Can new law increase Netflix subscription fees? Understand the problem!

Alert for streaming platform users! With the approval of a new law, the value of Netflix (and other streaming services) may increase! Know everything.

The streaming era in Brazil may be about to face a major upheaval. With the recent approval by the Senate’s Economic Affairs Committee (CAE) of Bill 2331/2022, known as the "Streaming PL", a new chapter begins in the regulation of video on demand and streaming services in the country.

This legislative change could have a significant impact on the prices of services offered by entertainment giants such as Netflix, Amazon Prime Video, HBO Max, among others. Understand now how this can affect you.

Can new law increase Netflix subscription fees? Understand the problem! Credit: Reproduction.

The most popular streams in Brazil

Brazil is a bustling market for streaming platforms, with several popular options available to consumers. The best known and most widely used include:

NetflixAmazon Prime VideoDisney+Star+HBO MaxInstagram (with video monetization)YouTubeTikTokFacebook

These platforms have revolutionized the way we consume entertainment, offering a variety of content just a click away.

The new law that could increase the value of Netflix

PL 2331/2022 appears with the aim of including streaming in the Contribution to the Development of the National Cinematographic Industry (Condecine), regulating Video on Demand (VoD) more broadly.

This means that streaming platforms such as Netflix, Amazon Prime Video, Disney+, Star+, HBO Max, as well as social networks that monetize videos such as Instagram, YouTube and TikTok, will be taxed by the Brazilian government.

What is the value of Condecine?

Condecine will be calculated annually, limited to 3% of the companies’ annual gross revenue. Tax ranges vary depending on the organizations' annual revenue, including:

Companies with revenues of up to R$4.8 million: exempt from taxation.Companies with revenues between R$4.8 million and R$96 million: rate of 1.5%.Companies with revenues exceeding R$96 million: rate of 3%.

This scenario directly impacts large players such as Netflix, which recorded revenue of US$8.5 billion in the third quarter of 2023. It is important to highlight that platforms will be able to deduct expenses on training, production, licensing and infrastructure for audiovisual content in Brazil.

In addition to the increase: Quota for national productions

A crucial point of the approved text is the obligation for streaming companies to offer a minimum of national productions in their catalogs for Brazilian subscribers.

Furthermore, platforms must be accredited by the National Cinema Agency (Ancine) to guarantee control over the content transmitted. There are proposals for different quotas, one of which is 10% applied over 8 years.

Will Netflix’s value really increase?

With the implementation of the new tax and changes in regulation, concerns arise about a possible increase in streaming subscription prices.

Although nothing has been confirmed, the platforms have already been adjusting their values ​​to cover previous losses. The arrival of the new tax and tax reforms could worsen this situation, impacting the consumer’s pocket.

While the perspective of tax reform is projected for the year 2033, the bills that aim to regulate the streaming sector have a short-term forecast. Therefore, it is possible that the effects of these changes will begin to be felt on consumer bills as early as 2024.

This situation puts streaming service users in a position of both anticipation and caution, waiting to see how prices and access to their favorite services might change in the coming year.

Has the Streaming PL been approved yet?

The approval of the "Streaming PL" marks a new phase in the digital entertainment industry in Brazil. With the possible implementation of new taxes and regulations, streaming platforms may be forced to review their pricing and content strategies.

For consumers, this could mean an increase in monthly fees, but also a greater supply of national productions.

Finally, it is worth remembering that, although the proposal has already been approved by a Senate committee, the matter must still be voted on in the plenary to generate practical effects. Furthermore, it must guarantee the sanction of President Lula.

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