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Netflix, Disney, Amazon plan streaming world domination, but meet resistance

U.S.-based streaming services are shaking up the entertainment industry’s world order.

Netflix Inc., Inc., Walt Disney Co. and AT&T Inc.’s HBO Max are chasing growth in overseas markets, investing billions of dollars to produce local-language television series and movies. That push is creating boom times—and competition—for writers, actors, producers and crew. It is also threatening established broadcast networks and distributors in other countries and prompting action from local lawmakers and producers over equal pay and content ownership.

In the past, long-established local players could easily contract top-tier talent in international markets such as Spain, Indonesia or Brazil. With cash-rich streaming companies such as Netflix in the mix, demand for writers, directors, and actors is high, putting pressure on local broadcasters and distributors with fewer resources.

“Any local buyers, whether linear, digital, cable network…are being outspent by global streaming platforms,” said Charlie Corwin, co-chief executive at SK Global Entertainment, a Los Angeles-based production company that is doing content deals with companies including Netflix, Amazon and Disney on high-profile international projects set in emerging markets such as Thailand and India.

German producer Martin Moszkowicz of Constantin Film says the big streaming services are locking in key production professionals. “They are like vacuums,” he said. “You can’t get crews, basically in all of Europe, at the moment.”

Netflix declined to comment.

Netflix recently projected that it would invest more than $17 billion globally on content this year, while Disney announced in December that it would be spending up to $9 billion a year world-wide on content for its Disney+ platform by 2024. With several dozen international projects in the works, both companies are expected to spend a large share outside the U.S.

Amazon says it has been doubling its volume of original, local-language content annually since 2017. HBO Max recently said it would produce more than 100 local language projects for Latin America alone during the next two years.

World-wide streaming subscriptions exceeded 1.1 billion last year, up from fewer than 400 million subscriptions in 2016, according to the Motion Picture Association. The major streaming services are betting overseas territories will deliver their next waves of growth as the North American market becomes saturated.

Struggling to compete on their own, some established foreign television networks and distributors are joining forces to counter the global reach and spending power of the U.S. streamers.

Mexican broadcast and media giant Grupo Televisa SAB agreed to a multibillion-dollar merger with Univision Communications Inc. last month, creating perhaps the world’s largest Spanish-language media company. Architects of the Televisa-Univision tie-up say they aim to create a global streaming service.

Brazil’s largest broadcaster, Grupo Globo, is investing heavily in original content for its Globoplay digital platform to compete with U.S. streaming services, said the network’s head of digital distribution Erick Bretas.

“Disney and Warner are pulling content from platforms that they used to license to,” Mr. Bretas said, adding that not being able to license popular American movies and shows has put more pressure on the network to develop and acquire content.

Mr. Bretas said Globo is developing more than 100 new projects exclusively for its platform.

“Netflix and Amazon are super powerful,” he said. “[But] we can’t aim for anything less than being the leader.” The company doesn’t disclose subscriber numbers, but said its subscriber base has risen by nearly 400% in the past two years.

In Europe, U.S. streamers are encountering new rules and regulations.

Belgium television executive Elly Vervloet—a coordinator for the European Broadcasting Union, which represents more than 50 public broadcasters including the British Broadcasting Corp. and France Télévisions—is overseeing an initiative to get those broadcasters to join forces and invest more in digital distribution.

Public broadcasters must shift to streaming, Ms. Vervloet said, adding that producing and airing high-end episodic series is how the broadcasters attract viewers to other, less commercial content.

In Europe, local governments and unions have made rules that require streaming services to provide greater transparency with metrics and reward teams whose shows win wide viewership, among other measures.

Streaming services infrequently disclose viewership data. Unlike with traditional film and television, writers, producers and actors who work with services such as Netflix typically don’t receive bonuses—or even data—when a show or film is viewed by many subscribers.

Amid the success of Netflix’s German-language series “Dark” last year, local unions in Germany negotiated a deal that requires the company to pay actors and crew bonuses when more than 10 million subscribers watch at least 90% of a series’ season. A Netflix spokeswoman praised the agreement at the time.

The deal fell within the bounds of a series of European Union regulatory measures that require streaming services to adequately compensate workers and preserve the continent’s cultural diversity.

Under EU rules, at least 30% of the content offered on platforms such as Netflix must qualify as European content and companies must reinvest a percentage of revenues into local content.

France, among the most aggressive nations in regulating streaming companies, has approved legislation that requires platforms to reinvest up to 25% of revenues realized in the country into new French productions.

To meet the EU’s 30% content threshold, U.S. companies are spending more on both new and old local-language programming, according to Prentiss Fraser, an international sales executive at film financier Endeavor Content. Disney and Netflix have announced dozens of new European projects in recent weeks.

While independent European producers welcome the incoming work from streamers, many object to the work-for-hire model promoted by Netflix, where they don’t retain any rights to the material they produce.

Typically, producers who make European shows retain ownership of the content rights, which can allow them to profit for years on some projects, even if the reach is sometimes limited.

“The upside can be finite for many European shows…but they still owned it and they were proud to own it,” said Ted Miller, an agent at Creative Artists Agency.

“We are creative producers. We are entrepreneurs taking risks,” said French producer Alexandra Lebret, managing director of the trade association European Producers Club. In March, the EPC, which represents more than 100 producers, issued a formal list of guidelines that it hopes U.S. companies will follow, such as asking streaming services to pay producers more when content is popular, on top of allowing producers to retain ownership.

Ms. Lebret said standing together is perhaps the only way creators will be able to convince companies such as Netflix to do business differently.

“We are many small companies and they are giants,” she said.

This story has been published from a wire agency feed without modifications to the text. Live Mint

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