Italy reduces streamer investment obligations, removes IP protections for indie producers

Rome: The Italian government has reduced investment obligations for streaming services and removed IP protections for independent producers as part of a controversial reform of the country’s Media Law.

Streaming services such as Netflix and Disney+ must now invest 16% of their Italian turnover into European works, down from 20%.

Legislators have also deleted the section of the Media Law that set out the contractual terms for investment obligations related to IP rights.

The revision to the 2021 Media Law, known as the TUSMA (Testo Unico sui Servizi Media Audiovisivi), was approved by the Italian cabinet last week.

The lead up to the revision of the Media Law has been accompanied by heavy lobbying of prime minister Georgia Meloni’s right-leaning government by linear broadcasters, streamers and producer groups.

While Italy’s headline investment obligation figure has been reduced to 16%, the Media Law mandates that streamers will have to invest a greater proportion of their turnover into Italian content and also into film.

Out of the 16% that streamers have to spend on European works, 70% must now go on Italian content spanning film as well as TV genres such as entertainment and factual programming. This equates to 11.2% of a streamer’s turnover being spent on Italian content.

Previously, streamers had to invest 50% of their 20% investment obligation on Italian content, equating to 10% of a streamer’s turnover being spent on Italian content.

Streamers will also have to invest more in cinema production under the new rules. The new rules will see them invest 3.024% of turnover in cinema, up from 2%.

However, the government has cut the amount that linear broadcasters must invest in cinema from 3.5% to 3% of turnover. Linear broadcasters investment obligations have otherwise stayed the same, set at 12.5% of turnover on European works.

Before the media legislation was revised, the European Producers’ Club (EPC) – which represents 170 leading European independent producers – called on the Italian government to maintain the 20% streamer investment obligation level, which it says is becoming the new norm in Europe for high-level producing countries. (France has mandated investment obligations of between 20-25%, while Germany recently proposed a 20% investment obligation.)

The EPC also called on the Italian government to limit the time streamers could hold on to IP rights for productions made by independent producers.

However, legislators have removed the section of the Media Law that set out the contractual terms for investment obligations.

The section – Article 57, paragraph three – provided for specific regulation on rights retention for independent producers, contractual practices and time limits on licences to broadcasters and streamers. The regulation was never approved but the principle established in the Media Law prevented full buyouts.

It is understood new IP regulation will instead be implemented as part of the government’s planned reforms to tax credits for the film and TV industry.

However, Italian producers have expressed dismay that the revised Media Law removes IP protections.

The European Producers Club managing director Alexandra Lebret stressed the importance of strong regulation to protect producers’ ability to hold on to IP. “What is key is rights retention, and to have regulation that protects independent production companies.”

Carlotta Ca’ Zorzi, head of business and legal affairs at leading Italian producer Fandango, also called for a legislative framework that would allow producers to retain rights. “We need to protect the independent sector,” she said, flagging its key role in investing in talent, ideas and developing projects for commissioners.