EU Will Force Netflix and Amazon to Create Content in Europe

A win for EU content creators, but a loss for consumers?

by Aaron Macarthy Beards Sep 11, 2018 at 7:48 PM


  • A report in Variety.com has broken the news that the EU plans to implement a new law ensuring that at least 30% of all content on Netflix, Amazon Prime and other on-demand media services is sourced from the EU's 28 member states.
    Roberto Viola, head of the European Commission's communication networks regulator, content and technology (speaking to Variety at the Venice Film Festival.) stated that: “We just need the final vote, but it’s a mere formality.”

    Under the proposed law on-demand services will be required to fund either TV series or films produced in any of the EU’s 28 member states. This can be done by ordering or purchasing content. Another option is paying into national film funds. Such a method uses a small surcharge added to existing subscription fees.

    Should the law come into force, from December, the 28 EU states would have 20 months to apply the new rules. According to Viola, each member state would be free to choose how they wish to implement the law. Viola also stated that individual member states could opt to enforce up to 40% of local, EU, content should they so desire.
    From December, the 28 EU states would have 20 months to apply the new rules.
    Such attempts to mandate, minimum, quotas for local content have a mixed history. In May of 2018, Netflix took the German Government to court over its law mandating a surcharge for subscriptions, similar to the EU’s proposed law. However, the European Court of Justice ruled that such a surcharge was legal within the EU (Hollywood reporter.com).

    In contrast, in 2016 France reduced its quotas, mandating French radio play at least 40% of songs from France. The quota saw increased backlash from radio producers and DJ’s. the quota was reduced down to 35% (Independent.co.uk).

    The EU will no doubt hope such a law will incentivize more content being produced within the EU as well as making existing Movies and TV programming more attractive to on-demand services. With only 20 months to implement, we could see a rush to produce or buy content within the EU. Viola stated, to Variety, that he believes Netflix is already very close to achieving the minimum 30% local content. However, he did not say how close he believed other services were to achieving the EU’s wishes.

    A worry for consumers could be that Amazon and Netflix will now start to pad out the catalogues with low quality or outdated older EU content in an attempt to meet the 30%. Another worrying strategy for on-demand providers could be to limit US TV programming without increasing their existing EU content, within the EU, to comply with the EU’s proposed law. Such a policy would see EU content, as a percentage, rise but the overall amount of content decline.

    With all future, and current, EU laws the UK remains in a state of limbo. With the UK set to leave the EU, in March 2019, it is unclear whether the UK would ever see this law enforced.

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