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Local Product Quotas for Netflix, Amazon to Become Law, EU Official Says (EXCLUSIVE)

Quotas obligating Netflix, Amazon and other streaming services operating in the European Union to dedicate at least 30% of their on-demand catalogs to local content are set to become enshrined in law soon.

Roberto Viola, head of the European Commission department that regulates communications networks, content and technology, said the new rules, which will also demand visibility and prominence of European product on streamers, are on track to be approved in December.

“We just need the final vote, but it’s a mere formality,” he told Variety at the Venice Film Festival.

Netflix, Amazon and other streamers will be required to fund TV series and films produced in Europe by commissioning content, acquiring it or paying into national film funds through a small surcharge added to their subscription fee, something which is already happening in Germany. Netflix tried unsuccessfully to fight the German surcharge in court.

Viola said that, starting in December, the EU’s 28 member states would have 20 months to apply these new norms and that countries “could choose to raise the quota from the 30% minimum to 40%.” EU nations can each choose whether the 30% includes sub-quotas on original productions in their countries and whether they want to follow the German model of adding a small surcharge on streamer subscription fees to support the national production fund.

Viola noted that Netflix isn’t that far from having a 30% portion of European content on its platform already, but said that the new rules are clearly intended to force streamers to up their investments in Europe.

He added that, in October, the EU will publish figures showing the percentage of European works already present on the various streaming platforms. “It doesn’t have a legal value, but will help national regulators apply the rules,” he said.

Other European Union rules being developed are intended to force streamers and user-generated platforms like YouTube to pay increased copyright fees to film and TV directors and writers.

“It’s a paradox that, in the digital world, the platforms are getting the largest shares of the revenue stream and those who create the content and drive traffic get the smaller share,” he said. “There is what we call a value gap there which the Internet world has created. … Artists and creatives must be able to renegotiate their contracts.”

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