Central and Eastern Europe (CEE) executives have highlighted the limitations of the Audiovisual Media Services Directive (AVMSD), suggesting it has caused local production costs to rise, inadvertently supported US streamers and failed to improve programming diversity in smaller markets.
Discussions over the future of the AVMSD have taken centre stage at events across Europe over recent months, as players across the continent’s TV and film industry have their say on the hugely influential EU directive, which is due to be reviewed next year.
The AVMSD, which has been transposed by numerous governments across Europe, enables countries to force US streamers to carry 30% of European works, with member states also able to implement their own financial obligations on streamers to invest in local content.
US president Donald Trump railed against EU regulations earlier this year, prompting a call for Europe’s industry to “unite” from France’s National Centre of Cinema (CNC) at Series Mania, but execs here at TV industry event NEM Dubrovnik have argued that the AVMSD’s needs revising.
Chris Marcich, chief executive of the Croatian Audiovisual Centre (HAVC), and president of the Association of European Film Agency Directors (EFAD), said the AVMSD had been “helpful” but added that there is “scope” for improvement, particularly around cultural diversity.
“There are loopholes in the directive, one of which is that the idea of cultural diversity which is supposed to be a concept that applies to all of Europe and all of the member states, in fact doesn’t. Let’s face it.”
European industry analyst Christian Grece outlined the disproportionate spend of streamers in the bigger markets, and Marcich admitted that smaller countries such as Croatia had seen “almost no benefit” from the directive in terms of investment.
Marcich praised Netflix for acquiring a limited amount of local programming and making it visible to subscribers, but highlighted that other major US players had “done nothing for us”, when referring to Croatia.
Vanda Rapti, exec vice-president of Viaplay Select and content distribution at Viaplay Group, also pointed out that streamers could meet quotas “by simply buying a lot of British content or French content”.
“It is less reflective of Europe’s diversity…improving that unfortunately, in practice, is something we still don’t see.”
Rapti added that quotas have also meant US streamers have had to become “more relevant, in a way” to European audiences, but suggested many would have invested in original content from the region, regardless of regulation.
Branko Čakarmiš, strategic adviser to CME-owned Pop TV, pushed back against the AVMSD’s quotas and said the industry’s future should be left to the abilities of creatives to entice viewership.
“Quotas in general are stupid things, especially for the people in the creative world,” he said. “The effect of the directive on the smaller and medium-sized markets in Central Europe has been zero.
“Businesses have to move where the audience is and there is a natural transition from broadcasting to streaming, but the directive is not helping in that direction.
“Actually, it’s hurting us because while we are pushing our big competitors to throw money into European works, that’s part of our identity [being lost].
“It’s also increasing the cost for us, because the Americans can always come in with better budgets for series and that then automatically increases the cost for local players. It’s stupid, quite honestly.”
Čakarmiš added that more thought should be given to the use of public money with regards to tax incentives to entice non-domestic productions.
“We are giving this incentive to American productions in our territories, for our production services, and that takes the best people from our markets to American products, which then come back on their platforms. It doesn’t make sense.”
Streamer opposition
While a review of the AVMSD is due next year, some US streamers have also begun pushing back against the directive.
Last August, Netflix filed an appeal in the Constitutional Court of Belgium, protesting a law increasing financial obligations up to 9.5% on streamers in the country’s French-speaking Wallonia-Brussels region.
Disney subsequently joined the case as an interested party in November, with the case taking on even greater significance following US president Donald Trump’s tariff war. Some see the case as being a challenge to the AVMSD, while the streamers are keen to trumpet their heavy investment in European content.
On Tuesday, Netflix chief exec Ted Sarandos appeared in Madrid alongside Spain’s president Pedro Sanchez to talk up a €1bn (£850m) investment in the country over the next four years, and Maria Valenzuela, the former Movistar Plus+ International and Sony exec, highlighted the effect of streamer investment on the broader industry in her home country.
“They create a lot of industry infrastructure, there is so much money invested in productions, and you get a spread of content that then gets reflected out to the world.”
Valenzuela, now a producer, added however that the inflow of productions to Spain over recent years had caused an inflationary effect, something that can hit local companies.
“I have been on the local platform side of the business and have seen that budgets had the problem of inflation… that inflation was from players coming into the territory to produce. And that meant we had a much harder job when it came to producing our content, so because of regulation you have a competitor on board that you were not planning on having before.”
This article was first published by Screen’s sister title Broadcast
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