Video-streaming providers like Netflix (NFLX) - Get Report , Apple (AAPL) - Get Report and Amazon (AMZN) - Get Report Prime all face new minimum European-content quotas under new legislative proposals unveiled in Brussels on today that has left the industry steaming mad.
The European Commission, the executive arm of the 28-country European Union, wants streaming services including Apple's iTunes and Amazon Prime to dedicate at least one-fifth of their offering to films and TV shows made in Europe.
While Netflix and others already are just above the mark, policymakers want mandatory quotas for all but the smallest providers, mainly to promote the European audiovisual industry.
"We feel we are providing a certain degree of security for the European industry for both conventional and new service providers, and at the same time we're giving businesses some room for maneuver to show non-European products," Günther Oettinger, the EU commissioner for the digital economy and society," told journalists in Brussels.
For traditional broadcasters like the U.K.'s BBC and Sky, a minimum 50% European-content requirement will continue to remain in force.
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The reform plan also gives EU governments the right to ask on-demand services in their country to contribute financially to European audiovisual works.
Wednesday's overhaul is part of a broader reform effort to update the EU's six-year-old audiovisual media services rules and forge a so-called Digital Single Market as foreseen by European Commission Vice-President Jean-Claude Juncker.
Other proposals put forward Wednesday call for an end to geo-blocking by online shopping services, better transparency of cross-border parcel delivery and stronger enforcement of consumers' rights in the digital world. All proposals still have to be vetted by EU governments and legislators.
Industry reaction to the content quotas has been largely negative.
"The EU online video market, while flourishing, is not yet mature, and the Commission should be careful not to hinder its growth," said James Waterworth, vice-president of the Computer Industry and Communications Industry Association Europe, in an emailed statement.
He added: "Rules requiring video on-demand providers to contribute to national funds in potentially 28 member states are undermining the Digital Single Market. Cultural quotes are outdated and unnecessary - video on-demand providers are already investing heavily into European content."
Asked during Wednesday's press conference how the Commission would be able to ensure that providers meet the 20% quota with new quality content instead of by re-cycling outdated offerings, Oettinger said that wasn't a concern.
"Old films are sometimes good, for example Charlie Chaplin is a timeless thing," he said. Besides, he said that if providers fill the 20% quota with sub-par programming then the viewers will simply not watch. "We trust them [providers] enough to fill this 20% with sensible stuff old and new."
Perhaps Netflix was on to something with Marseille, its new French-produced TV series starring Gerard Depardieu that launched globally earlier this month.
Netflix's shares were up 1.09% in morning trading. Amazon and Apple were also up at 0.37% and 1.07% respectively.