Background/Briefing for PM Cameron Event

Michael and Andrea,

From a SPE perspective, your meeting with Prime Minister Cameron on Monday will likely focus on our overall investment in the U.K. – with special emphasis on the jobs created by TOMMY COOPER, the importance of OUTLANDER (i.e., particularly vis-à-vis the political issues in the U.K. as Scotland contemplates detachment this Fall), and the growth of our channels business with the acquisition of CSC Media Group this week position us as the 5th largest commercial broadcaster. Even relative to our colleagues/competitors, I think our story is unique and special (because of the size, scope, and recent nature of our investments).

Additionally, you should be aware of the following:

1. Today (Friday, June 27, 2014), the Department of Culture, Media and Sport released figures about the creative industries – here are a few of the key facts:

§ Creative Industries jobs increased to 1.71 million in 2013, a 10.1 per cent increase on 2011 figures.

§ These figures compare with a 2.4 per cent increase in the total number of jobs in the UK over the same period.

§ In 2013, 1 in 18 jobs (5.6 per cent) were in the Creative Industries.

§ 1 in 10 jobs held by graduates in the UK in 2013 were in the Creative Industries.

2. Voluntary Copyright Alert Program (VCAP): Under the urging of the U.K. Government (and Vaizey specifically), we have worked within a multi-stakeholder group to negotiate an alternative to the Digital Economy Act (DEA), which is a statutory program to combat piracy through the ISPs – costs and delays obviated the need to find an alternative path to DEA (which is VCAP). Within the last couple of weeks an agreement was reached with the ISPs on VCAP to send notices to consumers who are accessing unauthorized content. The government is going to pay significant costs (roughly 3.5 million pounds) to educate consumers about legitimate ways to access content. While no sanctions are involved (e.g., suspension of Internet access for repeat offenders), we view this as a good step forward to alter poor behavior in this space and compel the ISPs to do more in the future. The public announcement of this program is imminent and may coincide with your event on Monday.

3. Private Copy Exception (PCE): In response to a report recommending changes to U.K. copyright laws (the report is called Hargreaves and the changes are problematic), we’ve been working against one of the recommendations - a proposal that would allow consumers to make personal copies of legally acquired content. While seemingly benign, the issue is the draft proposal was broadly drafted and could apply to digital services (EST, VOD, SVOD, etc.) and override commercial contract terms. This will be debated in the House of Lords Thursday, July 3rd. If appropriate, you can convey the following points:

- A private copy exception must not apply in the event there are commercially available services that achieve the same need.

- In the U.K. there are a multitude of services in the marketplace that respond to consumer need and interest (more than 30 exist today) – thus, there is no market failure. Examples include: UltraViolet allows legal access (both streaming and downloads) for multiple people across multiple devices and DVDs/BluRays often come with access to a digital copy.

- We need to rely upon a legal framework that respects the technical protections necessary to launch new consumer-oriented commercial services – this is key to our ability to make investments in films and great new TV shows (e.g., OUTLANDER is a good example for us, as this show alone has contributed 25 million pounds to the economy).

4. Site- blocking: We (the AV sector) have successfully utilized provisions of EU/UK law that have allowed for court orders to block access to sites that provide unauthorized content. In fact, the U.K. is the most successful territory in the EU where we’ve been able to block sites – more than 40 sites thus far. And, in comparison to concerns over what might happen were PIPA/SOPA to be enacted in the U.S., there is no public outcry over these actions in the U.K. – this has made the ISPs a bit more comfortable with this remedy as well.

Please let me know if you would like more information. Also, attached please find some details about OUTLANDER and TOMMY COOPER.

Best,

Keith

Keith E. Weaver, Executive Vice President

Worldwide Government Affairs, Sony Pictures Entertainment

Phone: 310.244.2187 Fax: 310.244.2467 Email: Keith_Weaver@spe.sony.com

Attachments:

Outlander and Tommy Cooper.docx (19725 Bytes)