Netflix faces EU quota on content

The EU wants to force US web streaming giants such as Netflix and Amazon to devote 20 percent of their content in Europe to European movies and TV programmes, according to a draft proposal seen by AFP on Thursday.

The quota is part of overhaul of EU broadcasting rules to fight off the might of Hollywood that is expected be made public next week by the European Commission, the EU's executive arm.

In addition, the EU hopes to tax the US web streamers in order to help fund European movies and TV shows in an effort to promote the European entertainment industry.

Fighting the dominance of Hollywood is a major priority for France, which has for years subsidised its own national film industry through a special tax on privately-owned broadcasters that rely heavily on US-made content.

The "promotion of European works will be enhanced by ... putting on-demand players under the obligation to promote European content," said the proposal seen by AFP.

In a speech at the Cannes film festival on Saturday Andrus Ansip, the European Commission's Vice President on media issues, said it was time to update EU rules.

"This is also about creating a level playing field," he said, referring to the new online actors like Netflix.

The draft seen by AFP could still be changed before an official announcement expected on Wednesday.

- 'Pre-historic' -

"The European Commission has yet again failed to understand how the digital world works," said Daniel Dalton, a British MEP from the European Conservatives and Reformists group, warning against "digital protectionism".

"Subscription services like Netflix and Amazon should consider only one thing when placing content on their platforms: what their viewers want to watch," he added.

If the Commission goes forward and proposes a content quota and require subsidising local production, it would need the approval of EU ministers and the European Parliament.

Netflix has said it is against quotas or making contributions to film subsidies, instead putting a priority on developing its own content, including in Europe.

Earlier this month, it released its first major French language series "Marseille", largely seen as a sign of its commitment to bring ambitious, non English-speaking productions to Europe.

Film industry analyst Geoffrey MacNab told AFP that the European Commission's proposal was "pre-historic" and would ultimately fail to protect European cinema.

"Amazon and Netflix want to treat the world as a whole but the whole basis of film production is based on territoriality and that threatens the basis of European film-making," he said.

"What they want is very disruptive of the way films are made," he said.