France: €1.5bn from SVoD ‘content levy’ by 2024
September 20, 2021
From Pascale Paoli-Lebailly in Paris
The obligation on French and foreign SVoD services to dedicate 20-25 per cent of their annual turnover (for services offering films newer than twelve months) to content creation in France, could generate between €1.2 and €1.5 billion additional funds for movie and TV production between 2021 and 2024.
The French ‘AVMS’ Euro Directive became operative in July through a levy called Smad, and relates to on-demand audiovisual media services and streamers.
According to research company NPA Conseil, the breakdown per year shows that platforms would contribute between €101 to €126 million in 2021, €280 to €350 million in 2022, €372 to €465 million in 2023, and €484 to 605 million in 2024.
Netflix will be the top contributor with at least 42 per cent of the annual share. NPA Conseil forecasts that the penetration rate of the main SVoD streamers would reach 50.6 per cent of French homes (15.5 million) for a total revenue above €4 billion in 2023.
The average number of services per home would reach 2.3, compared to 1.9 (end of 2021, a 49.3 per cent penetration and €2.3 billion revenues).
As daily Le Figaro revealed last month, Netflix has filed an appeal against the Smad decree.
This levy anticipates the ongoing reform of the windowing agreement that should allow streamers to run movies 12 months after their theatrical releases, while they currently have to wait 36 months. The new window chronology is still being negotiated, and seen by French government as a quid pro quo for the AVMS Directive.