OPINION. If Netflix claims an open-door policy why doesn't it want to talk to South Africa's actors?

by Jack Devnarain

The arrival on our shores of Netflix and Amazon Prime has certainly revolutionised the way we consume entertainment. As two of the world's leading streaming services, they offer a vast library of films, series, and documentaries; it’s clear why they have captivated audiences worldwide. 

South African consumers in particular were hungry for more entertainment options and were thrilled to welcome them. But have they led us to the land of milk and honey, or are we lambs to the slaughter?

Did streaming services approach the South African market and invest in local production for our benefit, or solely for their own profit?

Netflix certainly said all the right things to charm local talent and content creators. They highlighted their commitment to fair remuneration for authors and performers and made encouraging noises about uplifting and growing our entertainment industry while stimulating the local economy.

They assured us of their open-door policy; they were eager to learn more about what made local producers and creators happy. In short, the newcomers were keen to foster an environment of success that would be beneficial to all parties. That was until proposed reforms to our copyright legislation ruffled their feathers and the backlash began.

Now, thanks to the current SAG-AFTRA and WGA strike action in the United States, the flaws in the streamers’ subscription-based business model have bubbled to the surface. Big name stars are pointing out that the current system makes a fortune for the streaming companies and studio-heads, but that this does not trickle down to the talent in the trenches.

South Africa’s outdated Copyright Act from 1978, and its companion Performers’ Protection Act from 1967 are overdue for revision. The proposed changes would be positively transformative for the local film industry. 

But Netflix is disturbed by any changes to local copyright laws. They have raised particular concern over statutory royalty payments, stating that this is simply “not compatible” with the Netflix business model.

They claim that they have no way to track exactly which content leads to new subscriptions or what keeps existing subscribers hooked. This is extremely hard to believe, given their own quoted numbers: since 2016 they boast over 170 South African movies, series, and documentaries on their platform, including such originals as Blood and Water, My Octopus Teacher, and Queen Sono.

 
Their own Socio-Economic Impact Assessment report for South Africa shows that, between 2016 and 2022, they spent R1.8 billion on local content, estimating that this investment resulted in an R2.5-billion contribution to South Africa’s GDP. 

They further claim that over 7 000 jobs were created by Netflix productions in South Africa over the past seven years. How then is it not possible for them to know why viewers have subscribed? 

Surely such a substantial investment – an amount deemed worthy as proof of their local impact – must have been backed up by extensive market research?
 
But let’s return to their concerns about statutory royalty payments. It seems Netflix has not understood the proposed updates to legislation, nor are they familiar with the contents of the bills. 

They claim the draft provisions would prevent producers, authors, and performers from choosing between different forms of remuneration — such as an up-front lump-sum payment in lieu of royalties. Disingenuous as it is to suggest that local performers have ever had a choice in their manner of remuneration, Netflix has missed the point altogether. 

In fact, "equitable remuneration" – as laid out by the Performers’ Protection Amendment Bill – is the upfront buy out option. So, what exactly is Netflix protesting?
 
Not only has Netflix already claimed a rather large investment into the local market, the figures they share also demonstrate that they are, indeed, able to track the viewership of local content on a global scale. 

They clarify that while local viewership for a South African title might only be a million views, thanks to Netflix and their global reach it might stream up to thirty times that viewership across the world. 

In addition, local productions are being dubbed into foreign languages, further extending their reach into new markets. Local producers should benefit from those increased earnings, but with the way Netflix insists on licensing content, the producers’ share is nil. 

Netflix’s reaction to the very legislation designed to ensure fair compensation for local creators, is really telling. If the streamer is genuinely concerned about the growth and stability of the production sector in South Africa, why are they so vehemently against an equitable sharing of revenue?
 
If they are truly open to working with local industry to ensure that everyone is happy, why are they not willing to come to the table to discuss these issues with all parties involved? SAGA has been trying to arrange a meeting with Netflix executives for around two years now, with little success. In fact, at our last request for a meeting we received a curt “thanks but we decline”.  
 
The proposed copyright reforms will not only transform the South African film industry, but will align our industry with international standards, helping us to address problems that need more up-to-date solutions. 

The updated legislation will also enable us to anticipate what changes we could expect to see over the next few years as technology continues to advance, both in the production and consumption of content. By refusing to engage local role-players and adapting to the real needs of the industry, Netflix is effectively blocking transformation of the sector.
 
Striking an equitable balance is crucial to protecting both creators' rights and consumers' interests. 

Only through transparency and cooperation can we create an environment where everyone benefits, from creators and audiences, to streaming platforms like Netflix. But to do that, everyone needs to be on the same page. Right now, we’re not even in the same library.

Jack Devnarain is the chairperson of the South African Guild of Actors (SAGA) and this is an opinion piece.