Netflix and Amazon, both American companies have just received a shocker of their lives.
The European Union, EU is about to go local on them. The EU is now considering giving them content quotas that will determine the percentage of foreign and local content (content made in the EU) and foreign content (content made outside the geographic proximity of the EU) they can show within the EU.
According to people with the knowledge of the matter, the EU will be pegging the quota to 80% foreign and 20% local. This means that the 20% quota must not only be local content but produced locally before they can be shown to their EU subscribers.
Video streaming companies such as Netflix and Amazon claimed they have spent 20% of their revenues on producing original contents from the scratch.
Netflix might be able to adjust as it already possess original content platform. However, the company will have to adjust its revenue target for the EU as the regulation would eat into its profits estimates. The regulation will also include anti-pornography rules that is aimed at protecting children from explicit content within the EU.
Netflix has already gone global late last year. ShowMax, another streaming service from South Africa, might struggle to keep up to this kind of regulation.
IrokoTV is Nigeria’s first Internet streaming content that offered nearly 100% local content. If this kind of content regulation is enacted by Nigeria or via the Economic Community of West African Community, ECOWAS, companies like IrokoTV might benefit big from it.
YouTube is the largest video streaming site in Nigeria. However if such regulation is passed in Nigeria, Google’s YouTube will be the biggest loser. While the platform has considerable number of local videos, videos consumed on YouTube is still more foreign than local. Moreover, YouTube is absolutely free in Nigeria, IrokoTV which became a success via YouTube might not be able to argue how Google’s YouTube hurts its business.