Just days after Netflix announced record viewing figures for British series phenomenonAdolescence— the drama racked up 114 million views in just 24 days on the platform, making it the 4th most successful English-language series of all time on Netflix — the U.K. Parliament heard how its local TV industry is “under threat” and that global streamers are part of the problem.
The report, presented to the British House of Commons by the U.K. Culture, Media and Sport Committee (CMS) on April 10, cited evidence from the likes ofWolf Halldirector Peter Kosminsky and award-winning producer Jane Featherstone (Chernobyl, Netflix’sBlack Doves), that “urgent action” is needed “to protect distinctly British content.”
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The inquiry acknowledged the massive investment U.S. streamers have made in U.K. content — since 2020 Netflix says it’s spent an average of $1.5 billion a year on British film and TV production — but argue the platforms have distorted the market by pushing up the cost of shows beyond the reach of local broadcasters. Last year, the report noted, there was a 27 percent decrease in the number of domestic high-end TV productions made in the U.K., largely due to a decline in commissions from traditional networks.
Speaking toThe Hollywood Reporter, Kosminsky said ballooning production costs in the U.K. meant that period epicWolf Hall: The Mirror and the Light, co-financed by British public broadcaster the BBC and PBS in the U.S., almost didn’t happen. Only with drastic budget cuts, which saw both Oscar-winning writer Peter Straughan and Oscar-winning star Mark Rylance giving up a big chunk of their fees, was the show, the sequel to the Emmy-nominated period epic, able to get over the line.
Producers also complain that streaming commissions, while generous, are typically buyout deals, meaning the platform, not the creator, owns the underlying IP. This is unlike most broadcaster commissions in Britain where the writer, or the production company, owns the copyright to their original works.
“Successful production companies are being gutted by deals that deny them the ability to fully monetize their intellectual property,” the report states. The likes of Netflix, Amazon, Apple and Disney+, which “benefit from the creativity of British producers” should “put their money where their mouth is” and commit to pay 5 percent of their U.K. subscriber revenue into a cultural fund to help finance drama “with a specific interest to British audiences.” If the industry doesn’t voluntarily establish such a fund, the report concluded, the U.K. government should introduce a mandatory streamer tax.
The Brits aren’t the only ones looking to tax Netflix. On April 9, Germany’s incoming government laid out its plans to boost the country’s production industry by introducing a “investment commitment” from global streamers modeled on the French system, which requires platforms that have more than a 0.5 percent share of the local market, with more than $5.7 million (€5 million) in local revenue, to invest at least 20 percent of their French revenues in domestic and European productions. Italy requires streamers to invest 16 percent of their revenues in local production, Belgium recently upped its investment target from 2.2 percent last year to 9.5 percent by 2027, though Netflix has challenged the move in court.
In France, at least, the tax seems to be working as planned. Figures released by the National Film Board, the CNC on April 8 showed streamers invested a combined $83.7 million in French movies last year, a 59-percent jump on 2023, with Netflix leading the way, financing or co-financing 27 features, followed by Disney+ with 10 films, Amazon Prime Video with six and Max with two. The streamers also benefit from the regulation. The more money they invest in French films, the sooner they can release their movies online after their theatrical bow. By committing to financing at least 70 films over the next three years, Disney+ shrank its French cinema-to-streaming window to 9 months from a previous 17 month-window.
But few expect the Brits to follow suit. In January, Chris Bryant, the U.K. creative industries minister, said London had no plans to introduce a French-style streaming levy. In response to the British parliamentary committee proposal, Netflix also issued a thinly-veiled warning that if taxes go up, the company could take its business elsewhere. “The UKis Netflix’s biggest production hub outside of North America – and we want it to stay that way,” the company said, “but in an increasingly competitive global market, it’s key to create a business environment that incentivizes rather than penalizes investment, risk-taking and success. Levies diminish competitiveness and penalize audiences who ultimately bear the increased costs.”
“A streamer tax is never, never going to happen [in the U.K.], forget about it,” says Claire Enders, founder of media research group Enders Analysis. “Netflix invested $6 billion in U.K. production, they aren’t stealing anything, they are writing checks to good people.” With British public broadcasters under pressure from rising costs and budget constraints and commercial networks suffering from a chronically-weak ad market, she notes, “we are absolutely lucky to have Netflix, Disney+ and anyone else who wants to make shows here.”
The British government is also unlikely to want to antagonize Donald Trump, who has made European taxes and regulations on U.S. digital services part of his broader trans-Atlantic trade war. In a Feb. 21 memorandum, Trump lashed out at “digital service taxes” he claimed “are designed to plunder American companies” that “could cost American companies billions of dollars.”
Europe has signaled it won’t back down on tech regulation. In an April 10 interview withThe Financial Times, European Commission president Ursula von der Leyen called E.U. regulations on digital content and market power “untouchable” and threatened to impose new levies on U.S. digital companies if negotiations fail to end Trump’s tariff war against Europe.
In contrast, according to media reports, U.K. Prime Minister Keir Starmer has already signaled to Washington that he is willing to cut the headline rate of Britain’s digital services tax. The 2 percent levy, introduced in 2020, taxes the revenues of search engines, social media services and online marketplaces which generate more than £500 million ($655 million) in worldwide revenues and more than £25 million ($33 million) from U.K. users, a category that applies to most of the U.S. tech giants, including Amazon, Meta, Apple, Alphabet eBay, and likely Elon Musk’s X (X had not said publicly if it pays the U.K. levy).
The U.K. government has also delayed publishing a long-awaited bill regulating artificial intelligence, reportedly so that London can tweak the legislation to better align with Trump’s more AI-friendly approach, giving companies like OpenAI greater permission to use scrape copyright-protected work in training their large language models.
“Europe isn’t moving, but the U.K. will acquiesce to all the demands of the Americans in the digital space,” says Enders.
Trump’s tariffs, says Paolo Pescatore, an analyst at PP Foresight, are “the elephant in the room” when discussing a streaming levy, because “Any tax levied on a U.S. company may not be well received by the Trump administration.”
