Should Netflix, Disney and Amazon invest in the production of Swiss films and TV series? A nationwide vote on May 15 will decide if new obligations should be placed on the online entertainment giants.This content was published on March 30, 2022 - 09:00
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What's it about?
One of the referendum questions to be put to a nationwide vote on May 15 is an amendment to the federal legislation on culture and film production. Known as “Lex Netflix” ("Netflix law)" , this amendment will oblige streaming platforms to invest up to 4% of their revenue from Switzerland in Swiss films and TV series.
Why tax streaming platforms?
In Switzerland, national or regional distributors of television programmes already have the obligation to invest 4% of their revenue in Swiss cinema productions. Furthermore, half of their broadcast content has to be produced in Switzerland or in Europe.
The Swiss government wants to impose the same obligation on online streaming platforms like Netflix, Amazon, HBO and Disney. The aim is to get more support for Swiss cinema production and to end differential treatment of television channels and online services.
What does the amendment bring?
If the streaming platforms fail to invest 4% of their revenue in Switzerland for Swiss films and TV series they will have to pay an equivalent tax aimed at promoting the Swiss film industry. This rule will also apply to foreign television channels with broadcast advertising aimed at a Swiss public.
These new obligations would mean an additional CHF18 million ($18.8 million) for the local film industry, according to a government estimate. This money is to be earmarked for films, documentaries or TV series made by independent Swiss companies as well as international co-productions involving Swiss participation.
Independent filmmaking currently gets around CHF105 million in financial support per year. Of this, CHF39 million comes directly from government, CHF36 million from Switzerland's national broadcaster, CHF6 million from private TV channels, and the rest from private investors.
The new legislation also requires that at least 30% of the broadcast content of streaming services is produced in Switzerland or in Europe.
What are other European countries doing?
Almost half of the countries in Europe obliges streaming platforms to invest in local or European cinema production. The amount of revenue to be set aside varies: 1% in Portugal, 2% in Denmark, 5% in Spain, 20% in Italy and 26% in France. Some countries like Germany, Belgium and Croatia levy a tax that is then paid out to institutions promoting cinema. This tax is usually additional to the obligation to invest.
The European Union also requires 30% of the content of online services to be European productions. Some countries require a higher quota or a sub-quota of productions from their own country. In addition, streaming platforms active in Europe are obliged to promote European TV series and films.
Who wanted a referendum on this?
The youth wings of Switzerland's centre right and right-wing parties have joined forces to fight this new legislation. The referendum committee is composed of young Liberal Radicals, Liberal Greens and supporters of the People's Party. It is supported by a organisation for consumer advocacy in German Switzerland (Konsumentenforum) and the private-sector television lobby (TeleSwiss).
This coalition believes that Swiss film production is already adequately supported and that it does not need any further aid from private business. They see the compulsory investments required by streaming platforms as an attack on economic freedom, and claim that this action would increase prices for subscribers. In the end, it is the consumers that will end up paying for this, the committee says.
The proponents of the referendum also condemn the 30% quota of European productions required of the streaming platforms. They claim that the quota does not impose any quality criteria and discriminates against creators from elsewhere in the world. Such an obligation would harm diversity and restrict the freedom of users, they state.
The committee is supported by two parties on the right: the People's Party was strongly opposed to the amendment when it was debated in parliament, and the Radical-Liberal Party wants its support base to reject the proposal on May 15.
Who favours the proposed legislation?
Parliament largely voted in favour of the government's legislative amendment. While the Radical group was divided, Social Democrats and Greens as well as the Liberal Greens and the Centre Party accepted the new ground rules. They think that equality of treatment needs to be guaranteed between national TV broadcasters and the online services.
Parliamentarians pointed out that these taxes and obligations to invest, when legislated in other European countries, had not driven up subscription prices. Furthermore, requiring the streaming platforms to reinvest 4% of their revenue in Swiss productions would encourage the emergence of new players in the field.
They also found that the obligation to broadcast 30% European content ensures some diversity in the services provided online. This quota is also a key demand from the EU for Switzerland to be a part of the European cultural promotion programme, Creative Europe.
Individuals and associations active in the Swiss film industry are campaigning for the amendment. They believe that these new measures will benefit the Swiss economy as a whole. More ambitious projects can be carried out, thus creating jobs, making more films and showcasing local talent.
The film industry also notes that the streaming platforms are free to invest as they wish, whether in production, screenwriting or technical aspects. It points out that the commercial model of these distributors involves buying or co-producing films and TV series around the world.
Translated from French by Terence MacNamee
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