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Broadcasting & Cable
Broadcasting & Cable
Business
Jack Reid

Global Production Alliance Wants Regulation Forcing Netflix, Disney and Other U.S. Streaming Companies to Increase Local Content Investment

Society of the Snow, Current No. 1 Netflix Series.

A collection of 20 prominent film and TV trade organizations from Europe and other international locations have united to ask governments around the world to strengthen regulations ensuring that global streaming giants like Netflix and Disney Plus invest more resources in the production of local content. 

Hailing from Europe, Canada, Australia, Asia and Latin America, the 20 screen production organizations represent tens of thousands of companies.

A statement from the Canadian Media Producers Association, released Wednesday, lays out several guiding principles, the most important of which relates to growth opportunities and ownership of independent IP. (The statement also includes a list of all the orgs involved in the alliance.)

“Together we represent thousands of screen industry businesses and share a commitment to securing regulation from our respective governments that will ensure that our industry continues to both be sustainable and maintains our nation’s cultural sovereignty,” the joint statement reads.

The alliance also calls for governments to address how content is considered, the important of local stories, financial arrangements, up-skilling and approaches to market failure.

According to the statement, “all platforms that derive financial benefit from conducting business in the local market should financially contribute, proportionally, to the creation of new local content for the benefit of local audiences.”

Notably, the joint statement calls on governments to ensure a majority of streamer investments should be “through projects where IP is under the control of independent screen businesses,” so that local studios can remain continue to “participate in the success generated by their work.”

The principles outlined underscore the battle being waged overseas to change the operation of streamers as countries implements the EU’s Audiovisual Media Services Directive (AVMS), which forces foreign streaming services to invest a portion of their revenue into local productions.

France was the first country to set new rules as part of the AVMS, and since 2021, streaming services like Netflix have been required to invest between 20%-25% of their French revenues in local content.

Streaming regulation is likely to be among the biggest talking points in 2024, with residuals and compensation having occupied much of the conversation during the U.S. writer and actor strikes last year.

While producers and local studios want to ensure global-streamers must invest in local content, streaming companies including Amazon Prime Video, Disney Plus and Netflix consider their current strategies already beneficial to local markets.

Streamers argue they have opened up new investments in multiple territories, have spent millions on originals and acquisitions, and they do not need regulation. For example, Netflix’s acquisition of CBC’s Schitt’s Creek helped the Canadian comedy become a worldwide hit that swept the awards-season.

Netflix has already seen international success this year with titles including Spanish-language film Society of Snow, which topped Netflix’s international charts last week and landed on the Oscar’s shortlist. And with a forecasted increase in content spending to $17 billion in 2024 according to Netflix’s Q3 shareholder letter, the streamer will likely continue to churn out global titles.

When streamers first enter the International market, they typically trade content rights in exchange for a reduction in production fees. But with many streamers now prioritizing profitability over subscriber growth, producers have grown more concerned about the way streaming services operate in their countries.

“Independent screen businesses are facing tough new market dynamics brought about by the global audience shift to digital streaming platforms,” said Matthew Deaner, CEO of Screen Producers Australia, one of the signatories, in a statement.

“Our members have been telling us for some time that without intervention their financial viability and future existence cannot be taken for granted,” Deaner added. “Our creative IP is what the screen industry produces. Ownership of it is the ‘value-add’ to our industry from making screen stories. It’s important that the screen IP created by Australians, stays in the hands of Australian businesses and is not lost to mostly global streaming platforms.

“You only have to look at the global phenomenon of the Barbie movie, which is all based on successfully leveraging the IP in a created character, to see the huge value of IP ownership,” Deaner also said.

Added Reynolds Mastin, President and CEO of the Canadian Media Producers Association: “This is about ensuring local stories are discovered, developed and told on screen, and not lost to a massive, singular global content industry,” 

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