New EU rules could require Netflix to contribute to European content
On Wednesday, the European Commission published a proposal to renew European legislation for audiovisual media. Under the new rules, member states can oblige services such as Netflix to contribute to the development of European content.
This obligation may be imposed on on-demand services established in their own country or in another Member State. However, the latter is only allowed if that service provider focuses on the country that imposes the obligation, which may be apparent from the language in which the service is offered, advertising in the country and the offer of local content. The contribution may then be levied on the turnover achieved via the public in the target country. With this measure, the EU wants to ensure that sufficient investment is made in European works. Currently, on-demand services would invest only 1 percent of their revenues in their development.
In addition, on-demand services such as Netflix and iTunes must ensure that at least twenty percent of their catalog consists of European content. This requirement also applies to national broadcasters, which must reserve the same percentage of broadcasting time for EU content. However, research by the European Audiovisual Observatory shows that on-demand services such as Netflix already meet the new requirement, so that in the end little will change. For example, the percentage of EU content across all services is 27 percent.
The new rules should also better protect minors by requiring video platforms such as YouTube and Dailymotion to provide an opportunity to report harmful content. They should also facilitate age checks and parental controls. To achieve this, it is the intention that the services within an alliance draw up a code of conduct. This can be enforced by national supervisory authorities, for example by imposing a fine in the event of violation. The proposal for the revision of the current Audiovisual Media Services Directive should also protect citizens against ‘hate speech’.
The updated rules only apply in those last two areas to “platforms that organize and tag large amounts of videos,” such as YouTube, but not Netflix. The other rules of the proposed Directive do not apply to that category. According to the EU, the revised rules are necessary because the current rules only target linear services, such as traditional broadcasters. Because the boundaries between that group and non-linear services such as YouTube and Netflix are becoming increasingly blurred, the latter category must also be included under the regulations. This objective is achieved by the proposal, but only in a small number of areas. All innovations of the guideline are included in an overview.