Decree no. 2010-1379 of November 12, 2010 on-demand audiovisual media services

Decree no. 2010-1379 of November 12, 2010

relating to on-demand audiovisual media services

The Prime Minister,
On the report of the Minister of Culture and Communication,
Having regard to Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services, as amended by Directive 98/48/EC of 20 July 1998, and to Notification No. 2010/0492/F of 13 July 2010;
Having regard to Directive 2010/13/EU of the European Parliament and of the Council of March 10, 2010 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services;
Having regard to the Agreement on the European Economic Area of May 2, 1992;
Having regard to the French Commercial Code, in particular article L. 233-3;
Having regard to the French General Tax Code, in particular article 1609 sexdecies B ;
Having regard to Act no. 86-1067 of September 30, 1986, as amended, on freedom of communication, in particular articles 2, 27, 28, 33-1, 33-2 and 41-3;
Having regard to Decree no. 90-66 of January 17, 1990, as amended, implementing Law no. 86-1067 of September 30, 1986, and laying down the general principles governing the diffusion of cinematographic and audiovisual works by television service editors;
In view of decree no. 92-280 of March 27, 1992, amended, implementing articles 27 and 33 of law no. 86-1067 of September 30, 1986, and laying down the general principles defining the obligations of service editors with regard to advertising, sponsorship and teleshopping;
Vu le décret n° 2010-747 du 2 juillet 2010 relatif à la contribution à la production d'oeuvres cinématographiques et audiovisuelles des services de télévision diffusés par voie hertzienne terrestre ;
Having regard to the opinion of the French Superior Audiovisual Council dated September 27, 2010;
Le Conseil d'Etat (section de l'intérieur) entendu,

Decree:

CHAPTER I: PROVISIONS RELATING TO THE SCHEME FOR THE DEVELOPMENT OF THE PRODUCTION OF CINEMATOGRAPHIC AND AUDIOVISUAL WORKS.

Article 1
I. The provisions of this chapter are applicable :
1° On-demand audiovisual media services enabling viewers to watch, for a limited time, programs broadcast on a television service, known as catch-up TV services, which are mentioned in 14° bis of article 28 and in the last paragraph of I of article 33-1 of the aforementioned law of September 30, 1986, as well as those published, directly or through subsidiaries, by a company referred to in article 44 of the same law;
2° Other on-demand audiovisual media services with annual net sales in excess of 10 million euros.
II. The provisions of this chapter relating to the contribution to the development of cinematic production do not apply to services that offer fewer than 10 feature-length cinematic works per year.
III. The provisions of the present chapter relating to the contribution to the development of audiovisual production are not applicable:
1° To catch-up TV services;
2° To other on-demand audiovisual media services whose supply is mainly devoted to the programs mentioned in the fifth paragraph of article 1609 sexdecies B of the French General Tax Code, or which offer fewer than 10 audiovisual works per year other than those mentioned in the fifth paragraph of article 1609 sexdecies B of the French General Tax Code.

Article 2
I. For the purposes of this chapter, the net annual sales of a service do not include :
1° Value-added tax ;
2° The tax provided for in article 1609 sexdecies B of the French General Tax Code.
II. Revenue from the joint operation of several on-demand audiovisual media services is taken into account in calculating the sales of each of these services in proportion to the respective amounts of these sales.

Article 3
Each year, catch-up TV services devote a proportion of their net annual sales for the previous financial year to expenditure contributing to the development of the production of European cinematographic works, on the one hand, and original French-language works, on the other, at a rate identical to that to which the service editor is subject in respect of the operation of the television service from which the catch-up TV service originates.
The schemes set out in the previous paragraph do not apply to catch-up TV services whose revenues are included in the resources of the television service from which they originate, in application of the aforementioned decree of July 2, 2010.

Article 4
I. Each year, subscription services devote a proportion of their net annual sales for the previous financial year to expenditure contributing to the development of the production of European cinematographic and audiovisual works, on the one hand, and original French-language works, on the other, respectively equal to at least :
1° 26% and 22% when they offer at least 10 feature films a year within 22 months of their theatrical release in France;
2° 21% and 17% when they offer at least 10 feature-length cinematographic works annually within a period of less than thirty-six months and equal to or greater than twenty-two months after their theatrical release in France;
3° 15% and 12% in other cases.
II. Expenditure resulting from the application of the provisions of I is invested in the production of cinematic works and in the production of audiovisual works excluding those mentioned in the fifth paragraph of article 1609 sexdecies B of the French General Tax Code, in proportion to the share represented by each of these two genres of works in the total downloading or broadcasting of works by users of the service during the previous financial year. When the service offers fewer than 10 feature-length cinematographic works or fewer than 10 audiovisual works per year, the expenditure is invested solely in the production of works meeting the threshold.

Article 5
I. Services other than those mentioned in Articles 3 and 4, in particular fee-for-service services, devote each year :
1° at least 15% of net annual sales for the previous financial year resulting from the exhibition of cinematographic works to expenditure contributing to the development of the production of European cinematographic works, including at least 12% to expenditure contributing to the development of the production of original EOF cinematographic works;
2° at least 15% of net annual sales for the previous financial year resulting from the exploitation of audiovisual works other than those mentioned in the fifth paragraph of Article 1609 sexdecies B of the French General Tax Code to expenditure contributing to the development of the production of European audiovisual works, including at least 12% to expenditure contributing to the development of the production of audiovisual works of original French expression.
II. The proportion of sales generated by revenues other than those referred to in I is taken into account when calculating the sales referred to in 1° and 2° of I, in proportion to their respective amounts.

Article 6
Notwithstanding articles 4 and 5 of the present decree, the proportions set out in 1°, 2° and 3° of I of article 4 and in 1° and 2° of I of article 5 are fixed as follows:

see Official Journal page : table for article 6.

Article 7
I. Expenses contributing to the development of the production of cinematographic and audiovisual works, whether European or of original EOF, include the following:
1° The purchase, before the end of the shooting period, of exploitation rights ;
2° investing in producer's shares before the end of the shooting period;
3° The adaptation of works for the deaf, hearing-impaired, blind or partially-sighted;
4° The purchase of exploitation rights other than those mentioned in 1°, including sums paid to rights holders for each go paperless access to the work.
II. However, for services subject to the provisions of 1° or 2° of the I of article 4 which achieve annual net sales in excess of 50 million euros, the expenses mentioned in 4° of I may not represent more than 75% of the amount of their obligation.

Article 8
The sums mentioned in Article 7 are taken into account for the financial year in which the department fulfilled the corresponding financial commitment.

Article 9
I. At least three quarters of the expenditure provided for in 1° and 2° of the I of article 7 on cinematic works is devoted to the development of independent production, according to criteria linked to the work and the company producing it.
II. A work is deemed to be an independent production if its exploitation meets the following conditions:
1° When the exploitation rights stipulated in the contract are acquired on an exclusive basis, their duration does not exceed twelve months;
2° The service editor does not hold, directly or indirectly, secondary rights or marketing mandates for the work for more than one of the following modes of exploitation:
a) Theatrical release in France ;
b) Exploitation in France, in the form of videograms intended for private public use;
c) Exploitation in France, on a television service;
d) Exploitation in France and abroad on an on-demand audiovisual media service other than the one it publishes;
e) Exploitation abroad, in cinemas, in the form of videograms intended for private public use and on a television service.
For the application of these conditions, secondary rights and marketing mandates held indirectly by a service editor are understood to mean those held by a company controlled by the service editor or a person controlling it, within the meaning of article L. 233-3 of the French Commercial Code.
III. A production company that meets the following conditions is deemed to be independent of a service editor:
1° The service editor does not hold, directly or indirectly, more than 15% of its share capital or voting rights;
2° It does not hold, directly or indirectly, more than 15% of the service editor's share capital or voting rights;
3° No shareholder or group of shareholders controlling the service editor within the meaning of Article L. 233-3 of the French Commercial Code.
However, a company that does not personally initiate or share financial, technical and artistic responsibility for the work in question, and does not guarantee its successful completion, is deemed to be independent of a service editor.

Article 10
At least three quarters of the expenditure provided for in 1° and 2° of the I of article 7 on audiovisual works is devoted to the development of independent production, according to the following two criteria:
1° The service editor does not hold, directly or indirectly, producer's shares and does not personally take or share jointly and severally the initiative and the financial, technical and artistic responsibility for the production of the work and does not guarantee its successful completion;
2° The service editor, or the person or persons controlling it within the meaning of 2° of article 41-3 of the aforementioned law of September 30, 1986, does not hold, directly or indirectly, more than 15% of the share capital or voting rights of the production company.

CHAPTER II: SCHEMES TO GUARANTEE THE SUPPLY OF EUROPEAN AND ORIGINAL FRENCH-LANGUAGE CINEMATOGRAPHIC AND AUDIOVISUAL WORKS, AND TO ENSURE THEIR EFFECTIVE PROMOTION.
Article 11
The provisions of this chapter apply to on-demand audiovisual media services whose supply includes at least 20 feature-length cinematographic works or 20 audiovisual works and which are not mainly devoted to the programs mentioned in the fifth paragraph of article 1609 sexdecies B of the French General Tax Code.
The works mentioned in this chapter do not include those mentioned in the fifth paragraph of article 1609 sexdecies B of the French general tax code.

Article 12
At all times, service editors shall reserve a share of the total number of feature-length cinematographic and audiovisual works made available to the public at least equal to :
1° 60% for European works ;
2° 40% for original French works.
However, for a period of three years from their first application to services reaching one of the two thresholds mentioned in article 11, these proportions are set at 50% and 35% respectively. For services existing on the date of entry into force of this decree, this period may not begin to run before January 1, 2011.

Article 13
On their home page, service editors shall at all times reserve a substantial proportion of the works, the exposure of which is ensured by means other than the mere mention of the title, for European works or works of original EOF, in particular by displaying visuals and making trailers available.

CHAPTER III : PROVISIONS RELATING TO

ADVERTISING, SPONSORSHIP AND TELESHOPPING
Article 14
The provision of advertising messages by an on-demand audiovisual media service editor is governed by articles 2 to 7, the second paragraph of article 8, articles 9 to 12, III of article 15 and article 16 of the aforementioned decree of March 27, 1992.

Article 15
The provision of teleshopping by on-demand audiovisual media service editors is governed by articles 3 to 5, article 7, the second paragraph of article 8, articles 9 to 12, the first paragraph of article 21, article 23, the first and third paragraphs of article 25 and article 26 of the aforementioned decree of March 27, 1992.

Article 16
For the purposes of this chapter, sponsorship means any contribution made by a public or private enterprise or artificial person, or by a natural person not engaged in the publishing of television or on-demand audiovisual media services or in the production of audiovisual works, to the financing of on-demand audiovisual media services or programs, for the purpose of promoting its name, its brand, its image, its activities or its products.

Article 17
On-demand audiovisual media services or their sponsored programs must meet the following requirements:
1° Their content may not, under any circumstances, be influenced by the sponsor in such a way as to undermine the responsibility and editorial independence of the service editor;
2° They must not directly encourage the purchase or rental of products or services, in particular by making specific promotional references to these products or services;
3° Sponsorship must be clearly identified as such by the name, logo or other symbol of the sponsor, for example by means of a reference to its products or services or a distinctive sign, in a manner appropriate to the program at the beginning, end or during it.

Article 18
Sponsorship of an on-demand audiovisual media service or its programs is governed by articles 3 to 7, articles 9 to 12 and articles 19 and 20 of the aforementioned decree of March 27, 1992.

CHAPTER IV: MISCELLANEOUS AND FINAL PROVISIONS
Article 19
Articles 2 to 6-1 and article 16 of the aforementioned decree of January 17, 1990 shall apply to the implementation of the provisions of the present decree.

Article 20
The aforementioned decree of March 27, 1992 is amended .../...

Article 21
By June 30th of each year at the latest, publishers of on-demand audiovisual media services subject to the provisions of Chapters I and II shall provide the French Superior Audiovisual Council with an annual declaration of compliance with their obligations.
Service editors subject to the provisions of Chapter I shall produce a declaration certified by a chartered accountant or statutory auditor, including the analytical accounting data required to determine the sales of each service according to its marketing method or nature. This declaration may also be demanded by the French Superior Audiovisual Council from any service editor in order to verify that it is not subject to the law.
When making the declaration, the French Superior Audiovisual Council ensures that on-demand audiovisual media services produced by the same artificial person, by the person who controls it within the meaning of article 41-3 of the aforementioned law of September 30, 1986, or by its subsidiaries or those of the person who controls it, are not marketed separately with the aim of circumventing the thresholds mentioned in article 1 of this decree.

Article 22
The present decree will be effective from January 1st 2011.
Within a period of eighteen to twenty-four months from the date of entry into force of this decree, the French Superior Audiovisual Council shall, after public consultation, submit to the Government a report on the application of the provisions of this decree and propose, where appropriate, amendments designed to adapt them to developments in on-demand audiovisual media services and to relations between service editors, producers and authors.

Article 23
The present decree is applicable throughout the territory of the Republic.
References in the present decree to schemes not applicable in Mayotte, Saint-Barthélemy, Saint-Martin, Saint-Pierre-et-Miquelon, New Caledonia, French Polynesia, Wallis and Futuna and the French Southern and Antarctic Territories are replaced by references to locally applicable schemes having the same purpose.

Article 24
The Minister of Culture and Communication is responsible for implementing this decree, which will be published in the Journal officiel de la République française.