IBC2018 Show Event Channel

Everything you need to know for the show and exhibitors.

Click here

Europe Imposes 30% Local Quota on OTT Providers

Europe’s plan to require OTT providers to include 30% local content in their programming will have little impact on the major international SVoD providers Netflix and Amazon. Their European strategy is already built around an expanding portfolio of local content partly to appease national sensibilities but also because it wins subscribers and boosts viewing levels. They have been aware quotas were coming for about three years and had time to prepare, even if they had not originally been expecting it to be as high as 30%.

A preliminary deal to impose the 30% quotas has been agreed by the European Union’s three relevant executive bodies, the European Parliament, European Council and the European Commission. A 20% rule had been mooted originally two years ago to create a level playing field with national broadcasters who tended to devote at least that proportion of their air time to local content. The figure has been increased to 30% partly it was clear the main protagonists, that is Netflix and Amazon, were already up to or above the lower mark in most countries.

Netflix has not commented directly but has been making a huge push to diversify its own content production, such that about half its upcoming originals are being made outside the US, with a growing focus on localized content in the language of each country. This may have to increase a little further but is not far out of line with other so called “local global” strategies being pursued by pan-European operators that are also content producers like Sky, Telefonica, Canal+, HBO Europe and Modern Times Group, as well as Amazon.

Of the two truly global big SVoD players Amazon, the smallest by both subscribers and revenues, is actually better placed than Netflix to meet the 30% quota. By some counts Amazon is already there in all its major European markets. Even in the UK where its proportion of European content is lowest because of greater popularity of English language US-made movies and series, it is still just over the 30% mark. Even Netflix is up to 20% or more in countries where its European content proportion is lowest, such as Poland.

There are however other elements in the proposed rules that might have some impact on the big SVoD players, such as a requirement for contributions towards the development of European audiovisual production, either as a direct investment in content or payments into national funds as a kind of tax. The level of contribution in each country would be proportional to the on-demand revenues in that country.

There are also some measures applicable to all cross-border service providers, such as strengthening the ‘country of origin’ principle to provide greater clarity over which state’s rules apply to given broadcast or VoD services. There are also plans to preserve integrity of broadcast signals with smart TVs in mind, bringing an obligation on service providers not to insert windows with content in the screen during the transmission of a third party’s programme.

The outcome was described as “well balanced, especially with regard to the scope of the directive, including video-sharing platforms and audiovisual content on social media, a more level playing field for all communication stakeholders, and protection of European works,” by the European Parliament’s negotiator Petra Kammerevert. The Parliament insisted that the new levels of protection for internet media services were still only comparable with those in place for traditional broadcast media. In fact some of them do look slightly more stringent now.

At the same time though the EU has actually proposed relaxing rules over advertising, partly because pressure for that has come from some of the indigenous broadcasters. Currently broadcasters are limited to 12 minutes per hour, but under the new rules this 20% quota would be averaged across the 12-hour period between 06.00 and 18.00. Broadcasters could then if they wish show more advertising during prime-time slots provided they compensated up by airing less at other times.

Negotiations will officially end in June 2018 when the Parliament, Council and Commission will meet to finalize and discuss remaining details. After confirmation by the Council and the European Parliament’s plenary vote, the new rules will then have to be transposed into national law. The European Parliament comprises directly elected representatives and has executive powers, the European Commission is the independent legislative arm and the European Council is the strategic arm comprising mostly heads of the individual member states.

Not surprisingly French media regulator the CSA was quick to welcome the proposed rules, and in particular the extension of regulation to video-sharing platforms as well as the obligation on SVoD providers to provide European content. Such rules may not be enacted in the UK because it is leaving the EU with many voting for Brexit precisely because they regarded such impositions as infringements on national sovereignty. 

Let us know what you think…

Log-in or Register for free to post comments…

You might also like...

Articles You May Have Missed – June 7, 2017

Broadcasters face a bewildering range of new technologies in an ever more competitive landscape. With new delivery platforms, OTT, streaming, cellular, VOD and others, broadcast professionals need to adopt the newest technology solutions to remain competitive. One key decision is…

BBC Brings Overseas Subscription Service to Malaysia

The BBC has taken one more small step on the long road to self-sufficiency by launching its BBC Player authenticated multi-genre SVOD service in Malaysia, the second country to receive the service. This is the latest move in the BBC’s…

EU Takes First Step Towards Digital Single Market with Online Content Portability

The European Union has passed portability rules allowing cross border access to online services between all member states, which would give consumers ubiquitous access to content such as movies and live sports streams that they have paid for, wherever they…

UK Broadcasters Ready to Take on Netflix

UK commercial broadcasters are preparing to join their French and German counterparts in taking on Netflix directly with ad-free SVoD services.

Ooyala Beefs Up Live Streaming And Multiscreen Linear TV

OTT platform vendor Ooyala has strengthened its package for delivering live streams and linear channels to connected devices. Called OoyalaLIVE, this package enables creation, management, delivery and monetization of live streamed events as well as linear TV channels on OTT…