Netflix Partnering with Italian Broadcaster Mediaset for Movie Productions

Netflix has reportedly signed a co-production movie deal with Italian broadcaster Mediaset for seven titles to be distributed in the country and worldwide.

Mediaset Italia claims to target more than 60 million Italians living around the world. The company’s domestic TV channels include Canale 5, Rete 4 and Italia 1.

Italian daily Il Sole 24 Ore reports Netflix will majority fund the movies in exchange for first-run distribution rights. CEO Reed Hastings is scheduled to appear Oct. 8 for a public presentation of the deal.

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Mediaset CEO Piersilvio Berlusconi earlier this year disclosed the broadcaster was in negotiations with Netflix and Amazon regarding original content production.

The pact with Mediaset comes as Italian prosecutors have reportedly opened an inquiry involving Netflix’s tax status in the country.

Netflix reports third-quarter (ended Sept. 30) results on Oct. 16.

Spain Lawmakers Seeking 8% Tax on Foreign OTT Video Services

Lawmakers in Spain are looking to impose an 8% tax on over-the-top video services operating in the country, including Netflix, HBO, Amazon Prime Video, Sky Now and DAZN.

The so-called RTVE (Radio Television Espanola) tax is aimed at funding Spain’s ad-free public broadcaster, which has been undermined in recent years by plummeting advertising sales among commercial broadcasters, who contribute about 1.5% of their revenue to RTVE’s budget.

The proposed tax is incorporated in the Audiovisual Media Services Directive, which aims to level the playing among broadcasters such as Atresmedia and Mediaset, pay-TV operators/telecoms (Movistar, Telefónica España, Orange and Vodafone) and now OTT video.

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The updated law would impose a 5% tariff on in-state SVOD revenue earmarked toward domestic film production, and another 3% directed toward RTVE.

According to Spanish media site El Español, the tax would apply to revenue generated by an OTT service’s Spanish subscribers. As a result, HBO would be charged a percentage of the revenue generated by its 475,000 Spanish subs, instead of the company’s reported revenue based on the location of its tax-incentivized fiscal headquarters.

The tax  could become law by the end of the year.

Separately, local and national governments worldwide continue to search for ways to tap into the lucrative OTT landscape — with varying degrees of success.

Georgia lawmakers in February backed away from imposing a 4% tax on subscription streaming video services. The tax is still on the table for music services, video games and e-books.

“People didn’t like what has become known as the Netflix tax, so we took that off,” Rep. Bill Werkheiser told the media. “The effort initially was to help fund broadband. It won’t do that without the Netflix or streaming services tax.”