As telcos call for so-called over-the-top (OTT) players to contribute financially to infrastructure costs, Romania is already moving ahead with a direct tax on the profits of streaming services like Netflix
In recent months, European operators have once again been urging regulators to force big tech companies to help pay for their expensive infrastructure rollouts. In a recent study from the European Telecommunications Network Operators’ Association (ETNO), the telcos argued that Meta, Alphabet, Apple, Amazon, Microsoft, and Netflix should contribute €20 billion annually towards their network costs, since they account for over 56% of annual traffic on telco networks.
European Commissioner Margrethe Vestager has said that the EU will consider this proposal, saying that these players have so far “not been contributing” to enabling the traffic that they generate. Detractors, meanwhile, say such plans unfairly punish the tech players, with a group of non-government organisations also recently pointing out that such a tax would arguably run contrary to European rules surrounding net neutrality.
Now, it seems that Romania is already moving to redress the balance of power, at least when it comes to streaming services, implementing a new tax of 4% on the revenues of video-on-demand providers. The tax will apply on revenues generated from both individual transactions and repeat subscriptions.
The funds raised from this tax will be given to the national film fund, managed by the Romanian Film Centre, to help develop the country’s domestic film industry.
The tax is being implemented to create a more level playing field between streaming services and the broader film industry, with Romania’s domestic cinemas already obligated to dedicate 4% of their revenues to the film fund.
”The contributions to the Cinematographic Fund, as they are provided in art. 13 of Government Ordinance 39/2005 regarding cinematography are 4% for the traditional operators, respectively the cinemas. On-demand audiovisual media services, generically known as VoD platforms, are in fact still operating. Thus, a discrimination in the way in which one operator contributes to the Film Fund in relation to another does not find any objective justification,” said the government in a translated statement.
Services with audience levels below 1% or with revenues of less than €65,000 a year will be exempt from this new tax.
The law will also see streaming platforms required to dedicate at least 30% of their libraries to media produced in Europe.