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EU to Impose a 30% European Content Quota on OTT Services
Subscription services such as Netflix will need to invest directly in European productions or pay into a group fund that promotes local works.

Over-the-top (OTT) subscription video services operating in Europe will likely soon need to insure that 30 percent of the content on their platforms is of European origin, and also contribute money to local audiovisual production.

A preliminary agreement between the European Parliament, European Council, and European Commission spells out a quota for subscription video on-demand (SVOD) services that requires 30 percent of the works in their libraries be European. And both VOD and SVOD services will be required to contribute to a fund for European audio and video production, either by funding projects directly or contributing to a group fund. While the contribution levels weren't defined, they'll be proportional to the amount of revenue each service makes in each of the member countries. 

These proposed rules on video aren't the only changes the three bodies are considering. They've also drafted new regulations on product placement in children's entertainment, strengthen rules on hate speech on video sharing sites, and loosened existing regulations on the amount of advertising broadcasters can run. 

“These new rules reflect digital progress and recognize that people now watch videos in different ways than before. They encourage innovative services and promote European films—but also protect children and tackle hate speech in a better way," says Andrus Ansip, European Commission vice president, quoted in Digital TV Europe.com.

In May 2016, the European Commission imposed a 20 percent European content quota on OTT services. The new proposal goes far beyond that. A 2015 study by the European Audiovisual Observatory said 21 percent of Netflix's library was European.

The current negotiations will end in June. After that, rules will be finalized, confirmed, and drafted into national law.

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