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ANCINE launches public consultation on VOD and games regulation


Raphael de Cunto; Beatriz Landi Laterza Figueiredo

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The National Film Agency (ANCINE) launched on December 2016 two separate public consultations on controversial matters that were provided for in its regulatory agenda for the years of 2015-2016: audiovisual communication on demand (CAvD) and games regulation.

As it is often the case of ANCINE's proposed regulations, one of its announced goals, in both regulations, would be to stimulate the production and distribution of Brazilian independent and regional content.

Audiovisual Communication on Demand (CAvD)

ANCINE claims there is a need for regulation in order to, among others, establish fair competition with traditional audiovisual distribution channels and certainty on the assessment of the Contribution for the Development of the National Cinematographic Industry (CONDECINE) (as it is controversial whether the existing rules allow ANCINE to charge the fixed CONDECINE in this market).

In the Regulatory Notice submitted for debate, ANCINE defines the "Audiovisual Communication on Demand" (CAvD) market as a sector of the audiovisual industry (along with cinema, free-to-air TV and Paid TV) and describes it as the "offer, by means of electronic communication networks, of audiovisual content previously selected or organized in catalogues, for the fruition by users on demand and at the time they wish".

ANCINE also proposes to divide the CAvD market into two different segments according to the business model adopted and that would be subject to different regulations in some aspects: video-on-demand (VOD), and audiovisual content sharing platforms. The first is defined by ANCINE as the selection and organization of audiovisual content for the offer to the public, in general, and the latter as the interfaces and systems that (i) store and make available to the public, in general, catalogues of audiovisual contents produced or selected by users (wither individuals or entities), (ii) organize, mainly by means of algorithms, the audiovisual content stored, as to impact in the presentation, identification or sequence of the content made available, and (iii) have a commercial purpose.

Regulation of the VOD segment, as proposed by ANCINE, would include requirement of minimum quotas of national content and investment obligations in the national audiovisual industry, similar to those obligations existing in the Pay-TV market. In addition, players in both market segments (VOD and sharing platform business) would be required to register with ANCINE, employ Brazilian nationals with editorial responsibilities, disclose revenues and other business information to ANCINE, inform parental ratings, give prominent position to Brazilian content in their catalogues and pay CONDECINE (to be calculated over the companies' total revenues in the Brazilian market, including revenues with advertisement, instead of a fixed amount per title available).

ANCINE requests the public to provide comments on any topics addressed in the Regulatory Notice and especially to the following questions:

  • how to address CAvD regulation to avoid asymmetries in the competition between Brazilian and foreign companies;
  • how to address the obligation of minimum quotas of national content without compromising the increase in diversity of foreign titles;
  • how to address direct mandatory investment  in the production and/or licensing of national content;
  • how to ensure fairness or prominent position for Brazilian content in the catalogues;
  • what CONDECINE rates should apply on companies' revenues;
  • does it make sense to establish asymmetric obligations to early stage business (such as lower CONDECINE rates) as to stimulate competition?

The deadline for submitting contributions to this debate is March 22, 2017.

Video games
ANCINE submitted a Review of Regulatory Impact Report (Análise de Impacto Regulatório - AIR) of the games industry for public debate.  The report raises a few challenges faced by the domestic games industry, including, among others, those related to taxation and copyright protection. The report also compares this industry to the traditional audiovisual market and brings suggestions for government actions aimed at the sector's development.

ANCINE proposes the following actions for debate:

  • creation of incentive mechanisms to the industry, similar to those used in the traditional audiovisual market;
  • creation of tax benefits that cause part of the taxes due in international remittances to be applied in local investments (similar to benefits provided for in Articles 3 and 3A of Law 8,685/1993);
  • use of existing resources in audiovisual and cinema sectorial funds for the games industry development;
  • actions aimed at the formation of national publishers;
  • strengthening of direct distribution practices by the games producers;
  • incentives to human resources training/formation and to their retention in the national territory;
  • creation of one single sectorial policy;
  • actions that unburden the production chain and direct part of federal taxes to the industry's development;
  • clarification on the applicable copyright protection.

The deadline for submitting contributions to this debate is March 6, 2017.

In both cases (CAvD and games regulation), no draft rules have been made public by ANCINE.

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