Screen producers’ step up call for ‘Netflix levy’: what do other countries do?

Thursday, 23 November 2023

ANALYSIS: The screen producers guild, Spada, which represents local film and television production companies, has been stepping up its call for a levy on streaming services such as Netflix and Amazon Prime, to help fund local productions.

Chief executive Irene Gardiner says she is thinking of something in the vicinity of a 5% levy, which if passed on to consumers would push up the price of a standard Netflix subscription by about a dollar a month.

Spada and others in the local industry have been “softly lobbying” for some sort of intervention to help out local producers for some time, she acknowledges.

But Gardiner says she chose to use Spada’s annual conference last week as a platform to push the issue, because local production houses were being hit by a “double-whammy”.

Local broadcasters have cut back productions in response to tougher times. She cites the cancellation of TV3’s 7pm news show The Project as an example.

At the same time, production houses have suffered fall-out from the United States actors’ strike, which meant international productions weren’t being filmed here, she says.

All of that has come on top of a familiar trend.

“Over the last few years, the way that people watch television has changed,” Gardiner says.

“There are significantly fewer eyeballs on traditional network television, which means that the audience is less, the ad revenue is less, and there's less money to pump back into local production.

“Meanwhile, the streamers are operating here, bringing great content and giving good viewing to New Zealand viewers, but they are taking those eyeballs away, and therefore affecting the local sector’s ability to make advertising revenue.”

The moral case Gardiner makes for a levy is that streaming providers are benefitting from the public investment that the government made in the ultrafast broadband network, technically in the form of a soft loan.

“What we're saying is, ‘you're a part of our screen ecosystem here, but you don't pay tax and you don't face any government regulation and you use the broadband infrastructure; you need to play fair and be a part of the screen ecosystem that you're in.”

Gardiner notes many countries have introduced quotas that require streaming providers ensure a set proportion of their programming is produced locally.

But she accepts New Zealand doesn’t have that option because of its trade agreements.

“What we are proposing is a small percentage levy ploughed back into local production. That just seems the simplest, most logical way to do it.”

Netflix and Amazon Prime would not comment.

But there are precedents overseas for the levies Spada is suggesting, with some countries in Europe offering streaming companies a choice of either meeting a quota or paying up.

Screen Daily reported that as of September, 17 European countries had chosen to impose financial obligations on streamers to invest more in European films, documentaries and TV dramas, with another five mulling similar moves.

France, for example, imposes a 5.15% levy which is passed on to its National Cinema Centre to subsidise the production of French films, television programmes, video games and digital works.

Denmark has proposed a levy of either 2% or 5%, depending on streamers’ own local investment.

Outside Europe, Canada this year went down the route of imposing quotas.

The Australian government has signalled it will follow suit with a quota requiring Netflix, Amazon Prime Video and Disney+ to ensure a fifth of their content is produced locally.

National Party broadcasting spokesperson Melissa Lee was not available for comment.

But the party’s response to other such calls for assistance from the ravages of “big tech” suggest Spada’s request might be a long shot.

Shortly before the election, National rejected advancing a Labour government bill that would have provided a statutory framework forcing the likes of Google and Facebook to help fund local journalism.

It has also promised to pull the plug on a rule change that would force Airbnb and Uber to ensure gst was levied on all stays and trips arranged through their platforms in New Zealand.

But Gardiner isn’t disheartened.

“I’m actually quite hopeful that the new government would be supportive, because in the end this is about getting new money into the New Zealand economy,” she says.

“This is going to be a business-focussed government and this is a business initiative.”