That is the conclusion of a report published today by the European Audiovisual Observatory. If true, it could open up a legal Pandora's Box instead of opening up new distribution channels.
Providing one of the first analyses of the new Directive, the report claims that the legal parameters for VoD are far from complete and many areas are still subject to dispute.
The findings are based on a June 2007 workshop held in Saarbrücken by the Strasbourg-based Observatory, the Institute of European Media Law (EMR) and Amsterdam's IViR (Institute for Information Law).
The report considered the complex web of copyright questions concerning each part of a film, including the music soundtrack, which must be resolved before the final product is licensed for VoD distribution.
The issue of copyright clearance and the role of copyright societies in this process are analysed, as is the role of YouTube and other user generated-content platforms.
Providing a detailed review of copyright issues related to YouTube, the report looked at the subject from the US perspective and in light of the recent Viacom action against the site.
On the issues of privacy, discrimination and defamation, the report states that 'there is no doubt that the debate has just started'.
In this context, the report goes on to examine the E-Commerce Directive and its provisions concerning copyright infringement. The authors conclude that there is a need for the new review of the Directive to 'shed more light on some of these issues'.
The uncertainty surrounding traditional media release windows, which has been called into question by the arrival of VoD, is also addressed by the report.
In addition, the authors have looked closely at the experience of the music industry and discuss how transferable the lessons might be in making content available online in the film sector.
On the topical issue of licences, the VoD market is compared with the market for online music, with one author concluding that 'the financial success of VoD depends on the ability of rights holders to facilitate the acquisition of licences through one-stop shops'.
The report also provides an analysis of a number of other areas including: the legal difference between streaming and download; an analysis of the three different types of economic models - rental, purchase and free-on-demand; the legal and contractual differences between internet rights and pay-per-view rights; and the position of public service broadcasters regarding the rights they make available for VoD distribution.