Amazon, Netflix Face European Union Quota
As per proposals that will be announced in the coming week, online streaming services such as Amazon Prime and Netflix will be required to focus at least one fifth of their catalogs on European content. An overhaul is in the works for the broadcasting rules of the European Union by the European Commission for bringing in EU-wide minimum quotas in a move to increase and expand the circulation and funding of European television shows and movies. A draft came to light of the proposed Audiovisual Media Services Directive, which indicates that the on-demand works would have to include in their catalog at least 20% share of European works if they wish to ensure their ‘prominence’ in the region.
A study was undertaken for the Commission, which revealed that European films make up 27% of the total movies that are shown on streaming services and 21% of the movies that are shown on Netflix are European. It is also an option for the member states of the European Union to require streaming services, that are not based within that country but target their audience, to make a financial contribution to the production of European works such as by making payments into national funds or by making direct investments in them.
According to the current rules, member states only have the right to make on-demand services pay into European content if they are based in their jurisdiction. It is the aim of the commission to prevent forum-shopping in which companies set up their operations in countries such as Netherlands and Luxembourg where there are light financial obligations. The Commission has stated that about 20% of the revenue earned by TV broadcasters is invested in European content, but when it comes to on-demand services, their contribution just comes up to 1%. The digital commissioner of the EU, Guenther Oettinger said that it was apparent that the existing film financing system is being challenged by the changes in consumption, distribution and production, which has occurred due to digital technologies.
Some critics are of the opinion that the EU leaders should allow the market to provide good quality content. As a matter of fact, some of them were very vocal and said that the concept of ‘digital protectionism’ would not promote the concept of good film-making. It was stated that the European Commission is unable to understand the workings of the digital world. Only one thing should be considered by subscription services like Amazon and Netflix when they are placing content on their platforms, which is what their viewers want to see.
Under the current broadcasting rules, the on-demand services are required to promote the access and production of European works without any specific quotas. But, nearly half of the 28 members of the EU have introduced national quotas. Nearly half of the transmission time of the traditional broadcaster has to be dedicated to European works. For instance, in France, the on-demand services have already been forced to keep 60% of their catalog for European content.