The United Kingdom government has formally rejected a proposal to impose a 5% levy on the local revenues of major streaming services, including Netflix, Disney+, and Prime Video. The recommendation, put forward by Britain’s Culture, Media and Sport Committee, aimed to establish a dedicated cultural fund to bolster domestic high-end television production.
The government’s response, issued on Thursday, July 3rd, 2025, signals a preference for fostering a “healthy, mixed film and TV ecology” that actively encourages inward investment rather than introducing new taxation measures on digital platforms.
The Proposed Levy for Cultural Funding
The now-rejected proposal from the Culture, Media and Sport Committee envisioned a direct tax of 5% on the U.K.-derived revenue of prominent streaming platforms. The committee recommended that the proceeds from this levy be directed into a new cultural fund. This fund was intended to be administered by the British Film Institute (BFI) with the specific mandate of supporting and stimulating domestic high-end television (HETV) production. The committee’s report suggested a tiered implementation approach: initially, the fund could operate on a voluntary basis, but it should become mandatory if compliance from the streaming services proved insufficient. Proponents argued such a fund was necessary to ensure British production houses could compete effectively and continue producing high-quality content in an evolving media landscape dominated by global streamers.
Government Rejection and Strategic Priorities
In its official response on Thursday, July 3rd, 2025, the government explicitly stated its decision to decline the committee’s proposed 5% levy. The government’s rationale centers on maintaining and enhancing the U.K.’s appeal as a global hub for screen production. It emphasized its commitment to cultivating a “healthy, mixed film and TV ecology,” a phrase underscoring its view of a diverse and balanced industry encompassing public service broadcasting, independent production, and international inward investment. The response made it clear that the government considers inward investment, including significant contributions from global streamers, as a crucial component of this ecosystem.
Demonstrating Industry Strength and Inward Investment
To support its position, the government highlighted the robust performance of the U.K.’s film and high-end television production sector. Figures cited in the response showed that total U.K. production spend on film and HETV reached a substantial £5.6 billion in 2024. This represented a significant 31% increase compared to the previous year, 2023, demonstrating strong growth momentum in the industry. Crucially, the government noted that a dominant portion of this spend, specifically £4.8 billion, originated from inward investment and co-productions. The response pointed to specific, high-profile examples to illustrate the economic benefits of this inward flow, including the film “Barbie”, which contributed an estimated £80 million to the U.K. economy, and the television series “Bridgerton”, which contributed an estimated £275 million and supported approximately 5,000 local businesses over a five-year period. These figures were presented as evidence of the significant economic activity and job creation already being driven by international projects utilizing U.K. facilities, talent, and services.
Alternative Support Measures and Future Focus
Instead of implementing a new levy, the government outlined its strategy for supporting the screen sector through existing and enhanced initiatives. The response stated a commitment to building upon the foundations laid by the Media Act and leveraging the insights gained from Ofcom’s comprehensive Public Service Media review. Furthermore, the government announced a new, dedicated package aimed at fostering growth, committing £75 million to what it terms a “screen growth” package. A key component of this package is the significant scaling up of the Global Screen Fund. The fund’s annual allocation is set to increase substantially, rising from its current £7 million per year to £18 million per year. This expanded fund is intended to provide enhanced support across several critical areas, including film distribution, international co-productions, and fostering the development and sustainability of screen businesses operating within the United Kingdom.
Conclusion
The U.K. government’s decision to reject the 5% streamer levy proposal underscores its current strategy, which prioritizes attracting and retaining international investment in the screen industries. While acknowledging the importance of supporting domestic production, the government appears to favour a path that builds upon the sector’s demonstrated growth, largely fueled by inward capital, and supplements this through targeted public investment programs like the expanded Global Screen Fund, rather than introducing a new tax on global streaming platforms. The response firmly places the government’s focus on enabling continued growth through investment attraction and strategic funding initiatives following the landscape analysis provided by the Media Act and Ofcom’s review.
