19th Apr 2018

An agreement, which is still in the preliminary stages, between the European Parliament, Council and Commissions will determine that a quota will be applied to subscription video on-demand (SVOD) services, and may also lead to new regulations imposition on product placement.

The European Content Quota could mean that 30% of content on platforms will need to be of European origin. Both VOD and SVOD services will also need to make monetary contributions to a specified fund for local European audio and video production. It is not yet clear how much, or whether this will be in the form of a direct contribution to a project, or to a wider group fund, but it is thought that the contributions will be proportionate to the revenue the services gain from each of the member European countries.

Other regulations in the pipeline for OTT services

New regulations are being drafted to place greater control over product placement in children’s entertainment to give improved protection, following consumer complaints around hate speech in some apps and games aimed at the younger generations.

In addition, hate speech on video sharing sites will come under closer scrutiny and regulation, but it appears that existing regulations surrounding advertising quotas may be relaxed somewhat.

Updating current regulations

The new regulations follow a similar quota imposed on OTT services by the European Commission in 2016, which then stood (and are still in force) at 20% of all content to be of European origin. Currently, according to the industry experts, some of the biggest providers to be affected will be platforms like Netflix, whose current library holds 21% of European-originating content.

Negotiations are currently taking place, and these are expected to be completed by June 2018, after which the new regulations will be drafted and confirmed, before being finalised and drafted into the regulatory system.

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