France to force Apple, Netflix, Disney, others to spend 25% of local revenue on content

Apple TV+ is home to the biggest directors and top stars
Apple TV+ is home to the biggest directors and top stars

France is finalizing a bill to force video-on-demand services from Apple, Netflix, Disney, Amazon and others to invest at least 25% of their revenue derived in the country to fund local productions.

Helene Fouquet for Bloomberg:

The French legislation falls under a European Union directive requiring such companies to ensure that at least 30% of their catalogs are comprised of European-made content. The French Culture Ministry, which shared a presentation made Tuesday in Paris with Bloomberg, didn’t comment on how France is planning to measure sales of the platforms in France.

Netflix now has 6.7 million subscribers in the country, [CEO Reed] Hastings said in an interview with French news magazine L’Express. The company plans to invest more than 100 million euros ($111.5 million) in French productions this year, he said.

Parliament will debate the bill beginning in March and it would be enacted after a late-summer final vote, including details of the services’ obligations, the ministry said.

MacDailyNews Take: The requirement is part of a a ruling by the European Parliament’s Committee on Culture and Education regarding rules on audiovisual media services:

In order to support the cultural diversity of the European audiovisual sector, MEPs ensured that 30% of content should be European, also in the video-on-demand platforms’ catalogues.

Video-on-demand platforms are also asked to contribute to the development of European audiovisual productions, either through a direct investment in content or a contribution to national funds. The level of contribution in each country should be proportional to their on-demand revenues in that country (member states where they are established or member states where they target the audience wholly or mostly).

The EU penalty on streamers for failing to meet the quota by the end of 2020 is unknown.

More info here.

8 Comments

  1. 28 countries in the EU could ask for 25% local content as well. How would that even work? Would each country just add their content to the inventory available in each country?

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  2. 25% of revenue is excessive. That could take all the profits.
    No idea of that would work out. If Netflix had 7M subscribers at $10 a piece then that is $70M a month or $840M a year. I could see providers pulling out of the region since there would be no profit on it.

  3. I would hope they mean 25% of streaming revenue. Regardless, based on revenue, not expense? That’s insane. Unless they mean net revenues, which I doubt because accountant know how to make those go to zero.

    If your gross margin on streaming is 30%, you’re only allowed to make 5% while the State gets 5x what you do? And if you have less than 25% margin, you are giving away content not just for free, but at a loss and paying France for the privilege?

    But even on the expense side, let’s not forget that expense in film production is all financial fakery. Virtually every major Hollywood blockbuster is a loss on paper to avoid having to pay various parties a percentage of net profits.

    And even if you can produce the content in-country, there is no guarantee that’s going to be successful or even what people want to pay to see. You can see a version of this law trying to force a percentage of content, but the companies responding by making a bunch of low-budget puppet shows etc. that nobody watches just to stuff the catalog.

    I get the idea – smaller countries don’t want a cultural hegemony sweeping over them with nothing reflecting their own country/culture/identity. And we have minimum percentage deals in the US on all sorts of things (% North American parts for favorable tariff treatment etc.). But this sounds like nobody really thought this out very seriously. Noble intent, horrid execution not just to the Big Bad Companies, but the people who want the streaming in the first place.

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