UK government rebuffs call to impose 5% levy on streamers to back film and HETV

The government highlighted BBC Three/Netflix copro A Good Girl’s Guide to Murder

The UK government has rejected calls to impose a 5% levy on international subscription streamers as part of its response to the report by parliament’s Culture, Media & Sport Committee (CMSC)’s on the health of the country’s film and high-end TV (HETV) industry.

The report, published in April, urged the government to step up assistance for all elements of UK film and HETV.

It also called for tax breaks and a streamer levy to be considered as part of an “urgent package” of support for the UK’s crisis-hit HETV sector.

The 5% levy on subscriber revenue would apply to all SVoD platforms that operate in the UK and would be paid into a cultural fund administered by the British Film Institute to support domestic HETV production.

However, the government said it has “no plans” to introduce such a levy on SVoD services as part of its official response to the recommendations, published yesterday.

The government pointed to the existing support the likes of Amazon, Disney and Netflix already provide to the UK’s production sector and emphasised the importance of enabling “strong inward investment given the benefits it provides for our domestic industry and wider economy.”

It added: “In line with our objective to support a mixed ecology, we will, however, continue to engage with major SVoD services, with the independent production sector and with PSBs [public service broadcasters] on how best to ensure mutually beneficial conditions for all parties.

“One of the most significant ways the government can support the film and HETV sector is to ensure we have a strong public service broadcasting landscape. Maintaining inward investment is part of this picture. We strongly welcome increased investment in UK content and want to see more successful coproductions between SVoD services and UK PSBs like BBC/HBO’s His Dark Materials and BBC Three/Netflix’s A Good Girl’s Guide to Murder. We will build on the Media Act and [regulator] Ofcom’s public service media review by taking action to support public service media and the wider television ecosystem.”

The government said it is also aiming to boost growth in the creative industries by improving access to finance through public institutions such as the British Business Bank as it seeks to strengthen UK producers’ ability to finance projects and retain rights.

The CMSC had also recommended a boost to the country’s HETV Audio-Visual Expenditure Credit that would see the tax rebate of about 25% given a “targeted uplift” for shows costing between £1m (US$1.37m) and £3m per hour.

This, too, has been dismissed by the UK government, which said: “There are a multitude of factors to consider when deciding on new tax reliefs beyond return on investment and sector impact, and the government is committed to ensuring that all public money is spent and targeted effectively across the full breadth of the creative industries and the economy. The chancellor makes decisions on tax policy at fiscal events in the context of the wider public finances.”

Elsewhere, the UK government dampened hopes the country may rejoin Creative Europe as an associate member, as recommended by the CMSC.

It said: “Whilst we do not have any plans to rejoin Creative Europe, we recognise these sectors’ unique and valuable contributions to Europe’s diverse cultural landscape, and the economic benefits that relationship brings.

“We are supporting the international ambitions of the cultural and creative industries through various initiatives, including by scaling up the UK Global Screen Fund that supports UK independent screen content in reaching international audiences.”

The government’s response has itself received a mixed reception from the local industry, with some welcoming the overall tone of support and others labelling it “really disappointing.”

ScreenSkills CEO Laura Mansfield said: “The Department for Digital, Culture, Media and Sport has reaffirmed its commitment to supporting our talented film and high-end TV industry. We now need to work with the government to make sure this leads to growth and quality jobs across the sector. As an ambitious organisation, we are committed to building upon our successes and confronting the challenges that face the industry right across the UK.”

Neil Chordia, head of film and TV at ie:entertainment in London, said on LinkedIn: “This is a really disappointing response from government overall. The CMS committee put forward a number of good recommendations for the sector and the government response has basically been to bat these away.”

“I’m finding very little else in this response to believe that the government understands the challenges in the film and TV sectors currently. It begs the question, why bother have a CMS committee if the government isn’t going to listen to their advice?”