UK Culture, Media & Sport Committee officially recommends 5% streamer levy

The UK Culture, Media & Sport Committee (CMSC) has officially recommended the government impose a 5% levy on SVoD platforms and warned that “urgent action is needed to protect distinctly British content.”

Caroline Dinenage

Wikimedia Commons

In a report published by the CMSC, the streamer levy is included in an “urgent package of support for the UK’s crisis-hit high-quality drama sector” that MPs are proposing the government implement.

The package includes “a series of measures to halt the decline of domestic production of culturally distinct British film and programmes, which has failed to keep pace with the headline-grabbing growth of big box office productions financed and controlled from outside the UK.”

The committee has called on streamers “such as Netflix, Amazon, Apple TV+ and Disney+, which benefit from the creativity of British producers, to put their money where their mouth is by committing to pay 5% of their UK subscriber revenue into a cultural fund to help finance drama with a specific interest to British audiences.”

The recommendation comes after the recent CMSC inquiry into British film and high-end TV and is backed by Wolf Hall director Peter Kosminsky, who has previously argued that the US streamers have driven up the price of production so much that public service broadcasters in the UK can no longer afford to make high-end TV series.

In response to the report, Kosminsky said: “I hugely welcome the fact that the CMSC select committee has endorsed the call for a 5% levy on streamers’ revenue to support public service broadcasting high-end television. This is a brave thing to do in the current political climate and absolutely the right solution.”

The report doesn’t mention who would be eligible to draw from the fund the levy would be pooled into, and whether the streamers who contribute to it would also be set to benefit from it.

Noting this, Kosminsky added: “It is important to stipulate that the fund created by this levy should only be available to productions which are either commissioned or co-commissioned by a public service broadcaster,” which he said “is an essential aspect of the 5% levy solution to the problems our industry faces.”

Also in the package of support the CMSC is recommending is a tax credit to support the distribution of lower-budget films. The committee said that while the Independent Film Tax Credit introduced last year signifies a first step in the right direction, the government should go further “or producers will continue to struggle to develop and raise finance for films, and those that are made will not be seen by audiences.”

According to the CMSC, without “urgent intervention,” the problems experienced in the independent film sector will extend to domestic high-end TV “where competition from high-budget overseas production is driving up costs, revenue models are changing due to the terms offered by streamers and commissioning budgets of public service broadcasters are being squeezed by a fall in the licence fee and drop in advertising revenue.”

Philippa Childs

Commenting on these recommendations, Philippa Childs, head of UK broadcasters’ union Bectu, said: “It’s essential that the industry does not become too skewed towards large streamers, which risks the homogenisation of content and the loss of much of the UK’s unique and distinctive output.

“Public sector broadcasting is at the heart of this, and it is crucial that we have a level playing field that allows them to take risks and commission quintessentially British content. A secure future for public sector broadcasting, which sits at the heart of the UK film and TV ecosystem is essential and so we support the 5% levy on streamers to support domestic production.”

Elsewhere, the report makes a range of recommendations on how to bolster skills and worker rights in the industry, including reinforcing its previous proposal that the government appoint a freelancers’ commissioner.

In response to this, Childs said: “Freelancers are the backbone of this sector and the attention paid in this report to their contribution and how better to support and protect them is very refreshing. The report recognises that increasingly precarious and unpredictable work is unsustainable. Failing to address the issues could result in the industry losing workers at a time when the government have made wider commitments to employment rights and prioritised the creative industries within its industrial strategy.

“We urge the government to accept the recommendations to better support freelancers, in particular the committee’s support for the creation of a freelance commissioner which Bectu and other stakeholders have consistently argued for. This would be a vehicle for finding solutions to many of the issues facing freelancers such as intermittent work which can lead and has already led to financial crises for many Bectu members.”

On the subject of artificial intelligence (AI) and the growing concerns around the ethics of using it, the report states that the government should require licensing of creative works in all cases where they are used to train AI models.

Caroline Dinenage, chair of the CMSC, said: “Big box-office blockbusters made in Britain have showcased the UK’s world-class film and high-end television industry like never before. But the boom in inward investment of recent years now risks crowding out our many talented independent British producers.

“While streamers like Netflix and Amazon have proved a valuable addition for the industry and economy, unless the government urgently intervenes to rebalance the playing field, for every [British Netflix drama] Adolescence adding to the national conversation, there will be countless distinctly British stories that never make it to our screens.

“From independent production through to cinemas, all parts of our film and high-end TV sector, and the talented people that make it such a success, are going through a turbulent time. To neglect just one part puts the entire ecosystem at risk, so it’s therefore vital that the government goes further and faster across the board to support an industry that is so important to both our economy and our soft power overseas.

“Today’s report sets out a way forward for the government to put the name of the UK film and television industry up in lights around the world as the very best place to do business and to work, by offering the right tax incentives, tackling skills shortages, improving worker rights and making sure the rise of AI is a positive force, not a disincentive to investment.”