30% Quota – A Trouble-Making “Guardian” of EU Content

Zlatitsa Dimitrova, Consuelo Naranjo, Diandra Velica, Bo Pan, Juliane Henn, Özge Akman, Santiago Otalora, Alorila Murataj, Jiaqi Nie

The European Parliament and the Council of Europe have approved an update in the Audiovisual Media Services Directive (AVMSD) The revised AVMSD officially entered into force on 19th December 2018 and aims to guarantee a 30% share of European works on subscription video on demand (SVoD) platforms. The European Parliament declared: “In order to support the cultural diversity of the European audiovisual sector, MEPs ensured that 30% of content in the video-on-demand platforms’ catalogues should be European.” This change is expected to support cultural diversity and promote European production. It could help to fix the existing uneven relationship not only with the American content, but also within Europe itself. As a significant instrument to support European content against American superiority, the 30% quota along with the revised AVSMD will be implemented obligatorily by the member states before the end of 2020. The consequences of it have aroused pervasive debate.

Fighting Hollywood

An overview of Europe’s film industry (2014, Ivana Katsarova) showed that “at present, the EU film landscape is characterized by the strong presence of Hollywood productions. In 2013, they held a share of nearly 70% of the EU market, while European productions represented only 26%”.

The revision of the AVMSD aims to fight American content dominance. American and European audiovisual industries’ business models differ fundamentally. On the one hand, content investors in the U.S. prefer to invest in blockbusters with significant revenues. On the other hand, European moviemakers value to highlight avant-garde and independent productions to empower and represent its diversity.

The Verge, an online magazine, suggest that in 1920, multiple European countries began to impose screen quotas as well as subsidies for local films. Almost 100 years later, the success of these procedures in trying to prevent the expansion of external markets is debatable. According to Professor Karen Donders, a lecturer at the Department of Communication Sciences, Faculty of Social Sciences and Solvay Business School at VUB, this strategy has not been as successful as expected.

“In a lot of European countries, local production is possible only because of subsidies. There is no economic sustainability when we talk about domestic documentary, film and drama production. These are all very expensive genres to produce and difficult to sustain by smaller markets such as Denmark, Flanders, Switzerland, Ireland, etc. American content is still very popular. What we do see is that because of the explosion of screens and windows, there is an increasing need for content. That has been good for European content as the need for more options also means a bigger willingness, for example with broadcasters to buy content from other European markets”, Donders explains.

The AVMSD update very much plays into the SVoD providers hands: “I’ve never been very Hollywood-centric,” the Netflix chief executive Reed Hastings told the Financial Times in spring 2018. European content is “what our members want”, confirms Netflix Vice President Erik Barmack. The company wants to double its investments in Europe but still, this doesn’t seem to be enough to ensure 30% European content.

The new quota has aroused pervasive debates. Several concerns have been expressed over the question-could the 30% quota really change the picture of the film market in the Union and if so, how?

Бельгия4 fin

France, German, Spain, and Italy (hereafter the “Big Four” and “Big Five” when the UK is added) would be the biggest beneficiaries by filling the gap in demand of other low-productive member states.

The European audio-visual industry is extremely imbalanced, as France and Germany, Italy, and Spain are dominating the market. An overview of Europe’s film industry showed that more than 90 000 companies are involved in the sector, employing over 373 000 people, and reaping revenues of some € 60 billion in 2011. Within the EU, the ‘Big Five’, account for around 80% of releases, industry turnover, and persons employed”. After Brexit, the “Big Four” will constitute the majority of the industry, while non-big-four countries have much lower productivity.

It comes as no surprise that France, Spain, Germany, and Italy were amongst the majority that endorsed the 30% quota instead of 20% of the initial proposal. These countries would fill the quota and overshadow other member states with lower productivity. In other words, 30% quota would enhance the dominance of the ‘Big Four’ in the audiovisual market.

Additionally, with the EU media market slowly starting to show saturation effects, legislators should carefully watch over stable market domination patterns in the future and establish effective mechanisms to promote diverse European content.

The 30% quota will fail to foster European diversity without stipulating a concrete obligation of video on demand (VOD) players to contribute a share of annual turnovers directly into local film funding.

To analyze the success of European legislation, it is worth looking over the rim of one’s own teacup. Ivo Kummer, head of the film department at the Federal Office of Culture in Switzerland (BAK), commented that implementing the same quota in Switzerland should not be a big problem, but there is more: SVoD providers should contribute 4% of their annual turnover to national film funding, establishing them as the third pillar of public film subsidies. By this way, low-productive countries could gain more opportunities to develop their audiovisual industries instead of filling the 30% quota with ‘Big Four’ countries’ content.

The 30% quota may be left a room for creative measures, VOD providers may reduce the non-European content to meet up the expectations.

The last concern about the 30% quota is regarding what will happen when the online streamers won’t be able to reach the requirements since the revision does not provide an explicit standard of the 30% quota.

Tricks such as reducing non-European content on their catalogue could be played. If this were to be true, the quota could do more damage than good. It seems that partnerships and co-productions are no longer part of Netflix’s business model.

After the success of Netflix Original “Dark”, a German TV show which has a similar plot as the American series “Stranger Things,” the company made it clear that they will produce local content – but for international audiences.

Another serious option for ensuring near one-third European content could be also the acquisition of European film studios – a move that will provide a significant number of European titles to the company’s catalogue.

Specific national and regional quotas might be a way to tackle the “Big Five” dominance


Having increased their importance on national media markets significantly, private SVoD providers should be required to comply with the same obligations that some national public services broadcasters have to meet, claims UK culture secretary Jeremy Wright. Additionally, to establishing a national (ergo: European) quota, productions could also be obliged to meet regional (ergo: Italian, Greek, Swedish…) quota. These regional quotas could shine a light on the European diversity and help promote production by previously less productive countries.

In the end, we are still left with the question of whether the quota is going to promote European works to the expected level and help preserve cultural diversity. Europe needs to take into consideration more than just the supply side of its content. The new generation is replacing international values over their national ones and thus ensuring the diversity on the supply side will not automatically lead to the diversity on the demand side.

Further measures such as the promotion of distribution, co-productions within member states or even coming up with a European SVoD could contribute to achieving the purpose of fostering European diversity. EU content definitely has the potential to reach a wider audience.  Will the quota be able to promote that?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s