In recent years, to adapt to the rapidly changing European media landscape, the EU amended the Audiovisual Media Services Directive, which the Netherlands implemented through the passage of the Dutch Media Act in 2021. As a result of this act and these changes, the Dutch Media Authority (CvdM) is in the process of amending policies including its policy rule on quota requirements, which was recently published and gives practical information on how the CvdM monitors compliance with quota obligations. In the following article, we give a brief overview of the new "Policy rules on quotas for commercial media institutions", but do not comment on the "Policy rules on quotas for public media institutions".
Commercial media institutions
Commercial media institutions are "old-fashioned" commercial broadcasters broadcasting linearly. However, this category also includes media services on demand (i.e. video-on-demand services or VOD, such as Netflix), but not all obligations in the policy rule on quotas apply to VOD providers. Other rules may apply.
Quota obligations
Commercial broadcasters must devote a minimum of 50% of their programming to European programmes, of which 10% must be European independent productions. Commercial media services on demand must offer at least 30% European productions.
To determine whether commercial broadcasters meet their quota obligation, the starting point is the total programme offer minus programmes such as news, sports, games, advertising and teleshopping. Programme repeats (i.e. reruns) count for the determination of the percentages.
In the case of VOD services, the catalogue is used to determine the percentage of European productions. The number of European titles in the catalogue is compared to the total number of titles in the catalogue. A title can denote a feature film or a season of a series. On request, a single episode of a series may be regarded as a title (if the production or purchase costs of this episode amount to more than EUR 2 million).
Additional obligations for on-demand services
In addition to a mandatory minimum percentage of 30%, VOD services are obliged to bring European productions to the attention of the public. This can be done by:
- Referring to a European productions section on the home page;
- Searching for European productions via the search function;
- Recommending European productions (e.g. with banners).
Exemptions
In special cases, the CvdM may grant partial exemption to commercial broadcasters, but these broadcasters must still provide programming that consists of at least 10% European productions. Special cases may relate to the target group of the programme channel, which may cater to narrow target groups, such as children. The channel may also feature programmes of a specific genre not produced in Europe, such as American crime series or Asian animation.
Under certain circumstances, VOD services can apply to the CvdM for a complete exemption from quota obligations. In addition, quota obligations do not apply to providers of on-demand audiovisual media services with a low turnover or a small audience.
A low turnover is defined as an annual turnover of up to EUR 2 million, including the annual turnover of partner companies and associated companies.
A small audience is a proportion of users below 1% of the presumed number of potential users. The presumed number of potential users is 80% of the population of the member state on whose territory the VOD service is targeted. The calculation is based on the total proportion of users in a representative week of the year chosen by the VOD provider. Users are basically the number of paying subscribers, the number of unique accounts or the number of unique visitors, depending on the specific VOD service.
Only one of two requirements needs to be met to apply for an exemption. These requirements are not cumulative.
The CvdM may also grant dispensation from the quota obligations for VOD services, if achieving the quota of European works is deemed to be unfeasible or unjustified from a practical point of view. The target group or the nature of the VOD service can play a role in this (e.g. the VOD service is aimed at a specific target group, such as children, or the VOD service only offers American baseball matches). The CvdM may also take special economic circumstances in account, such as start-up problems. This 'economic circumstances exemption' may lead to a three year ramp-up timeline: for example, a quota requirement of 10% for the first calendar year (the CvdM will begin counting from the first full calendar year), a requirement of 15% for the second calendar year, and 25% for the third calendar year. The CvdM can tailor this on a case-by-case basis.
Reporting
All commercial media institutions required to comply with quota obligations must report every two years to the CvdM on how they fulfil these obligations. Reporting forms can be found on the CvdM website.
Conclusion
The Policy Rules on quota obligations are the first of a number of new or amended policy rules that the CvdM plans to publish. New policy rules on advertising, sponsorship and product placement are expected to be released soon.
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