new law could impact subscribers’ pockets!

Discover the details of streaming regulation in Brazil and how it can financially impact subscribers of services like Netflix and Amazon Prime Video.

Lovers of Netflix and other streaming giants in Brazil have reason to worry. Recently, the Senate’s Economic Affairs Committee (CAE) approved Bill 2331/2022, also known as the "Streaming PL".

This legislation aims to regulate video on demand and streaming services in the country, which could result in financial impacts for subscribers.

Understand how the new law could affect the price of streaming subscriptions in Brazil and what it means for lovers of Netflix and other platforms. (Credit: @jeanedeoliveirafotografia / pronatec.pro.br).

The new law and its details

According to PL 2331/2022, streaming platforms, such as Netflix, Amazon Prime Video, Disney+, HBO Max, among others, will be subject to new taxation. Additionally, social networks that monetize user videos, such as Instagram, YouTube and TikTok, will also be affected by this regulation.

Condecine and its financial implications

The Contribution to the Development of the National Film Industry (Condecine) will be applied to these companies and calculated annually. The rate varies according to the organization’s annual revenue. Companies with revenues of up to R$4.8 million will be exempt from taxation. Those with revenue between R$4.8 million and R$96 million will be subject to a general rate of 1.5%, while those with revenue exceeding R$96 million will have a rate of 3%.

Impacts on platforms; Netflix affected?

This new regulation has the potential to significantly affect major players in the market, such as Netflix, which recorded revenue of US$8.5 billion in the third quarter of 2023 alone. However, platforms will have the opportunity to deduct training expenses , production, licensing and infrastructure for audiovisual content in Brazil, which can help mitigate financial impacts.

Requirements and content control

In addition to taxation, the bill requires streaming companies to offer a minimum of national productions in their catalogs to Brazilian subscribers. It also provides for platforms to obtain accreditation from the National Cinema Agency (Ancine) to guarantee control over the content transmitted.

Possible Netflix price increases and other uncertainties

The question that concerns many subscribers is whether this new legislation will result in price increases for streaming services. Although it is a possibility, it has not yet been officially confirmed. In recent years, some platforms have already increased their prices to encourage customers to purchase packages with advertisements, seeking to cover losses resulting from the market consolidation period.

The arrival of the new tax and other tax reform changes could worsen the financial situation of consumers. According to InfoMoney, consumers can feel the impact of these changes in streaming subscription prices in their pockets. However, it is important to highlight that it is still too early to say with certainty how these changes will affect subscribers.

While the tax reform is scheduled for 2033, the bills that aim to regulate the streaming sector have a short-term forecast. If approved, the financial impacts will be felt throughout 2024. Therefore, streaming lovers should stay tuned for updates and possible adjustments to their budgets in the near future. Uncertainty persists, but one thing is certain: changes are on the way and could affect the pockets of streaming service subscribers in Brazil.

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