Sep 29, 2020

Netflix and labor unions clash over new production slots in France

One of the most important debates currently taking place in the European entertainment sector is also one of the most intractable.

The recently amended AVMSD (Audiovisual Media Services Directive) is the framework that coordinates new legislation for the audiovisual sector across the EU. Although this directive is not often talked about, the intensity of the lobbying surrounding it speaks volumes about its importance. One example is the recent controversy over the status of Netflix in France.

In response to changes in the way content is consumed, the revised AVMSD seeks to level the regulatory playing field for all broadcasters and video platforms, including subscription video-on-demand (SVOD) services such as Netflix and Amazon Prime . This framework covers a wide range of issues, from protecting minors to promoting cultural diversity.

One of the central provisions of the AVMSD is the extension of existing production quotas to SVOD platforms. It requires platforms to make at least 30% of their content European (and to give that content prominence), as traditional broadcasters already do. The guidelines in the directive are not legally binding, but merely a framework that each EU country must interpret individually under its own laws.

France plans to enact AVMSD into law on January 1, 2021. According to the new law, SVOD platforms, along with other broadcasters, will have to spend 25% of their sales in France on European productions, with a larger percentage (to be determined) spent specifically on French productions. Not surprisingly, this rule has met with resistance from the streaming industry.

Earlier this month, the consultancy Analysis Group, with the support of Netflix, published a study opposing this rule. Among other things, the study argued:

In conclusion, Analysis Group urged the government to waive the quota as a percentage of sales. Instead, it proposed that all broadcasters and streaming distributors contribute a certain amount equally to French and European productions each year.

The study drew the ire of French labor unions USPA (representing audiovisual production) and Animfrance (animation). Netflix, promoter of decline!" In a joint statement (in French) titled "Netflix, the driver of decline!", the unions refuted one by one the points made by the analysis group, arguing:

Last year, Frank Riester, then Minister of Culture, warned that platforms that did not comply with the law would be subject to sanctions, which could include total expulsion from the country. He warned that.

While this issue may seem parochial, it raises major questions about the role of government regulation and the future of our viewing habits, with implications throughout Europe and beyond. While the pandemic is helping Netflix, it is also wreaking havoc on film and television production around the world. Unions pointed out the irony of the streaming giant objecting to the new quotas despite a surge in membership.

(Top image: "I Lost My Body," an animated feature produced at Xylum and subsequently acquired by Netflix)