The Debate Over U.K. Streamers’ Tax: A Closer Look
On April 15, The Hollywood Reporter released an article outlining the skepticism surrounding the proposed streamers’ tax in the U.K., a proposal long supported by local program-makers and more recently backed by a parliamentary committee. Observers suggest that the introduction of such a tax would be perceived as a tariff by the U.S. government. With ongoing discussions about broader trade agreements, it’s argued that the U.K. administration is unlikely to alienate its historic ally over this issue. However, a critical aspect remains unaddressed: the proposed levy is not a tariff.
The Impact of Streaming on Local Productions
In 2023, my team and I completed The Mirror and the Light for Masterpiece and the BBC—continuing the legacy of our previous project, Wolf Hall, which garnered a Golden Globe, multiple BAFTAs, and eight Emmy nominations. If we were to attempt The Mirror and the Light again in 2025, the production landscape would likely prevent its success. The case of Mr. Bates vs. The Post Office underscores the financial burdens placed on creators in the U.K.; the debt incurred has led producers to abandon high-end drama projects for ITV, as public service broadcasters can no longer sustain them. Streamers, drawn by U.K. tax incentives, have flooded the market with various high-budget dramas, consequently inflating production costs and marginalizing domestic broadcasters.
Trends in Public Service Broadcasting
Data shows that public service broadcasters (PSBs) saw a staggering 25% decline in high-end drama production last year, reaching its lowest levels since 2019. The parliamentary committee advocates for a streamers’ levy, asserting it could rejuvenate production funding, providing necessary resources for organizations like the BBC, ITV, and Channel 4 to remain competitive. Nevertheless, doubts linger regarding the U.K. government’s willingness to confront U.S. interests.
Understanding Tariffs and Levies
Current U.S. tariffs impose a 125% charge on American products sold in China, with the revenue benefiting the Chinese government. In contrast, the proposed 5% levy would enable streaming platforms such as Netflix, Amazon, and Disney+ to recover costs associated with co-productions with U.K. public service broadcasters. This distinction is crucial as it highlights that the levy is not a punitive tariff but rather a collaborative funding mechanism.
The Need for Collaboration Between Streamers and Local Broadcasters
When streaming services first entered the U.K. market, their eagerness to co-produce was evident. However, this willingness has since diminished as these companies increasingly seek to retain full ownership of intellectual property. The proposed levy fund aims to revitalize co-production opportunities, encouraging streamers to partner with local broadcasters. This collaboration would not only create a new financing stream but also rekindle creative partnerships between local media and global content creators.
The Importance of U.K. Public Service Broadcasting
Streaming platforms epitomize the dynamic nature of a free television market, showcasing bold and innovative programming that has attracted top-tier talent. However, this growth has inadvertently sidelined U.K. public service broadcasters, which have a century-long tradition of producing diverse content that may not appeal to a global audience. Disregarding these fundamental broadcasters would not serve the British public well.
A Potential Solution: The Levy’s Role in Addressing Market Imbalances
The implementation of a 5% levy could dramatically rectify these market discrepancies. It would compel streaming companies to elevate their production quality as they face renewed competition from established broadcasters like the BBC, ITV, and Channel 4. Crucially, the streamers could reclaim their contributions from the fund when co-producing with local broadcasters, marking an essential step towards equitable collaboration.
In conclusion, as many stakeholders in the industry grapple with significant challenges in high-end television production in the U.K., the pressing question remains: will the U.K. government have the courage to move forward with the proposed levy?