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Netflix faces European content mandate

Thu 19 May 2016

Video streaming giants Netflix and Amazon are confronting a mandate to change their content. The European Commission has drafted a new policy that states that video streaming companies must ensure 20% of content is European in origin.

The new policy, which should be announced next week, requires video on demand streaming companies to be held to the same content standards as regular national broadcasting services. That includes the 20% European content requirement, and also the obligation that regular broadcasters have in some countries, to contribute financially to the production of European content. It will also mean that streaming services must promote European content, to ‘ensure prominence’ of those shows.

Earlier this week in Cannes Andrus Ansip, EC vice-president for the digital single market told French paper Les Echos that European content quotas would help to create a level playing field for streaming video on demand and regular broadcasters. He also said that the new rules would respect the streaming companies’ preferences for providing different content in different territories and preventing customers from accessing content intended for another area. However, Ansip said that he is a supporter of portability, and believes that consumers from one area should be allowed to access content from another. Netflix has been under fire of late due to their policies on cross-national content streaming and VPN restrictions.

Rather than leveling the playing field, Netflix warned that the proposed quota system would inhibit competition. “Rigid numerical quotas risk suffocating the market for on-demand audiovisual media services” and that “(a)n obligation to carry content to meet a numerical quota may cause new players to struggle to achieve a sustainable business model.” It added, “The focus of European audiovisual media policy should be on incentivising the production of European content and not imposing quotas on broadcasters or other … providers who would struggle to meet the supply.”

This policy is unnecessary, according to James Waterworth, Vice President of the Computer and Communications Industry trade association (CCIA). “The idea of cultural quotas is outdated, doesn’t serve the consumer interest in the twenty-first century and won’t help internet innovators or content innovators,” he said.

Research analysts from Ampere found that a 20% content policy would have a limited effect on Netflix’s content offerings. They analyzed the content of Netflix’s EU services and found that the content provided was already over 20% of European origin, in whole or in part. If the policy includes more stringent restrictions regarding the main country of origin, Netflix’s two largest EU markets (Germany and the UK) would still be unaffected.


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