This material was first published by Thomson Reuters, trading as Sweet & Maxwell, 5 Canada Square, Canary Wharf, London, E14 5AQ, in Entertainment Law Review 2026 , 37(2) and is reproduced by agreement with the publishers. For further details, please see the publishers’ website.

The Austrian Supreme Court has suspended proceedings in a case between Austrian audiovisual content streaming service provider SKY TV and a consumer rights organisation, which were initially brought before the Commercial Court of Vienna, in order to secure a ruling from the CJEU[1] on whether SKY TV’s digital audiovisual content streaming offerings fall under the definition of “digital service” or “digital content” under the Consumer Rights Directive (CRD).[2] This legal characterisation has significant consequences for the application of consumers’ right of withdrawal under EU consumer law and by extension the viability of well-developed business models within the audiovisual sector that are widely accepted and enjoyed by consumers.

The case could thus help clarify whether video-on-demand (VOD) offerings qualify as a supply of a “digital service” or “digital content” – a distinction with important implications under EU law. The CRD provides an exception to the consumer’s right of withdrawal for digital content not supplied on a tangible medium.[3] In essence, it creates a specific regime whereby the consumer loses the right of withdrawal if: (1) the supply of content begins within the withdrawal period; (2) the consumer has given prior express consent to begin the performance of the contract and has given the acknowledgment that she will lose her right of withdrawal; and (3) the trader has fulfilled its information duties.

The question from the Austrian Supreme Court describes the SKY TV product as a “streaming service”, which typically refers to subscription VOD (SVOD). In fact, the provider in question is a broadcaster that offers access to its broadcast online (linear online TV) and on-demand streaming offerings (SVOD for online content) for viewing the content from the time and place chosen by the users, as well as tethered copies (SVOD for offline content). The Court may choose to split the question to focus on SVODs or it could keep the combined category of streaming service (SVOD and linear broadcasting). In any event, the argumentation in support of treating these models to supply digital content to consumers as contracts for the supply of digital content is valid both for SVOD and linear online broadcasting.

The CJEU, in essence, is asked whether an SVOD should be classified as supplying digital content or providing a digital service for the purposes of EU consumer rights law as harmonised by the CRD. The answer will determine whether SVODs can rely on the special regime that provides an exception to the right of withdrawal for digital content supply contracts.

The CRD is a cornerstone of EU consumer protection law and has undergone several amendments. According to Article 4, it is a full harmonisation directive, meaning that Member States may not diverge from its provisions unless explicitly permitted to do so. The CRD grants consumers a 14-day right of withdrawal from distance or off-premises contracts (Article 9). Article 16 sets out exceptions to this right, including contracts for the supply of digital content not supplied on a tangible medium, provided that performance has begun and the contract places the consumer under an obligation to pay, subject to certain conditions. It is based on this specific regime that Sky argues its offerings are exempt from the right of withdrawal. Recital 19 of the CRD clarifies that contracts for online digital content should not be classified as either “sales of goods” or “service contracts”.

In 2019, a directive was adopted to regulate certain aspects of contracts on digital content and digital services (DCD).[4] It has repeated the definition of “digital content” already used since 2011 in the CRD and created a broad definition of “digital services”.[5] While the definition is very broad, it is notable that none of the examples of “digital services” provided in the DCD refer to SVOD.[6] Nevertheless, the claimant consumer protection organisation apparently took the view that typical SVOD would fall in the definition of “digital service” under the CRD.

However, Recital 36 of the DCD states that the Directive should apply without prejudice to other Union law governing consumer protection. This is in line with the scope and title of the Directive, which lays down rules only on “certain aspects concerning contracts for the supply of digital content and digital services” (our emphasis) as opposed to reforming substantive consumer law. Article 1 specifies that these aspects are limited to the rules on (1) conformity of digital content or a digital service with the contract, (2) remedies for a lack of conformity, and (3) the modification of the digital content or digital service. Nevertheless, the claimant seems to argue that the DCD would appear to classify SVOD as digital services for which the specific regime for the right of withdrawal for the supply of digital content would not apply under the CRD.

Following the adoption of the DCD, the EU co-legislator adopted additional legislation amending several EU consumer law instruments, chief amongst them the CRD (Omnibus Directive).[7] Recital 30 of the Omnibus Directive refers to the distinction between contracts for digital services and digital content and its implications for the right of withdrawal.

There is no case law to date on whether an SVOD would fall within the definition of a digital service or digital content under this legislative framework. The response to the question for preliminary reference primarily requires a proper statutory interpretation to construe the distinction between digital content and digital services for the purposes of consumer protection as regulated by the CRD. As shown below, both legal and policy arguments support the conclusion that an SVOD is not a digital service and therefore the specific regime for right of withdrawal should continue to apply.

Legal arguments

Such a statutory interpretation begins with Recital 30 of the Omnibus Directive as it regulates how the concepts of digital content and digital services in the DCD and the CRD should be distinguished.

This Recital acknowledges that “it may be difficult to distinguish between certain types of digital content and digital services, since both can involve continuous supply by the trader over the duration of the contract”. It gives examples of digital services such as “video and audio sharing services and other file hosting, word processing or games offered in the cloud, cloud storage, webmail, social media and cloud applications”.

For digital services contracts, Recital 30 confirms that the standard regime for right of withdrawal applies and justifies it on the basis of the continuous involvement of the service provider. In contrast, when discussing contracts for the supply of digital content, Recital 30 points out that “[c]ases such as web-streaming of video clips should be considered continuous supply over a period of time, regardless of the actual duration of the audiovisual file”. It adds:

“Many contracts for the supply of digital content which is not supplied on a tangible medium are characterised by a single act of supply to the consumer of a specific piece or pieces of digital content, such as specific music or video files. Contracts for the supply of digital content which is not supplied on a tangible medium remain subject to the exception from the right of withdrawal set out in point (m) of the first paragraph of Article 16 of Directive 2011/83/EU (…).”

An SVOD does not fit squarely in this description. As the Recital correctly notes, there are “many contracts” under which content is provided under a transactional model and these should qualify as contracts for the supply of digital content without any doubt. However, the existence of many contracts of this type does not imply that all digital content is necessarily supplied in this manner. The Recital clearly leaves room for other types of contracts through which digital content may be supplied to consumers such as through SVOD. This is supported by Article 5 of the DCD, which makes clear that the trader complies with the obligation to supply the digital content when “any means suitable for accessing or downloading the digital content is made available or accessible to the consumer, or to a physical or virtual facility chosen by the consumer for that purpose”. This implies that the supply of digital content is not necessarily linked to a single act of supply of a specific piece or pieces of digital content.

This is further supported by Recital 19 of the CRD, which explains that digital content is “produced and supplied in digital form, such as computer programs, applications, games, music, videos or texts, irrespective of whether they are accessed through downloading or streaming”.

Furthermore, Recital 30 of the Omnibus Directive explicitly acknowledges that both contracts for the supply of digital content and digital services contracts can involve continuous supply by the trader over the duration of the contract, stating that digital content “covers a single act of supply, a series of individual acts of supply, or continuous supply over a period of time”. This acknowledgement supports the argument that the continuous provision of content is not the decisive factor in determining the nature of a contract, as consumers may receive content from SVODs on a continuous basis over a period of time, e.g. over the course of a monthly subscription billing period.

The European Commission’s 2021 Guidance[8] on the CRD provides further support, noting that classification as digital content or digital service “depends on the mode of transmission or access as well as other specifics of the business model”. In this respect, it is notable that the list of examples of “digital services” provided by Recital 30 of the Omnibus Directive omits any reference to SVODs, despite the fact that this audiovisual consumption model had clearly become the leading consumption model of choice for many European consumers by 2019. The overall number of subscriptions to SVODs in Europe at the time of the adoption of the Omnibus Directive was above 50 million (with strong annual growth) – so the European legislature could have easily categorised SVODs, already a well-known consumer proposition, as a digital service – had it wished to, but it did not.[9]

The specific regime for the exception to the right of withdrawal only applies to digital content not supplied on a tangible medium. One might infer a contrario that the right of withdrawal would apply to CDs and DVDs. This would appear to undermine the argument above, as a film watched on a DVD cannot be “unwatched” any more than a streamed film can be “unstreamed”. However, the CRD contains no such contradiction as it provides a comparable exception to the standard withdrawal right for sealed audio and video recordings supplied on tangible media: the consumer loses the right of withdrawal once the seal is broken.[10]

This analogy demonstrates that the legislator’s rationale likely rests not on the digital nature of the content, but on its intangible and consumable character – once accessed, it can be consumed immediately and cannot be meaningfully returned. It is also consistent with the distinction in rationales highlighted by the Commission’s Guidance. While the policy rationale behind the right of withdrawal for services is to “allow the consumer to test the service and decide, during the 14-day period from the conclusion of the contract, whether to keep it or not”. The guidance notes that “unlike that of the withdrawal from the provision of services …, the consumer has no right to ‘test’ the digital content during the right of withdrawal period”.[11]

The Omnibus Directive also provides a consequential distinction between two distinct types of relationship a service may have with its users. On the one hand, for digital services, Recital 30 highlights the “continuous involvement of the service provider” as a key factor. The examples it cites are revealing: sharing services, file hosting, word processing, cloud video games, cloud services, cloud storage, webmail, and social media. What these examples have in common is the continued technological interaction between the user and the service provider. The relationship is deeply interactive. For example, sharing services facilitate on an ongoing basis the uploading and use of content for all users. This is in line with the definition of digital services of the DCD that applies to services where content is created, stored, and shared by users.[12] However, this description does not sit comfortably with VOD products where a specific piece of digital content or a specific catalogue of content is accessed by users. While SVOD services certainly involve some user interaction, the provider’s role is largely limited to enabling access to the catalogue of content for which the consumer has paid to view – by contrast, a social media platform provider has near constant interaction with users.

On the other hand, the same Recital refers to the possibility of continuous supply of digital content, emphasis being on the supplying. Supplying suggests a more limited, unidirectional, interaction between the user and the supplier of content. The interaction essentially consists in the choosing of content from the repertoire of SVOD, which in turn leads to the supply of the requested content to the user.

Unlike tangible goods, which can be returned to the seller, digital content cannot be “unconsumed”. Once a subscriber gains access to a streaming catalogue, they can typically view a significant and high-value portion of that library – films, television series, and other on-demand content – without any practical way for the provider to recover or repossess the value of what has been accessed if the right of withdrawal is later exercised. This marks a fundamental difference from tangible goods, as an SVOD subscriber may derive substantial benefit from the service by consuming significant amounts of content in a short time, effectively undermining the principle of fair exchange between the provider and the consumer.

Policy arguments

Beyond the statutory interpretation of the CRD, there are important public policy reasons that justify classifying SVOD contracts as digital content. This classification implies that the specific regime for the right of withdrawal should apply.

Classifying SVOD as digital content recognises the immediate, non‑returnable nature of streamed content once access is granted, aligns it with comparable digital products (e.g. music and e‑book downloads), and provides a clear, balanced framework for consumers and providers. It preserves the CRD’s intended balance by allowing immediate access where the consumer gives informed consent, while avoiding outcomes that would enable consumption without fair payment. This approach promotes legal certainty, ensures proportionality between consumer protection and legitimate business interests, and supports regulatory coherence, ultimately safeguarding investment, innovation and consumer choice.

Imposing a mandatory 14-day withdrawal period would expose SVODs to a significant risk of abuse by bad actors. Given the nature of SVOD, subscribers often obtain a materially significant benefit by gaining immediate access to new, high-profile series and films, as well as live events such as sports events. Consumers could simply rely on the withdrawal right to watch such high-value content without incurring any (or only a minimal) payment obligation. In practice, this invites “binge‑and‑refund” cherry‑picking around limited releases, and serial account creation to repeat the tactic behaviours that are antithetical to the consumer trust rationale underlying cooling‑off rights.

A rule designed to protect a minority (including bad actors) would impose broad, persistent costs on the majority. On SVOD platforms, a 14‑day withdrawal enables “binge‑and‑refund”, undermining predictable revenues that fund long‑term licences, minimum guarantees, production, and marketing. If consumption is followed by refunds, front‑loaded investment becomes unsustainable. Providers would scale back local commissions, take fewer risks, and delay innovation; they would also raise prices, curtail promotions, and restrict content – harming honest consumers. The result would be a seismic shift in the SVOD model, with higher prices, and fewer free or reduced‑price trials for EU consumers.

In the context of live sports, it should also be recognised that SVOD providers are only able to fund sports rights through long-term bids which are underpinned by stable subscription income. If the amount of refunds increases, it will be less viable for SVOD providers to offer live sports, diminishing competition and driving down the value of sports rights thereby also reducing the funding that flows through grassroot sports programmes which are otherwise crucial for unlocking health, wellbeing and other societal benefits for EU consumers.

Potential customers can typically view the catalogue of available and upcoming content without the need for a subscription and prior to making a purchase. SVOD providers frequently provide alternative models for consumers wishing to “test” a service, such as free trials. Consumers therefore do not require an additional post-purchase opportunity to reflect on whether they wish to continue with a subscription prior to the expressly agreed minimum term.

References

[1] Case C-234/25 Sky Österreich Fernsehen – request for a preliminary ruling from the Oberster Gerichtshof (Austria) lodged on 27 March 2025.

[2] Directive 2011/83/EU on consumer rights [2011] OJ L 304/64.

[3] Article 16(m) CRD.

[4] Directive (EU) 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services [2019] OJ L136/1.

[5] Article 2(2) CRD.

[6] See also Recital 30 of Omnibus Directive.

[7] Directive (EU) 2019/2161 amending Council Directive 93/13/EEC and Directives 98/6/EC, 2005/29/EC and 2011/83/EU of the European Parliament and of the Council as regards the better enforcement and modernisation of Union consumer protection rules [2019] OJ L328/7.

[8] Commission notice Guidance on the interpretation and application of Directive 2011/83/EU on consumer rights [2021] OJ C525/1.

[9] European Commission, Media use in the European Union (Publications Office of the European Union 2020).

[10] Article 16(i).

[11] Guidance at Section 1.5.

[12] Article 2(2)(b).