Netflix and Amazon, two of the world’s leading SVOD service providers, are under immense pressure from the European Union to boost European film-making. On Wednesday in a new proposal to update Europe’s Audiovisual Media Services Directive, the European Commission outlined plans to get video-on-demand services, including Netflix and Amazon, to increase their investments in European films and TV shows.
Netflix doubts such a proposal will help
The EU wants to make it mandatory for on-demand providers to ensure that their catalogs consist of at least 20% European content. The agency stated that both Netflix and Apple’s iTunes are just above the proposed level as of now. IHS Technology claims that 28% of Amazon’s library is made up of European content.
A draft of this proposal was published in October, on which Netflix spoke against the quotas for content.
“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,” the streaming firm said at that time.
Netflix argued that creating more European content will not guarantee that people will watch it. This is because unlike traditional broadcasters, viewers using on-demand services select the shows and movies they would like to watch, and the recommendations Netflix makes are based on of those selections.
In a statement to USA Today, the streaming firm reaffirmed this stance, saying that its subscribers around the world love European programming, so it is already growing its investment in European programming, including on original titles created in Europe.
“We appreciate the Commission’s objective to have European production flourish, however the proposed measures won’t actually achieve that,” the streaming firm said.
SVOD providers may need to contribute funds too
The new proposal not only asks for the quota but also stipulates that EU members ask on-demand video service providers to contribute funds to European film and television productions. Whatever revenue a provider like Netflix would have earned in one of the EU’s member states would serve as the base for the amount.
Netflix reported that for the most recent quarter, its international streaming revenues were slightly over $651 million with over 34 million international subscribers. In January, the company expanded its international offerings and is present in most of Europe now.
Netflix has been developing programs in Europe, and most recently, it released a new French political drama titled Marseille. The company has other shows in production in Italy, Germany and Spain.
