Urgent measures are imperative to safeguard the quintessentially British essence of our content," concluded the Culture, Media and Sport Committee of the U.K.'s House of Commons, following an extensive inquiry marked by a series of insightful hearings. In their final report, unveiled just past midnight on Thursday, they implore the government led by Labour Party Chief and Prime Minister Keir Starmer to bolster support for the film and high-end television sectors. Among their suggestions are the introduction of additional tax incentives for independent films, the provisioning of support for independent cinemas, and the imposition of a 5% levy on the U.K. subscriber revenues of foreign streaming giants, such as Netflix, Amazon, Apple, and Disney, to finance British dramatic productions.
Addressing the "crisis within domestic high-end television," the committee specifically advocates for "heightened tax incentives" to ensure parity in support akin to that received by independent films. They urge the British Film Institute (BFI) to expeditiously undertake an analysis of a potential measure aimed at productions with budgets ranging from £1 million to £3 million ($1.28 million to $3.83 million) per hour, focusing on design and return on investment.
Furthermore, the committee outlines a proposal for streaming platforms like Netflix, Amazon, Apple TV+, and Disney+, which capitalize on the creativity of British producers, to commit to allocating 5% of their U.K. subscriber revenue to a cultural fund dedicated to financing dramas that resonate specifically with British audiences. Should the industry fail to voluntarily establish such a fund, governed by the BFI, within a year, the report recommends that the U.K. government "enact a statutory levy."
The committee warns that the relationship between independent producers and streaming platforms is "unsustainable." "Lucrative deals are stripping successful production companies of their ability to fully monetize their intellectual property. The government must explore ways for British producers to retain a larger share of IP rights when collaborating with streaming platforms," they assert.
While lauding the government's aspiration to position the U.K. as the premier destination for film and high-end television production, the culture committee sounds a cautionary note, warning, "There must be no complacency in maintaining our status as a global production hub." They call for periodic evaluations of tax incentives to "sustain overseas investment."
Dame Caroline Dinenage, chair of the Commons' culture committee, emphasized, "Blockbuster hits made in Britain have never before showcased the U.K.'s world-class film and high-end television industry with such panache. However, the recent influx of inward investment risks overshadowing our myriad talented independent British producers. Streaming platforms like Netflix and Amazon have undeniably contributed positively to the industry and the economy, but unless the government acts swiftly to level the playing field, for every 'Adolescence' sparking national discourse, countless distinctly British stories will remain unseen on our screens."
She continued, "From independent production to cinemas, every facet of our film and high-end television sector, and the talented individuals who fuel its success, is navigating turbulent waters. Neglecting even one aspect imperils the entire ecosystem. Therefore, it is imperative that the government acts decisively and swiftly across the board to support an industry that is crucial both to our economy and our soft power overseas."
Urging a suite of measures to stem the decline of domestically produced, culturally distinct British films and programs, which have failed to keep abreast with the headline-grabbing growth of major box office productions financed and controlled from beyond U.K. shores, a summary of the committee's report describes last year's introduction of the Independent Film Tax Credit as merely a "first step." The committee contends that the government must go further, warning, "Or producers will continue to grapple with developing and securing financing for films, and those that are made will remain unseen by audiences." Among other supportive measures for independent film, they suggest a tax credit to aid the distribution of lower-budget films and the introduction of "tax relief for the print and advertising (P&A) costs of films to bolster distribution and exhibition."
The committee has issued a stark warning: without immediate intervention, the plights afflicting the independent film industry will seep into the domestic high-end television sector. Here, fierce competition from high-budget overseas productions is hiking costs, revenue models are being reshaped by the terms dictated by streaming platforms, and public service broadcasters' commissioning budgets are being squeezed by dwindling license fees and advertising revenues. Support for cinemas also finds itself as a pivotal part of the committee's report. The U.K. government must "introduce a core funding model tailored for culturally significant independent cinemas, to alleviate the cost pressures, evolving audience behaviors, and underinvestment in people and infrastructure that now jeopardize many community cinemas," it underscores.
The report also highlights the ramifications of AI. "Industry guidelines aimed at safeguarding human creativity in the utilization of generative AI are welcome, yet the film and TV sectors are crying out for assistance to harness the growth potential of generative AI in a manner that is equitable, responsible, and legally sound," the summary remarks. "The government ought to fund the BFI's development of an AI observatory and tech demonstrator hub. Failing to strike the right balance between AI development and copyright will undercut the growth of our film and high-end TV sectors, as well as the broader creative industries."
Testimonies to the culture committee came from figures like Peter Kosminsky, the director of Wolf Hall, who cautioned that the recent hit series Wolf Hall: The Mirror and the Light would not be produced today due to funding hurdles. Jane Featherstone, the producer of Black Doves, argued that streamers' business models primarily demand shows with global, rather than local, appeal.
Industry insiders hailed the report's proposals. "I warmly embrace the fact that the Culture, Media and Sport select committee has endorsed the call for a 5 percent levy on streamers' revenue to bolster public service broadcasting high-end television," Kosminsky said. "This is a courageous step in the current political milieu and undoubtedly the right solution. However, I do believe it's crucial to stipulate that the fund established by this levy should solely benefit productions either commissioned or co-commissioned by a public service broadcaster. As I see it, this isn't made explicit in the report, and it's a fundamental aspect."
Ben Roberts, CEO of BFI, stated: "This is the first report in over two decades focusing on our sector, and it's timely in exploring how we can optimally support and propel continued cultural and economic prosperity for the U.K.'s world-class film and high-end television sector." He further noted that "numerous recommendations align seamlessly with the work that the BFI is executing across various fronts, including facilitating access to finance for production, distribution, and exhibition—including dedicated support for independent cinemas and U.K. distributors."
Catharine Des Forges, director of the Independent Cinema Office, emphasized that the committee report "acknowledged the pressing need for capital funding for independent cinemas, which poses a direct threat to the survival of numerous independent cinemas and acts as a significant barrier to growth for others."
Meanwhile, Katheryn Needham, CEO of Studiocanal U.K., pointed out that her company is "dedicated to making crowd-pleasing British independent films, yet marketing costs can be prohibitively high for reaching a broad audience." She added: "Tax relief should be extended to print and advertising costs, enabling films benefiting from the IFTC (Independent Film Tax Credit) to attract a wider audience, thereby bolstering both cultural impact and economic growth."
Marie-Claire Benson, executive vice president and head of the motion picture group at Lionsgate U.K., said: "The introduction of a 25 percent tax relief on P&A costs would be a transformative impetus for the U.K.'s independent film sector. It's a clever, targeted initiative that acknowledges the crucial role distribution plays in the film industry's ecosystem: connecting exceptional British storytelling with audiences nationwide."
Zygi Kamasa, CEO of True Brit Entertainment, concluded: "When releasing a British film in the U.K., we're spending and competing in advertising terms with blockbuster movies, games, and other commercial retailers who possess far greater budgets than independent film distributors. To ensure that the films now being supported in production are adequately released, a tax credit for P&A would provide a substantial boost to distributors and those films, maximizing their potential box office earnings."
