It has been a mixed bag of reactions from industry to recommendations laid out by the UK culture, media and sport commitee’s inquiry into film and high-end TV.
The suggestion for all subscription video-on-demand (SVoD) platforms that operate in the UK to “put their money where their mouth is” and pay a 5% levy on their UK subscriber revenue has been a particular sticking point.
Netflix published a statement saying: “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.”
A source close to the issue noted that if a levy is introduced, the streamers will likely have to take money out of the content budget, or pass the cost onto consumers, which is “unfair to members” already paying subscription fees and their licence fee.
“It is important to remember the UK is not where it is by accident. The government made a concerted effort to attract investment in the UK. We only need to look at our neighbour Ireland next door,” said the source, referring to Ireland’s culture minister Patrick O’Donovan stating last week that he does not see a reason at the moment to impose a levy on streamers. “We can all see that if we were to have a streaming tax here, and our neighbour wasn’t, Ireland would be much more attractive.”
“Ultimately,” the source continued, “the committee’s proposals do not address the issue, which is the long-term financial stability of the PSBs [public service broadcasters].”
Patrick Holland, executive chairman of Banijay UK, added: “We are pleased that the committee is recognising the need for intervention in the scripted sector, however, we aren’t convinced the levy is the way forward. Banijay UK has long called for an increase in tax credits to support the mid-range UK production programming sector, which is at the most risk.”
The Association for Commercial Broadcasters and On-Demand Services (COBA) executive director Adam Minns noted: “The levels of investment from streamers in UK content are the envy of many countries. A levy risks damaging that. We urge policymakers to find ways to support the parts of the sector that need further support, without damaging existing investment as a levy risks doing, such as through an enhanced tax relief. Failing to do so risks undermining existing investment, growth and jobs.
“While we recognise the pressure on domestic production, this stems from the real terms decline in the licence fee of £1bn a year, as the committee pointed out. Total co-production funding is a fraction (7.5%) of this reduction.
“Some may argue a levy will not impact streamers, but that is pure cakeism. Especially in this economic climate, a levy risks impacting existing content budgets for UK shows, jobs, and growth, along with raising costs for businesses. Ironically, it could damage PSB dramas by reducing co-production budgets at streamers.”
Adrian Wootton, chief executive of the British Film Commission (BFC) and Film London, was also cautious about the suggestion of a levy: “Inward investment – which reached £4.7bn last year – is the single biggest thing that has boosted growth in our industry and spread those benefits across the UK. Productions like Outlander in Scotland,Young Sherlock in Wales, Game Of Thrones in Northern Ireland or Adolescence in Yorkshire have brought jobs to local crews, and spending to local areas.
“That investment in film and HETV is vital to keep our film and TV industry not just alive but kicking, in an increasingly competitive market. Of course, it should be one component amongst many in a wider UK production ecosystem, but our focus shouldn’t be at the expense of inward investment, and we remain extremely cautious of any measures that risk making us anti-competitive, especially given the current global market turbulence.
“The report is also surprisingly silent on the vital importance of production support provided by the BFC and our national and regional partners, truly making the UK the best place in the world in which to produce film and television.”
UK creative industries union Bectu head Philippa Childs supported the inquiry’s call for the likes of Netflix, Amazon, Disney+ and Apple TV+ to contribute to a cultural fund administered by the BFI to support domestic HETV production.
“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,” said Childs.
“Public sector broadcasting is at the heart of this, and we must 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.”
Bectu also backed the inquiry’s calls for bolstered support for freelancers, including the creation of a freelancer commissioner. “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.”
Ben Roberts, BFI CEO, confirmed many recommendations “align directly” with the BFI’s work; however, he did not comment directly on the MPs’ calls for the UK to rejoin Creative Europe or the streamer levy. “This is the first report in over 20 years focusing on our sector and is timely in looking at how we can best support and drive continued cultural and economic prosperity for the UK’s world-class film and high-end television sector,” said Roberts.
“Many of the recommendations align directly with work that the BFI is delivering across a number of fronts including supporting access to finance for production, distribution and exhibition – including dedicated support for independent cinemas and UK distributors; international business development; growing the workforce and Good Work guidance; a soon to be published report on where the sector is working with generative AI.
“We are happy to see the report note the success of the UK Global Screen Fund and the importance of our screen heritage and the role of the BFI National Archive. We await the response from government and are ready to offer support where we can on ensuing priorities.”
Defence of skills
National training body ScreenSkills was criticised by the inquiry, which stated that its 2024 strategy lacked “clear objectives and measurable targets”. The inquiry recommends the government link any future public funding for ScreenSkills to specific, measurable outcomes based on the training body publishing and meeting ambitious and robust performance indicators. The inquiry’s report also said the industry’s efforts “have been too slow and too fragmented to deliver the number of skilled workers needed. We lack confidence that the bodies tasked with tackling the problem will ever move beyond setting strategies and finally deliver meaningful results.”
ScreenSkills responded with the statement: “Since giving evidence last year, ScreenSkills has published a five-year strategy, developed through consultation with more than 1,600 senior leaders and freelancers and endorsed by the Screen Sector Skills Task Force. It set out a clear plan for a more sustainable and inclusive workforce, and ScreenSkills has since developed measurable year-on-year targets to track progress and impact.
”In 2024/25, record industry contributions to the five Skills Funds supported training for almost 30,000 people at all career stages across the UK’s nations and regions.
“ScreenSkills, working with 4Skills and Ampere Analysis, will shortly publish new research mapping the screen workforce by department, seniority and demographics. This will guide targeted training and inform a new Workforce Plan, developed with employers and educators, to coordinate skills development and career progression UK-wide.”
The inquiry also questioned the commitment of streamers and studios’ investment in skills, owing to the lack of transparent information available to the inquiry as to exactly how much these organisations invest in skills training in the UK. The inquiry suggests the government introduces a statutory requirement for the entire film and HETV production industry to report their spending on skills and training as a percentage of their production budgets every financial year.
Wootton said: “We question the report’s tone regarding streamers’ and studios’ investment into skills training throughout the UK. Far from ‘hiding’ or shirking the need to invest in UK skills, they have been proactive and willing partners in skills training. For example, collectively, the members of the UK Screen Sector Skills Task Force invested over £100m in skills development in 2022 – more than the 1% of production budgets recommended by the BFI Skills Review.
“That’s not to mention substantial additional investments in sustainability measures across productions and initiatives to broaden inclusivity in our sector.”
Directors UK was more positive on the inquiry’s approach to skills. “Directors UK has long called for support, including better production funding, investment in skills, and improved freelancer rights. We’re encouraged to see our recommendations reflected in the report – it’s now imperative that they are implemented by the government,” said Directors UK CEO Andy Harrower.
Animation UK’s executive chair Kate O’Connor wants to see more targeted support for the animation sector: “The committee’s report makes clear what we’ve been saying: our world-class content industries face a systemic crisis. For animation, the warning lights have been flashing for some time. We fully endorse the committee’s calls for stronger support but urge them to build on their recommendations by ensuring the distinctive needs of the UK animation sector are embedded into future evidence, analysis and policy.”
P&A support welcomed
The Film Distributors’ Association’s chief executive Andy Leyshon was thrilled with the inquiry’s recommendation for the introduction of a 25% tax relief for the prints and advertising (P&A) costs of films claiming the Independent Film Tax Credit (IFTC), to help bolster the box office potential for UK independent films.
“We are delighted that the Inquiry has recognised the urgent need for a distribution P&A tax relief, an essential intervention that will benefit all parts of the film ecology and cinemagoing audiences alike. We have broad cross-sector support and have worked on the proposal for the last 18 months to ensure that it can be implemented as soon as possible. There is a real opportunity to turbo-charge UK independent film for future success, and we look forward to working with government to act swiftly upon the committee’s recommendation.”
Stephen Bristow, partner in the film and TV team at accounting and advisory firm Saffery, echoed this sentiment. “A supportive tax system is a key driver of investment in the UK market, and having worked with the Film Distributors Association to make the case for incentives that support the wider distribution of UK independent productions, something the industry has been calling for some time, it is hugely pleasing to see the Committee take forward the proposal for the creation of a new prints and advertising tax credit. If this new tax credit is taken forwards by the government, it will benefit all parts of the industry.”
Phil Clapp, chief executive of the UK Cinema Association, also welcomed the bolstered support for distribution of lower-budget UK films. He added that the UKCA is “pleased to see qualified support for our wish to see consideration of a reduced level of VAT on cinema tickets (and tickets to other cultural venues). While recognising that we need to make the economic case for this, if implemented it would bring the UK in line with most other European territories.”
“AI is being built illegally”
Performing arts union Equity endorsed the inquiry’s call for better protections for creatives and copyrighted works in the face of AI. “The government should heed the culture, media and sport committee’s call today for the licensing of creative works in all cases where they are used to train artificial intelligence models.
“AI is being built illegally by stealing Equity members’ life’s works. These big tech firms must be brought to the table and made to pay creators what they owe.
“Yet so far, the government has appeared to labour under the false impression that our copyright laws are ‘disputed’. This is not the case. Those AI companies using copyright-protected works without their creator’s permission are breaking the law on an industrial scale. They must be held to account.”
The inquiry was launched in 2023 to investigate the many challenges facing the domestic film and high-end TV sectors, and how to maintain the UK’s position as a world-leading production hub, while protecting the homegrown industry. It received submissions from 130 companies and industry bodies before moving to public evidence sessions in early 2024.
Key figures to give evidence included the BFI’s CEO Ben Roberts and chair Jay Hunt, Studiocanal’s UK boss Alex Hamilton, Vue CEO Tim Richards, producers Jane Featherstone and Rebecca O’Brien, directors Gurinder Chadha and James Hawes, plus BBC Film and Film4 heads Eva Yates and Ollie Madden. After a general election-induced hiatus, a second iteration of the inquiry returned in the latter part of 2024 and early 2025. Conservative member of parliament Caroline Dinenage remained chair throughout.
The cross-party CMS committee scrutinises the spending, policies and administration of the government department for culture, media and sport and its connected bodies, including the BFI.
No comments yet