Netflix International B.V. has disclosed the conditions of its pilot programme offering additional compensation to Polish filmmakers. As anticipated, the terms presented to selected crew members are highly unfavourable to creators. Despite Netflix urging authors not to consult agents or lawyers, several have approached SFP-ZAPA to evaluate the proposed provisions.
Crucially, not every release, despite profiting Netflix, qualifies for a settlement. The proposed mechanism for 'additional remuneration' applies only to productions watched at least in 90% by 10 million viewers. This condition requires minimum of 10 million viewers to watch an entire season to trigger payment. Surprisingly, Netflix may exclude countries with an existing internet royalty system from this settlement. This therefore applies to countries with by far the highest consumption of content on demand across the European Union, such as France, Spain, or Italy, where statutory royalties from VOD have already been introduced.
The so-called 'additional remuneration' for film or series authors is unrelated to Netflix's profits; it's arbitrarily determined by Netflix for each production. This method contradicts proportional remuneration, undermining the essence of platform revenue linkage. The initial payment, even for productions not reaching 10 million views, may take five to six years, with rates lower than rightful royalties from online exploitation.
The proposed agreements violate Polish and European law, worsening the creators' legal standing. This affects current rights guaranteed by Polish law and new ones forthcoming from the 2019 Directive on Copyright in the Digital Single Market.
(1) Authors signing Netflix's contract unreasonably relinquish all claims, limiting their ability to address rights infringements or demand additional remuneration from above-average profits. Netflix can potentially commit various types of infringements of the rights of the series creators, making unauthorized fragmentation of the film, advertising use going beyond the scope of the production contract, etc.
(2) The agreement significantly restricts Netflix's disclosure obligations, hindering creators' ability to acquire vital information about their work's exploitation. These restrictions are completely unjustified and contrary to the standards introduced by the Digital Single Market Copyright Directive.
(3) The agreement seemingly waives statutory royalties under Polish law, putting creators at risk of receiving neither statutory royalties nor Netflix's 'additional remuneration.'
(4) Creators are unconditionally bound to fight against statutory royalties, risking further obstacles to their rights.
Dominik Skoczek, director of SFP-ZAPA, remarks on Netflix's potential motive, stating, "In my opinion, Netflix's real intention is to try to influence the new government before adopting statutory royalties from the internet for all filmmakers. We are concerned that Netflix will use the argument that the proposed mechanism of so-called 'additional remuneration' is sufficient and that there is no need to further strengthen the rights of creators through statutory royalties. Similar actions have been carried out by Netflix in other countries, such as Germany. German directors and screenwriters have described the terms of the collective agreement negotiated over their heads with Netflix for only selected creators as 'the worst in Europe.' Only a statutorily guaranteed solution will ensure that all creators are paid in full proportion to the profits of online platform owners. It is significant that the proposal was addressed to Polish creators just now - on the eve of the appointment of the new government, which, as is well known, has a decidedly more pro-EU stance than the previous one. It can therefore be assumed that it will swiftly implement the directive, which has already been delayed for 2.5 years."
Jacek Bromski, President of the Polish Filmmakers Association, denounces Netflix's offer, stating, "Netflix's offer can be considered an abuse of dominant position. It was made only to selected film and series creators, it is not subject to any negotiations and the deadline for its acceptance was set for a very short time, which makes a detailed analysis impossible. It is scandalous that a platform which functions and becomes rich thanks to film creators is dividing the Polish film community on an unprecedented scale. It creates blacklists of filmmakers, pits some against others and threatens to shut down productions in Poland. Netflix's actions today have led to a situation in which a handful of filmmakers, pampered by the platform, must decide whether to deprive the entire community of their due streaming remuneration."