Netflix And Amazon Prime's European Library Must Contain European Content

A new law may be announced in Europe next week, which will force online video streaming services like Netflix, Inc. (NASDAQ: NFLX) and Amazon.com, Inc. (NASDAQ: AMZN)'s Prime service to allocate at least 20 percent of their video catalog to local content.

According to Reuters, the European Commission is looking to completely overhaul its broadcasting rules and force minimum quotas among streaming providers to improve the circulation and funding of its local film and television industries.

Reuters suggested that Netflix's library may already be in compliance with the proposed new law. The publication cited a report by the European Union Commission itself who found that local content accounted for 21 percent of Netflix's total portfolio of films.

Individual countries within the union also have the option of requiring streaming services to contribute financially to the production of local works.

"It is clear that the current film financing system is being challenged by quick changes in production, distribution and consumption, triggered by digital technologies," Reuters quoted Guenther Oettinger, the EU's digital Commissioner as saying.

On the other hand, critics argue that the proposed law ignores one of the most basic fundamental rules of business.

"The European Commission has yet again failed to understand how the digital world works. Subscription services like Netflix and Amazon should consider only one thing when placing content on their platforms: what their viewers want to watch," Daniel Dalton, a member of the European Parliament for Britain's ruling Conservative party said.

The European Commission is set to announce the proposal on May 25. Other aspects of the law include stricter age barriers for minors and the banning of geoblocking services.