Netflix, Amazon and other streaming services should pay a levy to fund the crisis-hit UK drama sector, MPs have said, following concerns that their dominance could see “distinctly British” stories disappear from the small screen.
The cross-party culture, media and sport committee said new tax breaks should also be used to help fund UK dramas produced by the BBC, ITV and Channel 4 – the public service broadcasters who have seen their programme budgets squeezed while the costs of making shows have spiralled. The committee said there was currently a threat to such programming, which was vital to the UK’s identity, national conversation and talent development.
Major streamers should commit to pay 5% of their UK subscriber revenue into a cultural fund to help finance drama with British audiences in mind, the committee concluded. It said that ministers should force them if they fail to do so voluntarily.
High-end dramas can still draw large audiences when made and broadcast on traditional TV channels. The first episode of Wolf Hall: The Mirror and The Light, broadcast on the BBC at the end of last year, drew an audience of 4 million viewers in a few days.
However, there is a growing affordability problem. Peter Kosminsky, Wolf Hall’s director, has revealed that filming for the series was nearly called off weeks before it was scheduled to start because of budget pressures. In the end, expensive external scenes were cut, meaning there were more “conversations in rooms” in their place.
Jack Thorne, the writer of the global hit Adolescence, has questioned whether the Netflix show could have been made in the same way by the BBC because of the financial pressures it is facing after real-terms cuts to the licence fee.
Others inside the TV industry claim the arrival of large streaming services has had a huge impact. They say that in their drive for subscriptions, they made hugely expensive shows – costing up to $10m (£8m) an episode – which has had an inflationary impact on the business of making television.
As a result, the traditional British broadcasters have increasingly had to find international partners to fund the shows they want to make. Such agreements have been harder to come by as streamers have reined in their funding, leaving a list of potential shows by the BBC and others in limbo.
Elisabeth Murdoch is among those to have warned that the economic pressures could lead Britain’s broadcasters to turn away from issues that appeal mainly to a British audience, in favour of more saleable global money spinners. Even some producers of the ITV hit Mr Bates vs the Post Office have questioned whether it would be made in the current environment.
MPs on the committee shared the concerns and backed radical action. “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 Adolescence adding to the national conversation, there will be countless distinctly British stories that never make it to our screens,” said Caroline Dinenage, the Conservative chair of the committee.
Kosminsky said it was “hugely welcome” that the committee had backed a levy on streamers’ revenue to support British broadcasters’ high-end television. “This is a brave thing to do in the current political climate and absolutely the right solution,” he said.
“However, I do think 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. As far as I can see, this isn’t made clear in the report and it is an essential aspect of the 5% levy solution to the problems our industry faces.”
A Netflix spokesperson said: “The UK is Netflix’s biggest production hub outside of North America – and we want it to stay that way. But in an increasingly competitive global market, it’s key to create a business environment that incentivises rather than penalises investment, risk-taking and success. Levies diminish competitiveness and penalise audiences who ultimately bear the increased costs.”
The select committee also warned that the government’s current plans to regulate the training of AI models on copyrighted material – a so-called “opt out” system – risked damaging the UK’s reputation for strong copyright laws.
