EU pressures Netflix, Amazon to invest in European programming
The European Union wants to increase Europe's filmmaking, and it's going after streaming services like Netflix and Amazon to do it.
In a new proposal published Wednesday updating Europe's Audiovisual Media Services Directive, the European Commission outlined plans to get Netflix, Amazon and other video on-demand services to increase their investment in European films and TV shows.
As part of the proposition, the EU is looking to require "on-demand providers to ensure at least 20% share of European content in their catalogs."
According to the EU, both Netflix and Apple's iTunes currently are just above the proposed level. European content makes up 28% of Amazon's library, according to IHS Technology.
In comments on a draft of the proposal published in October, Netflix came out against mandated quotas for content, saying that it would be "potentially detrimental to the sustainability of existing and new business models and personalization of services that allow European consumers to access a wide variety of European and international content."
Creating more European content, Netflix argues, doesn't guarantee that people would watch it as unlike traditional broadcasters, viewers using on-demand services select the shows and films they want to watch and Netflix's recommendations are based off of those selections.
In a statement provided to USA TODAY, the company reaffirmed that stance. "Our members around the world love European programming, that’s why our investment in European programming, including Netflix original titles created in Europe, is growing. We appreciate the Commission's objective to have European production flourish, however the proposed measures won't actually achieve that."
Beyond the quota, the new proposal stipulates that EU members can ask those providing on-demand services to contribute funds to European film and television productions.
The funds would be based off of revenues a provider like Netflix would have earned in one of the EU's Member States. In its most recent quarter, Netflix's international streaming revenues were slightly over $651 million with more than 34 million international subscribers. The popular streaming service expanded its international offerings in January and is now available across most of Europe.
Netflix has begun developing programs in Europe, most recently releasing a new French political drama, Marseille, starring Gerard Depardieu earlier this month. The company has other shows in production in Spain, Germany and Italy. A new series, The Crown, about Queen Elizabeth II, premieres in November and was filmed in the United Kingdom.
Amazon currently only offers its Prime Instant Video service to customers in Germany, Austria and Britain and would therefore, at least currently, be less affected by any potential new legislation. The company is planning to expand in Europe and earlier this month said it plans to bring its streaming service to France.
"I want online platforms and the audiovisual and creative sectors to be powerhouses in the digital economy, not weigh them down with unnecessary rules," said Andrus Ansip, vice president of EU's Digital Single Market, in a statement announcing the new rules. "They need the certainty of a modern and fair legal environment: that is what we are providing today."
Follow Eli Blumenthal on Twitter @eliblumenthal