The Paris-based European Producers Club (EPC), which represents top independent film and TV drama producers across continental Europe, has issued a so-called Code of Fair Practices for streamers when commissioning content from indie producers.
The proposed rules — which the lobby group is hoping will provide a stimulus for an ongoing EU regulatory effort — cut to the core of efforts underway at various levels across Europe to change the rules of engagement with Netflix, Amazon Studios, Disney Plus and other Hollywood-based giants.
The EPC’s code comprises four basic principles covering crucial bones of contention such as the right for European indie producers to retain IP; to have access to streamer viewing data; and to become the exclusive conduit through which U.S. streamers can access European soft money.
These issues — see full text below — are at the heart of negotiations currently underway in several European countries, such as France, Italy, and Germany, where local legislators are still hammering out implementation of Europe’s Audiovisual Media Services Directive (AVMS) that forces foreign streaming services to invest a portion of their revenue into local productions, but leaves the modalities of this obligation to each individual country.
EPC president Gudny Hummelvoll, who heads Norway’s Hummelfilm, co-producer of “Occupied” which plays on Netflix, told Variety that the whole point of the code initiative was not to alienate the streamers. “For a lot of us, the streamers are some of our best clients. We want to cooperate with them, it gives us new opportunities,” she said. “But as independent producers, in order to survive we need to try work out a situation were we can actually keep our IPs, and also grow,” Hummelvoll added.
EPC board member Friedrich Radmann, who is managing director at German powerhouse Constantin Television, said that when European independent production companies negotiate with streamers, they raise many of the points stated in the EPC code. But “basically most of them fail, though someone may achieve one or two of these aspects,” he noted.
By raising these issues through a lobby group, the European Producers Club is “raising the voice of all producers in Europe,” Radman added. “I think that can have an effect; even in the business approach a streamer might have,” he said.
French producer Alexandra Lebret, who is the EPC’s managing director, noted that “there is an acceleration process” in which “the predominance of the streamers” is getting greater. Consequently, “there is also a predominance of their business model, which is “a model in which the independent producer is being transformed into a mere service producer under a work-for-hire doctrine,” she said.
The EPC is hoping that European Union regulators will adopt some or all of the proposed rules in the code and that it can provide a useful framework for discussion with national regulators when they implement the AVMS directive in countries where it has not been implemented yet.
Here are the proposed rules of engagement stated in the EPC’s Code of Fair Practices
1. Fair and proportionate remuneration and economic participation for producers
The principle of appropriate and proportionate remuneration, which is already provided for by the EU for authors, directors and other copyright or related rights owners, should be applied to independent producers as well.
Appropriate and proportionate remuneration for independent production companies includes reasonable producer fees, overhead fees in accordance with industry standards, and additional remuneration to be determined fairly and depending on viewing results. An adequate contingency reserve should also be included in the budget approved by the VOD Service.
2. Producers’ contribution and right to participate in future derivative works
When an independent production company has acquired, created or co-developed an IP, that underlying IP shall remain with the production company, including the rights to make sequels, prequels, remakes, and any other derivative audiovisual works based on the initial film or TV series.
As an example, the production company that has produced the first season of a TV series based on that IP should be involved as the production company in all subsequent seasons of that same series.
The exploitation rights granted to the VOD Service should be limited to the rights in the film or TV series that the VOD Service needs in connection with the primary exploitation of the work on its service, while allowing for the production company to authorize the reasonable, additional exploitation of the remaining or unused rights of the work, e.g. a theatrical release, where appropriate, and free TV exploitation after a reasonable period of exclusivity. VOD Services should only require the license of the rights they actually exploit or should acquire those additional rights for additional fees at a fair market rate.
All exploitation rights granted to a VOD Service should revert to the independent production company after a reasonable period of time.
3. Transparency and Accountability
In order for the independent production company to gain insight into the success of the works it has produced, the VOD services should provide the independent production company with regular and comprehensive information on the exploitation of the work, in particular with respect to (i) the number of overall views of the work on the VOD service, including detailed data for the key territories, as well as (ii) relevant and comprehensive information about any off-service exploitation and any revenues thus generated.
4. Public Benefits and Fiscal Incentives
National benefits or subsidies, regional support funding and/or tax incentives aimed at national and European works in the Member States should be accessed only through independent production companies. Such support should be recognized as part of the producer’s financial contribution and allow for the production company to maintain ownership and control of exploitation rights that are of a value that is truly comparable to that contribution.