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What level of financial contributions from platforms to creations?

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- The French reference at the heart of a European progress report on the transposition of the AVMS Directive at a conference organised by the CNC

What level of financial contributions from platforms to creations?
Jean-Baptiste Gourdin (Director General of Media and Cultural Industries at France's Ministry of Culture, at the conference (© Ministère de la Culture)

Organised by the CNC on the occasion of the French presidency of the Council of the European Union, the conference "Independence at the service of creation" took stock of the transposition and implementation of the European directive on audiovisual media services (AVMS) designed to regulate the activity of audiovisual media platforms. The main principles of the directive: a 30% broadcasting quota for European works and the possibility for destination countries to impose financial obligations in favour of audiovisual and cinematographic creation. However, out of the 27 countries of the European Union, 16 have not set up any financial obligations and for the 11 countries that have taken advantage of this possibility, the rates applied are very disparate, ranging from 1.5% of turnover to 20%-25% for the most advanced countries, France and Italy. Spectacular differences that make France a reference point, and Jean-Baptiste Gourdin (Director General of Media and Cultural Industries at the Ministry of Culture) explained the ins and outs. Here are some selected excerpts.

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“What was at stake in this transposition as seen from France? Not so much to force the global platforms, American in particular, to invest in local production because they did not wait for the AVMS directive to invest in European production and in French creation: they understood that it was in their economic interest, a demand from their subscribers. They were starting to do it, they were going to do it anyway. The challenge was first of all to anchor this investment strategy in the long term because you can never be sure that a very powerful player will start, in order to enter a market, by investing in local creation, and then decide to change its strategy and refocus its investments on works formatted for the global audience. More fundamentally, it was necessary to ensure the diversity of creation, linguistically with all the sub-quotas of French-language works, but also in terms of programme genres and budgets: that investments benefit not only audiovisual fiction and series, which concentrate all the appetites, but also cinema (i.e. films that are first released in theatres), animation, documentaries, etc. The second challenge was to protect the independence of our creation by directing a significant part of these investments towards independent production (with a demanding definition since it is not only a question of capital independence from the broadcaster, but of numerous conditions relating to the notion of delegated production, to criteria of the nature and extent of the exploitation rights): to ensure that our European producers are not gradually relegated to the rank of subcontractors, suppliers for platforms, and to enable them to continue to build up a heritage asset which is the sine qua non condition for them to continue to invest and take risks. Finally, the third issue is to defend our French and European conception of copyright with a notion of proportional remuneration, as opposed to the so-called ‘buy out’ model.”

“We have chosen a high level of funding for creation with high rates compared to what can be found in other European countries. But this choice is not based on a logic of taxing foreign players or on an intention to favour our national players over them, but on the very nature of these platforms and their specificities in terms of editorial positioning and economic model. Moreover, these 20%-25% rates should be put into perspective because they represent barely more than 1% of Netflix's €17 billion in global investment in creation, whereas French subscribers represent about 4% of Netflix subscribers worldwide and probably a little more in terms of contribution to their turnover. So it's not disproportionate or unjustifiable economically. It is true that this represents a windfall, but for all that we have not decided to lower the financial contributions of the historical players. We considered that the choice of a Malthusian logic, which would consist in operating a game of communicating vessels by lowering the obligations of the traditional players thanks to the increase in new funding, would be a rather deadly choice in the long term. Because we are convinced that it is essential that these so-called traditional media (free and pay TV) remain a pillar of our funding for reasons of cultural diversity (we need a plurality of funders to ensure the diversity of creation), free access to culture (because it is not France's choice to reserve works for subscribers to pay platforms) and cultural sovereignty (because it is undoubtedly not a very good choice to make all the funding of our creation depend on global platforms).”

“Tomorrow we will see new players arriving who will not necessarily come from the same territories and existing players diversifying their models and moving into other programme areas, as they have started to do.”

“For catalogue quotas, the arguments we faced, i.e. the risk of fragmentation, do not seem totally convincing to us, because in reality, catalogues are fragmented for many reasons relating to audience tastes, media chronology and the territoriality of rights. So the target country principle applied to catalogue quotas is not untenable. But I am convinced that quotas, the famous 30% rule, is almost a rearguard action. The real issue today is no longer the availability of European works, but their discoverability, their visibility. On this point, there are elements in the AVMS Directive whose full potential has not yet been exploited: the question of recommendation algorithms. This is extremely complicated, these are opaque mechanisms that are very difficult to audit and are protected by business secrecy, but this is the heart of the matter. And there is also the question of the promotion of services of general interest, because before the discoverability of works, there is the 'discoverability' of services. This is no longer a question of platforms, of publishers like Netflix or Amazon, but a question of interfaces: whether tomorrow we will still be able to access a diversity of services effectively and whether we will know which service we are accessing. Will we not have, above the publishers, aggregators that will crush the editorial brands? This is an even greater risk for our creation.”

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(Translated from French)

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