie mondiale (Insight Program, Social Science and Humanities Research Council of Canada) for this publication.

Notes 1 Because of the complexity and the diversity of their consequences on cultural and business practices, these transformations have been described in multiples ways. Benghozi (2011: 2) identifies four transformations of the cultural sector caused by the increased use of digital technologies: the multiplication of the supply; the mutation of cultural business models created by the increased convergence between content producers and the telecommunications sector, including the emergence of key new players and the growing weight of aggregation and distribution on-line platforms; the new role of consumers, which modifies the nature of cultural works by increasing the permeability between professionals and amateurs; and the coexistence of an increased number of business models at work in the cultural sector. Rioux et al. (2015) identify five transformation processes caused by digital technologies, which pose important challenges for local, national and international policies aiming to promote cultural diversity in digital networks. These five transformation processes, grouped under the concept of ‘5Ds’, are depicted as follows: dematerialization of cultural products, disintermediation of actors, decompartmentalization of sectors (cultural industries,

132  Michèle Rioux and Felipe Verdugo telecommunications, broadcasting, etc.), delinearization of access and dissemination, and deterritorialization of production and consumption as well as of contents and uses (see also Rioux and Verdugo 2017). 2 Depending on different versions of the concentric circles model defining the creative industries. See, for example, Throsby (2008a) and Work Foundation (2007). 3 The report does not indicate the economic contribution of each of the sectors integrated in the visual arts category (namely visual art creations, museums and photographic and design activities). It is then not possible to establish the economic contribution of design activities to the visual arts category. UIS classifications actually separate Visual arts and craft from Design and creative services. However, this UIS perspective may also be subject to debate because of the uncertain conceptual limit between crafts products, which include ‘articles of jewellery in gold or silver, and articles in woven fabrics, embroidery or knitted or crocheted fabrics’ (UIS 2016: 36), and design activities related to the ‘creative, artistic, and aesthetic design of objects’ (UIS 2016: 95). 4 Defined as business-to-consumer sales. 5 As the creative work related with games development may entail the use of symbols that express social representations and values. 6 Carried out by the Centre d’étude sur l’intégration et la mondialisation (Ceim, UQaM), this research benefitted from a funding provided by the Secrétariat aux affaires intergouvernementales canadiennes (SAIC) of the Government of Quebec. 7 For Canada, the cultural exception in trade agreements relates to a broad notion of cultural industries, while for the European Union, this exception is for the audiovisual sector. 8 This idea is also highlighted in the published draft of operational guidelines on the implementation of the Convention in the digital environment. According to this document, ‘the recognition of the dual nature of cultural goods and services (cultural and economic) is also applicable to cultural expressions in the digital environment or those produced with digital tools’ (UNESCO 2016: 5). 9 See the article of Los Angeles Time about Late-Shift, on ‘“Late Shift" is the first fully realized choose-your-own adventure movie. Or is it a game?’ (Martens 2016). If the convergence between movies and video games may for some still be at an early stage, there are signs to predict an accentuation of current converging practices due to the rapid development of the video game industry and the increasing accessibility of immersive and interactive technologies (for example, virtual reality technologies). 10 For example, classification of digital games remains indeed controversial as this kind of products may fall into several GATS sub-classification categories, including, among others, computer and related services, and value-added telecom, entertainment or audiovisual services (Steiner 2009: 15). 11 As explained by Richieri Hanania (2016), the text of the 2005 Convention can actually be used as a tool to promote regulatory coherence in the creative economy.

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134  Michèle Rioux and Felipe Verdugo Enjeux, actions prioritaires et recommandations. Report presented at the seventh session of the Intergovernmental Committee for the protection and promotion of the diversity of cultural expressions, Paris. Lee, H. (2016). Politics of the ‘creative industries’ discourse and its variants. International Journal of Cultural Policy, 22(3): 438–55. Martens, T. (2016). Late Shift’ is the first fully realized choose-your-own ­adventure movie. Or is it a game? Los Angeles Time, 28 April. Musitelli, J. (2014). Postface. La diversité culturelle et le numérique: un nouveau défi pour l’UNESCO. In Frau-Meigs, D. and Kiyindou, A. (eds.). Diversité culturelle à l’ère du numérique. Glossaire critique. Paris: La Documentation française, 305–12. Neuwirth, R. J. (2013). The future of the ‘culture and trade’ debate: a legal outlook. Journal of World Trade, 47(2): 391–420. ——— (2015). Global Market Integration and the Creative Economy: The Paradox of Industry Convergence and Regulatory Divergence. Journal of International Economic Law, 18: 21–50. Newsinger, J. (2015). A cultural shock doctrine? Austerity, the neoliberal state and the creative industries discourse. Media, Culture & Society, 37(2): 302–13. Oakley, K. (2009). The disappearing arts: creativity and innovation after the creative industries. International Journal of Cultural Policy, 15(4): 403–13. O’Connor, J. (2009). Creative industries: a new direction? International Journal of Cultural Policy, 15(4): 387–402. Potts, J. and Cunningham, S. (2010). Four models of the creative industries. Revue d’Économie Politique, 120(1): 163–80. Potts, J., Cunningham, S., Hartley, J. and Ormerod, P. (2008). Social networks markets: a new definition of the creative industries. Journal of Cultural Economics, 32(3): 167–85. Richieri Hanania, L. (2016). The UNESCO Convention on the Diversity of Cultural Expressions as a coordination framework to promote regulatory coherence in the creative economy. International Journal of Cultural Policy, 22(4): 574–93. Rioux, M. and Fontaine-Skronski, K. (2015). Conceptualizing institutional changes in a world of great transformations: from the old telecommunications regime to the new global internet governance. In Rioux, M. and ­Fontaine-Skronski, K. (eds.). Global Governance Facing Structural Changes: New Institutional Trajectories for Digital and Transnational Capitalism. New York: Palgrave Macmillan, 59–79. Rioux, M. and Verdugo, F. (2017). Hacia una nueva gobernanza global de las industrias culturales en la era digital. In Albornoz, L.A. and García Leiva, M.T. (eds.). El audiovisual en la era digital: Políticas y estrategias para la diversidad. Madrid: Cátedra Ediciones, 43–70. Rioux, M., Deblock, C., Gagné, G., Tchéhouali, D., Fontaine-Skronski, K. and Vlassis, A. (2015). Pour une culture en réseaux diversifiée, Appliquer la Convention sur la protection et la promotion de la diversité des expressions culturelles (CDEC) à l’ère du numérique. Montreal: Centre d’études sur l’intégration et la mondialisation (CEIM), University of Quebec at Montreal. Schlesinger, P. (2007). Creativity: from discourse to doctrine? Screen, 48(3): 377–87.

Digital Trade and Cultural Policy Nexus  135 Steiner, T. (2009). Online games under WTO law: unresolved classification ­issues. NCCR TRADE Working Papers no. 2009/3. Throsby, D. (2008a). The concentric circles model of the cultural industries. Cultural Trends, 17(3): 147–64. ——— (2008b). Modelling the cultural industries. International Journal of Cultural Policy, 14(3): 217–32. Tremblay, G. (2008). Industries culturelles, économie créative et société de l’information. Global Media Journal – Canadian Edition, 1(1): 65–88. UIS (UNESCO Institute for Statistics) (2016). The Globalisation of Cultural Trade: a Shift in Consumption – International flows of cultural goods and services 2004–2013. Montreal: UIS. UNESCO (United Nations Educational, Scientific and Cultural Organization) (2015). Basic Texts of the 2005 Convention on the Protection and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO. ——— (2016). Decisions (DCE/16/10.IGC/Dec.). Tenth ordinary session Intergovernmental Committee for the Protection and Promotion of the Diversity of Cultural Expressions. Paris, 15 December. UNESCO/UNDP (2013). Rapport sur l’économie créative 2013 – Élargir les voies du développement local. Paris: UNESCO/PNUD. Verdugo, F. (2017). Industries créatives, diversité et politiques culturelles. Revue interventions économiques, 57: 1–18. Vlassis, A. (2015). Négociations commerciales récentes et industries culturelles: de l’affrontement politique à la réconciliation normative? In Deblock, C., ­L ebullenger, J. and Paquin, S. (eds.). Un nouveau pont sur l’atlantique: l’Accord économique et commercial global entre l’Union Européenne et le ­C anada. Québec: Presses de l’Université du Québec, 259–79. Weber, R. and Burri, M. (2012). Classification of Services in the Digital Economy. Berlin and Heidelberg: Springer. Work Foundation (2007). Staying ahead: the economic performance of the UK’s creative industries. London: The Work Foundation and DCMS.

8 European Union Trade Agreements and Cultural Exception in the Digital Age Lilian Richieri Hanania

Introduction Trade agreements negotiated by the European Union (EU) have offered a rich illustration of ‘cultural exception’ provisions, that is, provisions which accord a specific legal treatment for the cultural sector in international trade agreements (see, for instance, Richieri Hanania 2009, 2012). In trade liberalization agreements, such specificity is justified based on the double nature – cultural and economic – of cultural goods and services, and with the objective of allowing partners in those agreements to adopt or maintain national discriminatory policies and measures intended to foster cultural diversity. In the case of the EU, cultural exception provisions have aimed specifically at policies in the audiovisual services sector. This has been the traditional EU position in trade agreements, attained through different legal techniques, such as a general exception in the agreement or in a specific chapter of the agreement (for example, chapter on trade in services), the absence of liberalization commitments when they are to be explicitly listed by each trade partner (the so-called ‘positive lists’) or specific limitations in liberalization reservations lists (‘negative lists’). Admittedly, the EU position may be criticized regarding its limitation to the audiovisual sector, while the specificity of each and every cultural sector – including therefore the audiovisual sector, but not limited to it – has been acknowledged in the 2005 UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions (hereafter ‘the 2005 Convention’) (Richieri Hanania and Ruiz Fabri 2014). In practice, though, even such restricted target on the audiovisual sector has often been hard to attain – a lot of advocacy effort has usually been necessary (Rogard 2016a, 2016b). The emergence of the digital economy and the changes brought about by new technologies to the audiovisual sector are among the factors raised by the opponents of this EU cultural exception approach. Digital technologies have not only completely changed the functioning of the cultural market but also challenged common understanding on cultural policies and measures since traditional cultural policies do not seem to respond adequately to the digital reality. In addition, the Internet gives

EU Trade Agreements & Cultural Exception  137 a false perception of diversity due to its limitless storage space. In fact, recent research demonstrates not only the difficulties in measuring diversity online (Marenghi et al. 2016; Ranaivoson 2016) but also the practical lack of real exposure diversity (Burri 2016) and the threats on cultural diversity resulting from market concentration in the hands of the ‘Net giants’ (Kulesz 2015, 2016). A second factor that has affected the way EU negotiators see the old ‘trade and culture debate’ was the entry into force of the 2005 Convention. This international treaty reaffirms the sovereign right of States to intervene in the cultural sector through cultural policies and measures, fosters cultural cooperation and proposes a systemic and multi-stakeholder approach to the topic (Richieri Hanania 2014b). While before the 2005 Convention the relationship between trade liberalization and cultural policies often seemed to be based on opposition, the adoption of an international convention that deals with both culture and trade calls indeed for a reshaped and integrative perspective. It was in search for such new approach that the European Commission put forward the first protocol on cultural cooperation based on the 2005 Convention and attached to the 2007 Economic Partnership Agreement signed with the Caribbean Forum (CARIFORUM) States.1 The appropriateness of such a protocol, its precise content and the way it should be linked to the traditional exception in favour of cultural policies in the audiovisual services sector have raised a lot of debate. The present chapter analyzes the way agreements negotiated by the EU since the entry into force of the 2005 Convention address the cultural exception and the cultural cooperation facets of the 2005 Convention, while drawing particular attention to the way these recent agreements take the context of digital technologies into account. Finally, this chapter puts forward general recommendations – that may inspire not only the EU practice in future agreements but also initiatives by States that ratified the 2005 Convention – by addressing notably the following questions: how should States intervene to protect and promote a diversified cultural offer in the rapidly changing environment of digital technologies? In which sectors should a State intervene? How should cultural exception provisions be drafted in such a new context? How to apply the cultural cooperation clauses of the 2005 Convention to the context of trade agreement negotiations? Should trade commitments be linked to such cooperation? And are the so-called ‘protocols on cultural cooperation’ a useful tool? In such case, to what extent?

Maintaining the Specificity of the Audiovisual Sector in the Digital Context For comparative purposes, it is noteworthy recalling that in trade agreements signed by the United States in the last decade, digital products have emerged as a new category covering inter alia audiovisual products,

138  Lilian Richieri Hanania and differentiated from the supply of services through electronic means. While the latter is subject to liberalization obligations established in other chapters of the trade agreement (cross-border services, investment, etc.), the Parties undertake specific non-discrimination obligations regarding digital products, which are defined as ‘computer programs, text, video, images, sound recordings, and other products that are digitally encoded and transmitted electronically, regardless of whether a Party treats such products as a good or a service under its domestic law’ (emphasis added) (RIJDEC 2015: 40–42). In fact, the partners assume national treatment and most-favoured nation treatment2 obligations on these products, and commit to not applying custom duties to electronic transactions. A first negative aspect of this approach is that the creation of this new category calls into question the technological neutrality principle3 in trade agreements, which is supposed to release the parties from the need to update liberalization commitments due to technological evolution. In addition, the mentioning of services traditionally considered as part of the audiovisual sector in such a definition may be a source of legal uncertainty. Moreover, the elimination of the distinction between goods and services implies the extinction of the relative flexibility that is usually advocated regarding the legal regime applicable to trade in services.4 Finally, the cultural policy space of the States having undertaken these non-discrimination obligations with respect to digital products is negatively affected. Indeed, the cultural exceptions that those partners might wish to establish are usually limited in those agreements to traditional cultural sectors, together with the possibility of applying subsidies – a cultural policy tool generally accepted by the United States. In the EU bilateral and regional agreements containing trade provisions, e-commerce has been dealt with without prejudice to the traditional European cultural exception for the audiovisual services sector, among other things, because provisions governing this topic are more general and mainly based on cooperation. In fact, the signatories to those agreements are generally required to cooperate on subjects relating to e-commerce (for example, electronic signature certification, liability of service suppliers in information transmission and storage, consumers’ protection, personal data protection and security of electronic transactions), to abstain from imposing custom duties on electronic delivery or transmissions and to apply high international standards on data protection.5 The prohibition regarding custom duties is explained in some of the agreements in relation to the fact that electronic delivery is to be considered as the supply of a service, therefore subject to the agreement provisions on trade in services.6 In other agreements, though, no such explanation has been provided,7 and, in a few of them, the absence of

EU Trade Agreements & Cultural Exception  139 consensus on the subject is manifest. For instance, the EU-Republic of Korea treaty states that [t]he inclusion of the provisions on electronic commerce in this Chapter [regarding trade in services, establishment and e-commerce] is made without prejudice to Korea’s position on whether deliveries by electronic means should be categorised as trade in services or goods. (EU 2011b: Article 7.48.3 footnote) In any case, the specificity of the audiovisual sector and the cultural ­ olicy space of the EU and its trade partners in that sector seem to be prep served. First, because liberalization obligations applicable to ­e-commerce in those recent EU agreements are quite limited, especially compared to agreements signed with the United States: there is no national treatment or most-favoured nation treatment obligation among the provisions on e-commerce. Second, because the cultural exception applicable to audiovisual services has been extended – often explicitly – to provisions on e-commerce. For example, the Comprehensive Economic and Trade Agreement (CETA) b ­ etween the EU and Canada affirms that in case of contradiction between the chapter on ­e-commerce and the other ­chapters of the agreement, the latter shall prevail, together with the cultural exceptions indicated therein (EU 2016: Article 16.7).8 The EU-Singapore agreement is even clearer when it reads: for greater certainty, the Parties affirm that measures related to the supply of a service using electronic means falls within the scope of the obligations contained in the relevant provisions of this Chapter [on trade in services, establishment and e-commerce] subject to any exceptions applicable to such obligations [which cover, in this agreement, audio-visual services (Articles 8.3 and 8.9)]. (EU 2015: Article 8.59) Among the most recent EU agreements containing trade provisions, only the EU-Republic of Korea agreement is subtler regarding such extension to digital audiovisual services, and yet nothing in the agreement seems to demonstrate a contrary intention of the Parties.9 The Commission’s ‘Statement on the cultural cooperation protocol’, included at the opening of the text, clearly reaffirms ‘the EU’s policy that trade negotiations on cultural and audiovisual services should not affect the Union’s cultural and linguistic diversity’ (EU 2011b: 4). In sum, cooperation on e-commerce in recent EU agreements has not prevented the signatories from maintaining their cultural policy space through cultural exception techniques. On the contrary, it seems that such cooperative approach – instead of an approach based exclusively on

140  Lilian Richieri Hanania market liberalization – is the most suitable in order to allow trade partners to adopt and maintain cultural policies adapted to the context of new technologies. Such an approach is, moreover, in line with the 2005 Convention, which calls for actions with respect to cultural cooperation and development that are complementary to the recognition of the specificity of cultural goods and services (Richieri Hanania 2014, 2015a, 2015b). It was in an attempt to foster an integrative path between trade and culture after the entry into force of the 2005 Convention and implement the provisions of the latter regarding cultural cooperation (EC 2009), that a set of cultural cooperation provisions inspired by the 2005 Convention has been proposed to some EU trade partners in parallel to the negotiation of trade clauses.

Promoting Cultural Diversity through Cultural Cooperation Cultural cooperation provisions connected with EU trade agreements or agreements containing trade provisions have first been put forward by the European Commission during negotiations of the Economic Partnership Agreement with the CARIFORUM States (Richieri Hanania 2012; Souyri-Desrosier 2014). At that time, cultural cooperation was integrated by means of a Protocol,10 which aimed to provide a preferential treatment to the CARIFORUM States, as established under the 2005 Convention: Developed countries shall facilitate cultural exchanges with developing countries by granting, through the appropriate institutional and legal frameworks, preferential treatment to artists and other cultural professionals and practitioners, as well as cultural goods and services from developing countries. (UNESCO 2005: Article 16) However, integration of cultural cooperation provisions in a trade agreement was strongly criticized since it gave the impression that the EU was softening its commitment to a cultural exception for audiovisual services in its trade agreements. The 2007 EU-CARIFORUM Protocol on Cultural Cooperation is indeed particularly focussed on market access in the audiovisual sector. It aims inter alia to promote access to the European market by allowing co-produced audiovisual works to qualify as European works and benefit from quotas existing under the Audiovisual Media Services Directive (EU 2010). Yet not all CARIFORUM States were allowed to establish a preferential market access relation with the EU in the audiovisual services sector due to obligations already undertaken in that sector under the General Agreement on Trade in Services (GATS) of the World Trade Organization (WTO). The technical legal solution found was to include the Protocol on Cultural Cooperation into

EU Trade Agreements & Cultural Exception  141 a regional trade agreement in accordance with Article V of the GATS, which deals with economic integration agreements and allows the WTO members, under certain conditions, to withdraw preferences established with specific partners from the GATS most-favoured nation treatment obligation. At the end of the day, it seemed as though decades of efforts to exclude the audiovisual services sector from trade agreements had just been disregarded. More worrisome was the fact that, when negotiating a trade agreement with the Republic of Korea, the European Commission put a similar protocol on cultural cooperation on the negotiations table. Not only a rigid model set of provisions seemed completely inappropriate in this area, but this time the trade partner was far from being a developing country as foreseen under Article 16 of the 2005 Convention – the Republic of Korea had a prosperous national audiovisual sector already. Another criticism that deserves to be put forward has to do with the Protocol of Cultural Cooperation effectiveness. In practice, the implementation of the CARIFORUM Economic Partnership Agreement still faces numerous challenges, ranging from organizational weakness and structural difficulties of the Caribbean cultural sector to the lack of awareness about the Protocol and its practical application by cultural practitioners, the lack of information on the requirements for market access to the EU and on existing opportunities in both the EU and CARIFORUM countries as well as difficulties in complying with the conditions set out in the Protocol for audiovisual cooperation (see KEA European Affairs 2011).11 Nevertheless, the CARIFORUM Protocol provides a first example of a non-reciprocal legal framework aimed at implementing Article 16 of the 2005 Convention. Another protocol directed to cooperation with developing countries was signed in 2010 by the EU with Central American countries – and was attached to the Association Agreement signed in June 2012 with those countries (and not its trade chapter; EU 2012a).12 It was followed by a stand-alone Agreement on Cultural Cooperation with Colombia and Peru in 2011 (EU 2011a),13 entirely disconnected from a legal standpoint from the trade agreement negotiated in parallel with those countries and signed in 2012 (EU 2012b). Technical assistance by the EU in favour of its developing partners has been foreseen, not only towards the development of their cultural industries but also the development and implementation of cultural policies and the production and the exchange of cultural goods and services. Less detailed than the CARIFORUM Protocol, the Central America Protocol and the Agreement on Cultural Cooperation with Colombia and Peru do not include preferential treatment through market liberalization commitments but focus on establishing preferential relations under Article 16 of the 2005 Convention through ‘festivals, seminars and similar initiatives’ – Article 5.2 of the Protocol with Central American countries

142  Lilian Richieri Hanania and Article 7.2 of the Agreement with Colombia and Peru. While some of the provisions in those two cultural cooperation frameworks might be considered as quite general, they seem to demonstrate a positive step towards the promotion of cultural cooperation, based on ‘pure’ cultural cooperation rather than trade liberalization measures. As such, they are arguably more in accordance with the simultaneous acknowledgement by the 2005 Convention of the specificity of cultural goods and services (translated into cultural exception provisions in trade agreements) and the preferential treatment obligation prescribed for its developed Parties. By fostering a closer relationship with those countries, attentive to their specific needs and priorities, the EU should be able to contribute to new opportunities for these countries’ cultural goods and services. Other positive improvements were also put into place in texts negotiated since 2009, which led to the Protocol with the Republic of Korea (EU 2011b: 1418 sq.).14 Despite being still mainly targeted on market access in the audiovisual sector, this Protocol established a reciprocal framework for cultural cooperation among the signatories, based on the level of development of their audiovisual industries and the existence, on both sides, of promotional schemes for local/regional cultural content. Co-productions that comply with the conditions established in the Protocol are thus entitled ‘to benefit from the respective schemes for the promotion of local/regional cultural content’ (EU 2011b: 1420, Article 5). While recognizing a link with the cultural exception contained in the trade part of the Agreement,15 this Protocol attempts to separate the implementation of the cultural cooperation provisions from those on trade by creating a Committee on Cultural Cooperation composed of experts in cultural matters and excluding any jurisdiction over the Protocol by the Trade Committee established elsewhere in the Agreement. Furthermore, in case of a dispute, a specific procedure under the auspices of this Committee, with the participation of specialized arbitrators, is foreseen (EU 2011b: 1418–19, Articles 3.1, 3.3 and 3bis). The provisions in each of the aforementioned four cultural cooperation frameworks address not only cooperation in the audiovisual sector (for example, through co-production, festivals, seminars, exchange among broadcasting industries and regarding broadcasting policy and regulation) but also the mobility of/and exchanges among artists and cultural practitioners: the performing arts (for example, exchanges, joint productions and training for practitioners), the publishing sector (for example, dissemination of publications; organization of events for the promotion of exchanges of publications; co-publishing and translation; and professional exchanges and training for librarians, writers, translators, booksellers and publishers) and the protection of cultural heritage sites and historic monuments (for example, exchanges of expertise and best practices).

EU Trade Agreements & Cultural Exception  143 With respect to cultural cooperation in the digital realm, some provisions are specifically targeted on technologies, but access to the digital media markets by artists and cultural goods and services of partner countries has not been dealt with as an autonomous issue. When the CARIFORUM Protocol provides for technical assistance for CARIFORUM countries, it mentions the transfer of technologies and knowhow (EU 2008: 1939, Article 4).16 In addition, the signatories ‘reaffirm their commitment to the use of international and regional standards in order to ensure compatibility and interoperability of audiovisual technologies, contributing therefore to strengthen cultural exchanges’, and shall endeavour to ‘facilitate the digitalisation of audiovisual archives in signatory CARIFORUM States’ (EU 2008: 1940, Article 5; emphasis added). For its part, the Protocol with the Republic of Korea contains a less-binding provision on interoperability of audiovisual technologies, according to which ‘the Parties shall endeavour to facilitate the use of international and regional standards in order to ensure compatibility and interoperability of audiovisual technologies (…)’ (emphasis added), and also stipulates that the signatories ‘shall endeavour to facilitate the digitalisation of audiovisual archives’ (EU 2011b: 1422, Article 6.3). Both the Protocol with Central American countries and the Agreement with Colombia and Peru contain a technical assistance provision similar to the EU-CARIFORUM Protocol provision (see EU 2008: 1939, Article 4), mentioning the transfer of technologies and know-how as part of the technical assistance to be provided by the EU. Interoperability of audiovisual technologies is, however, not dealt with in those two frameworks. As for the digitalization of audiovisual archives, it is not mentioned in the Protocol with Central American countries, while the Agreement on Cultural Cooperation with Colombia and Peru states that the signatories ‘shall endeavour to exchange best practices in the field of preservation, including restoration, and digitalisation of audiovisual archives’ and ‘shall encourage the cooperation between their cinematheques’ (EC 2011a: Article 7.5). Under the four cultural cooperation frameworks,17 the signatories commit to ‘encourage the development of international theatre technology standards and the use of theatre stage signs’. Finally, with respect to cooperation regarding the publishing sector, only the Agreement with Colombia and Peru explicitly mentions digital publications. In the digital age, it could have been useful that cultural cooperation provisions, particularly in favour of developing countries, specifically emphasized measures aimed at providing digital media market opportunities, through ‘specific support and assistance schemes for the distribution and dissemination’ of products online (UNESCO 2009: 3). For instance, such measures could be designed to make products originated

144  Lilian Richieri Hanania in partner countries available on popular online platforms in developed countries and to promote cultural events in order to develop new audiences for those productions. More generally, the use of digital technologies should be exploited in order to promote greater collaboration and exchanges in existing and future cultural cooperation under the 2005 Convention.18 Without trade liberalization commitments and while allowing Parties to maintain cultural exceptions in their trade agreements, such measures may play a major role in rebalancing the exchanges of cultural goods and services in favour of cultural diversity.

Future Perspectives for a ‘Cultural Exception’ in the Digital Environment The EU experience examined herein may lead to a few thoughts regarding the implementation of the 2005 Convention in a context of digital technologies, in respect of both trade and cultural cooperation provisions. Indeed, both aspects should be dealt with as complementary facets, which do not necessarily need to be directly linked from a legal standpoint though. The establishment of a clear legal linkage is only necessary when cultural cooperation is sought through market access provisions that may have a trade liberalization connotation and only if, because of previous most-favoured nation commitments (for example, in the WTO), such provisions need to be covered by a regional trade agreement – as was the case with the CARIFORUM Protocol. When the option of a protocol to a trade agreement is considered necessary, vigilance is needed in order to draft clear ‘cultural exceptions’ under the trade provisions of the agreement. In every other case, ‘pure’ cultural cooperation should be prioritized, apart from trade liberalization commitments, and in separate international instruments. Some of the features contained in the protocols with the Republic of Korea and Central America, and in the agreement with Colombia and Peru, may also serve as useful inspiration for future cultural cooperation frameworks. A first positive element is the creation of committees and other institutional bodies composed of experts in cultural matters to follow up regularly on the implementation of the cultural cooperation provisions and, as the case may be, the unambiguous separation from the institutional fabric established to follow up on the implementation of trade provisions. Another constructive element is the grounding of the cultural cooperation provisions on the 2005 Convention principles, objectives and definitions. In addition, c­ ollaboration in joint projects, exchanges of best practices and experiences, artists’ mobility, political dialogue on cultural measures and policies, effective participation of civil society and technical assistance in favour of developing countries should be enhanced and deserve detailed provisions. Stronger consultation among the 2005 Convention  Parties

EU Trade Agreements & Cultural Exception  145 pursuant to Article 21 in different international fora is also a positive path towards the diversity of cultural expressions. This could be developed and reinforced in cultural cooperation provisions established among specific Parties to the 2005 Convention, together with practical means for multiplying and improving public-private partnerships. Finally, the potentialities of new technologies to develop innovative collaborations should be exploited. In order to follow the rapid evolution of the digital content market and intervene in a creative way, so as to guide it towards a diversified cultural offer (Neuwirth 2016; Richieri Hanania and Norodom 2016), States need to remain vigilant and maintain their flexibility to adopt public policies for cultural diversity when negotiating international trade agreements. Admittedly, determining the sectors where such flexibility needs to be preserved may not be an easy task, and there is no model solution. Each State, regional or subregional bloc needs to examine the commitments already undertaken in previous trade agreements, the state of its cultural sectors, the sensitivities expressed by its society regarding each of those sectors and the priorities to focus on in order to define how to intervene in favour of a diversified cultural offer, according to economic, political, social and cultural circumstances. The difficulties in classifying digital content as a product or a service, and in categorizing new products and services, which emerged with the new technologies, for the purpose of precisely determining the applicable legal rule, are additional pitfalls. Due to business convergence in the digital economy, it might be useful, when drafting international trade obligations, to secure as much policy space as possible. That should also be the case with other sectors than those traditionally considered as cultural. One blatant example is the telecommunication services sector, where Internet service providers and network carriers have been offering more and more cultural content to their clients. The 2005 Convention may offer political support for its Parties to secure such policy space. This international treaty contains no limitation regarding the type of measure or policy to be adopted nor the sector in which they are to be adopted, as long as they mainly target culture and cultural expressions and comply with its principles and objectives (­R ichieri Hanania 2015b: 4). Indeed, the text largely defines cultural policies and measures as those relating to culture, whether at the local, national, regional or international level that are either focused on culture as such or are designed to have a direct effect on cultural expressions of individuals, groups or societies, including on the creation, production, dissemination, distribution of and access to cultural activities, goods and services. (UNESCO 2005: Article 4.6; emphasis added)

146  Lilian Richieri Hanania The very notion of cultural industries, defined as ‘industries producing and distributing cultural goods or services’ (UNESCO 2005: Article 4.5), seems to have been enlarged with the emergence and development of new actors in the digital content market. In an economy where several sectors may have a direct or indirect link with culture and creativity, States need to be open to innovative measures and policies that pursue the objective of cultural diversity while adapting to the rapidly changing market reality. No fixed list of sectors should therefore be pre-established (Richieri Hanania 2015b: 8–9). An attentive assessment of sectors by States should cover traditional cultural sectors, but also sectors which are strongly affected by digital technologies and which serve as vehicles for cultural expressions. Moreover, dialogue should be established with representatives of varied sectors in order to prepare an evolving political strategy regarding exceptions in future trade agreements. The integration of culture in sustainable development policies, as required under Article 13 of the 2005 Convention, reinforces the need for a coherent and coordinated approach in different areas of political intervention. Once a Party to the 2005 Convention has the political will to demand a cultural exception in trade agreement negotiations and has identified the sectors it wishes to cover (possibly including sectors not traditionally considered as cultural), drafting a ‘cultural exception’ adapted to the digital environment may require answering the following questions. First, have those sectors already been liberalized in its previous trade agreements? If yes, to which partners and to which extent? While existing liberalization levels will not be limited by new agreements with new partners, are the latter also Parties to the 2005 Convention and committed to the objective of cultural diversity? If yes, could it be politically interesting to establish a large cultural exception based on the specificity of cultural goods and services recognized by the 2005 Convention, while respecting the conditions established by the General Agreement on Tariffs and Trade (GATT 1994: Article XXIV) and the GATS (1994: Article V) regarding the scope of liberalization to be attained under regional trade agreements? In fact, the ‘elimination of substantially all discrimination’ in a ‘substantial sectoral coverage’ (GATS 1994: Article V:1) may be reached in other sectors than those identified for the purpose of establishing a cultural exception.19 For instance, in the CETA agreement, could the EU have simply adopted the Canadian exception applicable to cultural industries, so it would be extended to both partners? Even if the EU has undertaken commitments in some of those sectors in previous agreements – including at the WTO – and such commitments would in any case remain applicable, a larger ‘cultural exception’ would have had a political meaning, demonstrating the Parties’ strong engagement in favour of the 2005 Convention, its visibility and

EU Trade Agreements & Cultural Exception  147 the specificity of (all) cultural sectors (Richieri Hanania and Ruiz Fabri 2014: 495–96). As for the concrete wording to be employed in ‘cultural exceptions’ that would be adjustable to technological progression, reference to the 2005 Convention definitions of cultural industries or cultural policies could be a first avenue allowing for evolution and adaptation to market changes. The notion of creative arts contained in the agreement establishing the Association of Southeast Asian Nations (ASEAN) Australia-New Zealand Free Trade Area - may also be a source of inspiration. 20 It states that “creative arts” include the performing arts - including theatre, dance and music - visual arts and craft, literature, film and video, language arts, creative on-line content, indigenous traditional practice and contemporary cultural expression, and digital interactive media and hybrid art work, including those that use new technologies to transcend discrete art form divisions. (…) (ASEAN 2009: Chapter 15, Articles 1.3 and 1.4, Footnotes 1 and 2) Terms such as creative online content, digital interactive media or hybrid artwork might indeed be useful notions to be exploited. In any case, together with legislators and policymakers at the national level, negotiators of international agreements should adopt an approach open to the future and to the inevitable changes on the market, while keeping the diversity of cultural expressions as an important objective of public policy (Richieri Hanania and Norodom 2016).

Acknowledgements The author’s work on this chapter was partially supported by the Centro de Estudos Sociedade e Tecnologia (CEST) of the University of São Paulo. The author would like to thank Olivier Millot and the editors for their careful reading of earlier versions of this chapter.

Notes 1 The CARIFORUM is a subgroup of the African, Caribbean and Pacific Group of States and serves as a base for economic dialogue with the EU. It was established in 1992. Its membership comprises the 15 Caribbean Community states, along with the Dominican Republic. 2 In a few words, national treatment implies an obligation of non-discrimination between foreign and national products and services, that is, applying to partner countries the same treatment as to its own products and services. The most-­ favoured nation treatment means non-discrimination in the treatment applied between foreign trade partners.

148  Lilian Richieri Hanania 3 The principle of technological neutrality is defined by the EU as follows: The requirement for Member States to ensure that national regulatory authorities take the utmost account of the desirability of making regulation technologically neutral, that is to say that it neither imposes nor discriminates in favour of the use of a particular type of technology (…). (EU 2002) 4 And even though the WTO judge has decided that rules on goods and services are to be simultaneously applied (see Richieri Hanania 2009: 22, 110–42 and 157–70). 5 For instance, see Articles 119 and 120 in Chapter 6 of the EPA with the CARIFORUM States (EU 2008); Articles 7.1 and 7.48 in Chapter 7 of the EU-Republic of Korea agreement (EU 2011b); Title IV of the agreement signed with Colombia and Peru, and particularly Articles 107, 109, 162–66 (EU 2012b); Title III in Part IV of the agreement with Central American countries, in particular Articles 159, 201–2, as well as Article 56 of Title VI in Part III dealing with cooperation and technical assistance on the topic of electronic commerce (EU 2012a); Chapter 16 of the EU-Canada agreement (EU 2016); and Articles 8.1, and 8.57 to 8.61 of Chapter 8 of the EU-Singapore agreement (EU 2015). 6 See Article 119.3 of the Economic Partnership Agreement with the CARIFORUM States (EU 2008), Article 162.3 of the agreement with Peru and Colombia (2012b) and Article 8.59 of the EU-Singapore agreement (EU 2015). 7 For example, Article 201.3 in Part IV of the EU-Central America agreement (EU 2012a) and Article 16.1 of Chapter 16 of the CETA with Canada (EU 2016). 8 For an overview of the CETA exceptions, see Richieri Hanania (2015b). 9 For a more detailed discussion on such extension in this specific agreement, see RIJDEC (2015: 44). 10 Protocol III on Cultural Cooperation between the EU and the CARIFORUM States (EU 2008: 1938–41), signed on 15 October 2008 and provisionally applied. 11 Measures are, however, underway to implement the Economic Partnership Agreement (EC 2012, 2018). 12 The EU-Central America Association Agreement (EU 2012a) was signed on 29 June 2012. The trade part of the agreement has been provisionally ­applied since 2013. 13 Agreement on Cultural Cooperation between the EU and Colombia and Peru (EU 2011a), not yet in force, negotiated in parallel to the Trade Agreement with Colombia and Peru, signed on 26 July 2012 and provisionally applied since 2013 (EU 2012b). 14 Protocol on Cultural Cooperation between the EU and the Republic of Korea (EU 2011b: 1418 sq.), applied provisionally since 2011. The trade agreement entered into force on 13 December 2015. 15 Article 1.2 of the Republic of Korea Protocol on Cultural Cooperation reads: ‘The exclusion of audiovisual services from the scope of Chapter Seven (Trade in Services, Establishment and Electronic Commerce) is without prejudice to the rights and obligations derived from this Protocol. (…)’ (EU 2011b: 1418). 16 Article 4 of the EU-CARIFORUM Protocol on Cultural Cooperation reads as follows: 1. The Parties shall endeavour to provide technical assistance to Signatory CARIFORUM States with the aim of assisting in the development of their cultural industries, development and implementation of cultural policies, and in promoting the production and exchange of cultural goods

EU Trade Agreements & Cultural Exception  149 and services. 2. Subject to the provisions of Article 7 of the Agreement [regarding cooperation for development], the Parties agree to cooperate, including by facilitating support, through different measures, inter alia, training, exchange of information, expertise and experiences, and counselling in elaboration of policies and legislation as well as in usage and transfer of technologies and know-how (…) (emphasis added). (EU 2008: 1939) 17 See Article 7.3 of the Protocol with the CARIFORUM countries (EU 2008: 1940), Article 8.3 in the Protocol with the Republic of Korea (EU 2011b: 1422), Article 6.3 in the Protocol with Central American countries (UE 2012a) and Article 8.3 under the Agreement with Colombia and Peru (UE 2011a). 18 For proposals on this for the benefit of developing countries, see RIJDEC (2013: 8–20). 19 Moreover, it seems that those conditions have been interpreted with certain flexibility (WTO 2004: 21). 20 Other aspects of this ASEAN-Australia-New Zealand Free Trade Area cultural exception are challengeable, though. See RIJDEC (2015: 60–61).

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EU Trade Agreements & Cultural Exception  151 ——— (2015b). Le débat commerce-culture à l’ère numérique : quelle application pour la Convention de l’UNESCO sur la diversité des expressions culturelles au sein de l’économie creative? SSRN.com. 29 April. Richieri Hanania, L. and Norodom, A.T. (2016). Introduction. In Richieri Hanania, L. and Norodom, A.T. (eds.). Diversity of Cultural Expressions in the Digital Era. Buenos Aires: Teseo, 17–30. Richieri Hanania, L. and Ruiz Fabri, H. (2014). European media policy and cultural diversity at the international level: the EU’s role in fostering the implementation of the 2005 UNESCO Convention. In Donders, K., Pauwels, C. and Loisen, J. (eds.). The Palgrave Handbook on European Media Policy. Basingstoke: Palgrave Macmillan, 493–508. RIJDEC (Réseau international de juristes pour la diversité des expressions culturelles) (2013). Implementation of the convention on the protection and promotion of the diversity of cultural expressions in the digital age: challenges, priority actions and recommendations. Report presented to the Intergovernmental Committee of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions at its 7th session, Paris, 10–13 December. ——— (2015). Le renouvellement de l’exception culturelle à l’ère du numérique. Report presented to the Government of the Federation Wallonie-Bruxelles at the Workshop organized in Mons, October 25, for the celebration of the 10th anniversary of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions. Rogard, P. (2016a). Is cultural diversity adapted to the digital era? In Richieri Hanania, L. and Norodom, A.T. (eds.). Diversity of Cultural Expressions in the Digital Era. Buenos Aires: Teseo, 265–70. ——— (2016b). La mise en œuvre de la CDEC, l’Internet et les droits d’auteur. Presentation for the II Jornada Diversidade Cultural e Novas Tecnologias, CEST/University of Sao Paulo, 19 May. Souyri-Desrosier, C. (2014). EU protocols on cultural cooperation. An attempt to promote and implement the CDCE within the framework of bilateral trade negotiations. In Richieri Hanania, L. and Norodom, A.T. (eds.). Diversity of Cultural Expressions in the Digital Era. Buenos Aires: Teseo, 209–24. UNESCO (United Nations Educational, Scientific and Cultural Organization) (2005). Convention on the Protection and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO. ——— (2009). Article 16 of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions. Operational Guidelines. Preferential Treatment for Developing Countries. Approved by the Conference of Parties at its 2nd session, Paris, June. WTO (World Trade Organization) (2004). The Future of the WTO. Addressing Institutional Challenges in the New Millennium. Reinforcing the WTO to Meet its Institutional Challenges. Report by the Consultative Board to the Director-General Supachai Panitchpakdi. Geneva: WTO.

9 Cultural Policy in the Time of Digital Disruption The Case of Creative Canada Charles H. Davis and Emilia Zboralska

Introduction In April 2016, declaring the policy toolkit inherited from the linear era a ‘broken model’ that had become inadequate to address contemporary challenges and opportunities facing Canada’s 37,000 million dollars media and cultural sector, Minister of Canadian Heritage Mélanie Joly announced a comprehensive review of policies for Canadian content, the first such review in a generation. Minister Joly let it be known that ‘everything is on the table’. The review would therefore encompass key legislation for broadcasting, telecommunications and copyright; regulations requiring expenditures by broadcasters on Canadian content and distribution of Canadian programmes on television and radio; funding bodies and programmes for the book, periodical, music and screen media industries; and key public media institutions, such as the Canadian Broadcasting Corporation (CBC/Radio-Canada). A nationwide consultation involving more than 30,000 people took place in 2016 and 2017, culminating in the release of the Creative Canada Policy Framework (CCPF) in September 2017 (DCH 2017). Insofar as cultural policy must address the production, distribution and consumption of digital content, it is unavoidably entangled with media and telecommunications policy. Canadian and other national cultural policies that rely on the domestic broadcasting system to accomplish policy objectives are challenged by the rise of the transnational platform economy (Burri 2012). Online content distribution is growing by leaps and bounds, audiovisual consumption is shifting away from conventional broadcasting and foreign digital platform firms have become powerful new gatekeepers in the content distribution space. It has therefore become urgent to revise national cultural policy goals and the instruments to attain them in the context of the digital shift. As of June 2018, many of the CCPF’s policy items are in progress or in the pipeline. But a controversial issue concerning the so-called ‘Netflix tax’ has cast a shadow over public response to the CCPF, focusing attention on a highly contentious aspect of Canadian cultural policy: partition of the domestic media ecosystem into a regulated conventional

Canada: Cultural Policy & Digital Disruption  153 sphere and an unregulated digital sphere. In the latter, foreign digital content distribution firms are exempted from the cultural policy responsibilities and sales taxes to which legacy domestic broadcasting firms are subject. In this chapter we investigate how Canadian cultural policy is responding to the digital shift and its disruptive effects on the Canadian creative and cultural sector, especially the rapid emergence of powerful new foreign incumbents in the distribution of content. We first outline the legacy Canadian cultural policy framework and the policy instruments supporting it, emphasizing the centrality of broadcasting in promotion of Canadian cultural policy’s goals and objectives. Second, we describe the new CCPF, comparing the cultural policy objectives and instruments it incorporates with the legacy policy framework. Third, we discuss the reception of the CCPF and the ‘Netflix tax’ controversy.

The Centrality of Broadcasting in Canadian Cultural Policy Public support of cultural activities usually embraces social and political objectives flying the flag of cultural nationalism, notably promotion and protection of cultural identity, democratic practices, social cohesion, diversity and inclusion, community and youth engagement, and external displays of soft power (Throsby 2010; O’Brien 2013; Bell and Oakley 2014). Canadian cultural policy has been shaped especially by the ongoing sense of need to affirm and develop national identity, seeking to ensure availability of Canadian information, stories, images and experiences in a national context in which competing content (typically ­A merican) is readily available, and where questions about the robustness of the popular sense of national identity are a recurrent source of concern (Collins 1990; Grant and Wood 2004; Edwardson 2008; Vance 2009, Wagman and Winton 2009; Taras 2015; Armstrong 2016). In addition to cultural nationalism, cultural policy in Canada and in many other countries has developed a growing (some would say preponderant) interest in leveraging the creative and cultural industries to produce economic value. In Canada, this policy interest in the economic potential of the cultural and creative industries – what Edwardson (2008) calls cultural industrialism – emerged in the 1970s, manifesting itself in strategies and initiatives to grow employment in, and exports of, cultural goods and services. Canadian broadcasters and creative content producers have never been entirely sure whether economic or cultural objectives, or some combination of the two, meet the country’s cultural policy requirements. The Canadian broadcasting and telecommunications industry is dominated by five groups – Bell, Quebecor, Rogers, Shaw and TELUS – which

154  Charles H. Davis and Emilia Zboralska control 83 per cent of total combined industry revenues (CRTC 2017a). These five groups are small conglomerates with holdings in sectors such as broadcasting, telecommunications and publishing. Service bundling, restrained competition, high prices and customer service issues are frequently attributed to this high degree of market concentration and vertical integration. Revenues from telecommunications services represent about 73 per cent of industry revenues; broadcasting accounts for most of the remainder. Growth areas are in provision of Internet and wireless services, while broadcasting revenue is largely flat. A long-standing issue in the Canadian English-language television market is the relative economic riskiness of production of domestic content in higher-cost categories, especially drama, comedy and documentary, where it is much more expensive to produce original content than to import licensed content (especially from the United States), which more reliably attracts audiences and advertising dollars.1 It is unusual for Canadian English-­ language television programmes to attract domestic audiences exceeding one million viewers, while imported television programmes regularly do (CMPA 2018). The situation is different in French-speaking Canada, where domestic programmes regularly attract audiences of two million or more in a linguistic population that is around one-third the size of the English-speaking population of Canada (Ibid.). Canadian broadcasting policy employs a ‘walled garden’ regulatory model in which domestic firms are afforded protections, support and privileges in return for delivery of specific cultural and social goods and services which otherwise probably would not be produced. Cultural policy objectives are spelt out in the Broadcasting Act, which considers broadcasting ‘a public service essential to the maintenance and enhancement of national identity and cultural sovereignty’. The Broadcasting Act makes it clear that broadcasting should strengthen and develop the Canadian nation by promoting democracy, diversity, national cultural identity and economic development through programming that reflects Canadian opinions, displays Canadian talent and serves ‘the needs and interests, and reflect(s) the circumstances and aspirations, of Canadian men, women and children, including equal rights, the linguistic duality and multicultural and multiracial nature of Canadian society and the special place of aboriginal peoples within that society’ (Canada 1991: s.3.1 d.iii). The Broadcasting Act furthermore states that the Canadian broadcasting system is to be understood as a single system in which each element is expected to make an appropriate contribution to the overall policy objectives, and which is regulated by a single authority. Developed from the 1970s onwards, the Canadian cultural toolkit contains a variety of policy instruments (Grant and Wood 2004). Subsidies and tax incentives are provided for production and export promotion of various cultural products (of which film and television receive the lion’s share). Broadcasters must spend a specified portion

Canada: Cultural Policy & Digital Disruption  155 of revenue on Canadian content and air a specified amount of this content during specified periods. Furthermore, a specified portion of production expenditures must be directed to arm’s-length independent production firms. Eligibility for tax credits and subsidies is determined by a points system that takes into account the nationality of key creative personnel and the location of production. A public broadcaster (CBC/Radio Canada) provides programming that is ‘predominantly and distinctively Canadian’ across the country. In a unique policy accommodation known as ‘simultaneous substitution’, Canadian broadcasters substitute their own local signals for identical foreign signals when both programmes are being broadcast simultaneously, thereby creating a separate Canadian market for advertising. Ownership of broadcasting and telecommunications firms must remain in Canadian hands, and rules apply to foreign investments in book and periodical publishing and distribution and film distribution. Competition is ­managed, and anticompetitive practices are frowned upon. In the context of the Broadcasting Act, rules and regulations for broadcasters are made and administered by the Canadian Radio-television and Telecommunications Commission (CRTC), the arm’s-length regulatory agency that reports to Parliament through the Minister of Canadian Heritage (Salter and Odarty-Wellington 2008). In its regulatory capacity, the CRTC monitors and tweaks the domestic broadcasting and telecommunications system. The CRTC’s comprehensive annual Communications Monitoring Report provides a very detailed look at this walled garden, reporting trends in household expenditures on Internet and wireless services; prices; availability of broadband services; consumer behaviour, such as cord cutting and complaints; numbers of viewing hours in English-language and French-language services by genre; and the composition, financial performance, number of subscribers, expenditures on programming by ownership group and growth rates and profit margins by subsector or even specialty channel (CRTC 2017a). In 2017, CRTC began to include information about online television and video services.

Canadian Content and the Digital Shift The Broadcasting Act stipulates that the Canadian broadcasting system should be ‘readily adaptable to scientific and technological change’. Over time, policy measures have shaped the adaptation of the Canadian broadcasting system to the waves of new distribution technologies: radio, over-the-air television, cable, satellite, broadband and wireless (Armstrong 2016). Policy has ensured investment in production and carriage of Canadian content, and Canadian control over the domestic telecommunications system regardless of the current communication technologies.

156  Charles H. Davis and Emilia Zboralska The arrival of broadband Internet distribution severely challenges the cultural policy framework that relies, for its execution, on a regulated or walled garden domestic broadcasting system. Multipurpose transnational cloud-based digital platform services encompassing storage, processing, databases, software and networks have emerged very quickly in a ‘big bang’ (Downes and Nunes 2014). These providers in the online media system tend to be ‘tech companies that have morphed into media, such as Google or Apple, or… hybrid “tech-media” firms such as Netflix or Amazon’ (Noam 2014: 688). Platform providers that distribute content are able to attract customers away from domestic broadcasters, cable and satellite services on the basis of cost, choice, convenience and personalized recommendations of playlists (Evens and Donders 2018). Cunningham and Silver (2013) call these firms ‘the new King Kongs’ of online audiovisual distribution. Competition with them is only possible ‘ecosystemically, or, in other words, with a similar group of related activities’ (Miguel de Bustos and Casado 2016: 128), a model that national broadcastertelecommunications firms cannot easily imitate. The practical significance of the shift to platform power is only recently becoming apparent. Alphabet (Google), Facebook, Microsoft, Apple and Amazon are among the top ten most valuable companies in the world by market capitalization. Google, Facebook, Apple, Amazon, Microsoft, YouTube and Netflix are among the ten most influential brands in Canada in 2017 in terms of perceived trustworthiness, presence, being leading edge and corporate citizenship and engagement (Ipsos 2018). Google and Facebook now capture an estimated 72 per cent of Canada’s 4,200 million dollars annual digital advertising market (Winseck 2017). It is forecast that in Canada, by 2020, there will be more subscribers to over-the-top (OTT) services than TV subscribers (Chhabra 2018). Although hundreds of OTT streaming services have emerged around the world, most are local, marginal or niche players (Evens and Donders 2018). The success of Netflix has shown that a large market footprint and a catalogue of premium original content are necessary ingredients in commercial success, leading to competition in high-quality OTT programming by large providers such as Amazon, DAZN, Hulu and Netflix, with Disney, Google, Apple, CBS and Facebook on the runway. Bidding for quality original content is expected to drive up the costs of Canadian exhibition rights for Canadian broadcasters. Few foresaw the extent to which media and content delivery industries would be disrupted and displaced by the information technology (IT) industry in the space of scarcely a decade, producing a transnational media-technology system dominated by a small handful of huge, highly capitalized US-based media-technology platform firms enjoying very considerable economies of scope and scale, yielding a multitude of business opportunities as multisided markets and offering extraordinary new capabilities that make their products and services highly

Canada: Cultural Policy & Digital Disruption  157 attractive to consumers and advertisers. It is unlikely that mere digitization of a domestic broadcaster could have produced firms such as these. Only IT-intensive firms with relentless dedication to scalability, and investment capabilities to match, could have captured this high ground (Barwise and Watkins 2018). These are ‘exponential’ organizations in the sense advocated by Silicon Valley exponentialism – the principle that new organizations must be designed for high scalability, with a potential customer base in the hundreds of millions or more (Ismail 2014). Disruption of core media technologies inevitably disrupts regulatory processes (Downes and Mayo 2014). Prior researchers, including ourselves (Zboralska and Davis 2017), have emphasized the uncertainty that disruption introduces when ‘the old [policy] instruments, like existing national mechanisms for direct support and domestic content regulations, may no longer work’, but there is lack of a ‘clear idea about what to replace them with’ (O’Regan and Goldsmith 2006: 82). It is now clear that disruption of the regulated sphere involves introduction of a platform-based de facto regulatory regime: Far more than with most previous industries, digital platforms are regulatory structures. Even more than in natural monopolies (such as electric and water utilities), today’s digital platforms deeply structure the rules and parameters of action available to users. (Zysman and Kenney 2018: 62) The major digital firms are no longer market participants. Rather, in their fields, they are market makers, able to exert regulatory control over the terms on which others can sell goods and services. Moreover, they aspire to displace more government roles over time, replacing the logic of territorial sovereignty with functional sovereignty. In functional arenas from room-letting to transportation to commerce, persons will be increasingly subject to corporate, rather than democratic, control. (Pasquale 2018) As Pasquale (2018) observes, ‘when state authority contracts, private parties fill the gap’, thereby allowing territorial governance of a policy domain to be replaced by the ‘functional governance’ exercised by platforms, a not unlikely outcome of the eclipse of broadcast-based cultural policy by unregulated platform-based digital services. The creation of an unregulated space for digital media originated in Canadian cultural policy with the best of intentions two decades ago. The CRTC may exempt licensees from regulations or requirements if it considers that the objectives of policy are being met without regulation.

158  Charles H. Davis and Emilia Zboralska In 1998 the CRTC held extensive public consultations on what was at the time called ‘new media’ to determine if regulation was warranted. The ­ roblematic: CRTC examined the factors that subsequently have become p how to ensure investment in Canadian content in digital media? How to ensure visibility of content? What is the impact on conventional broadcasters? What are the implications for advertising revenues? It concluded that Canadian new media was flourishing and appeared to offer growth opportunities to conventional broadcasters. Therefore, there was no need to ‘impose any regulatory measures to support the development, production, promotion and distribution of Canadian new media content and services’. The CRTC issued an Exemption Order for New Media Broadcasting Undertakings in 1999 (CRTC 1999). In 2008, the CRTC conducted public hearings to review the new media exemption order as well as a more recent exemption order for mobile television. It sought evidence that digital media was adversely affecting conventional media industries and audiences in Canada. According to the CRTC (2009), the majority of the parties in the Proceeding, whether content creators, broadcasters, or broadcasting distribution undertakings (BDUs), were optimistic about new media’s positive potential to affect their respective businesses, stating that new media is more of an opportunity than a threat and that it currently complements traditional broadcasting by promoting programs and services, and building audiences. Because digital media business models were uncertain, the CRTC preferred not to levy contribution quotas on new media broadcasters. Considerable interest was expressed by participants in making Internet service providers (ISPs) responsible for financially contributing to Canadian content development, and by requiring ISPs to guarantee shelf space for Canadian content. ISPs resisted on the grounds that they are not broadcasters but merely transmission pipelines, an interpretation that was later confirmed by the Supreme Court. Finally, the operational complexity of monitoring content on the Internet from the standpoint of the cultural and social objectives of the Broadcasting Act was apparent. The CRTC concluded it would maintain its exemption for digital broadcasting over the Internet and review the situation in five years. In 2011 the CRTC launched a fact-finding exercise on OTT programming services in the Canadian broadcasting system. A pattern of stakeholder preferences emerged. Broadcasters argued that a level playing field required correcting the policy asymmetry that exempted OTTs from contributing to cultural policy objectives. Creator groups warned that the growth of OTT services did not justify the reduction of

Canada: Cultural Policy & Digital Disruption  159 cultural responsibilities among licensed broadcasters, but required appropriate contributions from OTT players. In their briefs, Netflix and Google argued against regulation of OTTs. Google noted that it did not enjoy the regulatory ‘benefits that are handed out in the walled garden world of traditional media’ – such as genre protection and simultaneous substitution – and should not be required to contribute (as cited in Anderson 2016). In 2012, the CRTC introduced some amendments to the Digital Media Exemption Order, including the requirement that digital media broadcast undertakings provide information from time to time upon request to enable the CRTC to monitor the development of digital media broadcasting. In late 2013, at the request of the Government to find ways to ensure greater choice in media, the CRTC launched the high-profile Let’s Talk TV policy consultation. This consultation aimed especially to challenge the broadcasters’ practice of requiring consumers to purchase bundles of specialty channels. The 2014 Let’s Talk TV hearings were highly publicized, with thousands of individuals and organized stakeholders seeking to make their views known. The national public broadcaster, the creative production community, the trade unions and the governments of Ontario and Quebec argued in favour of adding Canadian programme funding obligations and Canadian inventory obligations to OTTs. The private broadcasters questioned the digital broadcasters’ exemption from cultural policy obligations, and tended to advocate reduction of cultural policy obligations on domestic broadcasters (Anderson 2016). The Let’s Talk TV hearings resulted in the elimination of Canadian content quotas for daytime television, and introduced an exempt hybrid video-on-­ demand category to encourage the development of Canadian streaming services. The issue of governance of digital broadcasting in Canada exploded in a dramatic televised confrontation between the CRTC and the Netflix spokesperson, when the latter claimed that Netflix was not under the jurisdiction of the Broadcasting Act and declined to provide information to the regulatory agency about its Canadian audiences, revenues or programming. Google similarly declined to provide requested information, causing the Commission to strike the written submissions of both from the public record (Zboralska and Davis 2017). To summarize, since 1999 it is established policy in Canada to exempt digital media broadcasting from cultural policy obligations and protections. This exemption is based on the CRTC’s assessment that digital media broadcasting has not materially harmed the conventional domestic broadcasting industry or prevented it from achieving the cultural ­policy goals set out in the Broadcasting Act, that online broadcasting and consumption of online content complement conventional broadcasting rather than substitute for it and that digital media broadcasting therefore represents more of an opportunity than a threat.

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The Creative Canada Policy Framework: Continuity and Change The CCPF marks an attempt to significantly reorient Canadian cultural policy in response to massive digitization. The consultation document Canadian Content in a Digital World: Focusing the Conversation (DCH 2016) positions the emerging cultural policy as dedicated to promoting, not protecting, Canadian culture; as platform agnostic, that is, not primarily embedded in the broadcasting system; as a driver of economic growth, not as ‘a social phenomenon’; as an investment in creators and cultural entrepreneurs, not a subsidy; and as outward-oriented, to capture more global market share. It proposes three principles, derived from a pre-consultation in which 10,000 Canadians participated, as the foundation of a sort of social contract on Canadian digital content. The first principle, focusing on citizens and creators, interprets citizenship in terms of unfettered access to digital content, leading to expression of commitment for net neutrality and an unregulated Internet: The way forward is not attempting to regulate content on the Internet, but focusing on how to best support Canada’s creators and cultural entrepreneurs in creating great content and in competing globally for both Canadian and international audiences. Grabbing a bigger piece of the global pie is critical to building a strong and viable creative sector. (DCH 2016) This requires finding ways to nurture and showcase Canadian creative content, and make it discoverable in the digital ecosystem through partnerships, without recourse to content quotas or spending requirements, two key instruments in the legacy cultural policy toolkit. The second principle, ‘reflecting Canadian identities and promoting sound democracy’, is reminiscent of the cultural-sovereignty language and cultural policy objectives expressed in the Broadcasting Act. It recognizes that diversity, inclusion, local and regional information, and Canadian perspectives are valued by Canadians as citizens. It sets a bold challenge: ‘a new model must incentivize viable business models that support the production of news information and local content that is credible and reliable’. The third principle, ‘catalysing social and economic innovation’, attributes numerous social benefits and spillovers to the domestic creative and cultural sectors, and predicts significant growth for the cultural economy: ‘Thirty years from now, the arts and culture will be an even bigger part of all successful economies’. Once again, the solution to problems is not in domestic consumption of Canadian cultural content

Canada: Cultural Policy & Digital Disruption  161 but in ‘export and international audiences [which] will be critical to the future sustainability of Canada’s cultural sector and its economy’. After extensive consultations, including six regional consultative meetings across Canada, the CCPF was released in September 2017. This is a 38-page document that builds on and extends the familiar cultural industrialism strategy (Edwardson 2008) of the past, presenting itself, however, as ‘a new vision and approach to creative industries and to growing the creative economy’ and positioning creative and cultural activities as fundamentally linked to ‘the economy of the future’ (DCH 2017: 5). The CCPF is organized around the three central pillars already proposed in the consultation document, namely: investing in Canadian creators and cultural entrepreneurs, promoting the discovery and distribution of Canadian content domestically and internationally, and strengthening the Canadian public broadcaster and local news. With respect to the first pillar – investment in creators and cultural entrepreneurs –, the new policy increases direct funding for the programs and supports that creators rely on, including the Canada Media Fund and the Canada Council for the Arts, and it also expands the media sector’s access to technology-oriented programmes via the Strategic Innovation Fund. Under the CCPF, the Government also promises to work with Canada’s national cultural agencies to allocate more funding to Indigenous and minority language creators and programming, to programming led by women and to digital experimentation and innovation. The Government indicates that over the long term, it will also be aiming to modernize the Canada Media Fund – the principal national audiovisual production fund, which is supported by levies on broadcasters and federal contributions – to ensure that it ‘has the tools and the flexibility it needs to adapt its support for the screen-based sector given the rapidly changing environment’ (DCH 2017: 15). The CCPF also aims to offer creators support through the creation of new cultural spaces, ‘creative hubs that will help nurture and incubate the next generation of creative entrepreneurs and small business start-ups’. These hubs will encourage creators to help themselves by providing them spaces where they can ‘build their entrepreneurial skills, create, collaborate and innovate, and help generate new markets for Canadian creativity’ (DCH 2017: 16). As regards this pillar, the CCPF also announces that the Government will engage in a review of the Copyright Act. Under the second pillar – promotion of discovery and distribution of Canadian content – the CCPF promises forthcoming reviews of the Broadcasting and Telecommunications Acts, including examining ‘issues such as telecommunications and content creation in the digital age, net neutrality and cultural diversity, and how to strengthen the future of Canadian media and Canadian content creation’. The reviews will also

162  Charles H. Davis and Emilia Zboralska ‘address the digital shift and will aim to support diverse quality content and information for Canadians, as well as affordability and access to telecommunications services’ (DCH 2017: 26). The CCPF introduces a novel tool into the Canadian cultural policy toolkit: partnerships with global platform firms. According to the document, the Government ‘will seek commitments from, and pursue agreements with, global Internet companies that provide services to Canadians’. Furthermore, the Government notes that it expects ‘these companies will be partners in, and contribute to our objectives (…) helping grow our creative industries with investments in production and distribution’. The CCPF takes a stance against imposing ‘new taxes on online services that will increase the cost of these services to Canadians’ (DCH 2017: 26), but it is unclear whether the taxes to which it refers are cultural levies or sales taxes (neither of which currently apply to non-Canadian-owned online audiovisual services). The CCPF makes the export of Canadian content a national priority by setting out several key initiatives, including the hiring of new trade officers, as well as devoting new funding to export-related endeavours. Under the export strategy, the Government aims to ‘work with partners to strengthen Canada’s creative brand and its creators on the international stage’ (DCH 2017: 28). The Government will also be aiming to expand audiovisual co-production treaties around the world. Under the third pillar – strengthening of public broadcasting and local news – the Government promises to update the mandate of the public broadcaster in conjunction with its review of the Broadcasting Act and Telecommunications Act, and has already made financial investments to help stabilize its funding over a five-year period. On the issue of local news, the CCPF announces that the government will engage in a review and modernization of the Canada Periodical Fund which supports magazines and paid community newspapers, to ‘ensure that it (…) responds to industry needs’, including the possibility of funding digital-only content, which is not currently supported (DCH 2017: 33). Regarding this third pillar, the CCPF again invokes the use of partnerships as a cultural policy tool, announcing that it ‘will work with Internet companies to help jumpstart digital news innovation so ­Canadian journalists and news organizations are better positioned to succeed in offering Canadians local and regional news in the years ahead’. The CCPF emphasizes that its ‘expectation is that these ­platforms are partners and must do more to support the creation and distribution of essential news and information’ and that they ‘hold an important responsibility in promoting informed digital citizenship’ (DCH 2017: 34). In summary, the CCPF encompasses much of the existing cultural toolkit and promises review of the major legislative instruments, support

Canada: Cultural Policy & Digital Disruption  163 programmes and cultural institutions. This work is ongoing. The government makes commitments to maintain or increase funding to certain key programmes or institutions, notably the Canada Media Fund and CBC-Radio Canada. However, organization of policy intervention into the aforementioned three pillars is new. Inclusion of news within the cultural policy ambit is also a new development. The emphasis on cultural exports makes official what was unofficial for decades. The suggestion that partnerships, not regulation, provide the appropriate approach to transnational distributors of audiovisual content is a novel and untested approach to policy. No commitment is made to reclaim domestic market share for any genre, nor is attention given to telecom issues: access, pricing or quality.

The Reception of the Creative Canada Policy Framework In conjunction with the release of the CCPF in September 2017, Minister Joly made a stunning announcement: Netflix had agreed to establish a production facility in Canada and committed to spending 385 million dollars on content production in Canada over five years, but without Canadian cultural policy conditions attached. This would be Netflix’s first production facility outside the United States and the first agreement of its kind. The announcement made clear that the policy story was not about regulating OTT content distributors but about partnering with them. Stakeholder reactions to the CCPF were mixed. Even when some responses were positive, they were restrained, owing to what was viewed as a lack of details or clear path to implementation. Two aspects of the framework generated significant controversy: the deal with Netflix, and the lack of clear support for the financially troubled traditional news media. On the issue of Netflix, creator groups generally embraced the notion of additional spending on content made in Canada and the establishment of a physical Netflix studio on Canadian soil, but wanted to know more. According to the Directors Guild of Canada (DGC), for example, while the deal can generally be seen as a positive development because it can be taken as a signal that the government has embraced ‘the principle that every player in Canada has to be producing Canadian content and investing in Canadian creative talent’ (DGC 2018), crucial questions still remain: namely Are we talking about Canadian programming, or American shows shot in Canada with American talent in all the top creative functions? How much will be in French? Is this Netflix announcement a one-off, or the first step towards a real policy? (DGC 2018)

164  Charles H. Davis and Emilia Zboralska Broadcaster Bell pointed out that its ‘total annual investment in Canadian content in 2017/18 is nine times the average amount that Netflix would contribute yearly’ (Behar 2017). French-Canadian stakeholders were infuriated by the deal’s lack of clarity with respect to what proportion of the promised investment would be spent on French-language programming. Québec Minister of Culture and Communications, Luc Fortin, was ‘angry’ and ‘speechless’, arguing that the Federal Government ‘abdicated’ its responsibility to protect Francophone-Canadian culture and that ‘we can’t rely on the invisible hand of the market to ensure that French will have its place on digital platforms’ (Fortin, as quoted in Watters and Cullen 2017). In addition, in her speech announcing the new policy, Minister Joly (2017) commented that the government would not increase the cost of broadband services to Canadians by imposing a new tax. Whether the Minister was in that moment referring to a cultural levy or a sales tax is open for interpretation. Most creator groups and major broadcasters were angered by what they viewed as the maintenance of a two-tiered system that confers advantages on foreign businesses, keeping them exempt from cultural regulation and sales tax (Lloyd 2017; Coalition for Culture and Media 2018). The province of Québec announced that it would impose the collection of sales tax on all foreign-owned online suppliers of goods and services, including Netflix, and that it expects to recover 119 million dollars in lost revenue over five years (Tomesco and Rastello 2018). Québec is the only province to have made such an announcement. Responding to the controversy, Minister Joly commented that sales tax is outside her jurisdiction — she is ‘in charge of culture’, and it is the finance minister who ‘is in charge of taxation’ (Minister Joly, as quoted in The Canadian Press 2017). As mentioned above, the other aspect of the CCPF that generated substantial controversy was its lack of support for the traditional domestic news media. While the policy recognizes local news as a pillar of its plan, Minister Joly (2017), in her announcement of the document, said that her ‘approach will not be to bail out industry models that are no longer viable’. Instead, the CCPF introduced a partnership between Ryerson University and Facebook to incubate digital solutions for journalism. Generally speaking, citizen groups and journalists were very disturbed. Many felt the government had fatally misunderstood the predicament facing the news media. According to some commentators, traditional news media outlets have not been resistant to online transformation; rather, it is that good journalism delivered online is not sustainable due to the realities of the digital economy. As one veteran journalist, Dan Lett, pointed out, not one of global online players like Huffington Post, Snapchat, Amazon or Buzzfeed ‘make money’ (Lett 2017). Digital advertising, ‘a game designed to benefit mammoth near-monopolies that control hundreds of millions of unique

Canada: Cultural Policy & Digital Disruption  165 visitors’, could never solve the problems facing local news given the scale required to generate revenue (Ibid.). Minister Joly later scaled down expectations around the extent of outcomes of the Creative Canada consultations, stating, ‘the reality is that we always thought that this [Creative Canada] was our transition plan… We don’t have the tools in our system right now to have a way to protect our culture on the web’, arguing that the most important work must be done at the legislative level, with the review of the Broadcasting and Telecommunications Acts (Minister Joly, as quoted in Bailey 2018). Some industry analysts felt that the ‘dangerous stuff’ was being pushed too far into the future (Loyd 2017), and that ‘there is precious little to show for the minister’s endless talk’, noting that it is unlikely that any hard decisions will be made prior to the next federal election (O’Brien 2018).

Conclusions: The New Reality of Cultural Policymaking The digital shift in the cultural sector, manifesting itself especially in disruption of legacy content distribution systems and associated business models, introduces a new reality into cultural policymaking. The suitability of the domestic broadcasting system as the principal vehicle for attainment of Canadian cultural policy goals is waning. But to extend the rationales and goals of legacy cultural policy to the digital realm is not straightforward. The partition of the Canadian media ecosystem into a regulated domestic ‘walled garden’ and an unregulated digital sphere has become problematic, but the question of what are the effective political, legal and operational bases for national jurisdiction over digital cultural content distribution on transnational platforms remains unsettled. The CCPF charts several imaginative new directions. Developing international demand for Canadian cultural products, providing stronger support for cultural entrepreneurs, the beginnings of a strategy to save the struggling domestic news industry, platform-agnosticism (which in Canada means unhooking the funding mechanisms from the broadcasting system) and a commitment to deliberative democracy in the extensive policy consultations that led up to the development of the policy framework – these are all positive elements. Nevertheless, they have been eclipsed by the Netflix tax issue, making cultural policy reform more of a political liability than the asset it was intended to become. The entanglement of many policy issues makes policy agility difficult. New issues – data privacy, regulation of programmatic advertising, taxation, competition and antitrust law, and enforcement of compliance – are arising in many countries and are arguably more urgent than traditional cultural policy concerns with representation and identity, given the platforms’ affordances that lend themselves to weaponization of culture. Governments’ reluctance to regulate apparently diminishes when social media giants are found to have been complicit

166  Charles H. Davis and Emilia Zboralska in attempted political subversion, representing an existential threat to democratic states. Privacy and disruption of elections seem to be the two new cultural policy red lines, constituting a cultural policy shift as enormous as the digital shift. Regulatory processes, which are intended to guide the development of the market, have difficulty accommodating high-velocity change. Review of fundamental legislation such as the Broadcasting Act or the Telecommunications Act can take years. OTTs profit from regulatory fragmentation and accumulate political clout through their brand salience, consumer friendliness, and access to domestic policymakers. Possible political blowback may explain why federal politicians in Canada are not eager to provoke these giants or their allies, Canadian consumers. However, in an apparent reversal of two decades of policy, in response to an official request to examine the future of content distribution in Canada and following another extensive formal consultation, in late May 2018 the CRTC released a report advocating regulatory and contractual measures to induce transnational digital content distributors to embrace Canadian cultural policy objectives (CRTC 2018), thereby opening a new chapter in Canada’s search for cultural sovereignty in the digital age.

Acknowledgements Research reported here was supported by the Social Sciences and ­Humanities Research Council under the Creating Digital Opportunity partnership project and is gratefully acknowledged.

Note 1 The CRTC (2017b, chart 26) indicates that the only genres of Canadian content that produce an aggregate surplus are Sports, Lifestyle and Reality programming in English-language services, and none in French-language services. Canadian News, Fiction and Children’s programming are consistent money-losers.

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10 Cultural Diversity and Regulation in Brazil The Debate about the On-Demand Audiovisual Market Leonardo Gabriel De Marchi and João Martins Ladeira Introduction Brazil has an important audiovisual sector. In economic terms, the country has a television and film industry with a significant production of films, documentaries and television products (notably ‘telenovelas’). In political terms, the television industry enjoys a privileged relationship with the Brazilian state, which has allowed it to structure the audiovisual market over the decades. Having the control of the broadcast television market and the leading role in pay-TV, the major national players also sought to plan for the video-on-demand (VoD) market. By establishing partnerships with telecommunications companies that provided convergence between data, telephony and cable, they planned to develop the VoD market as if it were an extension of the cable-television market, where there is a secure subscriber base and a market structure in which national companies enjoy some security in relation to competition with foreign companies (Ladeira 2017). However, in recent years, digital streaming platforms have begun operating in Brazil, adding complexity to the VoD market. There is not a lot of information about this niche, but independent research suggests that it is a growing market characterized by a diversity of Brazilian and foreign companies, of different economic sizes, available through digital television, video games consoles and mobile telephony, which offer consumers different business models, ranging from ad-supported video-on-demand (AVoD), subscription video-on-demand (SVoD) and transactional video-on-demand (TVoD) to catch-up TV applications. In view of the growth in the VoD market, the government agencies dedicated to regulating the audiovisual sector in Brazil started a debate about how to act to ensure the full development of this emerging market and protect cultural diversity in the national audiovisual sector. The National Cinema Agency (ANCINE) began research with a view

170  Leonardo Gabriel De Marchi and João Martins Ladeira to proposing a model for regulating the VoD market. The result was a report containing a broad market analysis and suggestions for regulatory measures that would provide a basis for a future bill (ANCINE 2017). This document was in harmony with the ideas of the Brazilian Ministry of Culture (MinC, the acronym in Portuguese) during the years of centre-left governments led by the Workers’ Party of Brazil (PT, the acronym in Portuguese). Beginning with the administration of the musician, politician and activist Gilberto Gil (2003–2008), MinC adopted the United Nations Educational, Scientific and Cultural Organization (UNESCO) agenda for the protection and promotion of cultural diversity, and began to propose policies in which the state became more present in the regulation of cultural markets. Thus, it is not surprising to find proposals such as the establishment of quotas of national production available on digital platforms and the collection of progressive taxes based on the gross revenues of companies operating in Brazil. However, the publication of the report came at a time of serious political crisis in the country. In the aftermath of the impeachment of President Dilma Rousseff in August 2016, neo-liberal groups of politicians and technicians came to power and began to undo the main works and directives of previous governments. Also, neo-liberals took charge of MinC. The inauguration of Minister Sérgio Sá Leitão in 2017 marked an administration antithetical to the accomplishments of the previous ministry. Regarding the proposed regulation of the VoD market, Sá Leitão publicly attacked the ANCINE report, stating that it should not intervene in this emerging market, as this could hinder its development. He immediately rejected the proposal to impose a quota for the screening of national content on digital platforms. Instead of more direct action from the state, he preferred a policy based on tax exemptions for VoD service providers. Along these lines, MinC formulated a new regulatory proposal, based only on a hybrid tax model, in which the companies that offer VoD services may opt either for ­taxation based on the size of their catalogue or for a fixed tax per subscriber/ sale of on-demand content. This proposal has been supported by major market players, but strongly criticized by independent ­producers. These reactions cast doubt on the ability of this minimal regulation to reconcile diverse interests and, in particular, to protect and foster cultural diversity in the digital audiovisual market. The VoD regulatory debate is inextricable from a sensitive ­political scenario, fraught with tensions that threaten democracy itself in ­B razil. Therefore, our objective of describing and contextualizing this debate demands a contextualization not only of the Brazilian audiovisual market, but also of the complex contemporary political situation of the country. This is believed to be the best way to have some appreciation, however precarious it may be, of the consequences of this political and ideological conflict over regulation of the VoD

Brazil: On-Demand Audiovisual Market  171 market. The chapter is divided into three parts. The first introduces an overview of the digital audiovisual market. Next, we describe the transformation of the concept of cultural policies in Brazil during PT-related administrations until Sérgio Sá Leitão’s inauguration as the head of MinC. In the third part, the differences between the ANCINE report and MinC proposals during the post-PT administration are emphasized. The final considerations comment on the possible consequences of this clash for the digital audiovisual market.

The Digitization of the Audiovisual Market: Background and Agents Despite a discontinuous path throughout the twentieth century, Brazilian cinema managed to build a productive structure of quality and a considerable domestic market, reaching international recognition with Cinema Novo in the 1960s and more recently with the new Brazilian cinema, which had the film Cidade de Deus (2002), by Fernando Meirelles, as its milestone. Television has had a more consistent path, being the sector that structured the audiovisual market. Introduced into the country in the 1950s, television gained strong momentum during the civil-military dictatorship (1964–85). At that time, the military intelligentsia believed that the success of the regime would depend on the use of modern mass media for the transmission of the regime’s world views (Ortiz 1988). Television seemed to be the most efficient instrument for this purpose since it presented itself as a symbol of the modernity and progress of the so-called Brazilian economic miracle (1967–73) and could access a huge audience in a country marked by high rates of illiteracy. Thus, the state invested in the construction of a sophisticated technological infrastructure for telecommunications (communication satellites, cabling, construction of national communication networks, etc.), managed by state companies. At the same time, changes in the Brazilian Telecommunications Code prohibited foreign capital from investing in the domestic market, thus favouring local companies capable of obtaining public concessions to operate. The companies selected were private communication groups, concentrated in the country’s political and economic hubs (Rio de Janeiro and São Paulo) and closely aligned with the ideology of the military (Bolaño 2004; Ortiz 1988; Ribeiro et al. 2010; Simões et al. 1986). In particular, Grupo Globo stood out in this period, greatly increasing its interests in several sectors of the communication market. Created in 1965, Rede Globo de Televisão became the main company in the market (Brittos and Bolaño 2005). In the 1990s, the rise of neo-liberal governments (1990–2002) triggered a privatization programme for telecommunications, which would directly affect the audiovisual market. The privatization policy of

172  Leonardo Gabriel De Marchi and João Martins Ladeira telecommunications infrastructure mainly attracted companies from semi-peripheral countries like Mexico (Telmex), Spain (Telefónica) and Italy (TIM). Interested in future audiovisual developments in the digital environment, these companies soon invested in the synergy between telephony, cable television and the Internet (Ladeira 2017). Two of the paradigmatic movements of this strategy were Telmex’s acquisition of Grupo Globo’s Net (a pay-TV, Internet access and fixed telephony company) in 2004, as well as Telefónica’s acquisition of Grupo Abril’s TVA (a pay-TV and fixed telephony company) in 2007. Regarding content, the then emerging market for cable television was opened to foreign companies, initiating a certain diversification of the players involved in the television market (Brittos 2000, Possebon 2009). Over the years, cable television has developed into a market of 18.93 million subscribers by 2017,1 in which foreign companies such as Fox, Disney and HBO, among others, compete with the Brazilian ones. Within sight of these investments was the VoD market. As João Martins Ladeira (2017) analyzes, when Net was sold to Telmex in 2004, Grupo Globo insisted on including clauses that allowed the Brazilian company to exercise some control over the offered content. In practice, an agreement was reached between Telmex and Globo whereby the former took care of the technological infrastructure, while the latter managed the offering of content through its multichannel company Globosat. The goal would be to shift the market structure of cable television to the digital environment – so much so that in 2011 Net launched the Now service, of transactional video-on-demand (TVoD), and Grupo Globo launched the Muu application (renamed Globo Play in 2015) to transpose the organization’s programming into the digital environment. Since 2010, global digital platforms have begun to enter the Brazilian market. Although YouTube has served Brazilian users since 2007, it was only in 2010 that commercial agreements were made that allowed the platform to serve domestic producers. In 2011, Netflix began operations in the country, quickly gaining an audience. According to a Strategy Analytics study, Netflix had 2.9 million subscribers by the end of 2016, making the country its fourth largest market (Siebert 2017). Netflix itself projected that its number of subscribers would reach 24.41 million by 2020 (ANCINE 2017: 52). In addition, in order to consolidate its position in specific markets, Netflix seeks to invest in local productions as part of its catalogue. In Brazil, this investment has so far been translated into the co-production of two series for the ‘Originais Netflix’ (‘Netflix Originals’) label: namely 3% (directed by Pedro Aguilera) debuting in 2016 and O Mecanismo (by José Padilha) in 2017. Their mere existence indicates that the American company also entered the Brazilian market as a competitor of traditional film and television companies in the production of local content.

Brazil: On-Demand Audiovisual Market  173 There is not much information on the VoD market in Brazil, but what is available shows an interesting scenario. A survey by ANCINE (2017: 53) indicated the existence, in 2017, of about 44 VoD services operating in the Brazilian market, 38% of which required a connection to a subscription TV service (catch-up TV), 36% used the VoD by subscription model (SVoD), 25% used the transactional model (TVoD) and 7% offered free content use (AVoD). A survey by RBC Capital Markets in 2015 showed that 84% of respondents claimed to use YouTube, 71% Netflix, 50% Globo Play, 40% SBT, 40% Google Play, 20% Amazon, 17% iTunes, 12% NetMovies, 11% Terra and 11% others (ANCINE 2017: 50). A survey on the use of applications in Brazil reports that in 2017, among the 20 most downloaded applications, YouTube ranked seventh (11%) and Netflix ninth (9%) (Opinion Box 2017: 8). In the case of specialized ‘entertainment’ applications, the same survey states that a growing number of Brazilians started downloading applications for entertainment purposes (32% of the sample, while in the previous survey that number was 24%), with Netflix first (64% of downloads), followed by Spotify (19%), Deezer (5%) and Globo Play (4%). One clue pointing to the importance of video streaming lies in the growing supply of Internet applications dedicated to playing content transmitted through broadcast or paid television. For example, companies like HBO and Fox have launched their own applications, which work independently of their cable channel subscriptions. So, for about 10 dollars, a subscriber can have access to all the catalogues of both companies. This becomes significant as cell phone operators start offering service packages with no-charge access to VoD applications, taking advantage of the zero rating practice. 2 This intense movement of the market caught the attention of the Brazilian Government, which started to discuss what kind of regulation would be desirable and possible.

Cultural Policies, 2002–2018: From Cultural Diversity to Culture as a Business The victory of a coalition of centre-left parties led by the Workers’ Party of Brazil (PT), with Luís Inácio Lula da Silva becoming president in 2002, marked an ideological and political rupture with twelve years of neo-liberal governments in the country. At least in speech, the administrations led by PT adhered to the so-called new developmentalism position, which sought to equate economic growth and social equality, defending some degree of state intervention in the economy (Boschi and Gaitán 2008, Bresser Pereira 2011, Diniz 2010). In practice, however, as Diniz and Boschi (2007) observe, Lula’s ascent to power was made possible by a series of compromises and concessions that the coalition made with different political groups, from different ideological

174  Leonardo Gabriel De Marchi and João Martins Ladeira backgrounds. Among these negotiations, there was an attempt to conciliate neo-liberals and New Developmentalists, which materialized in the division of ministries into antagonistic ideological affiliations. While the Ministry of Finance and the Central Bank remained in the hands of neo-liberals, other ministries and departments were handed over to representatives of different sectors of the left. As part of this distribution, Gilberto Gil was appointed to head MinC; the composer, singer and cultural activist was then affiliated with Brazil’s Green Party, which was part of the government coalition at the time. As soon as he took office, Gil clearly stated his intention to break with cultural policy traditions in the country (Gil 2003). He referred to what researcher Antônio Rubim (2010) labels as three cultural traditions in Brazil. They are characterized by three types of attitude by the state towards culture: absence, authoritarianism and instability. By these, the author means that there are times when the state is absent in terms of public policy proposals or, on the contrary, there are times of an intense presence; the latter marked, however, by hierarchical and excluding interventions. When there is some initiative in democratic regimes, it translates into government actions that are discontinued according to the ups and downs of politics. To these characteristics can be added the type of cultural policy adopted by neo-liberal governments in the country, which limited itself to granting tax exemptions to companies that wanted to invest in culture (Chauí 1995: 81). The result of this conception of culture as entertainment was the delegation of decisions on cultural policies to private entities, without protecting local cultural diversity, which was damaging to the local cultural market. Throughout his administration, Gil (2003–2008) sought to bring the state back, this time in a continuous, parsimonious and democratic manner. Thus, he tried to transform MinC into an interlocutor between artistic classes, businesses and the civil society for the formulation of public cultural policies. For that, instead of producing laws behind closed doors, decided by experts or in meetings with a few market players, MinC’s administration preferred to hold conversations with all stakeholders through sectoral meetings and/or public consultations. The objective was to make the Brazilian state actively participate in the development of the cultural field, from then on understood in an expanded sense. In addition, the operational concept of culture for the ministry was redefined. If, traditionally, an idea of culture as ornamentation (fine arts) or as folklore guided the ministry’s actions, Gil and his team adopted a concept that was close to cultural anthropology – that is, as the capacity for a collective invention of symbols, values, ideas and behaviours in order to assert that all individuals and groups are cultural beings and cultural subjects (Gil 2003: 10). Thus, culture could be made synonymous with cultural rights rather than merely associated with the liberal

Brazil: On-Demand Audiovisual Market  175 arts. This understanding implied a broadening of its competencies, allowing MinC to support cultural manifestations and defend the rights of minorities (Afro-Brazilians and the LGBT movement, for example) as well as traditional populations (such as indigenous peoples and quilombolas, the descendants of escaped slaves who lived in colonies called quilombos) (Rubim 2010). The defence of cultural diversity had a strategic role in the project of reformulating the ministry. Since MinC was a politically weak department in the Brazilian state’s structure, with a low budget and political support, legitimacy was sought for the implementation of this new way of conducting cultural policy in a globally relevant institution: UNESCO (Kauark 2009, Miguez 2005). During the meetings for the formulation and approval of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions (UNESCO 2005), the Brazilian delegation stood out in defence of an agenda that included the consecration of the right of national states to protect and promote the diversity of their cultural contents and expressions, the affirmation of the specific nature of cultural goods and services in relation to utilitarian goods (Alvarez 2008: 160). By becoming a signatory to the 2005 Convention, which has international legal validity, the MinC gained sufficient strength to implement its agenda internally. However, after the impeachment of President Dilma Rousseff on 31 August 2016, and the rise of Vice President Michel Temer (Brazilian Democratic Movement party or MDB), a serious political crisis was created that has also affected cultural policies. Despite being on Rousseff’s ticket, Temer was one of the main characters in the plot that culminated in the president’s removal. Since his inauguration, the new president has imposed an agenda of ultra-neo-liberal reforms. In addition, he initiated a number of retaliatory policies against what had characterized the PT administrations. One of the targets was MinC. At first, under the justification of cutting public spending, the president decided to extinguish ministries that had no ‘manifest function’, in his own words. Thus, he determined that MinC would become a department added to the Ministry of Education. Faced with the opposition of the artistic community, he retreated, maintaining MinC’s status of ministry. However, due to the instability of Temer’s government, which was surrounded by countless accusations of corruption, MinC returned to being a ‘bargaining chip’ between political allies. The result was the high turnover of ministers: there were five in just over a year of government, in accordance with the government’s interest in making new allies among various political parties. During this period, what remained constant was the dismantling of the administrative structure that had been built in previous years. Several offices were extinguished, civil servants were fired and hired staff were dismissed. Finally, the executive branch arbitrarily decided on a 43 per cent cut in the ministry’s budget.

176  Leonardo Gabriel De Marchi and João Martins Ladeira This instability would only be resolved with the appointment of the journalist and public manager Sérgio Sá Leitão on 25 September 2017. From the outset, Sá Leitão categorically stated his criticism of previous administrations, which he described as ‘too interventionist’. Presenting himself as a spokesperson for market players, he stated that he was interested in the free development of the creative economy, an expression that he systematically used in place of the word culture in his official speeches. In fact, his management has been characterized by an in-depth review of the projects and measures adopted by previous administrations. It is in this scenario of political and ideological disputes that the debate on the regulation of the digital audiovisual sector in the country has developed.

The Regulation of VoD: Between Ideological Disputes and Political Uncertainties In 2015, the Superior Council of Cinema (CSC)3 published the document Desafios para a regulamentação do vídeo sob demanda, setting out the parameters for the regulation of VoD services. At that time, the Council believed that the intense market growth had given rise to a service provision framework that suggested a continuous expansion in the near future. This would justify an immediate regulatory action in order to safeguard users’ freedom of choice and ensure diversity in audiovisual content offered, especially in view of the national audiovisual industry (CSC 2015: 1). It is important to highlight the first definition that the CSC gives to the VoD service. In its third paragraph, the document defines it as a non-linear provision of digital content, which allows user control in the organization of personalized programming. The Council further specifies the elements that characterize the service: (a) an audiovisual content communication service; (b) organized in a catalogue; (c) offered to the general public or to subscribers; (d) in a non-linear manner; (e) by means of electronic communication networks, whether dedicated or not; (f) for commercial purposes, being compensated directly by the user (by means of individual purchases or subscription) and/or by sale of advertising space; and (g) implies the provider’s editorial responsibility for selecting, organizing and displaying content in the catalogues. (CSC 2015: 1) We note that this definition covers services offered through digital television, video game consoles or over-the-top (OTT) companies, which operate through Internet-connected applications. Finally, the document lists the main challenges for regulating this market. Among the difficulties, the tax known as Contribution for the Development of the National Film Industry (CONDECINE) deserves

Brazil: On-Demand Audiovisual Market  177 attention. Created in 2001, CONDECINE is a tax charged on the production, broadcasting, licensing and distribution of audiovisual works in order to foster the national audiovisual industries. Originally, ­CONDECINE was applied to cinema and television operators, but in 2011 it was revised to reach telecommunications companies as well since they started to distribute audiovisual content. The collection of the tax goes to the Audiovisual Sector Fund (Fundo Setorial do Audiovisual), which is used to promote the whole value chain of the Brazilian audiovisual sector. What is currently being discussed is how to revamp the tax in order to include the new digital players. It is important to highlight that the Council believes that the tax treatment of VoD services is a strategic aspect for the regulation of the digital audiovisual market in Brazil. It is understood that when the ­CONDECINE tax is applied on the offering of each title in the catalogue – as has been done for cinema and television, without considering the economic results of the companies – it tends to constitute a significant entry barrier to small providers and to restrict both the quantity and diversity of titles in the catalogues offered. There is a clear indication, therefore, that the tax should be levied on the billing of VoD service providers rather than on the catalogues themselves. The document ends indicating that it is waiting for the study that was being carried out by ANCINE. The report published by the agency shows the results of a two-year research project based on seminars with Brazilian and foreign experts, a public consultation with civil society and meetings with agents from the audiovisual market (ANCINE 2017). The text details the VoD market in the country, justifies the proposed regulation, makes recommendations for its regulation and presents international regulatory experiences. The first part of the document is dedicated to quoting observations and objections that have emerged throughout industry meetings and public consultation on the agency’s proposals. Issues such as the need for state regulation and mandatory minimum quotas for Brazilian titles on VoD platforms were the topics that generated the most debate between the agency, service providers and civil society. Chapter Five of the document argues for the proposed regulation of this emerging market because it is understood that it can provide legal stability and security to the sector, through a law applicable to all parties that offers access to audiovisual content to users in Brazil, regardless of the location of their headquarters or of the infrastructure for providing the service (ANCINE 2017: 31). Next, the on-demand audiovisual sector is defined as: a mix of activities, systems, platforms and interfaces designed to provide the user with services through electronic communication networks, at their request and at a time determined by them, based on the offering of audiovisual content previously selected or organized in catalogues. (ANCINE 2017: 31)

178  Leonardo Gabriel De Marchi and João Martins Ladeira In the same manner as the CSC document (2015), this brings a broad definition of this type of service, covering different forms of content transmission, as well as business models. Before analyzing the recommendations of the agency itself, it is interesting to note Annex I of the document, which reports experiences of and discussions on the regulation of the VoD market in different countries. This is because they seem to have served as an inspiration to ANCINE’s own proposition. In this sense, the experience of the European Union gains more importance in the document. Put into effect in 2010, the European Audiovisual Media Services Directive (AVMSD) specifies that in the case of VoD, member states should adopt in their national legislation measures that encourage the use of European works in the service catalogues, through a variety of instruments to be defined by each country, from screen quotas to obligations to use gross profit in the production or licensing of regional, national or European audiovisual works by VoD distributors. It is clear that the AVMSD allows state intervention. The cases are different with Argentina, Colombia, Chile and even Canada, which are also described. In Argentina, there is a single tax linked to the subscription or rental of audiovisual content. In Colombia, a value-added tax was introduced for audiovisual services on-demand from foreign providers. In Canada, there is a unique situation – VoD is regulated in services that operate through TV networks, but OTT services are exempt. While the former are required to invest in Canadian independent production and have local content in their catalogues, it was still being discussed at the time of publication of the document whether it would be feasible to create a tax for OTT services. And in Chile, at the time of the document’s publication, there was only a debate about how to regulate OTT companies. In all these cases, therefore, the state’s ability to intervene in digital platforms seems to be doubted, and the immediate response was to restrict regulation to the use of taxes. Returning to the fifth chapter, there are also ANCINE recommendations for the regulation of the Brazilian VoD market, including the following: • • • •

At least 20 per cent of total hours of audiovisual content in the ­catalogue must be available for Brazilian content. There must be some kind of balanced visual exposure in the service interface in all sections, not just in niches. The service provider must annually invest a portion of its gross ­revenue in the production of – or acquisition of licensing rights for – Brazilian works. The CONDECINE tax should be based on the gross annual revenue of service providers.

Brazil: On-Demand Audiovisual Market  179 The most controversial topic of public discussions seems to have been the screen quotas for Brazilian titles. The agency justifies its position by citing the results of the cable TV law in Brazil. The policy for cable TV contributed decisively to the creation of channels dedicated to Brazilian audiovisual works, with the number of independent production works licensed for that market rising from 137 in 2010 to 1,345 in 2015 (ANCINE 2017: 48). Even recognizing the upsurge in the case of digital content, the agency insists on the need to create quota mechanisms, since in the current scenario the proportion of Brazilian content in the catalogues of VoD services was well below that in other audiovisual sectors. The survey conducted by Business Bureau at the request of ANCINE shows that the percentage of Brazilian feature films on digital platforms in 2016 was 11.5% on Looke (an independent Brazilian platform), 6.2% on iTunes, 5.3% on Google Play, 2% on Netflix, 1.5% on HBO Go and 0% on both Crackle (Sony) and Mubi (an independent platform). The numbers for Brazilian TV series were bigger, but since feature films have a greater presence on the platforms, ANCINE found the results equally worrisome: 15.5% on HBO, 14.9% on Looke, 14.3% on Google Play, 0.8% on Netflix and 0% on Crackle (ANCINE 2017: 56–57). It is clear that ANCINE’s position was in line with what was established by MinC during the PT administrations: the development of this new market should be oriented towards the protection of cultural diversity and the Brazilian audiovisual industry, which would require a direct intervention of the state in the VoD market. However, the report was published in a problematic period, as noted in the previous section. The Neo-Liberal Switch of MinC VoD market regulation was prioritized in Sérgio Sá Leitão’s agenda. Promptly, he labelled ANCINE’s recommendations as ‘hasty’ for a developing market whose functioning was not very well known. In this context, he continues, the direct intervention of the state in the market, implementing some ‘restrictive benchmarks’, could inhibit its development. One should wait until its maturation to begin to apply specific regulations, if they were needed (Bittencourt 2017). In a meeting with the CSC, Sá Leitão obtained the agreement of the Council regarding the exclusion of ANCINE’s proposal to impose screen quotas of national content for the catalogues of VoD digital platforms. The justification of the minister was that quotas would represent an anticompetitive practice. Subsequently, MinC (2018) presented a document proposing a minimum regulation of this market. Specifically, this referred to the application of the CONDECINE tax. According to

180  Leonardo Gabriel De Marchi and João Martins Ladeira the new proposal, the tax would not be levied on the gross revenue of companies, but on the size of their catalogues. What has been called CONDECINE Title Catalogue is presented as a set of seven progressive brackets to qualify the number of titles offered in a catalogue of VoD services (see Table 10.1). The document further explains that the tax would be charged differently for foreign content, which would pay the entire tax, while nationals would have discounts of up to 80 per cent of the tax amount due. In addition, there would be a differentiation for serial and non-serial content, or other works, which would be taxed by season, rather than by the number of episodes. On 5 July 2018, however, MinC reworked its own proposal. Through a public notice, it stated that, first, a tax payment option would be included: companies could choose whether to pay for the CONDECINE Title Catalogue or pay a single tax per subscriber (CODECINE Subscription) or single sale of content (CONDECINE Transaction). Second, it redefined what it means by VoD service: instead of maintaining the previous, more comprehensive definitions, this time the services provided by TV operators were excluded from the new concept, even when they were offered through mobile devices. Thus, while services such as Netflix and Amazon Prime Video would be required to pay some kind of CONDECINE tax, platforms that operate in connection with broadcast television or cable networks such as Net Now, Globo Play, HBO Go or FOX+ would be exempt. MinC’s proposal of a hybrid taxation model appeared to have received full support from the major players. In the words of the minister Sá Leitão, the proposal was ‘approved even by Netflix, which has a seat in the Council [Superior Council of Cinema]’ (Sá 2018). Grupo Globo also publicly expressed its approval of the proposal. However, criticism came from independent producers and distributors. According to this group, such a taxation method would discourage the Table 10.1  Suggested CONDECINE tax brackets for SVoD titles (in US dollars) Number of titles

Brazilian titles

Foreign titles

Series

Other

Series

Other

Up to 500 501–1,500 1,501–3,000 3,001–5,000 5,001–9,000 9,001–20,000 Above 20,000

Exempt 11,512.30 34,491.31 68,959.64 114,917.42 206,832.97 459,600.73

Exempt 46,050.01 137,966.19 275,840.46 459,672.82 827,337.54 1,838,415.53

Exempt 57,562.11 172,456.55 344,798.21 574,587.08 1,034,164.84 2,298,003.65

Exempt 230,250.03 689,830.94 1,379,202.29 2,298,364.10 4,136,687.71 9,192,077.65

Source: Own elaboration considering MinC (2018: 5).

Brazil: On-Demand Audiovisual Market  181 emergence of large collections of digital audiovisual content, harming a ‘long tail’ economy of scale. In addition, they presented five demands: legal guarantee of space for independent production, legal requirements for direct investment in independent production, clarity in assigning the criteria of prominence to independent national content, inclusion by the new law of ad-supported VoD and creation of a specific CONDECINE tax for games. In addition, the group’s representatives affirmed that legal provisions are needed to guarantee quotas of independent Brazilian production in different types of VoD digital platforms (Lauterjung 2018). At first, MinC seemed to ignore critics, and stated that the final text would be completed by the end of August 2018 to be considered by the Brazilian Congress. However, criticism increased from late July onwards. Independent producers submitted their own proposal. Netflix started to demand the payment of taxes by ad-supported models, which created a disagreement with broadcasters and telecommunication companies. The TV broadcasters, in turn, requested discounts in the CONDECINE tax for domestic platforms. Finally, international corporations that do not have a seat in the Council (such as Google, Facebook, Amazon and Apple) have suggested that taxation should not be applied to ad-supported services, as they offer contents for free. Facing these challenges, MinC decided to postpone the writing of the final text without providing assurance though of when this will happen.

Final Considerations The Brazilian government’s hybrid regulatory model of the VoD market has emerged as an interesting experiment because of its uniqueness in the international scene. However, it is far from eliminating doubts about its ability to guarantee the protection and promotion of the cultural diversity. Historically, cultural policies based only on tax exemptions for private companies have proven to be counterproductive to cultural diversity. They reinforced market reasoning that favoured more saleable products at the expense of other types of cultural expressions. In addition, this practice gives private initiative the power to decide how the state should invest public money, which creates a number of ethical dilemmas. Another aspect that draws attention is the criticism presented by independent producers, since it points out important flaws in the CSC’s proposal regarding the protection of the plurality of digital content. The demand for mandatory quotas of Brazilian content produced by independent companies on digital platforms is clear. However, this type of measure was arbitrarily rejected by Minister Sá Leitão as soon as he started administering MinC. Finally, another question that hovers about the minimum regulation project refers to the transparency of the data to be used by the state for the collection of CONDECINE tax. There is no mention of how

182  Leonardo Gabriel De Marchi and João Martins Ladeira MinC will monitor the catalogues of digital platforms. Is it enough to just rely on the information that companies themselves provide? In practice, it is difficult to have an exact size of the vast catalogues of these digital companies that daily add and remove various titles from  their catalogues. Or will ANCINE enforce some kind of monitoring of the catalogues of private companies? If so, how will it be done? All of these questions reveal the main problem of the debate about regulation of the VoD market in Brazil at the moment: the centralizing way that Sá Leitão has been treating the subject. Decisions on public policies were again conducted behind closed doors by MinC, based on who-knowswhat criteria. Thus, the greatest contribution of MinC’s New Developmentalist period, which was its attitude of making public policies in a dialogue with various sectors of civil society, goes down the drain. Therefore, the possibility of a greater democratization of the Brazilian state is lost because of an arrogant technocracy, ruled by entrepreneurs. This scenario suggests that cultural policy in Brazil has resumed its sad traditions.

Acknowledgements This chapter draws on research undertaken for the project Audiovisual Diversity and Online Platforms: Netflix as a case study (reference: CSO201783539-R), supported by the State Research Agency (AEI), within the National RDI Program Aimed at the Challenges of Society of the Spanish Ministry of Science, Innovation and Universities, and the European Regional Development Fund (ERDF) of the European Union.

Notes 1 Data from ABTA (the Brazilian Association of Pay Television). www.abta. org.br/dados_do_setor.asp. Accessed 4 April 2018. 2 In 2014, the Brazilian legislature approved Law 12.965, known as the Civil Internet Framework. Among its clauses, the principle of net neutrality was guaranteed. Throughout the processing of the bill, however, this principle was heavily resisted by the lobby of mobile operators and ISPs. This opposition was able to insert an amendment into the principle of net neutrality that allowed a practice known as zero rating. Cellular operators may offer access to the Internet through certain applications, without such use being considered as use of the contracted service. Of course, this gives a huge economic advantage to digital companies that establish partnerships with mobile operators. 3 Created in 2001, the CSC is a collegiate body that is part of MinC. Among its powers are the formulation of national cinema policy and the adoption of general guidelines for the development of the audiovisual industry. The Council is composed of representatives of sectors of the national audiovisual industry and representatives of civil society, technicians and government leaders.

Brazil: On-Demand Audiovisual Market  183

References Alvarez, V. C. (2008). Diversidade cultural e livre comércio: antagonismo ou oportunidade? Brasilia: UNESCO, Instituto Rio Branco. ANCINE (National Film Agency, Brazil) (2017). Relatório de Consulta Pública sobre a Notícia Regulatória sobre a Comunicação Audiovisual sob Demanda e Recomendações da ANCINE para uma regulação da Comunicação Audiovisual sob Demanda. Brasilia: Ministry of Culture. Bittencourt, J. (2017). Ministério da Cultura acaba com cotas para conteúdo nacional em vídeos sob demanda. Revista Fórum, 4 September. Bolaño, C.R.S. (2004). Mercado brasileiro de televisão. São Paulo: EDUC. Boschi, R. and Gaitán, F. (2008). Intervencionismo estatal e políticas de desenvolvimento na América Latina. Caderno CRH, 21(53): 305–22. Bresser-Pereira, L.C. (2011). From old to new developmentalism in Latin America. In Ocampo, J.A. and Ross, J. (eds.). Handbook of Latin American Economics. Oxford: Oxford University Press, 108–29. Brittos, V.C. (2000). Recepção e TV a cabo. A força da cultura local. São Leopoldo: Unisinos. Brittos, V.C. and Bolaño, C.R.S. (2005). Rede Globo. 40 anos de poder e hegemonia. São Paulo: Paulus. Calabre, L. (2009). Políticas culturais no Brasil. Rio de Janeiro: Editora Fundação Getúlio Vargas. Chauí, M. (1995). Cultura política e política cultural. Estudos Avançados, 9(23): 71–84. CSC (Council Superior of Cinema, Brazil) (2015). Desafios para a regulamentação do vídeo sob demanda. Consolidação da visão do Conselho Superior do Cinema sobre a construção de um marco regulatório do serviço de vídeo sob demanda. Brasilia: MinC. Diniz, E. (2010). Estado, variedades de capitalismo e desenvolvimento em países emergentes. Desenvolvimento em debate, 1(1): 7–27. Diniz, E. and Boschi, R. (2007). A difícil rota do desenvolvimento. Empresários e a agenda pós-neoliberal. Belo Horizonte: Editora UFMG. Gil, G. (2003). Discursos do Ministro da Cultura Gilberto Gil. Brasilia: Ministry of Culture. Kauark, G. (2009). Oportuna diversidade. A participação do Ministério da cultura do Brasil durante a negociação da Convenção sobre a Proteção e a Promoção da Diversidade das Expressões Culturais. Master thesis, Federal University of Bahia, Salvador. Ladeira, J.M. (2017). Imitação do excesso: televisão, streaming e o Brasil. Rio de Janeiro: Folio Digital. Lauterjung, F. (2018). Produção independente pede garantia de espaço e de proeminência nas plataformas de VoD. Telaviva, 22 June. Miguez, P. (2005). A Convenção da Unesco sobre Diversidade Cultural. In Lopes, A.H. and Calabre, L. (eds.). Diversidade Cultural Brasileira. Rio de Janeiro: Edições Casa de Rui Barbosa. MinC (Ministry of Culture, Brazil) (2018). Proposta de diretrizes para desenvolvimento do setor audiovisual brasileiro por contribuição dos Serviços de Video on Demand. Brasilia: MinC.

184  Leonardo Gabriel De Marchi and João Martins Ladeira Opinion Box (2017). Uso de Apps no Brasil. São Paulo: Opinion Box. Ortiz, R. (1988). A moderna tradição brasileira: cultura brasileira e indústria cultural. São Paulo: Brasiliense. Possebon, S. (2009). TV por assinatura: 20 anos de evolução. São Paulo: ABTA. Ribeiro, A.P.G., Sacamento, I. and Roxo, M. (eds.) (2010). História da Televisão no Brasil. São Paulo: Contexto. Rubim, A.A.C. (ed.) (2010). Políticas culturais no governo Lula. Salvador: EDUFBA. Sá, N. de (2018). Proposta para streaming é do setor, não do governo, diz Sérgio Sá Leitão. Folha de São Paulo, 11 June. Siebert, G. (2017). Netflix is silently taking over Brazil: this is how. Energia Solar, 30 March. Simões, I.F., Costa, A.H. and Kehl, M.R. (eds.) (1986). Um país no ar. História da TV brasileira em três canais. São Paulo: Brasiliense. UNESCO (United Nations Educational, Scientific and Cultural Organization) (2005). Convention on the Protection and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO.

11 Audiovisual Diversity in the Digital Era Trends and Prospects Luis A. Albornoz and Mª Trinidad García Leiva Reflecting on the centrality that the notion of diversity has acquired in recent decades in relation to audiovisual industries, especially in terms of economics and policies, and in the digital environment, as this v­ olume pursues, generates such a myriad of questions that any attempt at concluding remarks is discouraging at first sight. Nevertheless, drawing on the findings presented by the chapters, it is possible to summarize key trends as well as to discuss practical proposals to improve the diversity of/in audiovisual industries. Since this collection pays special attention to new transnational players such as audiovisual online platforms, international governance efforts led by the 2005 UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions and its adaptation to the digital era, and national responses in which the diversity principle plays a role, usually to be disentangled, the following pages revolve around these. The aim is to advance the discussion regarding the relations between diversity, audiovisual industries and digitization, always bearing in mind that the characteristics of the digital environment in which cultural industries operate today are the result of several interrelated and complex socio-economic processes. As was indicated in another work (Albornoz 2015: 166–67), these processes that are modelling a digital cultural landscape that is under construction are not new. The normative deregulation of audiovisual and telecommunication sectors that has encouraged the protagonism of the private sector; the large-scale business concentration that gave rise to ‘global media giants’; the growing production, dissemination and consumption of multiple flows of content; the internationalization of capital, agents and contents; and the ‘financialization’ of the cultural sphere, for instance, have deep historical roots.

New Transnational Players Platforms: Concentration and Opacity As this book extensively portrays, the current digital audiovisual scenario can be characterized by the dominant presence of a few big corporations

186  Luis A. Albornoz and Mª Trinidad García Leiva with an important international dimension.1 The emergence of companies such as Google, Amazon, Facebook and Apple, quasi-monopolies in their core activities (Miguel de Bustos and Casado 2016), grew to maturity and has evolved into different forms of digital dominance (Moore and Tambini 2018). Such presence and dominance are the consequence of a concentration process displayed throughout the last decades that worries creators, cultural managers, academics and politician alike. On the occasion of the World Wide Web’s 29th birthday, Tim Berners-Lee declared: The web that many connected to years ago is not what new users will find today. What was once a rich selection of blogs and websites has been compressed under the powerful weight of a few dominant platforms. This concentration of power creates a new set of gatekeepers, allowing a handful of platforms to control which ideas and opinions are seen and shared. These dominant platforms are able to lock in their position by creating barriers for competitors. They acquire start-up challengers, buy up new innovations and hire the industry’s top talent. Add to this the competitive advantage that their user data gives them and we can expect the next 20 years to be far less innovative than the last. (Berners-Lee 2018) Information asymmetries among stakeholders are to be added to concentration issues. Business models are increasingly data-driven: consumers provide personal information in exchange for access to services. Audiovisual platforms are in line with this process led by big corporations – of which many times they are part of – that make profit of getting and using data to orient the production, acquisition and promotion of content. While citizens, in general, and researches and governments, in particular, have little information about the functioning of online audiovisual platforms, the exact opposite situation is the norm. As Lydia Deloumeaux explains: The privatization of data owned by a few big companies is another key issue. This has led to a “black box” regarding music or film streaming consumption, meaning that no information on the number of films or music consumed on these platforms at the country level is available for Netflix or Amazon − these companies do not divulge their data (…) This process hinders, in particular, the ­capacity of national statistical offices to accurately measure the flow of digitized cultural goods. For all these reasons, a global analysis of the flow of cultural services is not feasible. No comparable data on cultural services are available. (Deloumeaux 2017: 135)

Audiovisual Diversity in the Digital Era  187 It is therefore very difficult to understand the impact of transnational platforms on cultural ecosystems, especially those local or regional, in the absence of supply and consumption data (content presented and visualized, subscribers, revenue, etc.). It is even more difficult to define the measures to be put in place to ensure that all cultures are protected and promoted. While institutes for cultural statistics, researchers and policymakers lament the lack of data, we are witnessing the deepening and acceleration of an unprecedented phenomenon in the history of humanity: the worldwide presence of few audiovisual companies that collect information of their users. Take the paradigmatic case of Netflix, currently ­present in more than 190 countries with a total membership of 137 million subscribers, which is building the largest worldwide database on audiovisual consumption that has ever existed, identifying trends and patterns of global behaviour. 2 As Carlos A. Gómez-Uribe and Neil Hunt, former Netflix’s Vice President of Product Innovation and former Product Officer, respectively, pointed out, the company collects vast amounts of data that describe what each Netflix member watches, how each member watches (e.g. the device, time of day, day of week, intensity of watching), the place in our product in which each video was discovered, and even the recommendations that were shown but not played in each session. (Gómez-Uribe and Hunt 2015: 2) Certainly, audiovisual content recommendation systems, fed by huge amounts of information about consumers’ behaviour, are key in the platform management since they contribute to both having users logged in longer to the service as well as decreasing the subscriber monthly churn rate. The sophisticated (and secret) recommender system of Netflix, for example, made up of a variety of algorithms that rely on statistical and machine-learning techniques, allows the Californian company to save more than one billion dollars per year. According to Gómez-Uribe and Hunt (2015: 5), the effectiveness of the Netflix’s recommender system is very high: in total, it influences choice for about 80 per cent of hours streamed at Netflix, the remaining 20 per cent coming from search, which requires its own set of algorithms. Such a situation should prompt governments, consumers’ associations, academic organizations and international bodies in the field of culture and communication to demand transparency and a level playing field in the digital audiovisual market. It is essential that all stakeholders have access to clear, accurate and complete information. Legacy Players: Resilience and Regrouping Within audiovisual industries there are different types of platforms that commercialize contents, among which an initial distinction can be made

188  Luis A. Albornoz and Mª Trinidad García Leiva between those that produce and/or buy contents offered (like Netflix or Spotify) and those that simply aggregate them (like YouTube or TuneIn). It is also possible to classify platforms according to the way in which they distribute content: over the Internet bypassing traditional players (known as OTT) or not. OTT platforms that commercialize contents are especially relevant because their presence is disrupting the configuration of audiovisual industries, both analogue and digital, questioning and redefining the role of existing players since they compete for viewers, subscribers and advertising. By mid-2010, more than 500 OTT service providers were detected around the world, the vast majority of which operated advertising and subscription-based business models. Nevertheless, only five transnational companies – Netflix, Amazon, Hulu, HBO and YouTube – concentrated approximately half of the annual OTT market revenues (Arthofer et al. 2016). These services are a consolidated reality in many markets, some of which exhibit a fierce competition to secure clients via different catalogues and subscription packages. For instance, transnational platforms, originally launched in US territory (like HBO or Netflix), coexist with nationally created alternatives that tend to serve a specific market. In turn, the latter can be classified following the classic generalist/niche distinction. Generalist platforms offer a wide range of serialized fiction, films, documentaries and other kind of contents for different audience profiles, and are initiatives that usually belong to companies with financial power and capacity to commercially exploit premium audiovisual rights (legacy audiovisual operators, telecommunications companies, etc.). Niche alternatives, on the contrary, specialize in a field of interest and tend to be initiatives launched by digital-only players. Competition, both at national and international levels, has revealed the necessity most platforms have to count on exclusive audiovisual rights, which has made them enter into vertical integration processes where the content distribution is combined with its production. In 2017, for example, Netflix produced more than 50 titles, Amazon Prime Video 23, YouTube Red 16 and Hulu 8. In the meantime, while investments and commissioned productions skyrocket, partnerships between different players wreck and emerge in a highly complex framework of competition and cooperation. 3 Due to the proliferation of services in many markets, the supply of ­video-on-demand (VoD) is beginning to overcome potential demand, both in terms of the time that potential users can dedicate to the consumption of contents and in relation to the budget that they can spend. So, it is not unreasonable to foresee that the current competitive effervescence will end up in concentration processes that result in the worldwide presence of a few transnational platforms, oriented to the construction of attractive catalogues with contents for very different consumer profiles. These

Audiovisual Diversity in the Digital Era  189 will coexist, in each national market, with a handful of local platforms among which those dominant will offer similar types of contents guided, though, by a ‘national’ approach that takes into account consumers’ interests according to their location, customs and local idiosyncrasy. This situation explains that, beyond the reformulation of audiovisual markets offered via legislation, different strategies are in motion in order to face growing competition. The announcement of the launch of a subscription-based VoD service called Salto, a joint venture of French digital terrestrial television (DTT) leaders – the public broadcaster France Télévisions and the commercial operators TF1 and M6 – to compete with Netflix and Amazon, goes in this direction. The idea is to feed the VoD platform Salto, the ‘French answer’ to Netflix, with the partners’ contents keeping the exclusivity of their productions. Surely, this will affect future deals between national broadcasters and foreign platforms. A statement of September 2018 of the head of the French public broadcaster suggests this strategy when the intention to block the distribution of France Télévisions productions on Netflix, to reserve them for Salto, was announced (Baralon 2018). This kind of decision would certainly avoid situations such as the one starred by the Spanish public broadcaster, Televisión Española (TVE). In December 2016 the corporation entered into an agreement with Netflix to produce the third season of an original TVE production named El Ministerio del Tiempo (12 episodes of approximately 70 minutes each). In exchange for making a payment equivalent to 15 per cent of production costs, Netflix obtained the international rights of online and offline distribution of a quite a popular series that has a proven global appeal. This deal has prevented the series being available outside Spain while it was broadcasted in channel La 1 (neither in the international TV signal, TVE International, distributed by satellite, nor in the TVE’s online platform), provoking a mix of ‘surprise and annoyance’ among international audiences. In short whoever currently wants to watch the third season of El Ministerio del Tiempo, regardless their country of residence, must pay for it by subscribing to Netflix. At the European level, The Alliance, integrated by public service broadcasters France Télévisions (France), Zweites Deutsches Fernsehen (ZDF, Germany) and Radiotelevisione italiana (Rai, Italy), is a very interesting initiative. It brings together the efforts of three of the most important European audiovisual groups and is also open to other European operators. Its promoters, for instance, claim to have privileged partners such as TVE (Spain), Radio télévision belge francophone (RTBF, Belgium), Vlaamse Radio- en Televisieomroeporganisatie (VRT, Belgium) and Radio télévision suisse (RTS, Switzerland). The project is focussed on the production of fiction with international appeal, allowing participating public broadcasters to reserve the rights related to the works as the first announced productions show.4

190  Luis A. Albornoz and Mª Trinidad García Leiva Beyond Europe, another interesting case is the Argentinian VoD platform Cine.AR Play (former Odeón). Launched at the end of 2015, this public initiative led by the Film and Audiovisual Arts Institute (INCAA) offers free local audiovisual productions. The catalogue of this sort of ‘Netflix criollo’, as it was baptized at its launch, is currently formed by more than 600 films, including short and feature films, and more than 500 hours of series. Also, through Cine.AR Estrenos, the platform allows users who are in Argentina to enjoy premieres of domestic feature films simultaneously released in theatres, paying for them the same price that a ticket at cinema complexes Espacios INCAA has (these theatres, that have cheaper prices, are exclusively dedicated to the exhibition of Argentinian cinema). Additionally, the platform offers information about the programming of the television channel dedicated to Argentinian cinema, Cine.AR TV, which is on air via DTT, cable and satellite. Although the Cine.AR Play catalogue contains TV series and other types of contents, this is an experience led by a cinematographic authority that tries to articulate the diffusion of domestic cinematographic productions considering the windowing system existing in the audiovisual sector, which is gaining in complexity since traditional circuits (movie theatres and television) have to coexist with different digital devices (computers, tablets, telephones). To this end, the INCAA is committed to a strategy that breaks with the traditional chronology for the exploitation of cinematographic works, by allowing the release of Argentinian films simultaneously in theatres and online and by encompassing it with a pricing policy favourable for its consumption.

National Policy Responses Catalogues and Content Quotas As it is also discussed in this volume, one of the debates that has been calling the attention of scholars and policymakers in the field of communication and culture is the regulation of audiovisual contents offered by transnational online platforms through their catalogues. Public intervention is usually invoked to legally guarantee that platforms offer a predetermined percentage of titles or hours of local production in a given market. The aim is to secure that locally produced works are available for domestic audiences. In other words, it is about applying a well-known nationalist protectionist measure to the digital environment: the system of content quotas. It should be reminded that the preservation of the ‘national identity’ was the argument used by different European countries in the 1920s–1930s to justify the screen quotas instauration in order to counteract the massive import of American movies. In this regard, the British government was a pioneer in establishing a screen quota system for cinemas through

Audiovisual Diversity in the Digital Era  191 the Cinematograph Films Act of 1927. Years later, the national identity’s preservation argument also served as the basis for the adoption of Article IV: Special Provisions relating to Cinematograph Films in the General Agreement on Tariffs and Trade (GATT) in 1947, which legitimatized the use of screen quotas at the international level. A recent firm step in order to impose a quota system within the catalogues of digital platforms has been given by the European Union (EU) countries through the reformulation of the Audiovisual Media Services Directive (AVMSD) in 2018. This new regulation specifies that at least 30 per cent of the contents offered by platforms like Netflix, HBO or YouTube, through its catalogues, must be of European origin (there are exceptions to this quota for media service providers with a low turnover or a low audience). This quota can be filled through locally produced works as well as qualifying titles produced in other EU Member States or European states participating in the European Convention on Transfrontier Television. Some comments though can be made in light of this reformulation. First, as already pointed out, the imposition of content quotas related to the geographical origin of the works is a protectionist measure, linked to the defence of national audiovisual sovereignty, that splits the universe of creations in two opposite poles: ‘national’ (or ‘regional’, in the case of the EU) versus ‘foreign’. It is therefore a measure that does not favour external audiovisual diversity, understood as one of the diversity dimensions that refers to the fact that contents should reflect the multiplicity of groups that coexist in a given society (internal diversity) as well as the cosmogonies and expressions of foreign cultures (external diversity). Perhaps a more appropriate measure to protect and promote audiovisual diversity would be to establish minimum quotas for national production and maximum quotas for foreign production, equally applied to every country. That is to say, it could be proposed that the production of no country represents more than a certain per cent of a given catalogue (for example, 20 per cent). Without neglecting the debate about what defines the nationality of an audiovisual work, this type of measure could help to avoid that ‘non-national’ productions are monopolized by a single country or a handful of these. If external diversity wants to be promoted, balanced catalogues are to be achieved across geographical origins. Second, it must also be taken into consideration that the obligation to include local or regional audiovisual works in certain catalogues will not automatically translate into their consumption. It should not be forgotten that supply doesn’t guarantee demand. Therefore, even though the availability of works is a conditio sine qua non for its potential consumption, nothing can predict that it will actually take place. The consumption of works locally or regionally produced will depend on their quality, proper promotion and potential appeal.

192  Luis A. Albornoz and Mª Trinidad García Leiva Let’s give an example. In Europe, it is still unknown how big transnational players will reach the target set by the new regulation on ­catalogues. 5 According to the American Computer and Communications Industry Association, the mandatory requirement for VoD providers to include in their catalogues a 30 per cent share of European works ‘could either force US companies to buy large volumes of inexpensive European content or to reduce the number of non-European works in their catalogues’ (CCIA 2018: 48). So, we could be facing a future scenario in which the platforms comply with the national and/or regional quotas imposed by acquiring cheap contents of little value/interest for their respective catalogues. Such an unintended outcome would have a perverse effect in relation to the goal of connecting citizens with series and movies imagined and conceived in their respective countries and/ or regions. Finally, and in direct relation to the contents’ availability of a certain geographical origin in the platforms’ catalogues, the issues of their promotion and discoverability arise. It is key to avoid that national and/ or regional works have little visibility within catalogues made up of thousands of titles or that they are marginalized as low-profile niches. In this sense, we find some of the recommendations made by the Brazilian National Cinema Agency (ANCINE) to regulate VoD services very illuminating. Among these, one refers to ensuring ‘fairness’ in the dissemination of Brazilian audiovisual works (including independent productions) through ‘balanced visual exposure at the interface of VoD services, even in cases where mechanisms to suggest works are used’. It is also recommended that the regulation of the prominence of Brazilian works in the visual interfaces used by VoD services ‘favour strategies that make national works available in a transversal way in the different windows presented to the user, avoiding in doing so the creation of exclusive though isolated niches of Brazilian production’ (ANCINE 2017: 35–36). Policymakers, scholars and professionals have indeed been involved in a debate that evolved from concepts such as availability and visibility to others like discoverability, prominence and even serendipity. According to the Observatoire de la culture et des communications du Québec (OCCQ), for example, discoverability is6 The intrinsic capacity of a content, a product or a service available on the Web to be easily discovered by the user, or to stand out spontaneously from the lot without the user having searched for this particular content. This is the potential to capture the attention of the user, to position themselves, using various techniques and tools, so as to be easily identifiable and discoverable. (OCCQ 2017)

Audiovisual Diversity in the Digital Era  193 The debate is far from being settled, and the solutions are far from being perfect, but there is certainly a case for public intervention. Having a look at the British audiovisual market, for instance, shows that the battle for prominence has been fought for some time. Not only what is known as the prominence regime dates back to the 2003 Communications Act – which secured ‘appropriate prominence’ for designated channels in electronic programme guides, at the beginning of the transition to DTT – but the British Broadcasting Corporation (BBC) has also been systematically consistent with demanding prominence on ‘any significant device’. In fact, the BBC’s Distribution Policy provisions state that the following conditions form the basis on which the Corporation will make its content available: a

Prominence – the placement of BBC content and services relative to those of other providers should be in line with audience needs and expectations. b Editorial Control – the BBC retains editorial control of its content and its placement. c Branding & Attribution – users should be able to easily identify which content on a platform is provided by the BBC. d Quality – users should be able to enjoy a high-quality experience of BBC content and services. e Data – the BBC should have access to data about the usage of its services. f Free Access – users should incur no incremental cost to access BBC content and services. g Value for Money – arrangements should maximize costeffectiveness of distribution to the licence fee payer. (BBC 2018: 5) Production and Financing Obligations More interesting and probably fruitful than the obligation to comply with a content quota defined by the geographical origin of audiovisual works is the idea of making platforms part of every national audiovisual production and financing system. This is an industrially oriented approach that aims mainly, on the one side, to create or strengthen the audiovisual sector of a given country and, on the other hand, to secure the number of works produced per year. There are basically two ways in which platforms can be involved in national production and financing systems: (a) deriving, totally or partially, the money collected via taxes imposed on them – adapting existing obligations or creating new ones – to a fund dedicated to supporting the development of audiovisual industries and (b) making them invest

194  Luis A. Albornoz and Mª Trinidad García Leiva directly in the production of works and/or the acquisition of audiovisual distribution rights via the imposition of funding obligations in relation to their income in a given market (a situation that would tend to favour through bigger markets). The last word about the latter is, in the EU, on the Member States table since the reformulation of the AVMSD. If that would be the case, the new regulation would end in practice, with one of the principles ­originally at its core: the country of origin principle, which allowed audiovisual media service providers to abide only by the rules of the one-member state with jurisdiction over them, operating nonetheless in the whole EU. Due to the fact that this principle did not prevent countries form establishing higher standards at national level, companies – especially American – established where legislation best fit their purposes. Allowing Member States to impose financial obligations for the promotion of European works on providers established in other EU countries, on the contrary, could contribute to mitigate this ‘jurisdiction shopping’ practices. Nevertheless, it should not be forgotten that the norm has still to be transposed into national legislations, and that imposing obligations to providers established outside the region, but targeting Member States, could be difficult to implement. For its part, under the motto tous les diffuseurs financent la création, France became a pioneer country imposing payment obligations on VoD platforms, whether they are established in the country or not, and they offer services free of charge or not. After months-long discussions with the authorities of the Centre national du cinéma et de l’image animée (CNC), at the beginning of the autumn 2018, Netflix revealed that the company had agreed to start paying the two per cent tax on its annual revenues in France, thus complying with regulation (Decree No. 2017-1364 of 20 September 2017). These new resources will nourish the French audiovisual support fund managed by the CNC. The Canadian and Brazilian cases, discussed in this volume, also reveal the complexities to be faced by national responses, which tend to oscillate – as well as stakeholder’s opinions – between celebrating Netflix’s investment in domestic production and demanding the creation of a new tax to make platforms contribute in some way to the audiovisual sector. What is key, to avoid that this type of decision ends up reinforcing concentration in audiovisual industries, is that a significant part of resources obtained from new players can be destined to independent producers. This would allow promoting another dimension of the diversity of/in audiovisual industries: the one related to sources. This is an idea that connects with our own view of what diversity in the audiovisual industries should be, explained in the introduction of the book, which refers to the existence of different dimensions regarding the diversity principle. The reference here is to the fact that the production of contents should not be concentrated into a reduced number of agents that,

Audiovisual Diversity in the Digital Era  195 additionally, can be characterized as evidencing differences in terms of ownership, size and geographical origin.

International Governance Efforts The pages of this volume demonstrate that the digital environment has a strong impact on the creation, production, dissemination and access to audiovisual goods and services, as well as on their exchange, and that the debate regarding how policies should be adapted to address digital challenges has an undeniable international as well as transnational dimension. Digital audiovisual industries do not only question the classical, geographically based approach to policy formulation (online services, for example, do not fit automatically to the jurisdiction of the destination or recipient country), but they are also at the centre of the trade versus culture debate that lies behind the regulation of international flows and exchanges of audiovisual goods and services. At the international level, the Convention on the Protection and Promotion of the Diversity of Cultural Expressions (UNESCO 2005) and its overarching goals7 are an attempt to lead the international governance efforts to defend the diversity principle within cultural industries. Nevertheless, its adaptation and implementation in the changing and challenging digital environment does not seem to be relaxing the inherent tensions that exist between the social values conveyed by the existence of a diversity of audiovisual expressions and the economic benefits of their commercialization. It should be reminded that the guidelines for the implementation of the treaty in the digital environment, approved by the Parties to the Convention in June 2017, refer to (a) the adaptation of national policies on cultural goods and services; (b) the implementation of international cooperation mechanisms to promote diversity; (c) the provision on technical assistance to support the production and distribution of digital cultural content in developing countries; (d) the promotion of the Convention’s objectives within international bodies on trade, intellectual property rights and telecommunications; and (e) the building of infrastructures to facilitate access to a wide range of cultural content. In order to help the signatories to the 2005 Convention to strengthen their capacities to promote the diversity of cultural expressions in the digital environment, the government bodies of the treaty – the Conference of Parties and the Intergovernmental Committee – are facing the third decade of this century working on an updatable and modifiable ‘open road map’ (UNESCO 2018). This road map proposes twenty benchmark activities to the Parties. Among these, considering the issues addressed in this volume, we find the following particularly interesting. With the aim of supporting sustainable systems of governance for culture, it is proposed, among other activities: the design of regulations,

196  Luis A. Albornoz and Mª Trinidad García Leiva policies and measures to ensure discoverability of local and diverse cultural content, fair remuneration for creators and greater transparency in the use of algorithms; and the conduction of studies and the collection of data on the traceability and accessibility to diverse creative expressions, and on the use of metadata in different creative sectors. It is expected that the output of these types of activities, certainly of special relevance for the diversity of/in the audiovisual industries, are policies and measures to support digital creativity, enterprises and markets to ensure a diverse digital ecosystem (UNESCO 2018: 6). As regards the aim to achieve a balanced flow of cultural goods and services, and increase the mobility of artist and cultural professionals, it should also be noted that the road map proposes: to conduct an audit of clauses in trade agreements that have an impact on the cultural sector; to set up working groups between officials responsible for culture, intellectual property, trade, development, technology and innovation; to celebrate co-production and co-distribution agreements in order to improve the distribution of digital cultural goods and services; and to negotiate cultural clauses in trade and investment agreements dealing with e-commerce to recognize the dual nature of cultural goods and services. As a result of these four types of activities it is expected that international agreements promote a balanced flow of cultural goods and services as well as equality between countries in the digital environment (UNESCO 2018: 6). Even though the 2005 UNESCO Convention, put forward as a response to the attempts to completely liberalize audiovisual services on a global scale, represents a milestone in terms of filling an existing lacuna for cultural objectives in international law and serving as a counterbalance to the World Trade Organization (WTO), it should not be forgotten that countries such as Japan or the United States are not Parties to the treaty. Special vigilance should be exercised about their position on ongoing negotiations of bilateral or multilateral trade agreements, such as the Transatlantic Trade and Investment Partnership (TTIP) or the Trade in Services Agreement (TiSA),8 since they also have a special interest in the so-called new digital services (for example, VoD streaming services or online gaming), and attempts to reclassify them under the umbrella of e-commerce and in connection to information and communication technologies have not disappeared. If agreements are formulated without regard for the specific nature of the cultural goods and services being traded, the protection and promotion of audiovisual industries will be questioned once again and, with it, the possibilities to make them more diverse and to rebalance international flows. Before concluding, another front that opens a question mark about future governance efforts regarding audiovisual industries can be outlined: the status to be assigned to the net neutrality principle across the world. In the United States this principle was put to an end after a Federal

Audiovisual Diversity in the Digital Era  197 Communications Commission (FCC) decision was issued in December 2017. The FCC, under Republican Party’s control, reneged on its own 2015 Open Internet Order that was devised to allow open and fair access to the Internet. This revocation was made even though users and many technology companies and content providers, such as Google, Facebook and Netflix, remained strongly in favour of net neutrality. The problem is that against a ‘public good’ approach, where Internet service providers (ISPs; big companies such as Comcast, AT&T or Verizon) are obliged to treat all data equally, regardless of their origin, type and destination (or even the blocking of services), the net neutrality suppression favours a system that allows the existence of different speeds of connection that depend on payment and the ISPs’ interests. Despite the FCC decision provoked the reaction of multiple lawsuits against the regulator, and the US Congress is considering a joint resolution to overturn the agency’s decision, there is a well-founded fear that in the near future ISPs will take advantage of the lack of net neutrality rules (Rogers 2018). There is also concern about the fact that the FCC ruling could pave the way for similar moves in other parts of the world. In Europe, for example, net neutrality is currently protected by EU policy 2015–2120 in support of a Digital Single Market (EU 2015), while in countries like Brazil or Chile the principle is enshrined in their respective legislations. Nonetheless, even in countries where legislation consecrates the principle of net neutrality, many users experience huge variations in broadband access speeds, quality of connection and customer experience, at the same time that ISPs have preferential deals in place with specific content providers.

Final Remarks Audiovisual industries occupy a central place in contemporary societies derived from its power of influence and social persuasion: a very ­important part of our perception of the world is based on elaborated audiovisual narratives and metaphors generated and put into circulation on a daily basis. Digital technologies have come to amplify this centrality, demanding the elaboration of new analyses capable of critically examining the deep mutations underway. Stalled by a radical economicist vision of culture that ignores the ideological and identitarian character of different cultural expressions, the battle to preserve and promote the diversity of/in the audiovisual industries is revealed as a problem of universal scope – a key problem, in fact, for the functioning of democratic societies and the formation of critical spirits. Fighting for diversity requires a comprehensive understanding of how audiovisual systems work, both locally and internationally. It requires an integral perspective that considers the systems of creation and

198  Luis A. Albornoz and Mª Trinidad García Leiva production of works as well as the strategies for audiences’ formation, without forgetting, of course, the mechanisms of distribution and promotion of different types of contents. Without taking into account the different dimensions the diversity principle embodies, there is a risk that the diagnose will become incomplete and the policies and strategies to be implemented end up being lame.

Acknowledgements This chapter draws on research undertaken for the project Audiovisual Diversity and Online Platforms: Netflix as a case study (reference: CSO2017-83539-R), supported by the State Research Agency (AEI), within the National RDI Program Aimed at the Challenges of Society of the Spanish Ministry of Science, Innovation and Universities, and the European Regional Development Fund (ERDF) of the European Union.

Notes 1 The exception to the rule would be the Chinese market, closed to foreign companies. In China, IQiyi (that belongs to the Chinese multinational Baidú) offers audiovisual contents via streaming. 2 See Netflix: ‘Letter to shareholders’ (16 October 2018) and ‘You’re Still Hooked and Netflix Knows Why’ (21 September 2016). 3 For example, whereas in August 2017 the Walt Disney Company announced it would not renew its contract with Netflix (including Marvel, LucasFilm and Pixar film productions, and ESPN and ABC programs), and would launch its own streaming service in 2019, in May 2018 a deal between the Spanish telecommunications giant, Telefónica, and Netflix was announced whereby Telefónica’s Movistar+ will integrate the contents of the latter into its pay-TV offer. 4 The first three announced works for 2018–2019 are: Leonardo (Lux Vide and Beta Film production for Rai, ZDF and France Télévisions), Mirage (Lincoln TV, Cineflix and Wild Bunch Germany production for France Télévisions and ZDF) and Eternal City (Aurora TV, Fearless Mind and Banijay Studios France production for Rai and France Télévisions). 5 A research released by Ampere Analysis in September 2018, calculated that a company like Netflix, with European content accounting for 15 per cent of its online catalogue in the United Kingdom, would need to make or acquire nearly 800 new films or TV series, more than 4,000 hours of content, for its UK service to reach the 30 per cent quota imposed by the new AVMSD (Varatharajah 2018). 6 Researchers of the Laboratoire de recherche sur la découvrabilité et les transformations des industries culturelles à l’ère du commerce électronique (LATICCE), at the University of Quebec in Montreal, are working on the elaboration of a synthetic discoverability index for cultural products in the main online platforms to measure supply according to the following three elements or indicators: presence, visibility and recommendation. First, the presence of a work on the catalogue is necessary for it to be discoverable. Second, visibility represents the generic offer of works by platforms, without user preferences being taken into account. Finally, the recommendation is

Audiovisual Diversity in the Digital Era  199 the offer adapted to the user preferences estimated by the algorithms and the gatekeepers. These three indicators consist of different variables weighted according to their relative importance in the user discovery experience of online platforms. 7 These four goals are: (1) support sustainable systems of governance for culture, (2) achieve a balanced flow of cultural goods and services and increase the mobility of artists and culture professionals, (3) integrate culture in sustainable development frameworks and (4) promote human rights and fundamental freedoms. 8 The TTIP, a trade and investment deal between the EU and the United States, was launched in 2013, and the European Commission publicly presented its negotiating texts on 7 January 2015. Once in the US government, President Donald Trump halted negotiations until July 2018 when talks were resumed. The TiSA is another trade agreement, which has been negotiated since February 2012 by 23 members of the WTO, including the EU and the United States, the main proponents. Since the end of 2016, negotiations are on hold, with no formally set deadline for resuming or ending the talks.

References Albornoz, L.A. (2015). Digital Networks and Services: A New Political and Technological Agenda. In Albornoz, L.A. (ed.). Power, Media, Culture. A Critical View from the Political Economy of Communication. London: Palgrave Macmillan, 165–88. ANCINE (2017). Relatório de Consulta Pública sobre a Notícia Regulatória sobre a Comunicação Audiovisual sob Demanda e Recomendações da ANCINE para uma regulação da Comunicação Audiovisual sob Demanda. Brasilia: Ministry of Culture. Arthofer, F., Hardarson, A., Kon, M., Lee, E. and Rose, J. (2016). The future of television. The impact of OTT on video production around the world. New York: The Boston Consulting Group. Baralon, M. (2018). Delphine Ernotte veut que France Télévisions arrête de vendre ses séries à Netflix. Europe1, 16 September. BBC (British Broadcasting Corporation) (2018). Distribution Policy, June. Berners-Lee, T. (2018). The web is under threat. Join us and fight for it. Web Foundation, 12 March. CCIA (Computer and Communications Industry Association, the United States) (2018). Comments of the Computer & Communications Industry Association Regarding Foreign Trade Barriers to U.S. Exports for 2019 Reporting. ­Washington DC, 30 October. Deloumeaux, L. (2017). Persisting imbalances in the flow of cultural goods and services. In UNESCO (dir.). Re/Shaping Cultural Policies: Advancing Creativity for Development. Paris: UNESCO, 125–41. EU (European Union) (2015). Regulation (EU) 2015/2120 of the European Parliament and of the Council of 25 November 2015. Official Journal of the European Union, 26 September. Gómez-Uribe, C.A. and Hunt, N. (2015). The Netflix recommender system: algorithms, business value, and innovation. ACM Transactions on Management Information Systems, 6(4): article 13: 1–19.

200  Luis A. Albornoz and Mª Trinidad García Leiva Miguel de Bustos, J.C. and Casado, M.A. (2016). GAFAnomy (Google, Amazon, Facebook and Apple): The Big Four and the b-Ecosystem. In Gómez-Uranga, M. Zabala-Iturriagagoitia, J.M. and Barrutia, J. (eds.). Dynamics of big internet industry groups and future trends: A view from epigenetic economics. Berlin: Springer. Moore, M. and Tambini, D. (eds.) (2018). Digital Dominance. The Power of Google, Amazon, Facebook and Apple. New York: Oxford University Press. OCCQ (Observatoire de la culture et des communications du Québec) (2017). État des lieux sur les métadonnées relatives aux contenus culturels. Québec: Institut de la statistique du Québec. Rogers, K. (2018). Net neutrality is officially repealed. Vice, 11 June. UNESCO (2018). Road map for the implementation of operational guidelines to promote the diversity of cultural expressions in the digital environment (DCE/18/12.IGC/ and its Annexes). Working document for the 12th session of the Intergovernmental Committee of the 2005 Convention for the Protection and Promotion of the Diversity of Cultural Expressions. Paris: UNESCO, 11–14 June. Varatharajah, A. (2018). Euro content bonanza: SVoD giants face adding hundreds of titles to meet EU quotas. Ampere Analysis, 19 September. www. ampereanalysis.com.

List of Contributors

Luis A. Albornoz is Associate Professor in the Department of Journalism and Audiovisual Communication, Carlos III University of Madrid, Spain, and Researcher at the Argentinian Scientific and Technical Research Council (CONICET). He is also founding partner and former president (2007–2013) of the international scientific association Latin Union of Political Economy of Information, Communication and Culture (ULEPICC). Philippe Bouquillion is Professor of Communication Sciences at Paris 13 University, France. Researcher at the Laboratory of Excellence Cultural Industries and Artistic Creation (LabEx ICCA) and at the Laboratory of Information and Communication Sciences. Coordinator of the research group Cultural Industries and Arts at the Maison des Sciences de l’homme Paris Nord. His work focusses on cultural and creative industries, regulatory and public policy issues and, his most recent investigation, on digital platforms in Europe and India. Charles H. Davis is Professor in RTA School of Media, holder of the ES Rogers Research Chair in Media Management and Entrepreneurship, and Associate Dean for Scholarly Research and Creative Activity in the Faculty of Communication and Design at Ryerson University, Canada. He has research and teaching interests in media policy, political economy, audiences and innovation in the media and IT sectors. Leonardo Gabriel De Marchi is Visiting Professor at the Faculty of Communications at the University of the State of Rio de Janeiro (UERJ), Brazil. His research focusses on the music industry, creative economy, artificial intelligence applied to creative industries, policies for communications and culture. Mª Trinidad García Leiva is Associate Professor in the Department of Journalism and Audiovisual Communication, Carlos III University of Madrid, Spain. She has been a visiting researcher at the Centre for Cultural Policy Research, University of Glasgow (2009), and

202  List of Contributors the Programme in Comparative Media Law and Policy, Centre for ­Socio-Legal Studies, University of Oxford (2005). She is Co-­Director, with Professor Albornoz, of the research group on Audiovisual Diversity. João Martins Ladeira is Professor at the Faculty of Communications at the Vale dos Sinos University (Unisinos), Brazil. His research focusses on the audiovisual industry and policies for communications and culture. Philip M. Napoli is James R. Shepley Professor of Public Policy and a Faculty Affiliate with the DeWitt Wallace Center for Media & Democracy, Duke University, United States of America. He also serves as a Docent at the University of Helsinki, Finland. His research focusses on media institutions and media regulation and policy. He has provided formal and informal expert testimony on these topics to government bodies such as the US Senate, the Federal Communications Commission, the Federal Trade Commission and the Congressional Research Service. Heritiana Ranaivoson  is Senior Researcher and Project Leader at imec-SMIT-Vrije Universiteit Brussel, Belgium. Former member of the UNESCO Expert Group on the Statistical measurement of the diversity of cultural expressions (2007–2011) and, since 2008, part of the U40-Capacity Building ­Programme Cultural Diversity 2030. His main research interests are cultural diversity, media innovation and the economic impact of digital technology on cultural industries. Lilian Richieri Hanania, attorney (Paris Bar and São Paulo Bar), she currently teaches at Sciences Po in Paris and the University Paris V, France. Her research addresses mostly International Economic Law, International Cultural Law, sustainable development, creative industries and new technologies. Michèle Rioux is Professor at the Department of Political Science at the Université du Québec à Montréal, Canada. Director of the Centre for Integration and Globalization Studies (CEIM) since October 2011. As specialist in international political economy, her research focusses on international organizations and global governance, transnational corporations, competition, the information society and the telecommunications sector, economic integration and regionalism. Felipe Verdugo  is Researcher at the Centre for Integration and Globalization Studies (CEIM) of the Université du Québec à Montréal and Lecturer at the Faculty of Music of the Université de Montréal, Canada. His interdisciplinary research interests include, among others, cultural policy, culture and sustainable development, cultural

List of Contributors  203 diversity and trade agreements, the arts and the cultural and creative industries. Janet Wasko is Professor at Knight Chair in Communication Research, University of Oregon, United States of America. She studies the political economy of media, focussing on media industries and companies, with an emphasis on issues relating to ownership, control and power. Much of her work has focussed on the US film industry and the Walt Disney Corporation. Currently she is President of the International Association for Media and Communication Research (IAMCR). Emilia Zboralska is Lecturer at Ryerson University, Canada. Associate Director of the Transmedia Zone, a storytelling and media innovation incubator. Founding partner and CEO of King Squared Media Inc, a boutique media production start-up. As a specialist in the political economy of the Canadian media system, her research critically investigates entrepreneurship in the Canadian digital-first storytelling sector and provides the first benchmark analysis of gender and race across key creative roles in Canadian digital scripted series.

Index

Note: Page numbers followed by “n” denote endnotes. Alliance, The (audiovisual platform, Europe) 189 Amazon xvi, xviii, 2, 38, 40, 44, 62, 63, 68, 79, 80, 89, 92, 93, 94, 96, 100, 104, 107, 124, 156, 164, 173, 181, 186, 188, 189; Amazon Instant Video 2; Amazon Prime Video 34, 35, 111, 180, 188; see also Amazon Prime ANCINE-­National Cinema Agency (Brazil) 169–70, 173, 177–9, 182, 192 AOL Time Warner 60 AOL Time 61 Apple 2, 38, 62, 63, 68, 79, 80, 104, 107, 124, 156, 181, 186 ARD-­Arbeitsgemeinschaft der öffentlich-­rechtlichen Rundfunkanstalten der Bundesrepublik Deutschland (Germany) 78 ASIC-­Association des Services Internet Communautaires (France) 37 AT&T 93, 197 Audiovisual Diversity research group (Spain) 3, 15 AVMSD-­Audiovisual Media Services Directive 13, 39, 40–2, 44, 56, 60, 63, 178, 191, 194 BBC-­British Broadcasting Corporation (UK) xii, xv, 193; BBC1 111; BBC iPlayer 111 Bell (Canada) 153, 164 Bertelsmann 34, 71, 75, 76, 78 Blackish (TV Series, 2014-) 112 Blum-­Byrnes agreement (May 28, 1946) 54 Brazilian Cable Television Law

Brazilian Telecommunications Code 171 British Cinematograph Films Act of 1927 191 British Communications Act of 2003 193; DCMS-­Department for Culture, Media and Sport (UK) 120 Buzzfeed (news site, USA) 164 C More (SVoD, Sweden) 40 Canada Council for the Arts 161 Canada Media Fund 161, 163 Canadian Arts Council 11 Canadian Broadcasting Act (1991) 154–5, 158–60, 162, 166 CBC/Radio-­Canada 152, 155, 159, 161, 162, 163 Canada Periodical Fund 162 CPAF-­Canadian Public Arts Funders 11 CRTC-­Canadian Radio-­television and Telecommunications Commission 155, 157–9, 166 Canadian Telecommunications Act 161–2, 165–6 Canal + Groupe 58; Canal + 60–1; Canalplay 40 CBS Corporation 72, 156; CBS (SVoD, USA) 93 CEIM-­Centre d’études sur l’intégration et la mondialisation (Canada) 15, 132n6 CNC-­Centre national du cinema et de l’image animée (France) 37, 45n3, 194 Certeau, Michel de (1925–86) 50 Chewing Gum (TV series, 2015–) 112 Chili (VoD, Europe) 40 Cidade de Deus (film, 2002) 171

206 Index Cine.AR Play (VoD, Argentina) 190 CISAC-­International Confederation of Societies of Authors and Composers 122 Civil Internet Framework (Brazil) 12, 15, 182n2 CCIMAD-­Coalition of Canadian Independent Media Art Distributors 11 coalitions for cultural diversity 2, 14, 18; CCCD-­Canadian Coalition for Cultural Diversity 3, 14; FCCD-­ French Coalition for Cultural Diversity 56, 64; International Federation of Coalitions for Cultural Diversity 14, 66n4; UK Coalition for Cultural Diversity 3 Comcast Corporation 72, 75, 76, 78, 81, 197 CCIA-­Computer and Communications Industry Association (USA) 192 CSA-­Conseil supérieur de l’audiovisuel (France) 45n3 content aggregator 88–96 contribution to the audiovisual production 18, 37, 41–2, 45n3, 56, 58, 61–3, 159–63, 165, 176, 194; see also funding obligations Convention on the Protection and the Promotion of the Diversity of Cultural Expressions xxxi, 1, 3–8, 10–9, 25–8, 31–4, 39, 42–3, 55–6, 119, 120, 127–30, 132n11, 136–7, 140–2, 144–7, 175, 185, 191, 195– 6; operational guidelines on the implementation of the Convention in the digital environment 5, 7, 8, 11, 16, 19n3, 32, 33, 43, 120, 132n8, 195; quadrennial periodic reports 4; Secretary of the Convention xxiii, 4, 5, 7, 14; UNESCO global reports on the implementation of the Convention 5, 7, 8, 30, 34, 43 convergence 119, 123, 124, 126–31, 145, 169 corporations 69–70; media corporations 68, 70–82 country of origin principle 42, 194 Crackle 179; see also Sony Crackle CSC-­Superior Council of Cinema (Brazil) 176, 179, 181, 182n3 CCPF-­Creative Canada Policy Framework (Canada) 152–3, 160–5

cultural exception xxviii, 51–65, 132n7, 136–40, 142, 144, 146–7 cultural expressions 127–8 cultural imperialism xiv, 78 cultural industries xvii, xviii, 1, 18, 26, 54, 55, 57, 58, 62, 119, 122, 124, 126, 130, 146, 147 cultural industrialism strategy 161 cultural trade 26, 28–30, 43, 54, 122, 140, 142 culture xii, xiii–xiv, 50–5, 57, 65, 77, 124–5, 127, 174–5, 176, 197 creative arts 129, 147 creative industries 55, 62, 65, 119–22, 127, 130, 153, 161, 162 creative economy 55, 65, 120–1, 123, 126–8, 176 copyright 10, 11, 13, 14, 56, 66n4, 124, 152, 161 cultural cooperation 5, 6, 7, 42, 137, 139–45, 195 cultural policy/ies xii, xvii, 9, 11–4, 41, 50–2, 54–60, 65, 96, 119, 121, 122, 123–5, 128–30, 136–40, 142, 145, 147, 152–66, 170, 173–5, 181–2; see also media policy, audiovisual policy, cultural diversity policy, broadcasting policy, cultural policy 2.0 Dailymotion 36 DAZN (SVoD, Europe) 156 Deezer 173 deregulation 77, 185 Digital Agenda for Europe (European Union) 13 Digital Single Market (European Union) 13–4, 197 DGC-­Directors Guild of Canada 163 discoverability of audiovisual content 124, 192, 196, 198n6; prominence 40, 41, 181, 192–3; visibility 16, 17, 32, 34, 39, 44, 107, 112, 123, 158, 192, 198n6; visual exposure 178, 192 Disney 30, 71, 72, 74, 77, 80, 81, 156, 172, 198n3; see also The Walt Disney Corporation; Buena Vista 30 diversity of/in audiovisual industries definition xxv, xxix–xxx diversity of audiovisual contents: consumed diversity xxix, 50, 96, 102, 107; content diversity xxix, 105, 113; exposure diversity xxix, 96, 137; see also displayed diversity; external diversity xxx, 41, 191; internal diversity xxx, 10, 41,

Index  207 191; outlet diversity 102; diversity produced 50, 85; source diversity xxix, 31, 85, 102, 194; supplied diversity xxix, 102, 105, 107, 113 East India Company 69 economies: economies of scale 69, 104, 106, 107, 156, 181; economies of scope 69, 106, 107, 156 ERICArts 14 Europe 2020 13 European Audiovisual Observatory 40 EESC-­European Economic and Social Committee 40, 42 European Digital Single Market 13–4, 197 EU Portability Regulation 13 Facebook xviii, 2, 38, 63, 68, 76, 79, 80, 81, 107, 124, 156, 164, 181, 186, 197 FCC-­Federal Communications Commission (USA) 197 Flix Premiere (VoD, UK) 94 FONAP-­Paraguayan Audiovisual National Fund (Paraguay) 36 Fox 172, 173; Fox + 180; 20th Century Fox 30 France Télévisions 189, 198n4 Francophonie, International Organization of La 9 French Government: Ministry of Culture and Communication 11, 15, 55–8, 65; Ministry of Youth, Sports and Associations 56–7; CNFU-­French National Commission for UNESCO 3, 4, 26, 55 freedom of expression (or liberty of expression) xxvii, 6, 12, 18, 25, 64, 75–6 Fox Entertainment Group 172–3; Twentieth Century-­Fox 64; FOX + (SVoD) 180 Fundo Setorial do Audiovisual (Brazil) 36, 177 GAFA 63, 68, 79, 80, 124; see also GAFAM GATS-­General Agreement on Trade in Services 26, 42, 124–6, 132n10, 140–1, 146 GATT-­General Agreement on Tariffs and Trade 26, 54, 146, 191; Uruguay Round (1986–93/94) 26, 53

Google xviii, xxvi, 2, 19n7, 37, 38, 62, 63, 68, 76, 79, 80, 104, 107, 124, 156, 159, 181, 186, 197; see also Alphabet; Google+ 76; Google Play 173, 179 Globo, Grupo 78, 171, 172, 180; Globosat 172; Globo Play 172, 173, 180; see also Muu; Rede Globo de Televisão 171 HBO 93, 95, 172, 173, 179, 188, 191; HBO Go 179, 180 House of Cards (TV Series, 2013–18) 104 Hudson’s Bay Company 69 Huffington Post, The 164 Hulu 34, 35, 92, 93, 156, 188 independent audiovisual work 33, 39, 178, 179, 181, 192, 194 identity, cultural or national 33, 42, 52, 53, 54, 58, 59, 153, 154, 165, 190, 191 IMPALA-­Independent Music Companies Association 14 INCAA-­National Film and Audiovisual Arts Institute (Argentina) 190 interactivity 94–5 ITU-­International Telecommunication Union 9–10, 19n5 iTunes 2, 36, 40, 103, 173, 179 LabEx ICCA-­Laboratoire d’excellence Industries culturelles & création artistique (France) 16 LabSIC-­Laboratoire des Sciences de l’information et de la communication (France) 16 Lang, Jack (1939–) 57–8 licensing audiovisual content 89–93, 95, 177, 178 long tail theory 39, 85–97, 107, 112, 181 Looke (VoD, Brazil) 179 M6 (TV channel, France) 189 Magzter (digital magazine newsstand, USA) 90 Marseille (TV Series, 2016–) 112 Malraux, André (1901–76) 57 Matthew effect 87 Mecanismo, O (TV Series, 2018–) 172 media xiii–xv media power 73–9, 82

208 Index Mediaset, Gruppo 76 MinC-­Brazilian Ministry of Culture 170–1, 174–5, 179–82 Microsoft 63, 76, 156 Ministerio del Tiempo, El (TV Series, 2015–) 189 minority (or minor) social groups 65 Mitterrand, François (1916–96) 61 most-­favoured-nation treatment 26, 138, 139, 141, 144, 147n2 Mubi (SVoD) 94, 179 multisided markets 100, 103, 156; see also two-­sided markets Napster 100 national treatment principle 138, 139, 141, 147n2 neutrality: net neutrality principle 6, 12, 76, 123, 160, 161, 182n2, 196, 197; technological neutrality principle 5, 7, 8, 12, 18, 19n4, 138, 148n3 network effect 103–4, 113; see also cross-­sided network effects Net Now (VoD, Brazil) 172, 180 Netflix xvi, xxvi, 18, 29, 34, 35, 36, 38, 40, 41, 42, 44, 45n3, 61, 62, 63, 64, 87, 88–96, 103, 104, 107, 108, 110–12, 156, 159, 163, 164, 172, 173, 179, 180, 181, 186, 187, 188, 189, 190, 191, 194, 197, 198n3, 198n5 NetMovies (VoD, Brazil) 173 News Corporation 71, 72, 76 Observatório da Diversidade Cultural (Brazil) 15 Observatorio de Cultura y Comunicación (Spain) 15 OCCQ-­Observatoire de la culture et des communications du Québec (Canada) 192 Observatoire des mutations des industries culturelles (France) 16 OEI-­Organization of Ibero-­American States 9, 10; Ibero-­American Cultural Charter 10 Orange 63 OECD-­Organization for Economic Co-­operation and Development 29, 38, 39, 66n4 on-­demand audiovisual sector 177 ownership, media 30, 60–72, 74, 82, 85, 92, 155, 195; see also corporate

Pandora 90 Paramount Pictures 30 Pareto principle 86 platforms: generalist/niche platforms 93–6, 188; see also aggregators; platformization 100, 103, 113; social media platforms 76, 79; streaming platforms 2, 19n7, 29, 35, 38, 39, 41, 89, 90, 93, 153, 159, 169, 196, 198n3; see also services; VoD 36, 40–2, 44, 63, 104, 110, 111, 114, 169–70, 172–3, 176–82, 188–90, 192, 194, 196; OTT 36, 44, 156, 158, 159, 163, 166, 176, 178, 188 pluralism xxvi-­ii, 14, 64, 75, 107 Polanyi, Karl (1886–1964) 75 Popcorn Time (software for VoD) 94 preferential treatment for developing countries 5, 27, 34, 42, 43, 140, 142 Prisa, Grupo 76 public consultation 11, 40, 63, 158–61, 165, 177; see also public hearing; Canadian Content in a Digital World 160–2 public corporation 70 public service 58–59; public broadcasting xi, 34, 59, 60, 78, 103, 105–6, 154–5, 162; see also public TV channels or public broadcasters Quebec, Government of 3, 12, 132n6, 159 Quebecor (Canada) 153 quotas of audiovisual content xxix, 26, 39–41, 44, 56, 58, 59–60, 63, 114, 140, 159, 160, 170, 177, 179, 181, 190–2, 198n5 Rai-­Radiotelevisione italiana 189, 198n4 RTBF-­Radio télévision belge francophone 189 RTS-­Radio télévision suisse 189 recommendation system 86–9, 93, 101, 108–13, 187, 198n6; see also search engine; algorithm 4, 16, 17, 32, 41, 44, 94, 102, 108, 112–14, 124, 187, 196, 199n6; filter bubble 108, 110–11, 113; media bias 109; selection bias 110; presentation bias 110; overfitting 110–13; see also overspecialization Redbox (video rental, USA) 91

Index  209 RIJDEC - Réseau international de juristes pour la diversité des expressions culturelles 3, 14 RTL Group 78 Rogers Communications Inc. (Canada) 153 Salto (SVoD, France) 103, 189 Scribd (e-­book subscription service, USA) 90, 91 Shaw Communications Inc. (Canada) 153 Shudder (SVoD, USA) 94 Silicon Valley exponentialism 157 SMIT-­Studies on Media, Innovation and Technology (Belgium) 16 Snapchat 164 soft power 78, 153 Sony 30, 179; SME-­Sony Music Entertainment 31 Spotify 35, 36, 173, 188 Stirling model xxxiin2, 102; indicators of diversity xvii, 51, 137 superstars, economics of 87, 108 suppression of radical potential, the law of the 95 sustainable development 9, 13, 55, 105, 146; 2030 Agenda for Sustainable Development 10 tax: ‘amusement tax’ (Chicago) 69; BEPS project 38–9; CONDECINE tax (Brazil) 176, 177, 179–81; Internet Tax Freedom Act (USA) 35; ‘Netflix tax’ (Buenos Aires City) 35; ‘Netflix tax’ (Canada) 152–3, 164–5; ‘YouTube tax’ (France) 45n3, 194 techno-­deterministic discourse 32 telecommunications 6, 63, 80, 119, 124, 126, 128–31, 145, 152–6, 161–2, 169, 171–2, 177, 181, 185, 188, 195 Telefónica (Spain) 71, 75, 172, 198n3; Terra 173 Telmex (Mexico) 76, 172 Televisa, Grupo (Mexico) 76 TF1 (TV, France) 58, 66n2, 189; MyTF1 VOD 111 TIM (Telecom Italia) 172 3% (TV series, 2016–) 112, 207 Telus Corporation (Canada) 153 Time Warner (Warner Media) 60, 71, 72, 77, 93 Tencent Holdings Ltd. (China) 76

Texture (magazine subscription service, USA) 90 trade agreement: Asia AANZFTA 147 trade agreements: European Union with…: EU-­CARIFORUM Economic Partnership Agreement 137, 140–4; EU-­Republic of Korea agreement 139, 141–4, 178; CETA - EU-­ Canada Comprehensive Economic and Trade Agreement 139, 146; EU-­Singapore agreement 139; EU-­ Agreement on Cultural Cooperation with Colombia and Peru 141, 142–4; EU-­Central America Protocol 141, 143, 144; TTIP-­Transatlantic Trade and Investment Partnership 18, 56, 196, 199 trade agreement: TiSA-­Trade in Services Agreement 196, 199 transparency 17, 19n2, 113, 114, 181, 187, 196; see also lack of transparency TuneIn 188 TVE-­Televisión Española 189 U 40 Network Cultural Diversity 2030 14 UNESCO Chair on the Diversity of Cultural Expressions (Canada) 17 UNESCO 1982 World Conference on Cultural Policies 53 UIS-­UNESCO Institute for Statistics 28, 121, 122, 132n3; Framework for Cultural Statistics 121, 131 ULEPICC-­Unión Latina de Economía Política de la Información, la Comunicación y la Cultura 16 Universal Declaration on Cultural Diversity (UNESCO 2001) xxvii, 1, 2, 27, 55 United Nations xxvii, 10, 53 UniversCiné (VoD, France) 36 Verizon 34, 197 vertical integration in media markets 2, 91–3, 95, 188 Viacom CBS 72; National Amusements 72 video game industry/sector 37, 122 Vivendi Universal Group 60, 61; VUE-­Vivendi Universal Entertainment 61; Universal Pictures 30; UMG-­Universal Music

210 Index Group 31; UMPG-­Universal Music Publishing Group 31 VRT-­Vlaamse Radio- en Televisieomroeporganisatie (Belgium) 189 Warner Bros. Entertainment 30; see also Warner Brothers; Warner Chappell 31; WMG-­Warner Music Group 31 WIPO-­World Intellectual Property Organization 10

WTO-­World Trade Organization 26, 27, 29, 64, 124, 140, 141, 144, 146, 196, 199 Wuaki 40 YouTube xxvi, 2, 14, 18, 35, 36, 81, 100, 103, 156, 172, 173, 188, 191; YouTube Red 188 ZDF-­Zweites Deutsches Fernsehen (Gemany) 78, 189, 198