Netflix and Amazon will have to include Europe-made content

Netflix, Amazon and other video-on-demand services will have to ensure that at least 30 per cent of their catalogues are made of up Europe-made content, under new European Union rules agreed on Tuesday.

EU lawmakers voted to adopt the policy to modernise audiovisual media legislation in an age where people are watching more TV shows, movies and media clips online, on-demand and from their mobile devices.

The legislation, which could also require online platforms to help finance Europe-made films and television, still needs to be rubber-stamped by EU member states. Following that, countries will have roughly two years to incorporate the legislation into national laws.

Some of the largest platforms already offer a large amount of European content but will have to boost that offering to meet the new rules. Any new shows and films will have to be matched with European ones in order to maintain the 30 per cent quota level.

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Local content will also be required to be given good visibility and placement on the platforms, in accordance with the rules.

Representatives for Amazon and Netflix declined to comment.

Despite the requirements for the companies, the new EU rules could prove to be good for business. “We’ve seen in the case of music [and] the importance of offering local content,” said Paolo Pescatore, a London-based independent tech and media analyst. “Given the fragmentation of the European market, there is a demand.”

Expand internationally

It's also important for on-demand providers as the companies seek to expand internationally. Netflix, for instance, airs shows such as Marseille, a French political drama starring Gerard Depardieu, and an Italian crime series called Suburra.

Local-language programming resonates with European audiences and is often more popular with advertisers than imported shows, analysts have said. Those platforms “realised as they’ve gone global, they need to have good balance with global blockbuster hits but also serve local communities”, Mr Pescatore said.

Netflix is this year doubling its European programming budget to $1 billion (€860 million); Amazon will soon have at least a dozen original series from Europe, up from one in 2014.

The investment by the streaming platforms has, in turn, pushed broadcasters in Britain, France, Germany, and Italy to set aside rivalries to co-produce programmes or offer shows online.

Levies

Under the new EU rules, member states will also be allowed to require on-demand platforms to help finance the production of European content, for instance through levies paid into national funds, with the level of contributions based on the revenue the company collects in that country.

Some member states like France already implement a so-called culture tax, which is paid by movie theatres, broadcasters, and internet service providers in the country. On-demand providers who have subscribers in France but aren’t headquartered there already have to pay a 2 per cent streaming tax on revenue it makes in the country.