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France Says Netflix, Disney Must Plow 25% of Local Revenue Into Content

Helene Fouquet

(Bloomberg) -- France is finalizing a bill to force video-on-demand services from Netflix Inc., Amazon.com Inc., Apple Inc., Walt Disney Co. and others to invest at least 25% of their revenue derived in the country to fund local productions.

The French legislation falls under a European Union directive requiring such companies to ensure that at least 30% of their catalogs are comprised of European-made content. The French Culture Ministry, which shared a presentation made Tuesday in Paris with Bloomberg, didn’t comment on how France is planning to measure sales of the platforms in France.

California-based Netflix has already made several French original series, including “Marseille” and “Osmosis,” and announced plans to open a Paris office in January. The service exceeded 5 million subscribers in France, Chief Executive Officer Reed Hastings said last year.

Netflix now has 6.7 million subscribers in the country, Hastings said in an interview with French news magazine L’Express. The company plans to invest more than 100 million euros ($111.5 million) in French productions this year, he said.

Parliament will debate the bill beginning in March and it would be enacted after a late-summer final vote, including details of the services’ obligations, the ministry said.

The rule is part of France’s broader push for what it has dubbed its “cultural sovereignty in the digital era.” It aims at buoying national traditional media players in the face of the growing success of foreign entertainment platforms. France is also going to relax broadcasting and advertising rules that were designed in part to protect French cinema and keep people going to movie theaters.

Read More: France Considers Relaxing Its Archaic Broadcasting Rules

The National Center for Cinema and Animated Image, the governmental body overseeing French productions and funding, estimates Netflix and equivalent platforms accrued sales in France of about 500 million euros in 2018, which would make for an investment of about 125 million euros, French newspaper Les Echos reported on Tuesday.

In a speech in Paris on Tuesday, President Emmanuel Macron said his country “has a model, the French model, that is defending authors and authors’ rights.”

It runs counter to the “Anglo-Saxon model,” he said, which is designed to provide “content.”

(Updates with CEO comments in fourth paragraph.)

--With assistance from Lucas Shaw and Angelina Rascouet.

To contact the reporter on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Molly Schuetz, Nick Turner

For more articles like this, please visit us at bloomberg.com

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