Streaming services, including Netflix, Amazon and Disney Plus, will soon have to invest between 20%-25% of their French revenues in French content under a new decree that was just unveiled by the French government following an 18-month process.
The French decree is a stepping stone in the implementation of the Audiovisual Media Services Directive (AVMS), a legislation put forth by the European Commission to place streaming giants on an even playing field with existing players across Europe. France is the first country to have set new rules and regulations as part of the AVMS and other countries within the E.U. are expected to follow course.
Published in the Journal Officiel of the French government, the decree says streamers must dedicate 25% of their annual revenue in France in order to access films 12 months after their theatrical release or under, instead of the current 36-month window. Services that choose to invest 20% of their French revenues will have access to movies that are 12 months or older. Netflix has said it’s aiming to invest 20% rather than 25% and is looking to obtain a 12-month window.
Specific details on the windowing have been discussed separately for months among French industry professionals, TV channels and streaming services who have until Thursday (July 1) to come to an agreement. So far, talks have stalled because of conflicting interests from different parties; the French government has suggested it will step in and issue new windowing rules if an agreement between professionals can’t be reached.
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In parallel, French industry orgs, streamers and TV groups must also come to a final agreement and sign a convention with the French broadcasting authorities CSA to set these new investment obligations in stone. Under the decree, streamers will have to dedicate 80% of the 20% invested in French content to audiovisual works, such as series, TV movies and documentaries, while the remaining 20% — or 4% of streamers’ total turnover in France — will be invested in movies that will be theatrically released.
According to Netflix’s projections for its 2023 annual turnover in France, that 4% would come up to €40 million euros ($47.5 million), €30 million of which would go towards independent productions and the remaining 10% towards dependent production.
Netflix is aiming to launch these movies 12 months after their release in French cinemas and have 12 months of exclusivity on their platform. For independent production, there wouldn’t be any limit on the duration of Netflix’s rights.
But the streaming company’s projected investment is insufficient for France’s film bodies. “In France, free-to-air channels like M6 or TF1, which are not at all specialised in films and series, are investing 3.2% in French cinema and they are positioned at 22 months, so why should Netflix get a 12-month window with a mere 4% investment?” said a producer.
A diversity clause is also being discussed to have streamers invest in a certain number of films with different types of budgets. Netflix, meanwhile, is looking to finance between 15 to 20 films per year, rather than spread its wealth across too many titles.
The biggest impact of the decree will be seen on audiovisual content, allowing local producers to get a much bigger piece of the pie. Up until now, Netflix has owned global rights on hit shows it financed – for instance “Lupin” — leaving producers without the possibility of getting any upside on series’s international success.
Going forward, two-third of streamers’ investment in audiovisual content will go towards independent productions on which the duration of their exclusive rights will be limited to 36 months.
Isabelle Degeorges, the head of Gaumont Television France who produced “Lupin,” says Netflix fully financed the Omar Sy series and owns global rights to it, as with every other show the French studio did with the platform. The only exception is “Narcos” on which Gaumont was able to get back linear rights after four years, points out Degeorges.
The French exec says Gaumont has benefited from its long-term partnership with Netflix, mostly in terms of international recognition as these shows have become massive hits around the world. Speaking of “Lupin,” Degeorges says, “Netflix gave Gaumont the resources to make the ambitious series with the scope we had envisioned and give it a strong French DNA; it would have been a different series if we had had multiple partners involved.”