The rise of Netflix, Amazon and others has been welcomed by consumers and industry constituents alike, but governments around the world are increasingly in favour of regulating US streamers to safeguard their domestic TV ecosystems.

Netflix filmed thriller Clickbait in Australia

In July, France became the first country in the European Union (EU) to introduce new regulations requiring streamers operating in the territory to allocate a specified proportion of their revenues to content produced there.

The move, which will require Netflix, Amazon, Disney+ and others to invest 20-25% of their French income in local productions, comes as countries around the globe look to legislate against a perceived growing dominance of US players.

France may be the first within the EU to implement such rules, but others will likely follow suit – each able to choose their own interpretation of the European Commission (EC)’s 2018 Audiovisual Media Services Directive (AVMSD).

The AVMSD was designed to level the playing field for public service broadcasters (PSBs) struggling to compete in an era of global streaming, ensure domestic producers get a fair share of commissions, and safeguard a degree of on-screen cultural diversity. At the heart of the decree is the stipulation for overseas VoD services to offer a minimum of 30% homegrown product to subscribers in each market. The edict also gives governments leeway to set additional rules in terms of investment in local production, as France has chosen to do.

Furthermore, the country requires 85% of each streamer’s 20-25% spend to be on French-language programming – two-thirds of which needs to be with indie producers that regain rights to their shows after 36 months. This means, for example, that Gaumont will get back its popular Netflix series Lupin for licensing in three years’ time. In Europe in particular, the ‘work for hire’ production model propagated by US players doesn’t always find favour.

While EU states were supposed to have put versions of these measures in place a year ago, only Denmark, Hungary, the Netherlands, and Sweden met the deadline, prompting the EC to up the pressure on its other constituents – many of which continue to grapple with revisions to outdated existing statute.

Poland passed a new broadcasting act into law in August, becoming the latest to get its AVMSD house in order, but it didn’t go as far as France, opting to leave out the production investment requirement. Major territories including Germany, Italy and Spain are at various stages of enshrining the directive and have yet to finalise their plans, while the UK – despite having left the EU at the end of January last year – adopted AVMSD principles beforehand and remains intent on levelling “the regulatory playing field between mainstream VoD services and traditional broadcasters.”

The rights to Netflix’s Lupin will eventually return to producer Gaumont under new rules

“Now that the UK has left the EU, there is an opportunity to create regulation suited to UK viewers that goes beyond the minimum standards as set out in EU regulation under the revised AVMSD,” states the government. It is currently consulting on plans that will, however, likely focus on ensuring the national PSBs retain prominence on UK screens and that streamers are subject to similar content standards, rather than imposing production quotas.

Given the specific challenge US streamers pose to the position of English-language broadcasters, it’s no surprise Australia and Canada are the other two main territories wrangling over the paradox of welcome inward investment weighed against a potential long-term outflow of programme rights, eyeballs, cultural diversity and talent.

Australian film and TV makers have called on the federal government to require international SVoD services and local streamer Stan to spend a minimum of 20% of their locally sourced revenues on commissioning new homegrown content. Such a levy would generate hundreds of millions of dollars in annual spending and 10,000 jobs, according to trade association Screen Producers Australia (SPA).

Again, the government continues to consult on the matter as part of reforms to existing legislation, with the SPA’s submission also highlighting the need for streamers to work with Indigenous-led businesses on projects with a genuine Indigenous voice.

Netflix has hit back, arguing it already outspends Australia’s commercial broadcasters in drama with originals like Clickbait, The White Rabbit Project, Tidelands and others, while Amazon warned that prescribing the number of hours of Australian programming on its service would reduce the non-Australian content selection or lead to the “inclusion of low-quality or low-viewership content.”

In Canada, meanwhile, a controversial bill designed to give the Canadian Radio-television & Telecommunications Commission power over streamers was thrown out of parliament over the summer as amendments to include services like YouTube, Facebook and TikTok were perceived as threatening freedom of speech. The result of the country’s recent election will determine whether ongoing calls for greater scrutiny of international VoD providers makes it back on the statute book any time soon.

Margrethe Vestager, executive VP, European Commission
We want a level playing field for all media players and to better protect children and consumers accessing audiovisual content. We also want to ensure more diversity on video-on-demand platforms and to create a fairer landscape. The AVMSD merits all our collective effort. It is an important achievement.

Damien Porte, partner,global distribution and operations, Can’t Stop Media
In a market potentially seeing major consolidation among historic broadcasters – a trend mechanically reducing the number of opportunities and pushing commissioning budgets on a downward slope – it is very important to see new entrants committing to invest in original ideas. This new regulation is very promising for independent content creators like us.

Pascal Breton, founder and group chairman, Federation Entertainment
There will be an American model, which will give all the powers and the rights to the streamers and the studios, and the European model, which gives part of content ownership to creators and producers. What the French government is proposing is a good example for the rest of Europe, and other countries should follow France’s path. You can’t build a strong international studio without funding and rights.

Samuel Kissous, president, Pernel Media
Current regulations for the TV industry date back to the 1980s, pre-dating streamers. This means they are obsolete in today’s climate, particularly as we are going towards a model where streamers are considered to be like local broadcasters and local broadcasters are becoming more like streamers. The whole industry has been overhauled and we had been expecting a major shake-up of the regulations in France to reflect the current market.

Oliver Dowden, former UK secretary of state for Digital, Culture, Media and Sport
Technology has transformed broadcasting but the rules protecting viewers and helping our traditional channels compete are from an analogue age. The time has come to look at how we can unleash the potential of our PSBs while also ensuring viewers and listeners consuming content on new formats are served by a fair and well-functioning system.

Matt Deaner, CEO, Screen Producers Australia
Streamers are now an entrenched part of the Australian entertainment and cultural landscape, deriving huge financial gain from operating here. Now is the time to be taking steps to ensure they make an appropriate contribution back to local audiences. Incorporating streamers into the regulatory mix and levelling the regulatory playing field with the free-to-air networks will be crucial to unlocking the growth potential of our industry.

Troy Reeb, executive VP of broadcast networks, Corus Entertainment
We believe we are well equipped to compete with companies even as big as Netflix and Amazon. But we have to do it with a level playing field. We can’t do it in a way that we are so heavily regulated while our primary competitors – and make no mistake, Netflix is the biggest TV network in Canada every night in primetime – face no regulatory burden at all.

Stéphane Cardin, director of public policy for Canada, Netflix
Imposing the regulatory obligations of licensed Canadian broadcasters on online services would not be appropriate. Services like Netflix do not perform the same roles as traditional broadcasters, nor do we have the same content strategy. Overly burdensome regulation could result in reduced choice for Canadians. As new global services are launched, some may decide not to enter the Canadian market, while others may avoid regulation by providing content through a local intermediary instead of setting up here.