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May 20, 2016

EU may compel Netflix, Amazon to include 20% European content

On-demand services in France should ensure 60% European content.

By CBR Staff Writer

Online video streaming services such as Netflix and Amazon Prime may be asked to ensure that a fifth of the content on their catalogs is European, under the new rules which will be announced next week.

The European Commission is looking to reframe the broadcasting rules for the European Union in order to give a fillip to the circulation and funding of European films and television shows.

On-demand services providers will be required to make sure that at least a 20% of the content on their catalogues is from EU region and ensure their "prominence", according to a draft of the proposed Audiovisual Media Services Directive seen by Reuters.

Under the new proposals, video-sharing platforms such as YouTube will also be required to follow stricter age restrictions to avoid minors from watching harmful content.

A study conducted by the commission showed that European films already account for 27% of the content offered by the streaming services and occupy 21% share of Netflix content.

A member state will also have the choice to ask the streaming services based outside the country to support the production of European works, either by direct investment or contribution to national funds.

Under the existing rules, member states are only allowed to ask on-demand services based in their jurisdiction to fund European content.

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With the new proposals, the commission wants to prevent the companies to do "forum-shopping" that allow them to establish businesses in countries like Luxembourg and the Netherlands, where there are no tighter rules regarding their financial obligations, reported the publication.

While TV broadcasters spend nearly 20% of their income in on European works, on-demand providers invest only one percent.

The current rules do not specify quotes for the on-demand service providers but they are required to promote the production and accessibility of the European content.

However, more than of the region’s 28 members have already announced national quotas to boost the native content making.

France has already changed rules for on-demand services, asking them to ensure that 60% of their catalogs feature European content.

EU’s digital Commissioner Guenther Oettinger was quoted by Reuters as saying: "It is clear that the current film financing system is being challenged by quick changes in production, distribution and consumption, triggered by digital technologies."

The EU proposal has invited criticism from some quarters who want the market to decide the quality of the content.

Daniel Dalton, a member of the European Parliament for Britain’s ruling Conservative party, has criticized the proposals, saying that the "digital protectionism" that would not boost good film-making:

Dalton said: "The European Commission has yet again failed to understand how the digital world works. Subscription services like Netflix and Amazon should consider only one thing when placing content on their platforms: what their viewers want to watch."

James Waterworth, vice president of the CCIA trade association, whose members include Netflix and Amazon, said the proposals were obsolete.

Waterworth was quoted by The Telegraph as saying: "The idea of cultural quotas is outdated, doesn’t serve the consumer interest in the twenty-first century and won’t help internet innovators or content innovators."

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