London — A proposed levy on streaming services operating in the United Kingdom has ignited a fierce debate: Is it a fair contribution to British culture, or a protectionist tariff in disguise? the heart of the matter lies in the financial health of the U.K.’s public service broadcasters (PSBs) and the future of distinctly British content.

The Crisis in British High-End TV

The U.K.’s high-end television industry faces a critical juncture. Public service broadcasters like the BBC, ITV, and Channel 4 are struggling to compete with the financial might of global streaming giants such as Netflix, Amazon Prime video, Apple TV+ and Disney+ [[3]].Attracted by tax breaks, streamers have increased production in Britain, driving up costs and squeezing out local broadcasters.

one producer lamented that a project like Mr Bates vs The Post Office, which significantly impacted national debate, would be unfeasible to develop for ITV today as the public service broadcasters can no longer afford to produce high-end drama in the U.K.

The success of shows like Wolf Hall may soon be a thing of the past. The current financial climate makes replicating such achievements increasingly difficult.

The Streamers’ levy: A Proposed Solution

To address this growing imbalance, a parliamentary committee has proposed a 5% levy on streamers’ U.K. subscriber revenue [[3]]. This fund would be used to support British drama production, revitalizing the PSB’s ability to create high-quality content.

The committee believes a streamers’ levy would reverse this,providing a production fund which would turn contraction into growth and allow the BBC,ITV and Channel 4 back into the game.

Not a tariff, But an Investment?

A key argument against the levy is that it would be perceived as a tariff by the White House, potentially jeopardizing trade deals. However, proponents argue that the levy is not a tariff because streamers can reclaim their contributions by co-producing content with U.K. public service broadcasters.

Unlike a conventional tariff, where money goes directly to the government without any return for the payer, streamers could access the levy fund to offset production costs, provided they collaborate with a U.K. PSB.

To illustrate the difference, consider this: If a U.S. manufacturer attempts to sell its goods in China, it currently attracts a 125 percent tariff.That money goes straight to the Chinese government. It goes without saying that the U.S.importer can’t claim any of that money back to offset the cost of manufacture. But a Netflix or Amazon or Disney+ would be able to claim a contribution towards its production costs from the proposed 5 percent levy fund — on one condition,that the program is a co-production with a U.K.public service broadcaster.

Reviving Co-Production

Initially, streamers showed enthusiasm for co-productions with U.K. broadcasters. However, this interest has waned as streamers increasingly prefer to own the entirety of the intellectual property (IP). The levy fund aims to re-invigorate the co-production market.

By requiring streamers to partner with local broadcasters to access the funds, the levy creates a win-win scenario: streamers gain access to production finance, and PSBs have the opportunity to collaborate with leading global producers.

Preserving British Broadcasting Heritage

streaming services have undoubtedly revolutionized television, attracting top talent and breaking down traditional barriers.Though,this has inadvertently marginalized U.K. public service broadcasters, which have a 100-year tradition of creating content that reflects British culture and values.

The streamers are perhaps the ultimate manifestation of a free market in television… But an unintended consequence of this explosion of creativity has been the “elbowing aside” of the U.K.’s public service broadcasters, which make programmes that wouldn’t necessarily appeal to the streamers’ international audience. These broadcasters represent a 100-year tradition of programme-making in the U.K., a tradition the British audience will not thank us for jettisoning.

The 5% levy seeks to address this market failure, ensuring that PSBs can continue to compete and create distinctly British content.

The Question of courage

The proposed levy is not without its challenges and potential political ramifications. However,proponents argue that it is the most effective solution to the current crisis in U.K. high-end television.

The 5 percent levy would address this market failure at a stroke. It would force the streamers to still further up their game as they are onc again required to compete with broadcasters such as the BBC, ITV and C4. And it isn’t a tariff – as the streamers’ themselves could claim their own funds back when in co-production with a local broadcasters. No other solution put forward adequately addresses the acute problem faced right now in high-end TV in the U.K., most now accept that. The only real question remaining is whether the U.K. government will have the guts to implement it.