Netherlands approves law on investment obligations for domestic audiovisual products

Video-on-demand (VOD) services in Netherlands with a turnover of over EUR 10 million will be obliged to invest 5% of their annual turnover in Dutch productions. In early June, the House of Representatives approved the law after years of negotiations. This legislation, which has now been submitted to the Senator for approval, contains significant changes from the original bill.

In two previous Law-Now articles published in 2022 and 2020, we discussed the introduction of an investment obligation for Dutch cultural audiovisual products for VOD services. As indicated in the earlier articles, this investment obligation only applies to commercial on-demand media services or VOD services that generate more than EUR 10 million per fiscal year of relevant turnover in the Netherlands. The relevant turnover encompasses income from subscriptions and user transactions and income from advertising, product placement and sponsoring.

House of Representatives debate

The purpose of this investment obligation is to promote Dutch cultural products. This obligation as included in the bill encountered resistance from certain political parties, which argued that the obligation to invest exclusively in culture (e.g. films, documentaries and series) is too limited. They stated the entire audiovisual sector should benefit from the bill. Despite strong opposition from other parties, the bill was amended. In the amended bill passed by the House of Representatives, at least 50% of the amount to be invested must be invested in cultural programmes. The other 50% can be invested in entertainment programmes.

Drastic changes

Below is a summary of the changes the House of Representatives made to the bill:

• The investment requirement is increased from 4.5% to 5% of the Dutch turnover.
• The type of programmes that may be invested in has been broadened. Investments can be made in all types of productions and genres such as reality and game shows and other entertainment except sports programmes. However, as stated above, at least 50% of the investment amount must benefit films, documentaries and series.
• Explicitly included is that VOD services are required to invest at least 60% of the investment amount in productions by independent producers.
• The criteria that programmes must meet have been tightened. The audiovisual product in question must adhere to two of the following conditions although criteria c and d may not be combined:

1. at least 75% of the screenplay must be written in Dutch or Frisian;
2. the main characters must express themselves for at least 75% in Dutch or Frisian;
3. the screenplay of a production must be based on a literary work originally published in Dutch or Frisian;
4. a production must have as its main theme Dutch culture, history, society in a broad sense or politics.

Further proceedings

The bill as now presented by the House of Representatives contains likely the final text. However, before the bill is finally adopted and enters into force, it must first be dealt with in the Senate. In principle, the Senate cannot amend the bill, they can only adopt or reject it.

Unfortunately, it is not known when the bill will be debated in the Senate. This depends, among other things, on Senate proceedings, but we will closely monitor the progress of the proposal and inform you of developments as they occur.

For more information on investing in TV and film in the Netherlands, contact your CMS client partner or these local CMS experts.