Brazil's Lower House approved the base text of PL 8889/17 on Tuesday (4), regulating streaming and imposing taxes to boost Brazilian audiovisual production. The vote on 14 amendments is scheduled for Wednesday (5), and the text may still change. Platforms like Netflix and YouTube must pay Condecine contributions, at 4% for paid services and 0.8% for open ones.
Bill 8889/17, reported by Deputy Doutor Luizinho (PP-RJ), requires video-on-demand platforms in Brazil, paid or free, to contribute to Condecine, which funds the Audiovisual Sectoral Fund (FSA). For closed platforms like Netflix, Prime Video, Globoplay, Apple TV+, and Disney+, the rate is 4% on annual gross revenue, with up to 60% deductible through investments in licensing Brazilian productions. Open platforms, including YouTube, TikTok, Instagram, and Kwai, pay up to 0.8%, without direct deduction options.
FSA resources will support projects by Brazilian content creators, such as influencers and YouTubers, after an earlier amendment was dropped following talks with the Ministry of Culture. Platforms must allocate 10% of their catalogs to national works within six years. Up to 40% of contributions can be deducted via direct investments in Ancine-registered Brazilian producers, benefiting firms like Globoplay.
An Ancine report from 2024 indicates Brazilian content makes up 8.5% of streaming catalogs in the country, ranging from 1% on Disney to 28% on Globoplay. Sector sources predict more national works on foreign platforms in coming years but differ on consumer impacts. A source from a major platform states subscription prices are unlikely to change soon, more affected by factors like exchange rates. Another, linked to producers, believes the tax does not significantly impact profit margins.
The approval caused tension in the Lula government. The Ministry of Culture negotiated separately with the rapporteur, advocating for a 6% rate, but the text retained 4%. Other ministries, like Development and Institutional Relations, criticized the timing, fearing it could hinder tariff negotiations with the US, whose companies are most affected. Canada faced similar US resistance with a comparable law. In a statement, the MinC said it is acting in coordination, aligned with national sovereignty interests.