What Netflix will get for its R1-million FPB licence fee

Netflix will have to pay the FPB over R1 million a year if the draft review of its tariff regulations is passed.

The recently-released draft review proposes a new licensing model for online distributors in South Africa.

Under its new model, online streaming services like Netflix and Showmax will have to pay a “licence fee” per film and per series season they offer.

The FPB currently charges a flat fee of R795,000 per year for service providers, which Netflix and Microsoft have refused to pay.

FPB questions answered

“Licensing” costs for seasons of shows, as indicated in the table below, are priced to be four-times that of a film.

This raises the question: Why did the FPB decide on the figure?

The FPB told MyBroadband that the classification of a series is six-times more expensive than films. With the proposed tariff review, this is set to decrease.

This means the rate to classify series effectively decreases as the running time of a season increases, said the FPB.

When an online distributor pays the FPB its annual licence, it buys the right to self-classify content and submit it to the FPB for verification.

“We will also provide training for their classifiers on a quarterly basis, and when needed.”

The FPB’s proposed tariff structure for online distributors is summarised below.

Note: If a distributor offers over 1,000 titles, for example, the fee for 0–499 titles is applied to the first 499, the 500–999 fee is applied to the next 500 titles, and the 1,000+ fee is applied to the rest.

Now read: Netflix refuses to pay the FPB’s R795,000 licensing fee