Swiss voters decide to impose levy on streaming giants

Netflix and other international operators of online entertainment platforms will have to offer a minimum of 30% of European productions. Keystone/Gaetan Bally

International online entertainment platforms are facing a mandatory investment into the Swiss film industry following Sunday's nationwide referendum on the issue.

Final results show 58.4% of voters coming out in favour of a parliamentary decision to adapt the Swiss film law.

Only rural regions in the German-speaking part of the country voted against the levy.

Pollsters expected a neck-and-neck race between supporters and opponents who warned of state intervention in a free market economy and price hikes for consumers. 

Turnout on Sunday was below average following a campaign which was overshadowed by the war in Ukraine.  

In a first reaction, opponents said the result was a “respectable achievement” for the referendum committee made up of the youth wings of three political parties from the centre to the right.

Supporters described the outcome as a boost for cultural diversity and public services. They said Switzerland was catching up with legislation on streaming platforms in many other European countries.

Interior Minister, Alain Berset, whose portfolio includes culture, said Sunday’s result was good news for the Swiss film industry.

“The clear outcome shows the importance voters attribute to culture,” he told a news conference.

He said the legal amendment would come into force in 2024 and streaming platforms would be given four years to adapt their investment plans. He reiterated that the new rules are necessary to account for the digital transformation and growing importance of streaming platform operators.   

Obligation

At stake in the reform of the Swiss law was an obligation for streaming platforms, mainly from the United States, to invest up to 4% of their revenue from Switzerland in the production of Swiss films and television series.

It also requires that at least 30% of the broadcast content of the streaming services is produced in Europe, including in Switzerland.

The Federal Office of Culture estimates the extra annual contribution for the Swiss film industry at up to CHF18 million ($18.2 million).

Direct state funding for the industry currently amount to CHF39 million annually, according to the culture office. 

Referendum

Parliament approved the reform last September, but opponents collected enough signatures to force a nationwide referendum on the issue.

They argue quotas and obligations are an attack on the economic freedom of both producers and consumers. Extra funding does not ensure high-quality productions, the opponents say.

Restrictions on streaming platforms would inevitably lead to an increase in prices, they claim.

Parliament

The government and a majority of parliament, supported by the left and large parts of the centrist parties, have recommended approval of the reform.

“We want the streaming services which have won the upper hand over the past few years to be put on the same footing, like in other countries,” Berset said.

Supporters also say the planned obligations ensure some cultural diversity and encourages the emergence of new players in the audiovisual sector.

They have rejected allegations of price hikes pointing to similar legislation in several other European countries.

Media votes

Sunday’s referendum is the latest in a series of nationwide votes on media issues over the past years.

Earlier this year, voters rejected a CHF151 million financial package for Swiss media, primarily for print and online products.

In 2018, Swiss voters clearly threw out a proposal by the political right and private publishers to abolish the mandatory licence fee mainly for public broadcasters.

But three years before, a controversial change in Switzerland’s public radio and television system only gained the upper hand by a narrow margin.

Vote May 15, 2022 – Results

Organ donations – presumed consent           60.2% Yes               39.8% No

Funding European Frontex border agency     71.5% Yes               28.5% No

Reform Swiss film law (“Netflix law”)              58.4% Yes               41.6% No

Turnout: 40.3%

About 5.5 million Swiss citizens, including registered expat Swiss were eligible to take part in the votes.