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Younger generation, especially between 15 and 24 years old spend less time watching TV but more time watching programs on other devices, notably on their smartphones. This increase of use of smartphones has been facilitated by the development of new applications allowing people to stream videos directly from their smartphone and to share instantly all kinds of contents with friends, families and even a very large public.


Audiovisual content has become one of the most consumed content on the internet and is very attractive for all internet players as it has a strong potential to gain audience. In this respect, in addition to traditional online video platforms, such as Youtube, social network platforms, such as Facebook or Twitter, have implemented new tools which grant an essential place to videos and allow them to gather important amounts of strategic data from end users.


The generalisation of these tools disrupted the pre-existing economical schemes and balances implemented in the audiovisual industry (I) but also raised important concerns regarding the protection of intellectual property rights (II) and privacy rights (III).


I. Impact of online platforms on TV financial and economical schemes

Online platforms are based on economical schemes that are much different from the traditional schemes used by traditional TV broadcasters. Indeed, whereas broadcasters had to find ways to finance the content they intend to broadcast, most of the time, audiovisual online platforms don’t have to finance contents they host and share since these contents are directly uploaded by end users.


Furthermore, the way younger generation entertain their selves is differing from what traditional TV broadcasters were used to and encourage TV broadcasters to change their financial and economical schemes, notably regarding advertising.


A. A new generation of internet intermediaries: online platforms

Whereas end consumers used to entertain their selves by watching TV, the progress of the digital environment contributed to the emergence of new digital services such as video on demand services and over-the-top services (which have a direct internet access) which directly compete with traditional TV broadcasters and publishers.


With this increasing number of possibilities and services to offer to consumers, digital intermediaries have gain a considerable importance. Indeed, whereas they used to be limited to internet service providers and audiovisual broadcasters, they now cover a broad spectrum of activities: video sharing platforms, applications shops, social networks, online search engines, … This new generation of internet intermediaries is now called “online platforms”.


Because online platforms can be of many different kinds, both France and the European Union have worked on their definition and their inclusion in new legislative developments.


French law n° 2016-1321 of October 7, 2016 for a Digital Republic provides a definition of this new kind of actors. According to article L. 111-7 of the French Consumer code, the expression “online platforms” refers to any person or entity offering, professionally, with being paid or not, an online communication service to the public regarding the ranking or the referencing, by means of computer algorithms, contents, goods or services offered or uploaded by third parties, or connecting several parties in order to sell a good, provide services or share content, good or services.


The European Commission is also working on a definition of this new category of internet intermediaries and has launched a comprehensive assessment of their role as part of the Digital Single Market Strategy.


According to the European Commission, online platforms share key characteristics including the use of information and communication technologies to facilitate interactions (including commercial transactions) between users, collection and use of data about these interactions, and network effects which make the use of the platforms with most users most valuable to other users.


Unlike traditional TV broadcasters, online platforms have the ability to provide multiple innovating offers to end consumers which overcome traditional models from the audiovisual industry. Their economic model is different from the one followed by publishers and broadcasters. Indeed, whereas publishers and broadcasters had recourse to the selling and buying of audiovisual contents, online platforms don’t have to buy contents since they are directly uploaded by users. Furthermore, whereas certain free TV channels have to create their own content to broadcast, online platforms don’t have to create anything since all the content is uploaded for free by end users who are seeking for fame.


Because of the way they have almost unlimited access to audiovisual contents provided by end users, online platforms are challenging classic audiovisual schemes. Online platforms tend to blur the borders between the different kinds of media, professional and amateurs, free and payable contents, as well as geographical borders and have a direct impact on the way the audiovisual economy is evolving.


B. Evolution of the audiovisual economy

In the European Union, France has the highest market penetration rate for the possession and use of mobile phones and other connected devices. Mobile phones appear to be the device that is the mostly used by younger generation to connect to social networks and to watch online videos. More than 2/3 of French people between 15 and 24 years old have already streamed a TV program.me.


This new way of watching programs on different screens creates a new competitive environment for classic TV programs and has a direct impact on the way the advertising market is evolving: advertising is now made through new medias in relation with the contents that can be viewed online, and advertising is also diversifying its functioning with the implementation of online search tools, comparators, social media, etc.

Up to this date, online audiovisual contents are monetized in two different ways: either through a paid subscription or paying services (Netflix, iTunes Store, Spotify…), either through advertising.


Even if certain paid subscriptions are becoming successful (such as Netflix), it is still difficult for them to reach a very large public as it seems that consumers are not ready yet to allow a budget for online entertaining services (only around 10% of the population in France).


Furthermore, online counterfeiting still represents an important barrier to the development of this monetizing system since many consumers still navigate on counterfeiting websites (in 2015, 30% of French surfers went a least once a month on a counterfeiting website).


The advertising model is the model that is the most used by web editors. Consumers don’t pay to have access to contents, but their use of the platform is surrounded by advertises.


Furthermore, the user will generally have to provide personal data to the platform in consideration of the service and his behavior will be closely tracked by the platform in order to precisely target advertising content to broadcast. Because of this extremely targeted marketing, advertisers are extremely attracted to online marketing on highly visited platforms. In this respect, it is interesting to note that for the first time, in Europe, the online marketing market has exceeded the television marketing market (36,2 billions of euros were spent on online marketing whereas 33,3 billions of euros were spent on television marketing in Europe in 2015).


Consequently, the share that advertising represents in the financing of the audiovisual industry has decreased whereas most of the largest broadcasters mainly rely on the advertising market.


Nevertheless, the generalisation of the use of adblock services might upset this infatuation for online advertising and therefore affect free access to online contents. According to companies that depend on advertising online, there will be a lot less content on the Web if there's a lot less ad revenue, which means there will be a lot more places you have to pay for access to view the content.


To counter this risk and protect publishers’ interests, the concept of 'acceptable ads' is emerging. The purpose is to develop ads that aren’t too intrusive and don’t bother users; most of the time these ads will result in small text ads, small pictures, anything which is not interrupting the viewer's flow and still help financing the web.


Traditional publishers and broadcasters are aware of the strengths of online platforms and adapted their economic model to include this digital environment in their master plans. In this respect, many TV channels have started using online platform to promote their own content and raise their own audience. They don’t necessarily publish their programs directly on third parties’ online platforms, but use these platforms to broadcast old contents, trailers, and advertisements and links to their own websites.


Furthermore, broadcasters have recourse to online platforms to assess the potential success of a future TV program: depending on the amount of views, likes and links shared by end users, broadcasters are now able to mitigate the risks related to producing new programs.


Online platforms play an increasingly central role in social and economic life and are an important part of a thriving internet enable economy. Nevertheless, they raise some concerns about the way they collect and make use of user’s data, the fairness in business to business relations between online platforms and their suppliers, consumer protection, and their role in tackling illegal content online.


C. Audiovisual online platforms and the collection of strategic data for advertising

Social networks online platforms, such as Facebook or Twitter, are aware of the importance of streaming audiovisual contents, not only because streaming is very popular but mostly because it is an easy way to collect strategic data from consumers. In this respect, they launched applications, such as Facebook Live and Periscope, allowing users (professional and amateurs) to upload and/or watch live events.


Furthermore, some of these online social networks were able to buy non-exclusive rights to broadcast sports and political events. The online sharing and viewing of these live events allows online platforms to have access to very strategic data related to the end users’ habits, tastes and profiles and help them tailor their offers as accurately as possible for each consumer, and thereby harm traditional TV advertising as explained earlier. Because online platforms are able to process such a large amount of strategic data, important concerns have been raised regarding the way they relay information and display advertising.


Indeed, online platforms can control access to online markets and can exercise significant influence over how various players are remunerated. Indeed, platforms such as Facebook, Snapchat, Twitter, relay information according to specific algorithms aiming to target each user’s taste. Furthermore, information fostering their own activities may have a preferential treatment to the detriment of other kinds of contents. Therefore, online platforms have strong powers to control the access to information and to lead users to watching certain types of contents.


It is clear that online platforms are becoming key actors for digital marketing and that their role is far from neutral. Because some of these platforms have become extremely influential, there may well be violations of existing legislation, regarding fairness towards consumers and transparency.


Indeed, regarding advertising, it is important to underline that online platforms may not guarantee the same level of transparency than traditional advertising. Online advertising needs improvements in order to ensure advertisers that their campaigns are effective and have real visibility. In this respect, France adopted on November 8, 2016, a new law, called “LoiSapin 2”, aiming to reaffirm the importance of the principle of transparency on the French advertising market and expending the application of its main rules to online advertising.


Furthermore, the French law n° 2016-1321 of October 7, 2016 for a Digital Republic brought new stipulations to the French Consumer code regarding the loyalty of online platforms. The French Consumer code now includes articles concerning online platforms and their obligation of fairness towards consumers.


This obligation covers their general terms of use as well as their methods of listing, ranking and delisting of online offers. According to this new regulation online platforms should clearly mention any contractual relationships or ownership relations they might have with any individual or company they list, whether these individuals or companies paid for the listing and the potential impact of these relations on the rankings. For instance, an online platform specialized in travelling will have to specify if the first results appearing in a search are the consequences of a service purchased by an airline company.


Additionally, an administrative authority (which might be the French DGCCRF), will ensure effective and fair competition between the individuals and companies referenced on the online platforms. The French authority will notably determine which information online platforms should provide to consumers to enable fair comparisons, as well as the level of accuracy, format and indicators for assessing and comparing this information.


In addition to the concerns related to the way online platforms process even more important amounts of data thanks to their new online live streaming applications, intellectual property right holders, publishers and broadcasters are more and more concerned about the new online potential infringements they could be victims of.  


II. Impact of online video platforms on Intellectual property rights

Online platforms allow a wide sharing of contents of many different kinds with other users. Nevertheless, how can we organize such a large sharing while ensuring the protection of intellectual property rights?


A. Online live streaming platforms represent a new threat to intellectual property

right holders

In 2016, a new generation of streaming applications arrived with new challenges for right holders. Periscope, Meerkat and Facebook Live give the opportunity to users to film and broadcast instantly live events and invite their followers to view at the same time these videos: any smartphone holder can easily become a

self-live streamer.


As this new way of sharing information is getting more and more popular, right holders are becoming more and more concerned of the protection of their rights. Indeed, for instance, the exclusive broadcasting on HBO of the first episode of the fifth season of Game Of Thrones was highly hacked, notably through the new applications Periscope and Meerkat.


Because it is so easy for users to livestream, they can easily infringe third parties’ rights, notably IP rights and invade privacy, without being necessarily aware of their unlawful behavior.


All sectors related to content broadcasting are concerned by the potential infringements they could be victims of from livestreaming applications. Indeed, artistic, cultural and sport sectors deal with considerable investments for the exclusive broadcasting and organisation of events, and attract a very large public with many people willing to share their experience with their network. In this respect, all of these right holders are the direct targets of this new form of piracy.


Unauthorised live stream could significantly jeopardize the existing financial schemes regarding the broadcasting of live events: traditional broadcasters wouldn’t have enough viewers and therefore wouldn’t be able to support producers and organizers by purchasing broadcasting exclusive rights.


Furthermore, it is important to recall that anybody willing to share audiovisual contents for which he doesn’t hold the rights cannot do it without the prior authorisation of the right holder, even if the audiovisual contents can be viewed for free on a different support.


In a decision rendered on March 7, 2013, the Court of Justice of the European Union (CJEU) considered that: “The concept of ‘communication to the public’, within the meaning of Article 3(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonization of certain aspects of copyright and related rights in the information society, must be interpreted as meaning that it covers a retransmission of the works included in a terrestrial television broadcast where the retransmission is made by an organization other than the original broadcaster, by means of an internet stream made available to the subscribers of that other organization who may receive that retransmission by logging on to its server, even though those subscribers are within the area of reception of that terrestrial television broadcast and may lawfully receive the broadcast on a television receiver.


Indeed, the Court considered that: “Given that the making of works available through the retransmission of a terrestrial television broadcast over the internet uses a specific technical means different from that of the original communication, that retransmission must be considered to be a ‘communication’ within the meaning of Article 3(1) of Directive 2001/29. Consequently, such a retransmission cannot be exempt from authorization by the authors of the retransmitted works when these are communicated to the public.


In this respect, unless broadcasters take special agreements with live streaming applications, they might have to face an important amount of infringing practices due to the retransmission of their programs from consumers directly onto these new live streaming applications.


Besides specific arrangements between broadcasters, publishers, right holders and online platforms, the different stakeholders are thinking of different ways they could fight effectively against infringing practices. This reflexion evidences the fact that internet intermediaries, such as online platforms, have a key role to play in the fight against counterfeiting.


B. Online platforms liability and involvement in the fight against infringing practices

The French Intellectual Property code imposes online editors to make sure that IP protected contentsare not published without prior authorisation of the IP right holders. In the same way, the French LCEN, requires web hosts to acquire tools enabling the reporting of the existence of counterfeiting contents on their platforms and specifies that web hosts must promptly remove all illicit contents as soon as they become aware of their existence.  


Online platforms have set up moderation tools aiming to prevent online piracy. Nevertheless, these tools seem not to be sufficient for authors and IP rights holders who constantly fight for the protection of their rights. On this aspect, the European Commission project of Directive related to copyright in the digital single market, published in September 14, 2016, states that it is essential to strengthen platforms obligations in the fight against online piracy: obligations of means and transparency applicable to online platforms are part of the project.


The Commission will explore the need to issue Guidance on voluntary measures, to render the fight against illegal content online more effective, and in order to respond to the call for more clarity made by platforms. In this respect, the Commission will identify typical business solutions, map voluntary efforts that platforms can deploy to tackle trust-diminishing practices such as fake reviews, organize dialogues with industry and launch a study on the topic. This effort will be followed, from 2017 onwards, by a Commission-led forum for discussion whereby platforms will be incentivized to, where appropriate, do more to maintain user trust.


This project is unlikely to challenge the principle of limited liabilities of web host. Indeed, according to the Commission the measures could be put in place by intermediaries without losing the liability exemption under the e-Commerce Directive, beyond the requirements foreseen in other strands of the Digital Single Market work.


Nevertheless, it is interesting to underline that national judges have the discretion to determine whether an internet intermediary should benefit from the liability exemption.


Up to this date, under French law, online platforms such as Twitter are considered hosts with limited liability as opposed to editors who are directly liable for all the content they edit. Article 6 of the French Law on Confidence in the Digital Economy (Loi pour la Confiancedansl’EconomieNumérique, LCEN) n°2004-575 of June 21, 2004, states that people and entities who offer to the public online communication services, storage of signals, writings, images, sounds, or messages of any kind (hereafter, “hosts”) provided by users of such services cannot be liable for their activities or the information stored for their users if they were not aware of the unlawfulness of the content stored or if as soon as the host became aware of their existence they immediately reacted to remove such data or block the access to such data.


However, with the launch of new services such as Periscope, we can wonder if these platforms will maintain a limited liability. Indeed, in a recent case opposing the Spanish streaming website Rojadirecta to the LFP (Ligue de Football Professionnel), the French judge considered that the Spanish website was liable for allowing the sharing of weblinks enabling illicit broadcasting of football games.


According to the Court, the Spanish website had to be considered as an editor because it had an active role in the publishing of the weblinks. With regard to this decision, there are chances that right holders sue online platforms, such as Twitter, because they allow the sharing of weblinks relaying unlawful livestreams. Courts will have to decide, case by case, whether each online platform shall be considered as a simple host or an editor. Thereby, this liability exemption status may evolve within time and additional conditions may be added for a web host to benefit from this status.


In addition to the infringement of IP rights, livestreaming applications also represent a threat to privacy. Any user can livestream people all around him without asking for their authorisation. Such practices could cause important damages to the people appearing on these videos: reputational, financial, moral damages. Furthermore, not only the video in itself could constitute an invasion of privacy, but all the comments made by users who watched the video could undermine the honor and reputation of the people shown on the video.


III. Impact of online video platforms on privacy rights

Whether someone’s image or private life is exposed on TV or online, this person’s consent should be given first. Some exceptions are admitted in certain cases, notably when the person is aware that he or she is being filmed, however the generalisation of the use of self-live streaming applications has already raised important concerns regarding the protection of privacy rights.


A. Potential privacy infringements resulting from live streaming applications

The general principal is that each person controls his or her image and may therefore prohibit its use if his or her authorisation has not been given. Indeed, article 9 of the French Civil code states that: “Everyone has the right to respect for his private life. Without prejudice to the right to recover indemnification for injury suffered, judges may prescribe any measures, such as sequestration, seizure and others, suited to the prevention or the ending of an infringement of the intimate character of private life.”


Furthermore, according to articles 226-1 to 226-8 of the French Penal Code, any publication or reproduction of an image where a person can easily be recognized can only be used if this person gave his or her prior consent. Such authorisation should be interpreted strictly: the image of the person can only be used as expressed in the authorisation that was given.


However, with the development of new technologies and new applications such as Periscope, it is extremely rare that a written authorisation is given prior the broadcasting of the video incorporating pictures of individuals. Most of the time the use of these images will be implicitly authorized as they illustrate news or historic facts, crowd, public persons / celebrities on duty, or if it appears on the video that the person is aware of the fact that he or she is being filmed and doesn’t object to it.


Furthermore, regulation and case law regarding the use of pictures that social media users have on their public profiles could be transposed to uses of live streaming applications. In this respect, it is interesting to recall that despite the fact that anyone can have access to a public profile, the author of the picture and the person appearing on this picture control the right of using the picture. Therefore, a third party cannot make a commercial use of the profile picture of a social media user, even if his profile is public.


However, it is interesting to underline that the French judge have admitted exceptions to this principal. Indeed, in the case Zahia vs. VSD, the judge considered that the magazine had the right to use public pictures from Zahia’sfacebook profile because these pictures illustrated news facts related to the activities of this notorious person. Even if this case law is related to the press, the grounds of this decision could be used with regard to live streaming infringements.


In the event someone discovers an unauthorized use of his image, he will have two options: criminal or civil proceedings. Accordingly, this person will either have 3 years (from the broadcasting of the image) to file a claim before the criminal court, or, within 5 years from the broadcasting of the image, have the opportunity to seize the civil judge either through ordinary proceedings or through summary proceedings in order to request the deletion of the unauthorized contents and the allocation of damages.  


Because live streaming is instantaneous it is almost impossible to make sure that the persons who appear on the videos gave their authoriSation. Furthermore, due to the instantaneity of the broadcasting of the videos the damages related to the uses of third parties’ images without their consent can be very important and irremediable. Moreover, the proof of the non-authorized use could be very difficult to make in the event the video can only be streamed once.


It is highly important to make the public aware of their liability regarding the content they livestream. Most of the time people don’t pay attention to the general terms of the services they use: an important work needs to be done to inform the public of good practices and reflexes users should have when they start using such intrusive and powerful applications.


B. Users’ education and threats related to the limited knowledge of the terms and conditions set by live streaming platforms

Before its launch, realty TV shows producers had to deal with the challenging question of the authorisation of recording someone’s life around the clock. In addition to the principal according to which a person can be filmed without prior authorisation if this person is aware that he or she is being filmed and doesn’t object to it, specific agreements have to be concluded between producers and the participants to realty TV shows in order to give their authorisation for the reproduction of their image and allow this invasion into their private life.


Unlike realty TV shows producers, online live streaming platforms don’t conclude written agreements with their users and the people appearing in the videos that can be instantly viewed online.


Furthermore, it is very unlikely that the people using these live streaming platforms obtain the written authorisation from the people appearing in these videos. Therefore, most of the time, no written consent regarding the recording and the use of people’s image will be given. The only agreement available will be the terms of use set by the online platforms.


Because the purpose of applications like Twitter or Facebook is to share information between users and to be able to share it the easiest way, these platforms have set up terms of use depriving authors from most of the control of their contents once they are shared online. Indeed, it is interesting to underline that in order to allow users to “retweet” posts, Twitter’s Terms and Conditions state that a photo posted on Twitter remains the intellectual property of the user but Twitter's terms give the company "a worldwide, non-exclusive, royalty-free license (with the right to sublicense)".


In practice, that gives Twitter almost total control over the image and the ability to do just about anything with it. The company claims the right to use, modify or transmit it your photo any way. Therefore, even if one of the purpose of the Terms and conditions of social platforms is to inform users of what they are allowed to do and how they should behave to respect third parties’ IP rights, these platforms also take advantage of users in order to allocate themselves quite extensive rights regarding the use of contents posted by users.


In this respect, we can wonder if a stronger monitoring of live streamed contents should be made. Indeed, the consequences of live streaming or uploading amateur videos online can be severe and can have serious impacts on the lives of the people appearing in these videos. In this regard, a parallel can be made with realty TV, even if people agree to be part of videos, the broadcasting of their image and the invasion in their private life can hurt their reputation and cause serious moral damages.


In France, the ComitéSupérieur de l’Audiovisuel (CSA) is in charge of monitoring TV programs, and notably realty TV program. Regarding this particular kind of programs the CSA has set several recommendations aiming to ensure participants wellness and psychological support. It could may be interesting for online platforms to draw inspiration from realty TV practices to draft charter of good conduct and urge users to be compliant with their recommendations, notably by informing of the compliant practices through advertising videos played before they start using the application for instance.


Conclusion

Traditional TV broadcasters are facing new challenges related to new kinds of audiovisual contents directly uploaded by end users. Indeed, even if contents uploaded by users/consumers on online platforms don’t meet the same quality level as contents made available by traditional broadcasters (notably in terms of quality of content and format), these amateur contents attract more and more younger generations.


This has lead TV broadcaster to adapt their economic and financial schemes in order to be more efficient in their selection of programs and the way they finance them. In this respect, online platforms aren’t just challengers to TV broadcaster, but they also represent powerful tools helping them tailor their offer to the public thanks to the data they are able to collect and process.


The wide sharing of contents through online platforms and live streaming platforms has also raised important concerns for IP right holders. The current moderation tools used by online platforms don’t seem to be sufficient to fight online piracy and call for further legislative developments. Indeed, even if online platforms widely contribute to the sharing of content and therefore participate to goals of general interests, it is important to keep in mind that the respect of IP rights remains the base of financing creation which is essential to guarantee cultural diversity.


Furthermore, beside the question of deciding whether online platforms shall be considered as hosts and/or editors, it might be necessary for these platforms to develop and implement new tools allowing a better tracking of unlawful livestreaming. Nevertheless, it would still be very complicated for these platforms to track all contents that are shared and therefore almost impossible to weigh on them a general monitoring obligation.


Even if live streaming is challenging IP right holders’ protection, these new applications also represent great sources of inspiration for artists and authors as they allow them to find new ways of engaging with their fans and to encourage collaborative exchanges.


Finally, just like for reality TV show producers, self-live streamers need to be aware of the risks and consequences of the videos the directly broadcast onto online platforms. The public needs to receive an important education on the good practices related to taking and sharing videos of third parties, live events, and needs to be aware of the consequences of the uploading of their contents onto online platforms.

Anne-Marie Pecoraro is an intellectual property, new technologies and entertainment law expert specialised in advertising, literary and artistic property and trademark law. She has built expertise in service contracts preparation and negotiation and regularly assists clients during litigation cases (notably IP/IT infringement proceedings). Ms Pecoraro has acquired valuable expertise in strategic communication, from privacy right protection to crisis communication and is also well known for her legal knowledge in designs and unfair competition (at a national and international level). She represents numerous talented performers, key actors in the music and entertainment industries as well as institutional and non-profit entities. Ms Pecoraro is a member of the ABA, IAEL, APRAM, AFPIDA-ALAI, ACEECCA and Art & Droit Association, she actively participates each year, in major international trade shows (MIDEM, MIPCOM) and major events such as the Cannes Film Festival and the sxsw.com Festival in Austin.

Biographies

Marianne Lecron is the key contact lawyer of A Turquoise in Miami, FL, USA. She has developed cross skills in philanthropy and entertainment, and has extensive skills in copyright matters in the audiovisual and music industry. She has built her expertise in both counseling and litigation. Her experience encompasses the legal and business aspects ranging from development and production to exploitation of works and projects, along with communication/ media issues and strategies both on a national and international level. Ms Lecron has legal and management master degrees, in this respect she regularly provides strategic advice adapted to clients’ needs, taking into account marketing, economic, financial and legal aspects.

She is involved in many events related to intellectual property such as the Cannes Film Festival, the Miami Winter Music Conference, the E-merge summit in Miami, and regularly publishes articles related to intellectual property.


FRANCE

How online platforms are changing the audiovisual industry



Written by Anne-Marie Pecoraro and Marianne Lecron,

ATurquoise

Anne-Marie Pecoraro

Marianne Lecron

Technologies have brought important changes to the way people have access to entertaining contents. Whereas people used to be pretty sedentary by watching TV and sending e-mails to share news with their friends and families, people and especially younger generations tend to access to information and entertaining contents in a more and more nomadic way.


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