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Cuota de cine mexicano a Netflix, Amazon y HBO afectará al consumidor

La Ley Federal de Cinematografía y el Audiovisual, pretende que plataformas digitales como Netflix, Amazon, HBO o Blim tengan como obligación ofrecer el 30% de producción nacional, algo que perjudicará directamente a los consumidores mexicanos.

“La nueva ley impone una cuota desproporcionada de contenidos nacionales en todas las plataformas digitales que operan en México, similar al modelo de la Unión Europea con el fin de mejorar la producción y distribución de contenido local en las plataformas digitales, pero la mexicana está incompleta”, se señala en un documento del Consumer Choice Center con sede en Estados Unidos.

La  legislación europea encontró un equilibrio entre la promoción de sus contenidos locales y el mantenimiento de los incentivos para invertir en nuevas producciones.

“Sabían que una cuota de contenido por sí misma no tendría un impacto directo en los incentivos para producir nuevos contenidos locales, especialmente para los pequeños productores independientes que no siempre pueden alcanzar los altos montos de inversión requeridos para producirlos. Por ello, todos los países europeos que han decidido aplicar esta obligación la han combinado con incentivos fiscales para promover la producción audiovisual”, agregan.

Por esto, La Ley Federal de Cinematografía y el Audiovisual debe, también, incluir incentivos financieros para la producción nacional. Hasta ahora, los resultados han demostrado que en Europa el ingrediente esencial de esta ecuación son los incentivos financieros, no las cuotas.

La pérdida de los consumidores sería inmensa de aprobarse dicha ley, apoyada por la Academia Mexicana de Artes y Ciencias e impulsada por el senador Ricardo Monreal y la bancada de MORENA.

“Para cumplir con la cuota del 15%, Amazon Prime, al igual que otras plataformas similares, tendría que triplicar su colección de películas mexicanas en muy poco tiempo sin tener la certeza de que haya contenido disponible para incluir en su catálogo.  Reducirán la cantidad de contenido total disponible y comprando más contenido producido principalmente por Televisa. En lugar de aumentar la oferta”.

Sin cuotas y sin leyes

Las cuotas de contenido ya se está dando a través de un proceso natural en el que las plataformas internacionales buscan crecer fuera de sus países de origen.

Amazon Prime aumentó el contenido original producido en México en un 68% entre 2018 y 2019. En 2020, Netflix invirtió 200 millones de dólares para producir contenido original en México y gastará casi 300 millones de dólares para producir 51 series en 2021. México es uno de los cinco países en el mundo donde Netflix opera un estudio de producción para producir contenido regional. Disney+ también producirá 21 producciones este año en México. Y HBO Max, incluso antes de su lanzamiento, ya está creando producciones localmente. Todo ello sin cuotas impuestas por el gobierno.

“La cuota de contenido haría que la inversión de las plataformas digitales en México no se dedique a realizar nuevas producciones con nuevos talentos, y únicamente se destine a comprar programas antiguos, frenando el desarrollo del cine mexicano que recientemente ha tenido éxito de mano de los servicios de streaming”, se explica en dicho documento.

Netflix tiene más de 4,000 títulos aquí en México y Prime Video tiene más de 4,000. Blim, la plataforma mexicana con la mayor biblioteca local de contenidos, tiene casi el mismo número de películas mexicanas en su catálogo que Prime Video en 2019 (231 y 224 respectivamente). Sin embargo, las 231 películas mexicanas representan el 95% de todo el catálogo en Blim y sólo el 5% del catálogo de Prime Video. Para cumplir con la cuota del 15%, Prime Video tendría que eliminar dos terceras partes de su biblioteca.

¿Un peligro más?

La fracción de Morena en la Cámara de Diputados propuso cobrar un impuesto del 7% adicional en las tarifas que cobran las plataformas digitales extranjeras por los servicios de streaming .

La diputada Reyna Celeste Ascencio propuso modificar la Ley del Impuestos Especial Sobre Producción y Servicios (IEPS) y el  impuesto se cobrará adicionalmente a la tarifa de Apple Tv, Disney +, Hulu, Netflix, Roku, entre otros servicios.

El consumidor, volverá a perder ante un aumento en el precio de las plataformas y por la obligación de ver productos mexicanos, sin darle la oportunidad de elegir lo que quiere ver.

Originally published here.

We don’t need content quotas

Streaming platforms and consumers should make their own decisions…

A number of countries and regions are already applying entertainment content quotas. This means that a certain percentage of audiovisual content on broadcasting channels needs to be local. This rule already exists in France, for radio broadcasters.

For private radio stations, there are rules on the broadcasting of French-language songs. It states that: “the substantial proportion of musical works in French or interpreted in a regional language used in France must reach a minimum of 40% of French songs, at least half of which must come from new talent or new productions, broadcast during significant listening hours by each of the radio broadcasting services authorised by the Conseil supérieur de l’audiovisuel, for the part of its programmes composed of variety music. ” 

Since July 2016, the law has been supplemented by new provisions:

Firstly, the addition of a third ad hoc derogatory regime for so-called “musical discovery” radio stations: at least 15% of new French-language productions or new French-language talent Secondly, the introduction of a malus aimed at excluding some of the broadcasts of the ten most scheduled French-language titles, those that account for more than 50% of total French-language broadcasts, from the calculation of compliance with the obligations to broadcast French-language songs. Lastly, the creation of a bonus allowing the overall quotas for French-language songs to be adjusted downwards by up to five points, subject to compliance with several cumulative conditions relating in particular to substantial and quantified commitments to promote diversity in music programming.

It really needs the French to make a radio station so downright bureaucratic, and its music awfully controlled. Like French music or not, I cannot for the life of me understand a system in which the government comes into your station and decides of which origin your audio-content needs to be. It isn’t just dystopian, it’s downright authoritarian.

Mexico is currently debating new rules that would require a national content quota of 15% (“content or video generated by an individual or corporation with a majority of funding of Mexican origin”). The fact that the EU also deals with an audiovisual content quota for local content is inspirational to other countries. Developed countries having a rule often allows legitimacy to nationalistic rules in other regions. The term “nationalistic” is carefully chosen here, because in essence the government is making broadcasters discriminate on purpose.

On what basis could anyone in the European Union argue that consuming European audiovisual content is in any way preferable to a movie from South Africa or a song from Malaysia? Is this the European equivalent of supporting cultural diversity, supporting audiovisual access for our expat communities, and assisting content creators in developing nations?

Yes, the United States indeed dominates the streaming markets with its films and its music. The question is whether we — or any other country for that matter — is right in believing that boosting our cultural sector happens if we force broadcasters to favour our content by law. The EU is the most significant consumer region on the planet; if anything, it should be easier for our content providers to satisfy the need for local music and films.

Celebrating our cultural diversity is not a bad thing. While it is great when local artists make it on the big screen, or land their hit in the charts, it is not a tragedy if they do not. Art is not a national possession, it is an internationally cherished part of our lives. Government ought not appropriate it.

Originally published here.

The fallacy of content quotas

I’ve become somewhat of a streaming junkie during this pandemic, following up on the criticism that my pop-culture knowledge is sub-optimal. Now subscribed to three services at once, I watch both popular movies and TV shows from the U.S. and niche local productions buried in the dark corners of Netflix. On these platforms, content curation is everything. The algorithm feeds me with matching shows and the search bar helps me identify titles most fitting for what I’m into.

Though I’m satisfied, some regulators are unhappy with the amount of local artistic content on these platforms. “In order to increase cultural diversity and promote European content, the new legislation proposes that 30% of content of TV channels and VOD platforms would have to be European,” said a European Parliament press release from 2018. But putting “Europe first” on Spotify and Netflix is problematic for a number of reasons.

On the one hand, legislators intervene with broadcasting companies’ freedom to pick their own content. At present,  they choose which content they deem most interesting and valuable for their customer base. It’s difficult to imagine that streaming services would find no value in making local content, given that they are competing with TV broadcasters who cater to this market. Added to that, calling these content quotas “supportive” of the cultural sector is a misnomer because it is unlikely actually to support local productions.

Take Netflix as a case study. American users have access to 100% of Netflix titles, which makes intuitive sense. However, through a mix of copyright rules that enable geo-blocking and content quotas, European Netflix subscribers get a rotten deal. Of all EU member states, Lithuania gets access to the largest share with 52% of titles. With only 11%, Portugal gets the worst experience for subscribers. The idea that content quotas will automatically boost local film production is utopian — it is just as likely that streaming services will reduce the overall available titles to match the quota without needing to spend additional funds.

Politically, the move is deeply un-European. These quotas – which also exist on national levels – have been introduced and reformed by mainstream political parties. Still, it’d hardly be controversial to claim that had Marine Le Pen suggested them, while having French flags in the background, we’d think very differently of this policy. It would be labelled nationalistic, and rightfully so.

For some reason, EU legislators escape this judgement because now it’s being executed on a continent-wide level. But on what basis could anyone in the European Union argue that consuming European audiovisual content is in any way preferable to a movie from South Africa or a song from Malaysia? Is this the European equivalent of supporting cultural diversity, supporting audiovisual access for our expat communities, and assisting content creators in developing nations?

Yes, the United States indeed dominates the streaming markets with its films and its music. The question is whether we — or any other country for that matter — is right in believing that boosting our cultural sector happens if we force broadcasters to favour our content by law. The EU is the most significant consumer region on the planet; if anything, it should be easier for our content providers to satisfy the need for local music and films.

Most of all, European legislation is all too often the domino that creates a chain reaction. Mexico is currently debating new rules that would require a national content quota of 15% (“content or video generated by an individual or corporation with a majority of funding of Mexican origin”). However, this initiative overlooks the fact mentioned above; that the EU is the largest consumer region in the world.

The synergies obtained from an economic bloc the size of the EU are not the same from an individual market. And even if the EU regulation allows the production from over 40 countries to be considered for the quota – the chain reaction amplifies the insidious effects of the legislation rather than promote the so-called cultural benefits. In the end, consumers will be left with less diversity of content as producers would reduce their catalogues only to comply with the regulation.

Content quotas reduce consumer streaming experience, they unfairly discriminate against foreign productions, and they do not achieve the goals they were set out to achieve. If we were empowered to rate public policies on an IMDb equivalent platform, this would get a 0.0/10.

Originally published here.

Narcos 3.0: Mexico declares War on Vaping and repeats old prohibitionists mistakes

When Mexico’s far-left President Andrés Manuel López Obrador (or short AMLO) ran for office in 2018, he and his platform promised an end to the decade-long war on drugs in Mexico. He acknowledged that prohibitionist policies cause more harm than they do good. Ironically that same President issued a surprise presidential decree on February 19 banning the import of e-cigarettes, vapes, and heated tobacco products. The order even forbids the import of nicotine-free vaping liquids.

The Presidential decree relies heavily on scare tactics, invoking the U.S. “vaping crisis” to justify Mexico’s ban. But even the U.S. CDC and AMLO’s decree concede the “vaping crisis” was actually caused by illicit black market vaping liquids. Pushing Mexican vapers to the black market will exactly cause what the order claims it is trying to prevent: more lung diseases.

Even before this decree, Mexico had opaque vaping regulations, that had to be clarified by a supreme court ruling and allowed at least certain manufacturers to sell e-cigarettes to the country’s roughly 1.2 million vapers.

These vapers are now being left alone with no access to nicotine products that are less harmful than conventional cigarettes, and that in times of lockdowns and people spending most of their week at home thanks to COVID. Two scenarios are most likely to happen if the decree does not get annulled:

  • Narcos 3.0: Mexico has a well developed black market for illicit substances, and, as regular Netflix viewers know, it serves as a massive transit hub for the global drug trade. It wouldn’t take much for organized crime to either smuggle legal vaping products from neighboring countries into Mexico and sell them on the black market or (even more concerning) sell counterfeited vaping liquids to Mexican vapers. The vaping crisis in the United States, which the Presidential decree instrumentalizes for its ban, was caused by illicit black market vaping liquids. Pushing Mexican vapers to the black market will exactly cause what the order tried to prevent: More lung diseases. 
  • Back to the ciggie: Even is the more dramatic scenario of a booming vaping black market might not come true (mainly due to the low margins on nicotine products compared to Cannabis or Cocaine), we would still see over a million vapers left behind. It is more likely that most of them will switch back to smoking regular cigarettes instead of switching to nicotine patches or entirely quit. That, in turn, would also lead to worse public health outputs.

We can see that AMLO’s decree will have serious, negative unintended consequences contrary to its own objectives.

Perhaps the most concerning is that the World Health Organization lauded Mexico’s vaping ban as a public health achievement, it fails to recognize that Mexico’s anti-vape stance will keep smokers and nicotine consumers locked in with combustible cigarettes. This policy deprives them of the choice to switch to the 95% less harmful vapes. The Consumer Choice Center’s interactive vaping map shows that up to 3.3 million additional Mexican smokers could switch to vaping if the government would emulate the UK’s progressive and science-based vaping laws.

 

Better vaping policies could help millions of Mexicans

So instead of cracking further down on vaping, Mexico should embrace tobacco harm reduction. Due to COVID and the parliamentary schedule, the Mexican Congress is currently out of session. Still, there is a window for legislative action when Congress returns to operation in the fall.

Consumer groups, vaping advocates, and the scientific community need to use this window of opportunity to explain more Mexican politicians and regulators the benefits of vaping and help busting myths around the United States’ vaping crisis. Initial protests against this misguided decree started already in March. This multi-lingual paper on the Myths and Facts on Vaping, written by my colleagues Yael Ossowski and Bill Wirtz explains the reasons behind the perceived vaping crisis in the US and is also available in Spanish. Probably an essential message in this paper for politicians is this one:

MYTH #3: VAPING IS THE CAUSE OF RECENTLY REPORTED RESPIRATORY ILLNESSES

Much cause for concern of late has been a flurry of reports of illness and hospitalizations blamed on traditional vaping devices and liquids. The CDC has reported nearly 380 cases of lung illnesses related to vaping. Sensational headlines and opinion articles have convinced leaders in several states and even President Donald Trump to consider banning vaping flavors outright.

But careful analysis of the reported cases reveals that a vast majority of the patients with symptoms were found to have used illicit vape cartridges mixed with the cannabis compound THC. 

A study in the New England Journal of Medicine that examined cases in Illinois and Wisconsin found that 84% of hospitalized patients report using illicit THC vaping cartridges prior to their illness. No illnesses have yet been tied to store-bought vaping pods or liquids containing nicotine.

To that end, two Wisconsin brothers were recently arrested in connection with a multi-million dollar operation that mixed various chemicals (including Vitamin E) with THC in cartridges meant for vaping devices, which they then sold illegally. Authorities have identified this large scheme spread across much of the Midwest as a culprit in the recent lung illnesses there.

What this reveals is that illicit vaping products sold on black markets, rather than licensed retailers, have actually caused the most severe of the lung illnesses reported in the media. 

As such, a ban on regulated devices and liquids, whether with flavors or not, would not address the problem as it currently exists.

By pushing vaping into the black market and Mexican vapers going back to the cigarette, AMLO will (despite the thunderous applause from the World Health Organization) further weaken Mexico’s public health outputs. If he is passionate about fighting lung diseases he should make access to legal and safe ways of consuming nicotine easier and not harder. Everything else is just a stimulus program for organized crime and lung specialists.

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