How Weimer wants to force Netflix & Co. into millions of investments

German media policy is getting serious in the struggle with global tech giants. A draft bill for the “Media Services Investment Obligation Act” (MedienInvestVG) from the office of Minister of State for Culture Wolfram Weimer (independent), which heise online has seen and which is based on the political agreement of the black-red coalition from February, is intended to strengthen the German film industry in many facets.

The goal is a significant boost in growth for the location: according to the initiative, state funding will almost double from 133 million euros in the previous year to 250 million euros. Streaming services are also expected to pump hundreds of millions of euros into the market through the “platform solidarity surcharge”.

The initiative, known as the “Lex Netflix,” obliges all providers that generate significant revenue from video-on-demand (VoD) or television in Germany. Those who generate more than ten million euros per year will in the future have to reinvest eight percent of their net annual revenue in this country into European works.

This does not only concern Netflix, Amazon, or Disney+. National players such as RTL+, ProSiebenSat.1 with Joyn, and even the media libraries of public broadcasters are also in principle covered by the new regulation to avoid competitive distortions.

Strict quotas for “German character”

The draft sets high hurdles for crediting: A full 80 percent of the investment sum must flow into works with a “German cultural character.” This means it must be filmed in the original German language if the project does not already have German film funding. This is how Weimer wants to ensure that capital does not flow into arbitrary global mass-produced goods.

In addition, at least 60 percent of the funds must be invested in new original productions. Pure license purchases of old classics are not sufficient to meet the quota.

To protect the industry's medium-sized structure, the draft stipulates that at least 70 percent of the funds must go to independent producers. The legislator would thus intervene deeply in contract design: so-called total buyouts, where corporations acquire all rights forever, are to be limited by mandatory rights reversion after three to seven years. This is intended to enable producers to build up their rights catalogs – a core concern of the federal government's location strategy.

The twelve percent deal as a way out

However, the draft includes a loophole for the major US services: voluntary self-commitment. Those who are willing to invest twelve percent of their German revenue instead of the required eight percent can free themselves from the strictest legal framework. In an individual industry solution, the services can then negotiate more flexible conditions.

This could, for example, allow them to film in German studios despite the investment obligation in English. This is a compromise to combine international marketability and local investment.

The Filmförderungsanstalt (FFA) is to take over the control of the new regime. In the future, it will meticulously check whether the invested sums correspond to the actual revenues. Weimer sees the package as the basis for a new “boom in film and series production made in Germany”.

The draft must first pass the Federal Cabinet before it goes to the Bundestag and Bundesrat. Whether the streaming giants will accept the platform solidarity surcharge without lawsuits or pass on the additional costs to users through higher subscription prices remains the crucial question for the digital media market.

(wpl)