Netflix, Inc. (NASDAQ:NFLX) subscribers will now be able to access content online when they travel across the European Union member states after EU institutions moved to make the initiative a reality. This was in an agreement signed between Malta and the European Union in an effort to break down barriers in the bloc that has a market size of 500 million people. Malta is currently holding the presidency of the bloc.
Digital Single Market
The initiative is the first in a series of steps the European Commission is making in its efforts to transform the European Union into a single digital market. It was first announced at the Cannes Film Festival in May 2015.
Before the agreement can be implemented, it will have to get approval first. At this stage, however, getting the approval is being viewed as a mere formality. Once it goes into effect it will benefit individuals who find themselves temporarily in another European Union country other than the one they are normally resident in. This includes those traveling for studies, business trips or holidays.
For the man who launched the Digital Single Market, Andrus Ansip, this will be seen as a major political victory on his part.
“This is a new important step in breaking down barriers in the Digital Single Market,” said the European Commission vice-president in charge of the Digital Single Market in a statement.
Rights-holders contest decision
Though the move will greatly benefit consumers, rights-holders have contested it saying that with regards to financing production of their content, the principle of territoriality is key for them. The rights-holders are drawn from the film and television industry in Europe who see the Digital Single Market initiative as a threat to their modus operandi which involves licensing of films and television shows on a country by country basis rather than the whole bloc all at once.
The move to allow Europeans to access their online subscriptions wherever they in the 28-member bloc follows a decision by the community to abolish roaming charges for EU residents.
In Tuesday’s trading session, shares of Netflix shot up by 2.15 percent to close the day at $144.00.