Advanced Television

EU to force local quotas on Netflix & Amazon

September 5, 2018

By Chris Forrester

The European Commission (EC) is looking to set a 30 per cent “local quota” on video streaming operators such as Netflix and Amazon Studios for their European output. Reportedly the EC will vote on the proposal in December.

Equity analysts at investment bank Exane/BNPP, quoting a Variety story, say that the new rules will not necessarily have a huge impact on the OTT operators.

“Netflix is already reportedly close to having 30 per cent European content, and the EU will anyhow soon publish a report showing the percentages of European works across multiple streaming platforms,” said the bank. “To comply with the rules, any service operating within the EU could merely maintain a similar “European” fraction of its overall catalogue. However, specifics of the commission’s plan could add serious complications that effectively fragment both a service’s catalogue and pricing depending on the country where it’s being viewed.”

The bank added: “According to the report, the law will give each of the European Union’s 28 member states 20 months to apply the laws, allowing each country to choose whether to raise the European quota from 30 to 40 per cent, as well as whether to have a country-specific sub-quota for local production. Individual countries could also choose to require surcharges to support their national production funds. Consequently, Amazon Video in France might require 10 per cent French content, or Germany’s popular Netflix would need to raise prices to subsidise other companies’ production efforts.”

Additionally, it would be fairly easy for the OTT players to be able to meet the content requirements by acquiring European content, as well as commissioning content within Europe, or paying into national production funds. “The results will be increased prominence and visibility of European productions on on-demand catalogue services, as well as keeping more money in Europe rather than seeing it all flow out to international streaming companies,” said the bank.

The bank’s ‘bottom line’ is that the EU decision, if implemented, could be good news for Europe’s TV production giants, and in particular the likes of ITV Studios, TF1 and RTL in particular.

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