The 2018 EU Audio-visual Media Services Directive (AVMSD) requires EU Member States to ensure that streaming platforms carrying European content devote a share of their revenues to local production — but it leaves the specifics to each country. The result is a patchwork of obligations that varies significantly in ambition and scope.
RAISON D’ETRE
It is worth stating why we have such rules ? Going back to when I was overseeing this legislation for the Socialists in the European Parliament in the mid 1990s, it was to ensure that the majority of airtime on linear broadcasters was devoted to local programming. Now the EU rules demand that streamers’ catalogues contain 30% local national/EU audio-visual production and some countries (see below) impose investment obligations and levies to make the streamers invest in local audio-visual works. This is to ensure a measure of fair competition, cultural diversity of expression, local skills and jobs are maintained and that EU countries can maintain strong film/tv industries.
Put simply this is because the screen and what appears on it has a huge cultural as well as economic significance. It affects our values, identity and meaning in our lives. Also, often neglected is the strange economics of the TV/Film industry where huge programme or film prototypes cost a lot up front but can then be distributed at little or no cost digitally. This means that the global players, be they Hollywood or the streaming platforms, can outcompete individual countries’ production easily and without local rules they could come to dominate nearly all we see and hear on a screen.
France operates the most demanding regime. Since 2021, all streaming services offering their services in France have been subject to the SMAD decree, which requires them to reinvest between 20% and 25% of their French revenues in local film and audio-visual production. A joint report by France’s National Cinema Centre (CNC) and ARCOM found that global streamers invested more than $1 billion in French film and TV between 2021 and end-2023, with Netflix, Prime Video and Disney+ collectively putting €866 million into the French sector over that period. The obligations have come with an incentive: platforms investing at the higher rate gain access to a more favourable window for releasing films after their theatrical run. However, the three platforms had yet to fully meet their financial obligations in terms of cinema, with deficits recorded particularly in pre-financing commitments.
Germany has moved to impose its own investment obligations this year. The government agreed plans in early 2026 for a legally binding obligation requiring streaming platforms and broadcasters to invest 8% of their German revenues in local and European content. Platforms that voluntarily exceed 12% of revenues on local productions will be exempt from more complex regulations, including requirements to produce content in the German language. The government has also committed to nearly doubling public film funding to €250 million a year. The announcement drew mixed reactions: local producers offered a cautious welcome, while streamers and commercial broadcasters called it a bitter disappointment.
Belgium presents a distinctive picture, given its federal structure. In Flanders, streaming services have been required since 2019 to contribute to Flemish audio-visual production, either through direct investment or by paying a levy to the Flemish Audio-visual Fund (VAF). Under updated rules, platforms must contribute between 2% and 4% of their local turnover, or alternatively pay a lump sum of €6 million to the VAF per annum. The Flemish framework was also extended to cover video-sharing platforms such as YouTube and TikTok — a move that attracted protests from US technology companies. The EU Commission is looking into it.
In Wallonia-Brussels (the Fédération Wallonie-Bruxelles), ambitions have been higher. A 2023 decree set out a phased increase in the financial contribution required from audio-visual media providers, rising from 2.2% of revenues in the region to 9.5% by 2027. Netflix challenged this before Belgium’s Constitutional Court, with Disney joining as an interested party. Netflix argued the scheme was “unworkable and contrary to the principles of the single market,” while Disney contended the regime went beyond the AVMSD and undermined competition and consumer choice.
In March 2026, the Constitutional Court dismissed Netflix’s complaint, ruling that the system was “reasonably justified” and that the 9.5% rate, while higher than elsewhere in the EU, was proportionate. However, the outcome was not a clean defeat for the platforms: the court acknowledged that key aspects of the scheme raised questions under EU law — including the inability to count the acquisition of distribution rights as an investment, how funds paid into a public body are used, and whether companies can offset contributions imposed in other EU member states — and referred these questions to the EU Court of Justice.
The ruling has wider implications. There have been suggestions that Netflix’s challenge was also an attempt to set a legal precedent across Europe that could be used to counter AVMSD-based obligations in other territories. With the questions from the case still pending, and the five-yearly AVMSD review under way, the final shape of streaming investment obligations across the EU remains very much in flux.
Meanwhile across the pond…..
Canada’s Online Streaming Act: The CRTC Turns Up the Heat
Canada’s Online Streaming Act, which came into force in April 2023, represented a landmark shift in Canadian broadcasting policy — extending regulatory obligations to online platforms for the first time. The Act amended the Broadcasting Act to require the Canadian Radio-television and Telecommunications Commission (CRTC) to ensure that both Canadian and foreign streaming services contribute meaningfully to Canadian and Indigenous content.
Following a public consultation that drew over 360 submissions and a three-week public hearing, the CRTC established an initial baseline obligation in June 2024: streaming services earning at least $25 million in annual Canadian revenues must contribute 5% of those revenues to support the Canadian broadcasting system. The funding was directed to areas of immediate need, including local news, French-language content, Indigenous content, and content created by and for “equity-deserving communities”.
That baseline proved short-lived. In May 2026, the CRTC formalised a new framework requiring companies that stream video and audio content to devote 15% of their Canadian revenue to support domestic programming — triple the original 5% requirement. The CRTC says the new regime will unlock $2 billion a year for Canadian and Indigenous content. Platforms generating more than $25 million in annual Canadian broadcasting revenues fall within the framework, including Netflix, Amazon Prime Video, Apple, Disney+ and Spotify. At the same time, contribution requirements for traditional broadcasters, which currently pay between 30% and 45%, will be reduced to 25%.
As one would expect the response from US-based platforms has been sharply hostile. The Motion Picture Association, whose members include Netflix, Disney, Paramount, Sony, Universal, Amazon, and Warner Bros. Discovery, condemned the decision as imposing “unprecedented, unnecessary, and discriminatory investment obligations” and reiterated its position that the Online Streaming Act constitutes an unfair trade practice, potentially violating Canada’s obligations under the CUSMA trade agreement. Major streamers including Apple and Amazon were already challenging the initial 5% levy in court, and further legal battles are widely anticipated. The issue has also become a flashpoint in broader US-Canada trade tensions, with the United States identifying the Act as a trade irritant ahead of bilateral negotiations.
Why Europe’s Film Sector Is Demanding EU Commission Scrutiny of the Paramount–Warner Bros. Merger
Announced in February 2026, Paramount Skydance’s proposed $110 billion acquisition of Warner Bros. Discovery would create a company owning a film library of more than 15,000 titles and thousands of hours of television programming, alongside a portfolio of major streaming platforms including HBO Max, Paramount+ and Discovery+. Washington appears ready to wave it through. Europe’s film community is not.
In a letter sent to the European Commission, the European Parliament, and EU governments, industry representatives warned that the deal could damage independent film production, reduce cultural diversity, and fundamentally alter the balance of power in the European film business. They are calling on Brussels to go beyond a standard competition review and examine, in their words, “all the implications for the European audio-visual ecosystem.” Logos-pres
The Disney–Fox Precedent
At the heart of the European industry’s alarm is a concrete historical parallel. The 2019 Disney–Fox merger offers a cautionary precedent: before the deal, the two studios released 26 films annually in wide theatrical distribution; today that number has fallen to 14 — a 46% decline. European cinema operators and filmmakers argue there is every reason to expect a Paramount–Warner combination to follow the same pattern: fewer films, reduced competition, worse terms for independent distributors and less diversity of films for audiences. Indie European producers worry is that with a single entity controlling production, distribution and streaming at this scale the one company would have enormous leverage over the terms on which European programming/films are commissioned , licensed and are shown…potentially squeezing out indie producers and distributors on whom the diversity of European cinema depends.
European film makers hope to get regulation with binding commitments that protect the eco system of festivals, arthouse theatres, indie distributors and national film cultures that have taken decades to build. They argue, rightly the free market will not just simply protect these on its own.
We now await to see what the EU Commission will do as it reviews the deal under several EU regulatory frameworks.