‘The Netflix law won’t push streaming platforms to raise prices’

© Keystone / Alessandro Della Valle

A proposal to oblige online viewing services to invest in domestic production will ultimately benefit Swiss cinema, says the secretary-general of the consumers’ federation in western Switzerland.  

This content was published on May 4, 2022 - 09:00

More and more viewers are choosing to stream films and television series online. But Netflix, Disney+, Amazon and others provide little space for local production. 

An amendment to the cinema law, which comes before voters on May 15, would oblige streaming services to invest 4% of their local revenue in Swiss productions. In addition, at least 30% of their programming will have to consist of European productions. 

Similar measures are already in place in neighbouring countries. France, notably, has introduced an obligation to re-invest 26% of revenue into domestic production – in Italy, it’s 20%. 

To learn more about what’s at stake in the vote on the new cinema law, see our explainer:  

But the law has been forced to a vote by the youth factions of the right-wing parties, who argue that audio-visual production already receives adequate subsidies. They believe that the proposal ignores consumers’ needs.  

Sophie Michaud Gigon, who heads the consumers federation and is a parliamentarian with the Social Democrats, says that, if anything, the amendment could give Swiss productions more international visibility. If the new cinema law is accepted on May 15, will the streaming platforms pass the costs on to consumers – as opponents of the law claim they will? 

Sophie Michaud Gigon: No, there is no correlation between the introduction of obligations to invest and the prices the platforms set. In countries like France, Spain and Italy, where such measures have already been introduced, subscription fees have remained more affordable than in Switzerland. The streaming services set their fees according to the population’s purchasing power. That is why the Swiss already pay the highest subscription fees in the world.  

Netflix raised its prices at the beginning of the year, incidentally. The platform can do that whether or not there is an obligation to invest in local production. The real problem we have to address is the uniquely high prices that people in Switzerland have to pay for all of these services. This has nothing to do with the cinema law. 

If they don’t raise prices, isn’t there a risk that the streaming giants will limit their offer in Switzerland so that they don’t have to re-invest as much? 

The platforms are free to choose what they show in each country. The different services are in a fierce competition to attract an audience. Netflix won’t limit its offer, because that would mean giving up parts of the market to Apple or Amazon. From a business point of view, it would be nonsensical.  

What’s more, several European countries have already introduced either an obligation to re-invest between 1% and 26% [in France] or a direct tax. By demanding a re-investment rate of 4%, Switzerland is being rather conservative. There is no reason why this measure would have an influence on what the providers offer. The platforms themselves are not part of the campaign against the new law. They are ready to apply it – as they already do in many other countries. 

The young members of the right-wing parties who initiated the referendum believe that people want to dictate to them what they should watch. Do you understand their fears? 

Are they afraid they won’t be able to watch Heidi on their streaming platform? There is no risk of that happening, because young people would simply opt for another service.  

The aim of the law is not to force Netflix to show only Swiss films. The platforms themselves will continue to select the products they want to offer to attract audiences. At the moment they earn considerable profits in Switzerland, all of which are transferred abroad. Thanks to the new law, a small part of their earnings would be invested here. This mechanism already exists for television. There is no reason why video-on-demand services should be exempt from it. This could also help some Swiss series to get more international visibility. 

In Switzerland, the financing of independent audio-visual production has risen to some CHF105 million ($108 million) per year. Isn’t that enough? 

No, these are modest sums that don’t give the sector enough scope to develop, given the high costs of cinema production. This measure will not only strengthen the audio-visual sector, but it will also have positive repercussions on the Swiss economy as a whole. If a film is shot in Switzerland, the crews spend money in the country. So hotels, restaurants and regional businesses benefit from this. 

Opponents of the law say that the obligation to show European programmes is discriminatory. What’s your response to that? 

The opposite is true – this quota [of 30%] would allow us to increase diversity. It’s normal to give some form of support to films produced near us. This doesn’t change anything for consumers. It’s not as if non-European productions are going to disappear from programming. International streaming services already respect this requirement, which is part of a European Union directive adopted in 2019. As far as Swiss television channels are concerned, they already now apply a quota of 50%. 

Translated from French by Catherine Hickley

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