Streaming services should be taxed to save the Irish screen industry

Should the State do what some EU members are already doing and introduce levies on subscription video-on-demand companies to boost funding for Irish-produced screen content?

A version of this question was asked as part of a recent Department of Communications consultation, half of which was about Irish implementation of the EU’s revised audio-visual media services directive – not the kind of thing that screams “popcorn” to most people.

But for those who consciously care about Irish screen culture and the consequences of its neglect, the period between now and September 2020, when the directive must be transposed, is an especially good time to discuss what the State can do better to protect Irish cultural reach and its associated returns.

"We have to, in this dialogue, talk about Irish screen storytelling and Irish creative talent and what we can do for them," says James Hickey, outgoing chief executive of Screen Ireland, which "strongly supports levies".

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In its submission, Screen Ireland notes there are already many European precedents for what the State could do here.

Croatia, for example, is levy central, with levies on cinema tickets (0.5 per cent of revenues), on video-on-demand platforms (2 per cent), broadcasters (0.5-2 per cent), cable and satellite service companies (0.5 per cent) and internet providers (0.8 per cent). Elsewhere, giants like Netflix are being pressed for direct contributions to cultural funds. From September, after much legal wrangling, Netflix is expected to join Amazon in paying a revenue-based levy to a German national film fund.

Across the EU, Screen Ireland submits that a hefty 40 per cent of national or federal funding for indigenous film is sourced through industry levies. “The trouble here is that it’s 100 per cent from the taxpayer,” says Hickey. “It should be supplemented in another way, I would say.”

Broadcasters actually based in the State already pay a levy for the cost of their regulation. Subscription “streamers” have no such obligation, and nor do an even longer standing thorn of Irish television broadcasters, the mostly British “opt-out” channels that collectively mop up a large chunk of Irish TV ad revenues.

Reverse flow

Screen Ireland estimates that Irish audiences and Irish advertisers pay more than €2 billion annually to providers of audio-visual entertainment that are based overseas. Shouldn’t there be a little more money flowing the other way?

There’s been an absolute boom in the global television business, and yet Irish independent producers report that the resulting industry pressure on national broadcasters means the explosion has actually been negative for Irish creative talent.

Screen Producers Ireland, in its submission, noted that funding was "a constant concern" among its members and was discussed at every committee and board meeting.

There's a nice story to unfold here, if only the Government were to switch on to its potential

The Screen Directors Guild of Ireland has separately called on the Government to "fix the dysfunction of funding to RTÉ" and support Irish television production so that it can join in the international party – a feature of which is bolder and bigger budget projects.

RTÉ has made its own efforts to secure both television licence fee increases (there's been none since 2008) and reform everything to do with the fee, while Screen Ireland has had some success in its campaign for a restoration of its exchequer-funded, recession-savaged capital budget. In 2019, this stood at €16 million.

At the heart of the EU directive lie quotas for “European works”, which means video-on-demand platforms must make 30 per cent of their catalogues European. While positive, this won’t guarantee a spike in investment in Irish production. The State still needs to make it attractive for the big spenders to do business with Irish production companies.

Increasing the public funding "leverage" available to producers in search of elusive commissions is one way to help them. Some would welcome a redefining of the rules around the roughly €12 million in licence fee funding distributed by the Broadcasting Authority of Ireland (BAI) through its Sound & Vision scheme. At the moment, this fund is tied to commissions from linear free-to-air broadcasters – mostly RTÉ, TG4 and Virgin Media Television.

But it would be a weird decision to open up existing funds to producers pitching to, say, Netflix if there wasn’t also a parallel move to oblige companies like Netflix to make a formal contribution to the industry.

Unfolding story

There’s a nice story to unfold here, if only the Government were to switch on to its potential. The new EU directive gives it the opportunity to usher in levies on audio-visual services that are regulated in another EU state but target Irish audiences, then use that money to support Irish creative talent.

Timing wise, it also helps that the streaming world is set to become a festival of competition with several new launches. This will make it harder to pass the cost of levies back to the consumer through pricier subscriptions.

Really, the two-part question for the next consultation is this: should the Government be satisfied with sticking ministerial names on press releases celebrating how wonderful everybody is when an Irish film is nominated for an Oscar? Or should it be interested in making the Irish screen industry a vibrant one the other 364 days of the year?