French member La SRF signs historic agreement with Netflix on investment in cinema feature films

---

In February 2022, French cinema organisations, including FERA French member La SRF, signed the first agreement of its kind with global streamer Netflix setting out investment thresholds in cinema features, as part of a multi-faceted transposition of the Audiovisual Media Services Directive in the country.

The landmark agreement marks the first time that a subscription video-on-demand platform (SVOD) specifically commits to the French film industry, is expected to generate in 2022 a total investment of about 40 million EUR in French and European cinema creation.

In the three-year deal, Netflix agreed to detail its contribution amounting to 4% of its net annual turnover in France as follows:

• A minimum yearly investment of 30 million EUR in original French-language films,
• A so-called “diversity clause” to ensure these investments will also benefit lower-budget films, earmarking at least 17% of prefinancing to original French-language films with a 4 million EUR or less budget,
• Investment in a minimum of 10 films a year.

Netflix’s partnership with French cinema is also underpinned by its position in the new French release window system, allowing the service to show films 15 months after their theatrical release during a 7-month exclusive window.

Based on new legislation transposing the 2018 Audiovisual Media Services Directive, the obligation to contribute to the development of cinematographic and audiovisual works is applicable to on-demand audiovisual media services, including those not established in France but aimed at French territory. While different regimes apply to video-on-demand services (SVOD), transactional video-on-demand services (TVOD) and other services, SVOD services must devote at least 20% of the net annual turnover they generate in France to the funding of European or French cinematographic and audiovisual production (20% minimum of which has to be dedicated to cinema films). The proportion increases to 25% for services that offer at least one film less than 12 months after its release in France.

Another notable and complementary feature of the new French legislation excludes all works whose production contracts do not respect the moral rights and right to proportional remuneration of the authors from the quotas of European works and public financial support, through standard contractual clauses (see below).

The French transposition constitutes a steppingstone in the implementation of the 2018 AVMS Directive. More information on its ongoing transposition, and specifically on new investment obligations on on-demand platforms, are available from the European Audiovisual Observatory (see below).

 

To go further:

>>> Agreement announcement Press release in French:

https://www.la-srf.fr/article/communiqu%C3%A9-blic-bloc-arp-netflix

>>> Standard contractual clauses governing the allocation of national public support for cinematographic and audiovisual works:

https://www.sacd.fr/fr/mod%C3%A8les-de-contrats-audiovisuels

>>> May 2022 European Audiovisual Observatory IRIS Plus 2022-2 Report “Investing in European works: the obligations on VOD providers” including a country-by-country analysis of the 14 countries that have decided so far to introduce such obligations:

https://rm.coe.int/iris-plus-2022en2-financial-obligations-for-vod-services/1680a6889c