Netflix and other major streaming platforms have criticised a proposed German law that would require digital services to reinvest part of their locally generated revenue into domestic film and television production.
German Chancellor Friedrich Merz’s cabinet approved the draft legislation on Wednesday as part of efforts to strengthen the country’s struggling film industry.
Germany Proposes New Investment Rules
Under the proposed law, streaming platforms would invest at least eight per cent of revenue earned in Germany into German and broader European film and television projects.
Authorities said platforms that fail to meet the requirement could face financial penalties.
The regulation would apply to international services such as Netflix, Disney+, and Amazon Prime Video, alongside domestic streaming providers.
However, the proposal still requires approval from the German parliament before it can take effect.
Government Increases Support for Film Industry
In addition, the German government announced plans to nearly double public funding for local productions.
Authorities said funding for the sector would increase to €250 million ($290 million).
Berlin hopes the combined measures will revive local film production and improve the competitiveness of Germany’s entertainment industry.
Netflix Warns Policy Could Hurt Industry Growth
Meanwhile, Netflix warned that the proposed law could negatively affect investment and reduce the number of major productions in Germany.
Wolf Osthaus, Netflix’s Senior Global Affairs Director in Germany, said excessive regulation could discourage ambitious projects.
“If regulation ultimately makes it harder to invest in ambitious projects and fewer titles are produced overall, that benefits neither audiences nor the production location,” Osthaus said.
He also criticised provisions requiring platforms to share or gradually return rights to producers instead of retaining them permanently.
According to him, the policy could make large-scale productions financially difficult.
Streaming Industry Raises Concerns
Furthermore, Vaunet, a media association representing streaming platforms including Disney+, Paramount+, and RTL+, opposed the proposed law.
The organisation described the measure as unnecessary interference in media operations.
Vaunet Managing Director Daniela Beaujean argued that authorities cannot strengthen the production industry through legal pressure alone.
She called for a review of the proposed framework before implementation.
Violators Risk Heavy Penalties
Under the proposal, authorities would fine any streaming platform that fails to comply.
The penalty could reach 75 per cent of the amount a company failed to reinvest.
The law would also require streaming services to maintain a minimum quota for German-language and European content.
However, platforms that reinvest at least 12 per cent of their German revenue would receive exemptions from some content requirements.
Several European Countries Already Apply Similar Rules
Meanwhile, countries such as France, Denmark, and Sweden already require streaming companies to support local productions through reinvestment policies.
Although the rules differ across Europe, regulators increasingly push global streaming services to contribute more directly to domestic entertainment industries.
