The Brazilian House of Representatives approved on Wednesday (August 16) the urgency request for a bill that establishes a kind of quota for national content on video-on-demand platforms, also known as “on-demand” platforms, such as Netflix, for example. The request was approved with 291 votes in favor and 106 against.
There were five abstentions. The approval of urgency allows the issue to be discussed by the full House of Representatives without the need to go through a special committee, as stipulated by the procedural rules. If approved by the deputies, the text will move on to the analysis of the Federal Senate before going through presidential approval or veto. The text was introduced in 2017 by Paulo Teixeira, currently the Minister of Agrarian Development and a licensed federal deputy.
The proposal suggests that 2% to 20% of the total hours of the film and series catalog offered by the platforms be titles produced by Brazilian production companies. The percentage will be determined according to the company’s gross revenue, with a minimum quota of 2% for companies with an annual gross revenue of up to R$ 3.6 million and a maximum quota of 20% for those with an annual gross revenue above R$ 70 million.
If approved, the changes will apply to all platforms that offer services to users residing in Brazil, “regardless of the location of their headquarters.” Microenterprises and small businesses that are part of the Simplified Tax System (Simples Nacional) will be exempt from these obligations. According to the project, content platforms will also have to contribute to the National Cinematographic Industry Development Contribution (Condecine).
The contribution will be progressive, starting at 0% for companies with an annual gross revenue of up to R$ 3.6 million and reaching a maximum of 4% for companies with an annual gross revenue above R$ 70 million.
The text also stipulates that 30% of the collected amount will be allocated to Brazilian production companies located in the North, Northeast, and Central-West regions. According to the proposal, platforms can also deduct up to 30% of the amount owed to Condecine for the purchase of rights to Brazilian independent production works or for production or co-production projects of these works.
Regulation and Penalties: The bill being analyzed by the House of Representatives also states that the regulation and oversight of on-demand audiovisual communication activities will be under the competence of the National Cinema Agency (Ancine).
Video-on-demand companies will need to be accredited by the agency. Platforms that fail to meet their obligations will be subject to penalties ranging from warnings to fines of R$ 1,250 to R$ 25,000 per violation, with the possibility of temporary suspension or cancellation of accreditation. The urgency request was approved by 291 votes in favor and 106 against; there were five abstentions.
