Netflix and Disney+, South Africa’s coming for you with its proposed ‘local content tax’

Thapelo Mokoena and Kgomotso Christopher in a scene from ‘Fatal Seduction’. Picture: Courtesy of Netflix

Thapelo Mokoena and Kgomotso Christopher in a scene from ‘Fatal Seduction’. Picture: Courtesy of Netflix

Published Aug 2, 2023

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The Department of Communications and Digital Technologies recently invited public comments on its draft white paper on audio and audiovisual media services and online content safety.

Published on Monday, the draft proposes several new measures that the department hopes will boost local audiovisual content.

One of the stand-out points, as highlighted by Business Tech, is how to get Audio and Audiovisual Content Service (AAVCS) platforms to pay their dues in South Africa.

“The proposed policy changes make way for international and digital platforms to be licenced in South Africa, effectively levelling the playing field among various services – from satellite, pay-TV, online and digital terrestrial (after the analogue switch off later this year),” shared the business news platform.

“Included in these license conditions will be a requirement to carry and boost the production of local content.

“Until now, license holders have had to meet certain quotas for carrying local content, typically expressed as a percentage of total broadcasting time.”

The department cited the high audience and revenue performance of South African drama and music content as evidence that the South Africa content quotas have been successful in stimulating demand for South African content.

“This proposed policy will distinguish between broadcasting services (linear) and non-linear services in graduated fashion and create a level playing field between competing services by imposing regulations and public interest obligations on licensees,” the document read.

The department added, “The extent to which large, global content providers who target South African audiences can be regulated effectively is debatable, but updating the legislation is clearly required, and could unlock additional revenue streams, and platforms for local content.”

According to the report, Netflix submitted that rather than imposing local content quotas, the white paper should be revised to focus on incentivising content providers to make broad-based investment commitments, which would encourage investment at all levels of the content production value chain.