NAB
Having sewn up the domestic market, growth for SVOD giants
like Netflix lies overseas. But the more they co-opt local market subscribers,
the more national governments want to exercise a measure of control.
https://amplify.nabshow.com/articles/governments-draw-battlelines-to-curb-the-us-domination-of-svod/
For some it’s a matter of cultural protectionism. France has
long been a fierce defender of media produced in the French language. For
others it’s a matter of financial and business fair play in much the same way
to how tech powerhouses like Facebook, Microsoft and Amazon have been
challenged for anti-competitive or tax-averse corporate behavior. Local
broadcasters are being outmuscled by international streamers with one arm tied
behind their back in the form of quotas for locally produced content, they
argue.
High time the playing field were levelled. In most
territories state legislation is being introduced to curb streamer power
although it also seems likely that Netflix et al will find amicable ways to
work with the new rules.
Variety has a comprehensive rundown of
various country rules.
In the European Union (EU), the most significant act is the
Audiovisual Media Services Directive, which is in various stages of
implementation. It involves investment obligations in most countries and, in
some, will set out terms of trade for streamers when they engage with European
producers, who welcome the work but object to the Hollywood work-for-hire
model.
“The new directive has made the playing field more level
between VOD services and television channels,” says Laura Sboarina, a senior
media analyst for regulatory research firm Cullen. She notes that Europe had
rules in place regarding investment quotas for broadcasters, and these are now
being extended to streamers.
At its core, the AVMS Directive states that streamers must
offer a 30% quota of European content to European subscribers. On top of that,
it allows EU countries to introduce nationally tailored legislation to make
streamers directly reinvest a percentage of their revenues in each European
country where they operate and also regulate their business models in
individual territories.
France — known for fiercely defending its culture and
industry — is where implementation of the AVMS Directive could have the
greatest impact.
The French government has just issued a decree that sets an
investment obligation oscillating between 20-25% of revenue from
streamers’ French operations.
Variety believes TV producers will be most affected by
the AVMS Directive in France. That’s because Netflix has owned global rights,
in perpetuity, on most hit French shows it has financed. Under AVMS rules, when
streaming giants work with France’s indie producers, the duration of their
exclusive rights could be limited to 36 months, which could discourage
streamers from pumping big money into high-end shows.
Isabelle Degeorges, head of Lupin producer Gaumont
Television, says, “Netflix gave Gaumont the resources to make this ambitious
series with the scope we had envisioned and to give it a strong French DNA.”
She underlines that “it would have been a different series if we had had
multiple partners involved.”
In addition to France’s tough rules, Italy is aiming to
“impose an investment quota of between 12.5 percent to 20 percent of the
streamers’ local revenues.” Italian producers are also “trying to block
streamers from being able to acquire rights to Italian IP and negotiating deals
directly with local actors, writers and directors.”
In Spain, said producer Álvaro Longoria, “Netflix produces
more content in the country than any obligation requires,” but Spanish
producers hope the country enacts the AVMSD law, to “make the landscape more
sustainable for linear broadcasters.”
She also makes the point that for streamers, many European
countries “are just not big enough; the algorithm would never choose to make a
movie in Polish or in Lithuanian.”
Under EU law it won’t have a choice.
In Australia, the emphasis is all about local content
spending. Australia’s commercial free-to-air broadcasters must give 55% of
their airtime between 6 a.m. and midnight daily to local content – while
international streamers have no current obligation to buy or produce Australian
programming.
Netflix counters that it already outspends Australia’s
commercial broadcasters in adult and kids drama by $84.1 million to $66 million
in the last financial year.
Academic Amanda Lotz also says regulation could backfire: It
could put off international companies, it could force the international
heavyweights to compete with local producers for local content and it could
spark an increase of production in Australia, but not necessarily of content
that is culturally Australian.
Other parts of Asia show interest in regulating foreign
streaming companies mostly for reasons of taxation, licensing or extracting
some other form of payment. In South Korea, where Netflix is the leading
platform and expects to invest close to $500 million in content this year,
local internet service providers are lobbying for streamers to pay “network
fees.”
The UK (part of Europe but not part of the EU after Brexit)
has signed up to the AVMS Directive but now faces a threat from the EU to
restrict import of UK-produced film and TV programming.
Under the directive, a majority of airtime must be given to
European content on terrestrial television and it must make up at least 30% of
the number of titles on VOD platforms.
According to an EU document seen by The Guardian, in
the “aftermath of Brexit” it is believed the inclusion of UK content in such
quotas has led to what has been described as a “disproportionate” amount of
British programming on European television.
A move to define UK content as something other than
European, leading to a loss of market share, would particularly hit British
drama, as the pre-sale of international rights to shows such as Downton Abbey
and The Crown has often been the basis on which they have been able to go into
production.
Adam Minns, the executive director of the Commercial
Broadcasters Association (COBA), said: “Losing access to a substantial part of
EU markets would be a serious blow for the UK TV sector, right across the value
chain from producers to broadcasters to creatives.”
A follow-up story suggests that Brussels
regulators may be out of step with TV viewers in the EU.
Chiara Lagana, an Italian journalist who writes about TV, is
shocked at the prospect of having less access to British content.
“The thought is truly unbearable,” she said. “I’ve been fond
of British TV series for years. The thought of losing them or not having access
to new ones makes me feel poorer. They are of huge quality, much better even in
comparison to the US.”
