Unauthoritative Pronouncements

Scharon Harding’s post for ArsTechnica starts with the UK, but it gets around the globe.

For the US, the recommendation garnering the most attention is one calling for a 5 percent levy on UK subscriber revenue from streaming video on demand services, such as Netflix. That’s because if streaming services face higher taxes in the UK, costs could be passed onto consumers, resulting in more streaming price hikes. The CMS committee wants money from the levy to support HETV production in the UK and wrote in its report:

The industry should establish this fund on a voluntary basis; however, if it does not do so within 12 months, or if there is not full compliance, the Government should introduce a statutory levy.

Calls for a streaming tax in the UK come after 2024’s 25 percent decrease in spending for UK-produced high-end TV productions and 27 percent decline in productions overall, per the report. Companies like the BBC have said that they lack funds to keep making premium dramas.

This is all very ironic if you have been following the generous tax rebates that the UK provided to lure global production to the UK for pre-production, filming, post-production, etc. They are very generous subsidies that have all kinds of little rules and loopholes that get updated over time.

Instead of lowering those hefty rebates for international productions in the UK they want to tax subscriptions of international streaming services.

In a statement, the CMS committee called for streamers, “such as Netflix, Amazon, Apple TV+, and Disney+, which benefit from the creativity of British producers [Joe: and our enormous tax rebates], to put their money where their mouth is by committing to pay 5 percent of their UK subscriber revenue into a cultural fund to help finance drama with a specific interest to British audiences.[Joe: Unlike the content that they are paying to subscribe to which is definitely of no interest whatsoever to British audiences.]” The committee’s report argues that public service broadcasters and independent movie producers are “at risk,” due to how the industry currently works [Joe: We’re all trying to find the guy who did this!]. More investment into such programming would also benefit streaming companies by providing “a healthier supply of [public service broadcaster]-made shows that they can license for their platforms [Joe: Is there a term when something goes beyond double-dipping?],” the report says.

As Scharon notes, the same applies to Canada, which has eye-watering tax rebates in Montreal and Vancouver, but at the federal level, Canada wants to slap a 5% levy on streaming services. It’s just wild.

I know it’s rich for me, a guy in a country that turned tariffs on and off like a child playing with a light switch, to comment on the affairs of other countries, but I do feel at least a little affected by it.

It’s been one year since I was laid off from my VFX studio job after being furloughed for six months due to the dual labor strikes in the US, and a possible third. What production has resumed has mostly resumed abroad. Sound stages in LA are only at 63% capacity. Post production is even easier to do outside of the US, with my former employer exclusively hiring in other countries for positions like the one I did –but I did it in LA. This is a little less like trying to bring back coal mining jobs. I’m talking about jobs that were there 18-24 months ago.

It’s darkly funny (to me, anyway) to distort a market through tax rebates on foreign productions, then swoop in and demand money from subscriptions to foster locally-owned production. If a government wants to fund the production of local culture then they should funnel their money there to begin with by appropriately taxing foreign productions instead of trying to capture the revenue, after the fact, of the foreign system they’re supporting.