On Wednesday, the European Union proposed new rules that could force Netflix, and other streaming services, to give a chunk of their revenue to fund European films and TV shows.
Netflix’s European headquarters are in the Netherlands, which has served to insulate it from some laws in other EU countries.
But the European Commission indicated that these new rules could allow other member countries, like France, to seek money to finance their domestic TV and film industries, even if a streaming company was headquartered elsewhere, according to The Wall Street Journal. The amount a service like Netflix would have to pay would be based on its revenue in the particular country (France, for instance), in accordance with its local laws.
How much money are we talking about?
In France, which has the most robust government system for film and TV financing, the Journal says it could mean a whopping 15% to 26% of Netflix’s French revenue. This percentage would have to go to “the development of European cinematographic and audiovisual works,” according to The Hollywood Reporter. Italy, Spain, and Belgium also have similar systems, though not quite as onerous as France’s.
Netflix, it seems, is not happy with this proposed change, or with the quota that could mandate that streaming services show at least 20% European content (through Netflix already consists of 21% European content).
“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,” a Netflix spokesperson said. “We appreciate the Commission’s objective to have European production flourish, however the proposed measures won’t actually achieve that.”
Netflix says it has spent “millions of euros” on European production so far, and that its investment continues to grow. But even so, 15% to 26% is a hefty chunk of revenue.
Netflix has been doing well in France since its September 2014 launch, according to a recent survey by RBC Capital Markets.
16% of those surveyed subscribed to Netflix, up from just 7% in May, 2015. It is the second-largest streaming video service in that market — the top spot is taken by CanalPlay (18%). And 87% of those Netflix subscribers said they were either “extremely” or “very” satisfied with the service, compared to 66% in the US (though we should note these are early adopters of the service, so they might be predisposed to rate it higher).
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