You will be redirected back to your article in seconds

Netflix, Amazon Prime Face Content, Investment Quotas in Europe

E.U. announce sweeping new Euro TV regs, taking in VOD services

Netflix, Amazon Prime and other video-streaming sites in Europe look set to be subject to 20% European content quotas, plus European product-investment requirements in European Union countries that demand them, under proposed new regulations unveiled Wednesday.

The proposed quotas are part of a massive overhaul of E.U. broadcasting regulations that aims to create a level playing field in video-on-demand services across Europe. The proposals require the approval of European lawmakers to come into effect and would update the E.U.’s Audiovisual Media Services Directive.

Announced in Brussels by Andrus Ansip and Gunther H. Oettinger, the European Commission officials leading Europe’s drive for a more unified digital market, the proposals “oblige on-demand providers to ensure at least 20% share of European content in their catalogs,” according to a commission press statement. “The proposal also clarifies that member states are able to ask on-demand services available in their country to contribute financially to European works.”

Unchanged would be rules requiring TV broadcasters to dedicate at least half their viewing time to major types of European content.

Some will see the proposals as a victory for France. The French government and its pay-TV behemoth, the Vivendi-owned Canal Plus, have campaigned long and hard for new Over-the-Top services such as Netflix, which launched in France two years ago, to be subject to the same regulation as national VOD players. The new regulation would pave the way for that.

Ironically, however, the European Commission’s new proposals align with Netflix and Amazon Prime’s core strategy of investing in European content to drive up the number of their European subscribers.

Currently, four territories — France Spain, Croatia and the Francophone region of Belgium — already have investment quotas for VOD services. These are mostly around 2% of VOD operators’ total yearly turnover, but in France, which has the strictest demands, that figure rises to 26% for movie SVOD services.

So far, Netflix, which has been based out of the Netherlands since January 2014, has not been subject to E.U. quotas, only Dutch rules. But under the proposed E.U.-wide regulations, it could be subject to investment quotas in all the European countries it operates in.

Meanwhile, HBO has scheduled a streaming service launch in Spain by year’s end. It remains to be seen how many of the E.U.’s 28 member states will adopt investment quotas and how onerous they might prove.

Netflix’s services in the E.U. already boast a 21% share of E.U. films, according to a study by the European Audiovisual Observatory cited by the European Commission on Wednesday. To date, Netflix has ordered eight original series in Europe — four in Britain and one each in France, Italy, Germany and Spain. It also has two co-productions in Scandinavia and multiple global early acquisitions: ITV’s “Marcella” and Channel 4’s “Kiss Me First,” as examples. It is believed to have made a slew of licensing deals on European content at Cannes.

Netflix will raise its overall content budget from more than $5 billion in 2015 to more than $6 billion in 2016, and “the piece of that dedicated to original production is growing, and in absolute terms,” Netflix CEO Reed Hastings said at the premiere of “Marseille,” its first French original series whose full-financing by Netflix would alone account for a significant chunk of any investment quota imposed by France.

“Our members around the world love European programming. That’s why our investment in European programming, including Netflix original titles created in Europe, is growing,” said Joris Evers, Netflix head of communications in Europe, reacting to the European Commission’s proposals on Wednesday.

The VOD quotas are likely to be welcomed by much of Europe’s content industry. “Within the logic of a level playing field, we think it’s fair that OTTs that work in Europe should contribute to the growth of the European audiovisual industry by investing in new films and original TV dramas,” said Marco Chimenz, president of the European Producers Club.

Chimenz’s major concern with the new quotas is that they establish content requirements, “regardless of the fact of if it’s recent product or old library, [which] would prompt the OTTs to accumulate old local titles just to meet the quota.”

The proposed regulations would also relax advertising restrictions for European broadcasters. There would still be an overall limit of 20% of broadcasting time from 7 a.m. to 11 p.m., but broadcasters would be able to comply with this spread out over that time as a whole rather than by the hour.

To France’s chagrin, the new proposals do not take in social media or video-sharing platforms, such as YouTube, which may be the subject of “targeted policy measures” in the future.

“YouTube laughs, Netflix cries,” an article in the French financial daily Les Echos declared Wednesday. “Video platforms such as YouTube, in particular, capture a growing part of the ad cake, but escape any control in Brussels project on audiovisual material.”

Nick Vivarelli contributed to this report.

Correction: An earlier version of this article said Amazon had announced that it would launch the Prime service in France; in fact, the company has not announced such plans.

Popular on Variety

More Digital

  • United Talent Agency Reveals New Logo

    UTA Unveils New Logo, Corporate Image

    UTA raised the curtain Monday on a new corporate logo. The three-dimensional image is meant to emphasize the talent agency’s focus on uniting ideas, opportunities and talent. Building signage with the new logo will go up next month at UTA’s headquarters in Beverly Hills. “Our new identity captures the multiple facets and intersections of our [...]

  • Altice One set-top

    Amazon Prime Video Coming to Altice's Optimum, Suddenlink Cable Services

    Altice USA plans to launch Amazon Prime Video for Optimum and Suddenlink cable customers nationwide in the next few months, under a pact announced Monday. Altice is the third pay-TV operator in the U.S. with a distribution deal for Amazon Prime Video, after Comcast and Cox Communications. The cable operator is adding Prime Video to [...]

  • youtube leanback screenshot

    YouTube to Shut Down Leanback Web TV Interface on October 2

    YouTube is getting ready to retire its TV-optimized browser interface, also known as YouTube Leanback, on October 2, Variety has learned. The move comes as YouTube is putting a bigger emphasis on its native TV apps, but also represents a blow to users who directly connected their PCs to their TVs. YouTube started to inform [...]

  • Terminator: Dark Fate

    Paramount & Adobe Launch ‘Terminator: Dark Fate’ Trailer Remix Contest

    Adobe has teamed up with Paramount Pictures to launch a remix contest for the trailer of “Terminator: Dark Fate,” which is set to debut in theaters November 1. The winner of the contest will get $10,000 as well as a one-year Adobe Creative Cloud membership and a private screening of the movie for up to [...]

  • Gabrielle Carteris

    SAG-AFTRA Urges Gavin Newsom to Sign Law Punishing 'Deep Fake' Videos

    SAG-AFTRA National Executive Director David White is urging Gov. Gavin Newsom to sign legislation that institutes penalties for nonconsensual digital sexually explicit videos, also known as “deep fakes.” The legislation, Assembly Bill 602, targets companies and individuals who create and distribute the videos in California without the consent of the individual being depicted. “We urge Gov. [...]

  • Facebook Portal logo

    Facebook Is Launching a Portal TV Device: Here’s What We Know

    Facebook is getting ready to launch a TV streaming device in time for the holiday season, Variety has been able to confirm with multiple sources familiar with the company’s plans. The new streaming hardware will be part of the company’s Portal family of devices, featuring a camera, and combining video chatting with TV viewing and [...]

More From Our Brands

Access exclusive content