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“Intellectual property has a massive value in the market, but currently the people who create that do not get rewarded”; WGI director Hugh Farley discusses the potential of the proposed Content Levy
29 Apr 2022 : Nathan Griffin
PayTV and VOD Services.
As the discussion around the introduction of a proposed content levy on PayTV and VOD services begins to intensify, IFTN explores the potential benefits that industry stakeholders believe will come with the implementation of this levy.

At present, Irish audiences pay circa €600 million every year to PayTV and VOD services such as Sky, Netflix, and Disney - most of whose headquarters reside outside of the country. The argument put forward is that these services contribute little to the development and production of original stories on screen by Irish writers and directors. 

2021 saw Ireland enjoy a record breaking year in terms of film & television spend in Ireland. Against the background of the pandemic, the screen industry continued to thrive with major productions such as Disney’s Disenchanted, Apple’s Foundation, and Netflix’s Vikings: Valhalla leading to international production activity growing by 45% on 2019 figures.

However, an industry group of stakeholders from the Irish audio visual sector, which includes Screen Producers Ireland (SPI), Screen Directors Guild of Ireland (SDGI), Screen Composers Guild of Ireland, Writers Guild of Ireland (WGI), and Animation Ireland, feel this investment from international PayTV and VOD services does not go far enough towards the creation of original Irish content and have come together to call for the urgent introduction of the content levy.

It was initially thought that this topic would be addressed in the Government’s Online Safety and Media Regulation Bill, which has already been brought forward in early 2022. The Bill however did not provide for a levy to be introduced. Instead, it has delegated that decision to the proposed new Media Commission, which will be trusted to decide whether it might introduce a levy, after further research.

“The levy represents a tremendous opportunity to solve the kind of existential threat that is posed by the changes in the marketplace and the exit of Britain from the EU,” Hugh Farley, director of the Writers’ Guild of Ireland tells IFTN. “We have the great misfortune of being adjacent to the most efficient manufacturer and distributor of creative content in Europe. However, there is an opportunity and that is through the levy, which is provided for in the 2018 AVMS directive.”

The EU passed the AVMS Directive in 2018, which allows EU Member States to put in place a levy on PayTV and VOD services, based on their turnover, as long as they are targeting Irish audiences. “It's a tax on their profits, but it is not a tax on the taxpayer. It costs the taxpayer nothing. And that's, I think, a really significant thing,” Farley explains. “It's not the same as a TV licence.”

The idea is that money collected via the levy can then be used to fund Irish stories by Irish creative talent. These levies already exist in other EU Member States examples of implemented levies being seen in France (5.15%) and Germany (2.5%).

Some fear however that any taxation could ultimately result in knock-on costs being felt by consumers who would incur any addition costs placed on these subscription services. That's highly unlikely in a competitive market,” Farley states, “but it's certainly there to try and rattle politicians who might be cautious to enter into this Levy.”

The aforementioned sector audio visual representative group commissioned a report from consultants, Indecon, which concluded that based on a 3% levy, there would be an annual fund of at least €24m available for Irish films and TV series.

When the Bill was published, the Industry Group then came forward with specific amendments to the Online Safety and Media Regulation Bill 2022. They wanted a new vision for the fund, supporting the development and production of high quality films and TV series with a focus on younger audiences. The amendments included the immediate introduction of a 3% levy as of 1st January 2023. 

The Minister has declined to take on board the amendments. As such, the Industry Group has begun campaigning to the nation that the content levy is a great opportunity for Irish creative talent and Irish screen content to tell their stories to Irish and world audiences, not to be passed up.

At the heart of it, Farley argues that the proposed Levy aims to “invest in development” and give Irish creatives the time and finances to make world class original content and IP that will subsequently strengthen the Irish industry as a whole – something he believes doesn’t happen in Ireland nearly enough at present.

“It's a thing that really has been the bedevilment of our industry,” Farley explains. “If you start asking - how do we build a world class industry? What are the kinds of steps we would have to take? Well, one of the first things is we have to come up with great ideas, which have to be very well worked out into excellent scripts.”

“A great concept punches through but there's no point in having a great concept if the scripts are poor. What that takes is to have the money and time to get it right. Being able to pay writers and producers to have enough time, because at the moment producers only make their money when they're in production. So there is a rush to get into production all the time.”

“From the point of view of writers, they need to be compensated well enough to be able to stay in the game,” Farley adds. We need to think about that when Amazon spent around a billion on acquiring the Lord of the Rings’ intellectual property rights, not to make the thing, just to acquire it. Or the fact that JK Rowling is a literally billionaire on the intellectual property she created.”

“Intellectual property has a massive value in the market, but currently the people who create that do not get rewarded,” Farley states.

The levy fund will provide more money to invest in development to enable creative people to spend the time to make the darn things really, really great,” he concludes. “The international market is extremely competitive. And the only thing that matters is how good your idea and how good your scripts are. And that's what's critical.





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