The Court of Justice potentially overturns the existing business model with respect to the broadcasting of copyright-protecte…

In the SBS Belgium NV (SBS) v. Belgische Vereniging van Auteurs, Componisten en Uitgevers (SABAM) case (C 325/14), the Court of Justice, following a reference for a preliminary ruling made by the Brussels Court of Appeal, has now excluded broadcasting organizations (such as SBS) that transmit their programme-carrying signals exclusively to signal distributors, without those signals being accessible to the public, from having to pay compensation to rights holders under the communication to the public right (ex article 3(1) Directive 2001/29/EC). In one fell swoop, the Court seems to have overturned existing business models in the broadcasting sector in Belgium.

SBS broadcasts its programmes almost exclusively via the ‘direct injection’ technique, a process in which SBS first transmits its programme-carrying signals ‘point to point’ via a private line to its distributors. At the second stage, the distributors then send the signals (whether or not in encrypted form) to their subscribers so that the latter can view the programmes individually on their television sets with or without the help of a decoder made available by the distributor. This is a broadcasting model that is applied by most broadcasters, as Belgium is a small country that is very well cabled.

As the signals in this system cannot be received by the general public during the first stage (the communication of copyright-protected works to individual professionals (distributors)), the Court determined that SBS did not infringe the rights of authors of the programmes it transmits in communicating to the public. The actual communication in this case is made by the distributors.

However, a proviso was stated by the Court, namely: If the distributor’s intervention is limited to the provision of "technical means of ensuring or improving reception of the original broadcast in its catchment area" (as set out in recital 27 of Directive 2001/29/EC), it is merely a technical intermediary enabling the broadcasters to reach a public. In such case, the distributor does not communicate to the public, only the broadcaster does. This nuance is somewhat theoretical, as in practice, certainly in the Belgian market, distributors are not merely technical intermediaries, but rather they are well developed market players, with their own subscribers, their own digital product and service, substantive publicity incomes, etc.

With this judgment, the Court has challenged the current business models in the Belgian broadcasting market, where the broadcasters pay the copyrights and most distributors contest such payment claimed by the collecting societies. In the future, it seems that only the distributors will have to pay the copyrights.