France’s ultimatum to Netflix: ‘Our way or the Google way’

Jan 27, 2014
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Netflix has a new tentative launch date in France, the JDD reported this weekend; the video streaming site has delayed its launch by nearly a year, despite successful internationalization in Sweden and other European countries, raising questions about France’s ability to ‘play nice’ with companies. Quick to respond to the leaked news, the Cultural Minister Aurelie Filippetti said of Netflix “If they want to launch in France, they are going to have to bend to our rules… Netflix will not be a[PASSENGER] “ Netflix’s delayed launch into France has, again, raised questions about tax equilibrium in Europe. On the one hand, we see the Netflix’s performance both as an Internet company and in the TV/entertainment space has been astonishing; the service recently received its first Emmy, Golden Globe & Oscar nomination for ‘House of Cards’, marking its arrival into the proverbial ‘big leagues.’ On the other hand, France’s vibrant local film scene (along with Bollywood & Nollywood, arguably one of the strongest film hubs outside of California) seems to be a perfect fit for Netflix – a vast catalog of French films largely unavailable to the public. Filippetti points out that Netflix could easily set up a holding in Luxembourg and manage all its transactions there, avoiding the very Culture Tax that Filippetti set up in order to fund the very film scene that Netflix is looking to monetize. In 2013, only 1 out of 10 films in France were profitable (Source: Allocine); while one could easily suggest that this is France’s problem, those very films that are unprofitable are producing actors like The Artist’s Jean Dujardin, or the Inception’s Marion Cotillard, arguably making their mark on the international stage. Just like the NCAA is ‘funded’ by the NBA, so it goes that, if Netflix wants to monetize France’s vast filmography (as well as monetize French citizens) it’s going to have to play France’s game. It’s not as if France hasn’t been trying to engage in open dialogue with Netflix; between meetings at the Elysée & at CES earlier this month, France is sending a clear message: do it our way and be welcomed with open arms like Amazon has, or do it your way and become a veritable digital enemy of the state as Google has. The choice is yours, Netflix, so which is it: Amazon or Google?