“It is an important moment for the French cultural exception”, estimates Roch-Olivier Maistre, the president of the Superior council of audio-visual (CSA), on the signature, Thursday, December 9, of agreements on the financing of the creation, with Netflix, Amazon Prime Video, Disney + and Apple TV +. These subscription video-on-demand services will have to devote 20% of their turnover in France to French or European series, films and programs, i.e. “250 to 300 million euros per year” from 2022.
“This is a crucial step, at a time when streaming is developing strongly. It was necessary to adapt the model to rebalance the obligations between the new entrants and the historical chains ”, continued the president of the CSA. From TF1 to France Télévisions, via Canal +, these groups provide the sector with around one billion euros per year in total.
American platforms will devote 16% of their turnover to audiovisual programs, or 200 to 240 million euros per year and 4% to cinema, or 50 to 60 million euros. This distribution was provided for by the decree on audiovisual media services (SMAD) adopted in June, application of the European directive of the same name, adopted in 2018 and transposed in France in 2020.
Netflix will be by far the biggest contributor, with a total contribution of around 200 million euros. “We are pleased with the signing of this agreement, which is part of the constructive and contributory approach that has always been ours”, reacted the company. Established in France since the end of 2014, Netflix says it is targeting 40 French productions per year, against 27 in 2021, 21 in 2020 and 20 between 2014 and 2019.
“Differences in legal interpretations”
The case of Amazon Prime Video was more thorny, because it posed a problem of valuing revenue: “This service posed a particular difficulty because it is integrated into a composite offer”, explained Mr. Maistre. Indeed, the video offer is included in the Prime package with the right to fast delivery and music, video games or books services. For an overall price of 49 euros per year or 5.99 euros per month. Many in the industry were therefore concerned that Amazon Prime bonds would be undervalued.
The American company first proposed a “Cost-based valuation method” of Prime Video, which would have generated “A contribution of 10 million euros per year”, reported the CSA. The regulator refused it and threatened to calculate the amount from the entire turnover of Prime, as authorized by the decree, which would have resulted in 60 million euros per year. The “Negotiation” finally made it possible to set a “Guaranteed minimum of 40 million euros per year or a rate of 30% of premium turnover, if this amount exceeds the minimum”, welcomed the CSA.
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