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The Italian government has reduced investment obligations for streaming services and removed intellectual property protection for independent producers as part of controversial media law reforms.
Streaming services such as Netflix and Disney+ will now have to invest between 20% and 16% of their Italian sales in European productions.
Lawmakers also removed a section of the Media Law that sets out the terms and conditions of investment obligations related to intellectual property rights.
The 2021 amendments to the Media Law, known as TUSMA (Testo Unico sui Servizi Media Audiovisivi), were approved by the Italian Cabinet last week.
The media law changes have been accompanied by intense lobbying of Prime Minister Georgia Meloni’s right-leaning government by linear broadcasters, streamers and producers’ associations.
Italy’s headline investment obligation figure has been reduced to 16%, but the media law mandates that streamers must invest a larger portion of their sales in Italian content and films.
Of the 16% that streamers have to spend on European productions, 70% must be focused on Italian content, which spans movies as well as TV genres such as entertainment and factual programming. This corresponds to his 11.2% of the streamer’s revenue being spent on Italian content.
Previously, streamers had to invest 50% of their 20% investment obligation in Italian content. This equates to his 10% of the streamer’s revenue being spent on Italian content.
Streamers will also have to increase their investment in film production under the new rules. Under the new rules, 2% to 3.024% of sales will be invested in films.
However, the government has lowered the amount that linear broadcasters must invest in films from 3.5% of sales to 3%. Investment obligations for other linear broadcasters remain unchanged and are set at 12.5% of sales of European productions.
Before the media law was revised, the European Producers Club (EPC), which represents 170 of Europe’s leading independent producers, called on the Italian government to maintain a 20% investment obligation level for streamers. The government says this is becoming the new norm in Europe. A high-quality producing country. (France mandates a 20-25% investment obligation, while Germany recently proposed a 20% investment obligation).
EPC also called on the Italian government to limit the length of time streamers can retain intellectual property rights to works by independent producers.
Intellectual property right
However, lawmakers removed a section of the media law that set out the terms and conditions for investment obligations.
This section – Article 57(3) – provided specific regulations regarding the retention of rights for independent producers, contractual practices, and the term of licenses to broadcasters and streamers. The regulations were never approved, but principles set out in the Media Act prevented outright takeovers.
New intellectual property regulations are thought to be introduced as part of the government’s planned tax credit reforms for the film and television industry.
However, Italian producers have expressed regret that the revised media law has removed intellectual property protection.
Alexandra Lebret, Managing Director of the European Producers Club, emphasized the importance of strong regulation to protect producers’ ability to retain their intellectual property. She said: “It’s all about preserving rights and having regulations that protect independent production companies.”
Carlotta Ca Zorzi, head of business and legal affairs at large Italian producer Fandango, also called for a legal framework that would allow producers to retain their rights. “We need to protect the independent sector,” she said, highlighting the independent sector’s important role in investing in talent and ideas for commissioners and developing projects.
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