Under the new rules, which are set to be announced May 25, the biggest impact for US and EU viewers would likely come from that vague requirement of "prominence" for European titles. While the precise meaning of "prominence" is unclear (as well as whether the requirement would apply just to the EU, or to everywhere that Netflix operates), it could mean that some of your old family favorites and Hollywood box-office hits will be replaced on your Netflix page with European films. Given that one of Netflix' hallmarks has been tailoring its experience to what you, individually, want to watch, this could represent a major challenge to how it organizes and presents videos online.
The new quota regulations on the other hand, would have a smaller impact and simply require that Netflix, Amazon and other streaming providers continue to feature European content. Under the proposed rules, European films and TV shows need to make up at least 20% of the catalogs for streaming services operating in Europe. But European films already make up 27% of content shown on streaming services and 21% of Netflix content, according to research by the European Commission. These numbers are backed up by media research firm Ampere Analysis, which found that both Netflix and Amazon are already above the required quota.
"Netflix has already been starting to create content that’s designed to appeal to audiences in certain geographies," said Paul Verna, a media analyst at eMarketer. "'Narcos' and 'Marco Polo' are case in point. It already behooves them to tap into local taste as they can, so I don't see this new requirement as a huge deal."
Netflix, however, lambasted the proposed rules in a written response to the Commission, according to the Financial Times. “Rigid numerical quotas risk suffocating the market for on-demand audiovisual media services,” Netflix said. “An obligation to carry content to meet a numerical quota may cause new players to struggle to achieve a sustainable business model.”
One other possible effect is that in order to meet the new quotas, Netflix might have to settle for content it wouldn't otherwise acquire. "I don't think it's a fatal blow if it passes," Verna says. "But I could see it happening that they would be forced to start bidding for cheaper content."
"No company likes to be forced to change their business practices," Verna added. "For them it's a cog int he wheel, but it's not going to derail the train."
Netflix declined to comment for FORBES, and Amazon could not be reached by press time.
