Baltic streaming platform Go3 says the proposed rules would limit companies' investment choices and make Estonia less attractive to international streaming providers

The Ministry of Culture has drafted a bill which would transpose the EU's Audiovisual Media Services Directive (AVMSD) into domestic law.

It would require providers of on-demand audiovisual media services, traditional TV and on-demand services alike, to plough 5 percent of any revenues earned in Estonia back into the production of Estonian movies, music and other audiovisual output. This would strengthen the competitiveness of the local industry, proponents say.

However, some streaming industry stakeholders both in Estonia and internationally say the bill and the AVMSD could harm domestic production of streaming services, particularly more niche areas.

Digital TV film channel Go3 says the obligation would restrict companies' ability to make investment decisions, rendering the Estonian market less attractive to international service providers.

Go3 also shared the Motion Picture Association's (MPA) reservations about the definition of an Estonian audiovisual work, calling it too narrow in the bill's understanding.

Feature films, documentaries, animated films and series are mostly in focus in the bill, whereas Go3 says local entertainment, cultural, current affairs, music and lifestyle programs should also be taken into account, as they contribute just as much to the development of the Estonian language and culture.

Go3 also said the requirement to submit a report audited by an independent auditor every year is disproportionate and would impose a significant additional administrative burden on service providers and hike compliance costs.

The bill should also regulate in greater detail methodologies for calculating the investment obligation, including those relating to bundled services, promotions and advertising revenues, Go3 said.

Meanwhile, global streaming alliance Beyond Mainstream said while it supports the intention of promoting Estonian audiovisual content, the bill must retain an exemption for thematic streaming services. Niche platforms are based on a specific editorial focus, and applying the same investment requirements as those imposed on general-interest platforms could make operating these challenging economically, the organization said.

Niche platforms help increase the diversity of content available to Estonian viewers, Beyond Mainstream added.

The Motion Picture Association (MPA), representing the major U.S. film studios, has called for the investment obligation to be abandoned, arguing the bill does not sufficiently justify why the obligation should amount to precisely 5 percent of a service provider's revenue. The obligations could hike production costs, affect competition and restrict streaming platforms' ability to decide for themselves which projects to invest in, the MPA stated.

The MPA said a reduced rate lower than 5 percent, the removal or revision of language and localization requirements and the easing of the auditing and reporting burden provided for in the bill are among the changes that could be made.

The MPA also called for the obligation's entry into force to be postponed until at least January 2028 and said the bill's definition of an Estonian audiovisual work is problematic. Conditions relating to language, culture and the location of the production company are too restrictive and may conflict with EU principles, the MPA argued.

The AVMSD may enter into force in Estonia as early as next year.

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