Netflix, YouTube mandated to make fifth of content European under new EU audiovisual laws


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| 26 May 2016




On-demand and online video providers will be obliged to beef up their European content and may have to contribute financially to other Europeans’ works under new audiovisual rules proposed by the European Commission (EC).



Netflix origcontnetIn essence, the EC says it is acting to create a fairer environment for all players, promote European films, protect children and tackle hate speech better, and that the proposal also reflects a new approach to online platforms, addressing challenges in different areas. It notes that an updated Audiovisual Media Services Directive (AVMSD), delivered as part of the of its Digital Single Market strategy, will refresh the common rules which have governed audiovisual media, ensured cultural diversity and the free circulation of content in the EU for almost 30 years.

The EC observed that video consumers are increasingly consuming video content via video-sharing platforms and video-on-demand services, specifically citing YouTube and Dailymotion in the former category, and Netflix and MUBI in the latter. In a clear pointer to the online video firms, the EC added that it wanted to achieve a ‘better balance’ of the rules which today apply to traditional broadcasters, video-on-demand (VOD) providers and video-sharing platforms.

Under the proposals, the EC says that in a drive for more European creativity it wants TV broadcasters to continue to dedicate at least half of viewing time to European works and will oblige on-demand providers to ensure at least 20% share of European content in their catalogues. It notes that currently, European TV broadcasters invest around 20% of their revenues in original content and on-demand providers less than 1%. The proposal also clarifies that Member States are able to ask on-demand services available in their country to contribute financially to Europeans’ works. The level of this contribution has yet to be realised.

Aiming to provide more flexibility to TV broadcasters, the revised directive gives them licence as to when adverts can be shown. The overall limit of 20% of broadcasting time is maintained between 7am and 11pm, but instead of the current 12 minutes per hour, broadcasters will be able to choose more freely when to show ads throughout the day. The EC claims that its new proposals empower broadcasters and on-demand providers with greater flexibility to use product placement and sponsorship, while keeping viewers informed.

Ultimately, the EC expects its new measures to have a positive economic impact for media service providers and increase their capacity to invest in audiovisual content. This, it asserts, will be important for the competitiveness of the EU audiovisual industry.

“The way we watch TV or videos may have changed, but our values don't,” said EC Commissioner for the Digital Economy and Society, Günther Oettinger. “With these new rules, we will uphold media pluralism, the independence of audiovisual regulators and will make sure incitement to hatred will have no room on video-sharing platforms. We also want to ensure a level-playing field, responsible behaviour, trust and fairness in the online platforms environment, our today's communication sets out our vision for that.”

While the VOD and over-the-top (OTT) industry in general was taking stock of the decision, Netflix announced that in its opinion the updated ruling would fail in its ambition. Talking to trade bible Variety, Netflix’s European head of communications, Joris Evers, said: “We have committed hundreds of millions of Euros in European productions so far, an investment that continues to grow. 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.”

Jan Isenbart, president of egta, the European trade association for marketers of advertising solutions across multiple screens, commented: “The new proposal delivers some much needed flexibility to the rules on commercial communications, and the Commission should be applauded for doing so. However, there are still too many specific rules that only apply to linear broadcasters. We believe that more ambition could still ensure a more level playing field, enabling the sustainable production and financing of original, premium European content.”