European customers of video streaming services could end up paying a higher subscription, if a proposal from the European Commission is adopted. According to a draft of the Audiovisual Media Services Directive, expected to be revealed next week, member states within the European Union could impose a "Netflix Tax" on services operating within the country, with funds received from the levy intended to help finance local TV show and movie productions.
The draft acquired by Politico
would also mandate that on-demand video streaming services would also have to include European productions as 20 percent of their content catalog offered to EU viewers. An EU spokesperson advised to Ars Technica
that the proposal "will notably strengthen the promotion of European works obligations for on-demand services," adding that, while TV broadcasters invest approximately 20 percent of their turnover into EU-derived content, this figure drops to less than one percent for video streaming services.
This is not the first time streaming media services would be hit by government demands for extra tax payments. Last year, Chicago
indicated it wanted to apply a nine-percent tax to streaming services, made up from an extension of the city's amusement tax usually applied to concerts , as well as a personal property lease transaction tax. Unlike the EU proposal, it doesn't appear the intended tax would be reinvested into more content, but would instead be used for other city purposes.
While the proposals have been driven forward by the French government, they appear not to go as far as France wanted. Apparently, there was an attempt to try and remove existing country-of-origin rules on content, which would force businesses to comply with laws in all 28 EU member states, no matter where their headquarters is located, instead of the current rules that needed compliance only with the laws of wherever they are based.
The same draft also covered elements that applied typically only to traditional broadcasters rather than streamers. These include restrictions to the advertising of unhealthy food products and alcohol during times children would be watching, and a change in advertising caps to a new daily limit.