When Paramount Pictures signed an agreement with Sky in the UK, the company stipulated that customers in the UK wouldn’t be allowed to access its content when they leave the country. That meant users going on holiday would have to be sans-Paramount content during their holiday period. Now, thanks to the EU Commission, Paramount has scrapped the clause in its contract with Sky that required geoblocking customers.
Last July, the European Commission warned Paramount, Disney, NBCUniversal, Sony, Twentieth Century Fox and Warner Bros that they needed to change the way they signed licensing contracts with Sky in the UK. That’s because the clauses they all included within their contracts were in breach of EU competition rules.
Since then, Sony has acted by allowing all of its content to be available to Sky customers across Europe – not on a country-by-country basis. Paramount is taking a slightly different approach however, by removing the geoblocking clause of its contract to allow Sky customers outside the UK and Ireland to watch its film via satellite and online.
According to the commission: “Such clauses restrict the ability of broadcasters to accept unsolicited requests (so-called passive sales) for their pay-TV services from consumers located outside their licensed territory. The commission had concerns that this may eliminate cross-border competition between pay-TV broadcasters and partition the EU’s single market along national borders.”
While Paramount has not technically scrapped the contract completely, the company has promised not to enforce the current clause. Of course the company is free to break that promise, but it faces a fine of up to 10% of its global annual turnover if it chooses to do so.
With Brexit having just occurred however, the company’s commitment to not include the clause for the next five years could be an empty promise. After the UK exits the single market, it could be possible for Paramount to once again block access to its content to customers outside the UK.