Government draft approved by the Federal Cabinet on 27 May 2026

In brief

On 27 May 2026, the German Federal Cabinet approved the government draft of the Media Services Investment Obligation Act (Mediendienste-Investitionsverpflichtungs-Gesetz – “MedienInvestVG”). The new regime obliges streaming services and other on-demand audiovisual media services that target the German market to invest a defined percentage of their German revenues in European audiovisual works. The Act implements Article 13(2) of the Audiovisual Media Services Directive (Directive (EU) 2018/1808 – “AVMSD”), which permits Member States to require both domestically established services and cross-border services targeting their territory to make direct investments in European works. With the new Act, Germany now aligns itself with other EU jurisdictions that have had comparable obligations in place for some time, such as France, Italy and Spain.

1. Scope of Application

The Act applies to media service providers offering an audiovisual media service on demand to users in Germany (§ 1(1) MedienInvestVG). On the commercial side, the law captures subscription-based video-on-demand services (“SVOD”) and advertising-financed video-on-demand services (“AVOD”).

Under § 1(2), services established outside of Germany fall within scope if their service “targets” users in Germany. A service is considered to target German users in particular if (i) advertising or other promotional measures are directed specifically at consumers in Germany, (ii) the main language of the service is German, or (iii) content or commercial communications within the service are specifically addressed to users in Germany. These criteria are alternative, not cumulative.

Public broadcasters operating an on-demand service are within the scope of the Act as well, although they are subject to a separate measurement basis (programme costs rather than net turnover) and to specific funding mechanisms. However, this article primarily focuses on private on-demand services.

2. Obligations

2.1 Investment Obligation

The core obligation is set out in § 3 of the Act. Commercial VoD providers within scope must invest at least 8 % of their net turnover generated in Germany in European audiovisual works. The notion of “European audiovisual works” is defined broadly in § 2(8) and includes works originating in EU Member States, EEA contracting states or Switzerland, provided certain production or financing criteria are met.

Sub-quotas (§ 4)

The Act prescribes three sub-quotas that must be observed within the 8 % overall obligation:

• New works: at least 60 % of the obligation must be invested in the production of new European audiovisual works, as opposed to the mere licensing of works that already exist.
• Works with German cultural imprint: at least 80 % of the obligation must be invested in works with German cultural imprint, defined as works produced in the German original language or works that have benefited from federal film funding.
• Independent producers: at least 70 % of the obligation must be invested in works produced by independent producers, defined in § 2(5) by reference to a 25 % capital or voting-rights threshold (including affiliated and foreign undertakings) and a “comparable influence” criterion.

These quotas are cumulative rather than additive, i.e. each individual investment in a single audiovisual work may simultaneously satisfy several quotas at once. A single investment in a new, German-language work commissioned from an independent producer, for example, counts towards all three sub-quotas in parallel.

The Act also introduces two incentive multipliers: investments in European cinema films released theatrically in compliance with the cinema window under the German Film Promotion Act (“FFG“), as well as investments in children’s films and series, are credited at a factor of 1.5 towards the 60 % new-works sub-quota.

Recognized investments (§ 6)

Not every form of expenditure on audiovisual content qualifies as a recognized investment under the Act. § 6 contains a catalogue of eligible categories:

• Production costs of European audiovisual works;
• Acquisition of exploitation rights in already produced European works;
• Financing of script and project development;
• Adaptation of works to accessibility needs (e.g. subtitles for the hearing-impaired, audio description for the visually impaired);
• Synchronization and subtitling;
• Advertising for European works (capped at 2.5 % of the total obligation);
• Contributions to talent development projects in the audiovisual sector (capped at 1 %);
• Participation in European film festivals and prizes (capped at 1 %).

Exemptions and limitations

The Act recognizes that the investment obligation should not apply uniformly to every service or to every revenue stream. Several mechanisms therefore reduce, exclude or modify the obligation in defined circumstances.

• De-minimis threshold: Services with less than EUR 10 million annual net turnover in Germany, or whose offering dedicates less than 2 % of its volume to audiovisual works, are exempt from the obligation.
• Market entry phase: The obligation only takes effect from the third calendar year in which a service offers its service in Germany.
• Carve-outs from the measurement basis: Revenues attributable to in-house productions, sports content and current news reporting are excluded from the measurement basis when calculating the 8 % obligation.

Opening clause. The opening clause in § 9 deserves separate attention as the principal flexibility mechanism within the Act. Provided that the service commits to a higher investment quota of at least 12 % of its German net turnover, it may enter into a collective agreement (Branchenvereinbarung) with representative producer associations and, on the basis of that agreement, deviate from a number of the Act’s detailed steering rules. Specifically, the parties may depart from the sub-quotas in § 4, the catalogue of recognized investments in § 6, the mandatory rights reversion in § 8, and the two-year investment period in § 16(1). The agreement must contain fair terms on the licensing of rights and is subject to a two-stage approval process: the FFA first reviews whether the agreement is reasonable and capable of achieving the Act’s objectives in a comparable manner, after which the Federal Government Commissioner for Culture and the Media (“BKM”) must grant formal approval. Until that approval is in place, the statutory regime continues to apply to the service concerned. The opening clause is open to all services on equal terms and is intended to accommodate the wide variety of business models in the streaming market.

2.2 Mandatory Rights Reversion

One of the most distinctive features of the German Act – and one without a close precedent in other EU jurisdictions – is the mandatory rights reversion in § 8. The provision is designed to enable independent producers to build up their own catalogues of exploitation rights over time and thereby strengthen their economic independence from the major commissioning platforms. To that end, an investment can only be credited towards the 70 % independent-producer sub-quota under (see above), if the on-demand service only acquires exclusive exploitation rights for a defined initial period. After expiry of that period, the rights must revert to the producer, who is then free to exploit them on the secondary market. The maximum duration of the initial period is graduated according to the producer’s own share of the total production costs: the higher the producer’s own contribution and economic risk, the shorter the period during which the service may hold exclusive rights.

The maximum exclusive rights periods are as follows:

• Producer’s own share below 9 %: up to 7 years, provided that the producer contributes the essential underlying IP to the work;
• Producer’s own share of 9 % to 30 %: up to 7 years;
• Producer’s own share of more than 30 % to 50 %: up to 5 years;
• Producer’s own share of more than 50 %: up to 3 years.

The reversion period commences, at the latest, on the date of first publication of the work; for series, it begins with the first publication of the first episode of a season, so that rights revert season by season.

2.3 Other Obligations

In addition to the substantive investment obligation, the Act imposes a range of administrative and procedural duties on covered services. These duties primarily enable the FFA to monitor and verify compliance. The most important items are:

• Annual reporting (§ 14): Services must report annually to the FFA, by 31 July of the following year, on their German net turnover, subscription and viewing figures, distribution agreements with producers, and the investments made under the Act.
• Auditor confirmation (§ 14(5)): Material data points must be confirmed by an EU/EEA/Swiss-based statutory auditor.
• Transparency on distribution agreements (§ 14(2) no. 6): Distribution agreements with producers must be made available to the FFA to permit spot checks on compliance with the rights reversion provisions of § 8.
• Notification of corporate changes (§ 14(2) nos. 1–2): Services must notify the FFA of their corporate form, group affiliation, registered seat and any changes thereto.

2.4 Supervision and Sanctions

Supervision and enforcement of the Act lie with the FFA. Each year, by 31 December, the FFA issues a determination notice (Feststellungsbescheid) setting out the service’s investment obligation for the following calendar year, based on the reported data and after applying any offsets (see section 3 below). The notice is an administrative act; objections and appeals against it have no suspensive effect.

Where a service fails to fulfil its investment obligation in whole or in part, the FFA may impose a compensatory charge (Ausgleichsabgabe) in the amount of the unfulfilled direct investment (§ 16(2)). The compensatory charge is structured under German constitutional doctrine as a special charge without a financing function and is intended to neutralize the economic advantage gained by the non-compliant service. Where data is submitted late, incomplete or in a form that does not permit a clear determination of the basis of assessment, the FFA is empowered to estimate the obligation (§ 15(3)).

3. Interconnection with the already existing German Film Levy

VoD providers targeting the German market are not encountering a German production-financing obligation for the first time. Under § 130 of the FFG, VoD providers have been subject to a film levy (Filmabgabe) for many years. The levy applies to the German net turnover generated from the exploitation of cinema films, with rates of 1.8 % up to an annual turnover of EUR 20 million and 2.5 % above that threshold. To avoid double taxation of the same revenues, the MedienInvestVG provides for a full offset. Under § 13, the film levy actually paid under the FFG, together with any voluntary payments by the service to federal and state-level film funding institutions, is deducted from the investment amount determined by the FFA. As a result, the film levy and the investment obligation operate alongside each other but do not result in a cumulative burden on the same revenue base. From a legal perspective, the two instruments remain distinct in nature: the film levy is a parafiscal payment to a public film-funding fund, whereas the investment obligation is a conduct obligation under which the capital remains with the service and is invested directly in productions of its choice.

4. Interconnection with Content Quotas Requirements

The new investment obligation must be distinguished from the existing content quota requirement under § 77 of the German Interstate Media Treaty (Medienstaatsvertrag – “MStV“). § 77 MStV requires VoD providers to ensure that at least 30 % of their catalogue consists of European works and to give those works appropriate prominence in the user interface. The MedienInvestVG, by contrast, is a financial investment obligation that operates at the level of production expenditure rather than catalogue composition. The two regimes also have different bases in EU law: § 77 MStV implements Article 13(1) AVMSD (catalogue share), whereas the MedienInvestVG implements Article 13(2) AVMSD (financial contributions). The AVMSD expressly contemplates that the two instruments may apply cumulatively, as they regulate different layers of the same value chain – the supply side of catalogue composition on the one hand, and the financing of production on the other.

5. Applicability

The Act is scheduled to enter into force at the earliest on 1 January 2027 (§ 19). Transitional rules in § 18 provide for an accelerated reporting cycle in the first year of application: services must submit the data required under § 14 for the year 2025 within one month of entry into force, and the FFA is required to issue the corresponding determination notice within two months thereafter. Investments already made in 2026 may exceptionally be credited towards the 2027 obligation. Production contracts concluded before entry into force are not required to comply with the independent-producer sub-quota of § 4(1) no. 3 or the mandatory rights reversion under § 8. The Act will be evaluated for the first time three years after entry into force, with subsequent evaluations every three years thereafter (§ 17).

6. Further Legislative Process

The bill is currently in the federal legislative process. Following the Cabinet’s approval, the bill now moves to the Federal Council (Bundesrat) and the Federal Parliament (Bundestag) for the legislative process. In parallel, it is subject to a notification procedure at EU level. Details may still change before final adoption.