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Amazon.com, Inc. (AMZN) and Netflix Face European Content Quotas

Amazon.com Inc (NASDAQ:AMZN)

Amazon.com, Inc.  and Netflix, Inc.  will be required to produce local content in Europe – the European Commission is demanding it. Video-on-demand (VOD) services must produce at least 20 percent of the titles they provide to EU subscribers locally. Will they oblige?

Amazon.com, Inc. And Netflix Face Quotas in Europe

The commission released a revised proposal Wednesday. The likes of Netflix, Amazon and Apple Inc ‘s iTunes must invest in European creative content. In addition to investing in such content, officials request that the titles have “good visibility.”

Amazon.com Inc (NASDAQ:AMZN)

It doesn’t end there.

The proposal could allow other European governments, like France or Italy, to get it on the act. States could require Netflix and Amazon to actually invest their own money in European films and television series.

Another idea is to protect minors from viewing violent content. The group also wants new phrases and symbols. These would inform viewers what they can expect to view in the video content, like sex or drugs.

Europe’s proposals are part of an overall EU legislative barrage on obstacles to ecommerce. It was in December that the first set of rules were presented to favor the 28-nation bloc.

Does the move help? Amazon says not really. The retail giant said 98 percent of its website is open to EU users, whether it’s retail or content.

Netflix also believes it won’t help. An official from the tech titan says it’s already investing in European content.

“Our members around the world love European programming, that’s why our investment in European programming, including Netflix original titles created in Europe, is growing,” said Joris Evers, a spokesman at Netflix.

Others say it’s a crucial step the government is taking. The Society of Audiovisual Authors (SAA), trade body representing film and TV writers, said in a statement that it’s a step in the right direction to help local writers.

What if they do invest in European content, but it’s low-quality or a protest against being forced to? Gunther Oettinger, Commissioner for the Digital Economy and Society, posits it would hurt their business models. Simply put: “junk” content will deter viewers.

It’s unknown if the websites will fight these proposals.

Europe’s Amazon.com, Inc. Quota Not the Only One

Europe isn’t the only jurisdiction that requires content creators like Amazon and Netflix  to make more local film and TV series. Worldwide, to try to showcase their own country, officials are either urging major firms to produce more local content or investing in domestic firms to do it.

Last month, for instance, the Canadian government urged the CBC and the CRTC to focus more on local content.

Heritage Minister Mélanie Joly wants a new cultural strategy next year.

“Canada’s cultural and creative industries are important drivers of innovation and a vibrant part of our economy,” she said. “As we adjust to the realities of rapid technological advances and changing consumer behavior, I am launching consultations to better understand the challenges and opportunities brought on by this transformation.”

For years, the CRTC has given networks broadcast quotas. It used to have a 55-percent requirement for Canadian content on daytime local TV. This was cut last year by the Conservative government, but it could be raised once again.

The idea behind this is that U.S. content is far more popular than anything else. What do you prefer: “House of Cards” or “LetterKenny”?

Amazon, Netflix and Apple don’t have to meet Canadian content quite quotas yet. But how long will it be before Ottawa decides to mandate VOD services to product such content?

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