The editing room has always been where filmmakers finalize their vision. Today, however, it’s geopolitical forces wielding the final cut on your creative future. And in his seemingly neverending quest to make life miserable for 99% of the people on the planet, Trump has recently declared tariffs on film that now pose a threat to an already fragile American filmmaking ecosystem. One area of concern is how will American movies be made for the overseas market, particularly in Europe.
What Is AVMSD?
Lately, a battle between US studios and the EU’s Audiovisual Media Services Directive (AVMSD) has been brewing. “The AVMSD is the key piece of legislation in the field of EU audiovisual policy,” according to the European Union Council (originally introduced in 2010 - dj). “Since its last revision in 2018, the audiovisual and media landscape has changed considerably, due to factors such as the COVID-19 pandemic, the Russian war of aggression against Ukraine, the increase of disinformation, misinformation, fake news, hate speech and hybrid threats, and the emergence of artificial intelligence.” Because the AVMSD governs EU-wide coordination of national legislation on all audiovisual media, it includes both traditional TV broadcasts and on-demand services. Furthermore, it contains rules for addressing video-sharing platforms like YouTube, Netflix, and Facebook, more flexibility in TV advertising, and stricter rules to protect minors from harmful content, inappropriate advertisements, and misuse of their personal data. These all sound reasonable but US studios are having problems with the AVMSD because it requires that 1) video-on-demand platforms ensure that at least 30% of their catalog consists of European productions and 2) that these productions are given prominence on the platforms.
How Does This Impact U.S. Studios and What is Their Response?
1. Investment Obligations: The directive forces foreign streaming services to invest a portion of their revenues into local productions in European countries. This requirement has been a point of contention for U.S. studios seeking access to a global market beyond these European countries.
2. Lobbying Efforts: The Motion Picture Association (MPA), representing major U.S. studios and streaming services, has been actively lobbying against what they term "disproportionate investment obligations" in countries like France, Germany, and Italy. However, some European filmmakers like Jacques Audiard and Costa-Gavras have chided the Directors Guild of America for siding with the MPA and using the AVMSD as a scapegoat for Trump’s tariffs or the studio’s troubles.
3. Market Access Concerns: U.S. studios are concerned about maintaining their dominant position in the global market. The AVMS directive's requirements for local content and investment potentially reduce the market share and profitability of U.S. content in Europe.
4. Compliance Challenges: The directive creates additional regulatory burdens for U.S. studios operating in Europe, as they must navigate different investment requirements across various European countries.
5. Content Strategy Shifts: To comply with the directive, U.S. studios and streaming platforms may need to adjust their content strategies, potentially increasing investments in European productions or co-productions.
6. Potential for Market Exit: If investment obligations become too onerous, some U.S. studios or streaming services might consider reducing their presence in certain European markets.
THE DIRECTOR’S DILEMMA
As the battle intensifies between American studios and the EU’s Audiovisual Media Services Directive (AVMS), independent filmmakers may find themselves caught in the crossfire. This isn’t merely corporate posturing—it’s a fundamental restructuring of how films get financed, distributed, and ultimately seen.
The conflict creates a troubling paradox for producers: both sides claim to champion creative expression while simultaneously restricting the very ecosystem producers need to thrive. When studios pressure against investment obligations, they’re fighting requirements that often fund diverse, boundary-pushing independent cinema. Yet when the EU mandates local production quotas, it potentially forces unnatural creative partnerships driven by regulatory compliance rather than authentic storytelling.
PRODUCER CHALLENGES
1. Budget Restructuring Requirements
Producers now face constant budget revisions as investment sources shift. When studios resist EU obligations, previously committed funding evaporates mid-development. Simultaneously, meeting AVMS requirements often means reallocating 20-30% of your budget to satisfy country-specific spending quotas, forcing painful cuts to other production elements.
2. Budget Restructuring Requirements
Producers now face constant budget revisions as investment sources shift. When studios resist EU obligations, previously committed funding evaporates mid-development. Simultaneously, meeting AVMS requirements often means reallocating 20-30% of your budget to satisfy country-specific spending quotas, forcing painful cuts to other production elements.
3. Artificial Casting Constraints
Your casting decisions are increasingly dictated by regulatory checkboxes rather than narrative needs. Studios demand internationally recognizable talent to offset potential market restrictions, while EU quotas require specific percentages of local talent—creating contradictory demands that compromise your creative vision and inflate costs.
4. Production Timeline Disruptions
Regulatory uncertainty extends production timelines possibly up to 3-6 months. Projects stall during critical financing stages as potential partners await policy clarification. These delays cascade through your entire slate, threatening the viability of future productions and creating cash flow crises for production companies.
5. Distribution Deal Complexity
Standard distribution agreements now contain extensive contingency clauses addressing potential regulatory changes. What could be a 30-page contract now becomes 75 pages, requiring specialized legal expertise and introducing new points of negotiation that can derail otherwise promising distribution opportunities.
6. Co-Production Relationship Management
Managing international co-productions has transformed from a creative opportunity to a regulatory necessity. Producers must navigate partner relationships where power dynamics are dictated not by creative contribution but by regulatory leverage, creating tension that frequently compromises the final product.
U.S. Producers in Europe: PREPARe YOUR PRODUCTION STRATEGY
1. Strategic Co-Productions
Develop partnerships that satisfy regulatory requirements while maintaining creative authenticity. Identify European collaborators whose artistic vision genuinely complements yours—forced marriages rarely produce compelling cinema.
2. Distribution Flexibility
Build distribution strategies with multiple contingency plans. The landscape will continue shifting; your distribution approach must be adaptable to emerging realities in both markets.
3. Funding Diversification
Reduce dependence on any single funding mechanism tied exclusively to either US studio backing or EU directive-driven investment. Cultivate relationships with independent financiers who value your creative vision regardless of regulatory environment.
4. Content Rights Strategy
Protect your intellectual property by carefully structuring agreements that preserve your rights across evolving regulatory frameworks. The value of your content may shift dramatically between territories.
ASSESSING THE PREFERABLE OUTCOME
The uncomfortable truth? Neither extreme serves the independent producer’s ultimate goal — creating meaningful cinema with global impact.
The studios’ unfettered access model historically provided international distribution but concentrated power in few hands. The AVMS directive has moral standing and creates funding opportunities but risks fragmentation and potentially forces artificial creative decisions to satisfy quotas.
The preferable outcome lies in the middle ground: regulations that encourage authentic cultural exchange and protects vulnerable individuals without restricting the free flow of creativity. In an ideal world, filmmakers would get a framework that:
Values artistic merit over arbitrary origin requirements
Provides sustainable funding without excessive corporate control
Ensures broad distribution access while protecting creator rights
Supports authentic representation without mandating specific content formulas
THE FILMMAKER’S PATH FORWARD
While policymakers and executives battle, your responsibility remains to your vision. Your power comes from understanding this landscape with its obstacles requires you to adapt and navigate it in new, creative, and efficient ways. The most successful independent producers emerging from this conflict will be those who have the most money to pad risks or those who can figure out how to adapt without compromising.
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