Urgent action is needed to protect distinctly British content, the Culture, Media and Sport Committeeof the House of Commons of the U.K. parliament has concluded after holding an inquiry via a series of hearings.

In its final report, published just after midnight on Thursday, it calls on the government of Labour Party leader and Prime Minister Keir Starmer to ramp up support across film and high-end TV. Among its proposals are additional tax incentives to benefit independent films, support for independent cinemas, and a levy of 5 percent of U.K. subscriber revenue on foreign streaming services, including the likes of Netflix, Amazon, Apple and Disney, to help finance British drama production. Speaking of the crisis in domestic high-end television, the committee specifically suggests enhanced tax incentives to ensure similar support as is available for independent film. The BFI should urgently conduct an analysis on the potential design and return on investment of a measure targeting productions with budgets of 1 million-3 million ($1.28 million-$3.83 million) per hour, it argues.

It also outlines a recommendation for streamers, such as Netflix, Amazon, Apple TV+ and Disney+, which benefit from the creativity of British producers, to put their money where their mouth is by committing to pay 5 percent of their U.K. subscriber revenue into a cultural fund to help finance drama with a specific interest to British audiences. If the industry does not voluntarily establish such a fund, administered by the BFI, within a year, the U.K. government should introduce a statutory levy, it recommends.

The dynamic between independent producers and streamers is not sustainable, according to the parliamentary committee. Successful production companies are being gutted by deals that deny them the ability to fully monetize their intellectual property. The government should consider ways that British producers can retain a greater share of IP rights when working with streaming platforms.

While welcoming the governments ambition to make the U.K. the best place to create films and high-end television programs, the culture committee warns that there must be no complacency over its status as a global production hub, calling for a regular assessment of tax incentives to maintain investment from overseas.

Dame Caroline Dinenage, chair of the culture committee in the House of Commons, said: Big box-office blockbusters made in Britain have showcased the U.K.s world-class film and high-end television industry like never before. But the boom in inward investment of recent years now risks crowding out our many talented independent British producers. While streamers like Netflix and Amazon have proved a valuable addition for the industry and economy, unless the government urgently intervenes to rebalance the playing field, for every Adolescence adding to the national conversation, there will be countless distinctly British stories that never make it to our screens.

She added: From independent production through to cinemas, all parts of our film and high-end TV sector, and the talented people that make it such a success, are going through a turbulent time. To neglect just one part puts the entire ecosystem at risk, so its therefore vital that the government goes further and faster across the board to support an industry that is so important to both our economy and our soft power overseas.

Urging a series of measures to halt the decline of domestic production of culturally distinct British film and programs, which has failed to keep pace with the headline-grabbing growth of big box office productions financed and controlled from outside the U.K., a summary of the committees report calls last years introduction of the Independent Film Tax Credit only a first step. But the government should go further, or producers will continue to struggle to develop and raise finance for films, and those that are made will not be seen by audiences, the committee argues, suggesting a tax credit to support the distribution of lower-budget films, among other measures to support independent film.

Among tax measures, the committee members suggest introducing tax relief for the print and advertising (PA) costs of films to support distribution and exhibition.

The committee warns that without urgent intervention, the problems seen in independent film will extend to the domestic high-end TV sector, where competition from high-budget overseas production is driving up costs, revenue models are changing due to the terms offered by streamers and commissioning budgets of public service broadcasters are being squeezed by a fall in the license fee and drop in advertising revenue.

Support for cinemas is also part of the committee report. The U.K. government should introduce a core funding model for culturally significant independent cinemas to mitigate the cost pressures, changing audience behaviors and under-investment in people and infrastructure that have threatened many communities cinemas, it emphasizes.

The impact of AI, of course, is also part of the committee report. Industry guidelines based around protecting human creativity in the use of generative AI are welcome, but the film and TV sectors are calling out for help to embrace the growth potential of generative AI in a way that is fair, responsible and legally compliant, the summary notes. The government should fund the BFIs development of an AI observatory and tech demonstrator hub. Getting the balance between AI development and copyright wrong will undermine the growth of our film and high-end TV sectors and wider creative industries.

Evidence to the culture committee came from the likes of Wolf Hall director Peter Kosminsky, who warned that recent hit series Wolf Hall: The Mirror and the Light, would not be made today due to funding challenges, while Black Doves producer Jane Featherstone argued that the business models of streamers mostly require shows with global rather than local appeal.

Industry members lauded the reports proposals. I hugely welcome the fact that the Culture, Media and Sport select committee has endorsed the call for a 5 percent levy on streamers revenue to support public service broadcasting high-end television, said Kosminsky. This is a brave thing to do in the current political climate and absolutely the right solution. However, I do think it is important to stipulate that the fund created by this levy should only be available to productions which are either commissioned or co-commissioned by a public service broadcaster. As far as I can see, this isnt made clear in the report and it is an essential aspect.

BFI CEO Ben Roberts said: This is the first report in over 20 years focusing on our sector and is timely in looking at how we can best support and drive continued cultural and economic prosperity for the U.K.s world-class film and high-end television sector. He also noted that many of the recommendations align directly with work that the BFI is delivering across a number of fronts, including supporting access to finance for production, distribution and exhibition including dedicated support for independent cinemas and U.K. distributors.

Catharine Des Forges, director of the Independent Cinema Office, highlighted that the committee report recognized the urgent need for capital funding for independent cinemas that threatens the very survival of large numbers of independent cinemas and for others is a huge barrier for growth.

Meanwhile, Katheryn Needham, CEO of Studiocanal U.K., noted that her company is committed to making crowd-pleasing British independent films, but marketing costs can be prohibitive to reaching wide audiences. And she added: Tax relief should be extended to print and advertising costs, so that films benefiting from the IFTC (Independent Film Tax Credit) can attract broader audiences, boosting both cultural impact and economic growth.

Marie-Claire Benson, executive vp and head of motion picture group at Lionsgate U.K., said: The introduction of a 25 percent tax relief on PA costs would be a transformative boost for the U.K.s independent film sector. Its a smart, targeted initiative that recognizes the vital role distribution plays in the film industrys ecosystem: connecting great British storytelling with audiences across the country.

Concluded Zygi Kamasa, CEO of True Brit Entertainment: When releasing a British film in the UK, we are spending and competing in advertising terms with blockbuster movies, games and other commercial retailers, who have many more millions of pounds in their budgets than independent film distributors. In order to ensure that those very films that are now being supported in production are adequately released, then a tax credit for PA would be a huge boost to distributors and to those films to maximise their potential box office takings.