Netflix
Thomas James

PARIS– Gaul’s film biz is boiling over Netflix’s expected launch, which is reportedly coming as soon as September.

Led by the SACD (the French organization that collects fees for content providers) and the ARP (the union of authors, directors and producers), local film guilds have joined forces to push the government to implement stricter rules with regards to investment quotas in French film and TV programs.

“Following the announcement of Netflix’s arrival in France  and the reactions it sparked, the SACD is calling for an overhaul of French and European laws,” stated the org.

The crux of the battle for French industry players is to get all VOD services on a level playing field regardless of where they’re headquartered. Netflix is indeed reportedly looking to operate from Luxembourg, as are Google and iTunes.

“The SACD has been asking for many years a European reform to have digital operators that are headquartered abroad and distribute their content in Gaul to be bond to the same obligations of financing and programming of French and European content,” stated the org on Friday.

In the current system, French VOD platform like FilmoTV and Canalplay Infinity, who have annual revenues exceeding 10 million Euros, must inject 15% of their revs in European films and 12% in French movies. Meanwhile, Google and iTunes nab the bulk of VOD sales in France but they don’t contribute a penny in local content and pay lower value-added taxes since they are based in Luxembourg.

In any case, Netflix could end up paying French taxes: The European Union members have recently voted to obligate service providers to pay sales tax based on point of consumption/payment, rather than point of distribution starting on Jan. 1.

The guilds are also emphasizing the necessity to maintain a fairly strict SVOD window — the one in which Netflix typically gets movies. That sequence is currently locked at 36 months after theatrical bow and is now being reviewed as part of the drafting of a new antipiracy law.

The position of the SACD on this subject remains ambivalent. The org says it “supports the modernisation of certain rules (…) relating to the distribution of films that it deems archaic and obsolete because they don’t take into account the evolution of audiences’ use and the necessity to develop the legal offer.” On the other hand, it claims to “refuse the total liberalization of the rules that would weaken the French policy of creation support.”

The system in place allows French TV channels who invest in films to have an exclusive access to broadcast films before they become available on VOD. And in essence, French guilds fear that more flexible rules would mostly benefit Netflix.

Even if Netlfix doesn’t rely on new films but rather on premium TV drama to attract consumers, the delayed access to fresh releases could impact the service’s stock of library titles.

Another challenge for Netflix will be to find a French broadband partner to distribute its content. The U.S. company initiated discussions with Orange, which counts over 10 million internet subscribers in France, last month; but insiders say Orange won’t be interested in signing a deal with Netflix if the service choose to be headquarted in Luxembourg.

 

 

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