Netflix (NASDAQ: NFLX) and other major streaming platforms are publicly opposing a new German legislative proposal that would require them to channel a portion of domestically generated revenue back into local film and television production.
Chancellor Friedrich Merz’s cabinet approved a draft law Wednesday that would compel streaming services to invest at least eight percent of earnings generated in Germany into domestic and broader European film and TV sectors.
Platforms that fail to meet the reinvestment threshold would face financial penalties equivalent to 75 percent of the amount they fell short of reinvesting.
The law, which still requires parliamentary approval, would apply to major international services including Disney+ and Amazon Prime Video, as well as domestic German platforms.
Berlin has framed the legislation as a necessary intervention to support the struggling German film industry, and the government simultaneously announced it was nearly doubling public financing for local productions to 250 million euros, or approximately $290 million.
Netflix warned the policy could produce the opposite of its intended effect, arguing the regulation risks dampening overall output rather than stimulating it.
“If regulation ultimately makes it harder to invest in ambitious projects and, as a result, fewer titles are produced overall, that benefits neither audiences nor the production location,” said Wolf Osthaus, Netflix’s senior global affairs director in Germany, in comments sent to AFP.
Osthaus also criticised provisions requiring the gradual return or sharing of rights with producers, rather than allowing streaming platforms to retain those rights indefinitely.
“The risk is that large, ambitious projects will no longer be economically viable, because such big budgets often cannot be put together through co-financing,” Osthaus said.
Vaunet, an umbrella organisation representing streamers including Disney+, Paramount+ and RTL+, told AFP the planned law was “an unnecessary and disproportionate interference with media freedom.”
Vaunet’s managing director Daniela Beaujean urged a full overhaul of the plans, stating that “the actual goal of strengthening Germany as a production hub with diverse content cannot be achieved through legal compulsion.”
Under the proposed rules, platforms would also be required to produce a minimum share of German-language and European content, though services that reinvest at least 12 percent of Germany-sourced income would be exempt from that requirement.
Germany is not the first European country to pursue such a framework, with France, Denmark and Sweden already operating their own reinvestment mandates for streaming platforms, though the applicable rates and specific rules differ across those markets.
