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France implements EU directive, streaming services to invest 20–25% of revenue in local content

Streaming platforms that don’t reinvest their local revenues will not be allowed to license films that were released recently. 

We missed this earlier: Last month, France finalised the European Union-led Audiovisual Media Services Directive, requiring streaming services like Netflix and Amazon Prime Video to pump in 25% of their revenues from the country into local content. This makes France among the first to implement the directive which comes as countries with greater access to streaming, fear having local creators at a disadvantage from foreign content production giants. The concern is real — French media giants TF1 and M6 announced a merger in May, partly justifying the move as a way to fight against global giants like Netflix.

French culture minister Roselyne Bachelot told Le Monde that while French authorities would make sure the deal is sound from an antitrust perspective, “France needs strong actors to resist the dominance of global media and technology giants. The crisis [that led to the merger] exposed the weakness of the French media market, which does need to be consolidated.”

The local investment requirement is interestingly applied: Streaming services that want to license films that were released in theatres less than one year ago will have to invest 25% of their annual revenues; services that want to license films that released more than one year ago will have to invest at least 20%, and services that don’t commit to reinvesting their local revenues will only be allowed to license films that were released at least 3 years prior.

Why such a directive is unlikely in India

Hollywood dominates most international markets in the world, at least as far as films are concerned. However, India is part of a small number of countries — a list that includes Japan — where the domestic film and entertainment industry beats Hollywood by far. But European countries in particular, where subtitled and dubbed Hollywood films are widely available and popular, are exposed. Most European countries’ film industries make the majority of their money from the domestic market.

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In India, services like Netflix and Amazon Prime Video are losing subscribers to homegrown OTT players. Additionally, Indian viewers’ general preference for local content means that these companies’ strategies are already geared heavily towards the production of local content. As such, the biggest concern around streaming has not been a loss of revenues for traditional TV — which continues to be far more dominant — or revenue sharing, but that of content regulation.

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I cover the digital content ecosystem and telecom for MediaNama.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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