Netflix has announced it may increase subscription prices if the UK goes ahead with a proposed 5% streaming levy. The Culture, Media & Sport Committee (CMSC) recommended imposing the levy on streamers’ UK subscriber revenues, suggesting the government should enforce this if the industry doesn’t comply within a year. Netflix emphasized the UK’s importance as its “biggest production hub outside of North America” and expressed concern that the levy could undermine this status.
A spokesperson stated, “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.”
Despite the committee’s recommendation, the levy’s imposition doesn’t appear imminent. Chris Bryant, the UK’s creative industries minister, indicated the government has no current plans to introduce such a levy.
He acknowledged the potential diplomatic strain that imposing additional costs on American firms might cause.
UK streaming levy considerations
Netflix’s contribution to the UK production ecosystem is substantial, with recent successes like “Adolescence,” a Netflix UK original.
The company hinted at a second season, underscoring its commitment to local content. Other streaming services and industry representatives have also voiced concerns. The Association for Commercial Broadcasters and On-Demand Services (COBA) argued the levy could inadvertently harm Public Service Broadcaster (PSB) dramas by reducing co-production budgets at streamers.
COBA highlighted that streamers’ investment in UK content is highly regarded globally. The CMSC’s 18-month inquiry report, which suggested the levy, also made recommendations on tax credits, artificial intelligence, and funding for the British Film Institute (BFI). As the industry awaits further developments, companies such as Amazon and Disney have yet to comment on the levy plans.
