Lex Netflix: Is Swiss cinema at a cultural crossroads?

Keystone / Fw

Voters are set to decide if international streaming services should be forced to invest in the Swiss film industry. Will Switzerland follow its neighbours in propping up domestic production, or lag behind in the competitive film market?  

This content was published on April 12, 2022 - 09:00

On May 15 the Swiss vote on an amendment to the federal cinematic culture and production law dubbed “Lex Netflix”. With the proposed change, the government wants to regulate the presence of major international streaming platforms in Switzerland, requiring them to invest 4% of their domestic revenue in Swiss audiovisual productions.

This is expected to generate between CHF18 million ($19.3 million) and CHF30 million extra a year for the Swiss film industry, according to estimates from the Federal Office of CultureExternal link (BAK) and the Swiss parliamentExternal link.

Industry professionals are largely in favour of the proposal. “I don’t understand how anyone could be against it,” said filmmaker Fred Baillif during a discussion at the most recent Think Cinema festival in Lausanne in March.

Yet there was enough opposition at the political level to force a nationwide vote on the amendment. The youth wings of Switzerland’s major centre-right and right-wing political parties (the Radical-Liberal Party, the Swiss People’s Party, the Liberal Green Party and the Centre Party) had already announced a referendum before the government decided to impose a 4% levy.

In some quarters, resistance to the proposal has been fierce. In a tweet, Philippe Nantermod, vice-president of the Radical-Liberals, described the law as “Schwarzenbach 2.0”, in reference to the 1970 referendum that aimed to significantly reduce the number of non-Swiss residents in the country.

Nantermod took issue with the supporters’ slogan, “What if your next favourite show was Swiss?”. He took it to mean that national identity is all that matters, when in fact the phrase simply acknowledges that streaming in general, and Netflix in particular, has given a new global spotlight to productions from all over the world, be it Italy, Finland, Turkey, Indonesia, South Korea or Brazil.

Campaigners submit 65,000 signatures against the new film law, Lex Netflix, in Bern in January 2021 © Keystone / Peter Schneider

Swiss consumers already pay more

Opponents also claim the amendment is unprecedented in dictating how private companies are to reinvest their profits. However, a fact check posted on the External linkwebsite of supportersExternal link of the amendment says this is not the case. The 4% rule already applies to national distributors such as Swisscom TV.

External Content

Those behind the referendum also say the law would lead to higher prices for the various services’ subscription offers. Netflix, however, is raising its prices only in certain territories, regardless of local legislation. In Switzerland, a “premium” subscription has gone up from CHF21.90 a month to CHF24.90. Supporters of the amendment argue that, since streaming services, including Netflix, are more expensive in Switzerland than in other countries, it’s only fair that these services give something back.

According to pro-consumer website ComparitechExternal link, Switzerland and Liechtenstein are, in fact, the two countries with the most expensive Netflix subscription rates – subscriptions cost CHF2-CHF5 more, depending on the country and/or subscription tier. As Comparitech revealed, despite the higher price, the catalogue of television shows and films available to Swiss consumers is smaller than in other markets.

Filmmakers are firmly behind the amendment, with the consensus being that voting yes would put Switzerland on equal footing with other European countries.

European comparison

Similar laws are already in place in countries such as Spain and France. The proposed amendment, supporters say, would keep the Swiss film industry competitive on a European level.

In GermanyExternal link, streaming services are required to invest in the national film fund if their annual film-related revenue in the country exceeds €500,000 (CHF512,000). The rate is either 1.8% or 2.5%, depending on whether the revenue is up to or above €20 million.

Netflix declined to make the requisite payments between 2014 and 2019, arguing that it didn't have any real German presence since its European headquarters at the time were situated in the Netherlands.

In the United Kingdom, there is no law regulating Netflix's relationship with the local film industry. However, the streaming service did recently team up with Creative UK to launch an initiative called BreakoutExternal link, which aims to support the development and funding of debut feature films in the country. At least one project will receive a production budget of £1.5 million (CHF1.84 million) and a guaranteed global distribution on the platform. 

The battle of the festivals

The French case is notable, given the country’s sometimes uneasy relationship with streaming services: in addition to investing in local productions, Netflix also signed a new windowing agreement, granting it access to third-party titles 15 months after their theatrical debut.

Previously, French law dictated that all films receiving a standard theatrical release would not be available on platforms for 36 months. That’s why Netflix does not release its original films in French cinemas, save for special events and retrospectives.

Netflix films have not appeared at the Cannes Film Festival since 2017, when public outcry over two Netflix titles in the main competition brought about the implementation of a new rule the following year: all films submitted for the competitive sections of the festival must have a regular cinema release in France.

Cannes remains the only festival with such a rule, according to Alberto Barbera, director of the Venice Film Festival. Barbera, who has been at the helm in Venice since 2012, was the first festival director to allow a Netflix film in competition.

“Back in 2015, when we screened Beasts of No Nation, no one really cared about the Netflix factor,” he told SWI “The complaints began with the Cannes protest and their rule change.”

Is such a system viable in the case of Venice? “Not at all, because France is an outlier,” said Barbera. “Cinema and movie-going have a very special status there, which is not really the case anywhere else. I can’t remember the last time every single film that was in the main competition in Venice in a given year received a theatrical release in Italy.”

“I still think the French situation will change at some point,” he adds, “because Thierry Frémaux [director of the Cannes Film Festival] would give an arm and a leg to have Netflix back in Cannes, and I know for a fact Netflix wants to come back, too.”

As for Netflix’s contribution to Italian cinema, the issue has other hurdles. “They do invest in Italian productions, but there is no legal requirement per se. Our bureaucracy is famously complicated,” Barbera said.

Boost to the economy

There’s also the question of the overall economic boost beyond the film sphere.

Filmmaker Pierre Monnard Keystone / Ennio Leanza

Pierre Monnard, one of the two directors of Neumatt, the first Swiss series acquired by Netflix for international viewers, gave a concrete example. In 2021 he filmed a series called Hors Saison in canton Valais.

“The local hotels, businesses and restaurants were thrilled to have us there because the money used to film the show gets reinvested in other sectors, most notably tourism,” he said. “The entire population benefits from this, not just the cultural sector. The 4% will provide salaries and work opportunities for people.”

Monnard also points out that the investment that streaming services are required to make is a fraction of what they have to pay elsewhere. In France, for example, it’s between 12% and 25%.

Netflix gets ready

The vote on the proposed amendment is still several weeks away but Netflix is already hard at work. It opened an office in Berlin to deal with issues relating to Germany, Austria and Switzerland.

In November Wolf Osthaus, Netflix’s regional director of public policy, laid out the Swiss strategy during a talk at Geneva Digital Market, an event on audiovisual innovation. In short, the more culturally specific the story, the wider its appeal is likely to be.

Whether a story idea will work best as a film or a series will be up to the individual creatives and production companies. But Osthaus said not to expect any local third-party content.

“We are happy to acquire existing titles like WolkenbruchExternal link or Neumatt for our global viewers, but it doesn’t make much sense to make non-original Swiss content available in Switzerland,” he said. “You already have Play Suisse for that.”

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