Written Evidence Submitted by Netflix

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Written Evidence Submitted by Netflix Written evidence submitted by Netflix Submission to Digital, Culture, Media and Sport Committee inquiry The future of Public Service Broadcasting June 2020 Netflix in the UK 1. Netflix is a streaming subscription video on demand (SVoD) service that allows customers to watch a wide variety of TV shows, films, documentaries, and more over the internet and ad-free on any one of thousands of internet-connected devices at a time and place of their choice. We are a global service, offered in 190 countries with close to 180 million subscribers, of whom over 12 million are in the UK. 2. The UK is one of Netflix’s top three locations for production globally, along with the U.S. and Canada. In 2019 we invested over £400m1 here in local content, with over 50 different shows in production including co-productions with the public service broadcasters and in total over £500m in UK production - a third of all our production in Europe. We expect our investment here to continue growing; our long-term commitment to the UK creative community and our intention to increase our investment in production is also reflected in our announcement last year that we are creating a dedicated production hub in the UK, based at Shepperton Studios.2 3. Localised content is increasingly a priority for our business, both in the UK and around the world. Since 2019 we have appointed several UK-based commissioners overseeing scripted and unscripted content, including drama, comedy, factual, and kids and family - all of whom built their careers in the UK film and TV industry, including with the PSBs. The decentralised nature of our operations, both structurally and culturally, mean these executives have significant creative and financial autonomy when it comes to making the shows that inspire and excite them. 4. Netflix’s production slate of commissioned originals to date in the UK includes hit series like The Crown and Black Mirror, and major features like Outlaw King. Notable recent launches include Sex Education, created by first-time British writer Laurie Nunn; After Life, from Ricky Gervais and a new season of Top Boy, a gritty drama series following two drug dealers on an East London housing estate which originally aired on Channel 4 before ending in 2013. Written, produced and filmed in the UK and starring British talent, all three series have been recommissioned for subsequent seasons following wide acclaim. 1 https://www.theguardian.com/media/2019/sep/20/netflix-spend-500m-british-made-tv-shows-films 2 https://www.standard.co.uk/business/netflix-moves-to-historic-shepperton-studios-in-blockbuster-deal- a4181526.html 5. In addition we’ve also recently launched The English Game, a six-part series on the origins of football, written and executive-produced by Downton Abbey creator Julian Fellows, and filmed in Manchester and The Stranger, a thriller based on Harlan Coban’s novel of the same name which was also made in Manchester and Stockport. We’re also diversifying from scripted drama into an increasing variety of UK-produced content, from natural history programming like Our Planet, narrated by David Attenborough to our first children’s animation, Robin Robin, which will be made by the talented Aardman Productions. 6. We aspire to be champions of British content, talent and storytelling. We also believe we're uniquely placed to make it globally accessible, finding and building new global fanbases for British content by opening it up to an audience over 180 million strong, and helping British audiences to discover stories from around the world which they might otherwise have never had the chance to watch. The growing appetite for original content on our service is well documented: Ofcom estimates it has increased in the UK from 26% of all viewing in 2017 to 43% in 2019.3 7. The fact that our business model is not dependent on achieving a specific size of audience at a particular time of the day means we can take greater creative risks and invest in a broader range of content that is reflective of the diversity of our membership. As a 2019 Ofcom report noted “Netflix [is] mentioned by LGBT people, people from minority ethnic backgrounds more broadly and younger audiences as providing good examples of authentic portrayal.”4 Netflix’s relationship with the PSBs 8. In general the PSBs and the streamers have mutually supportive roles in the UK AV ecosystem. As the Covid-19 crisis has demonstrated, PSBs have a vital part to play in bringing the nation together and keeping the general public informed; their enduring appeal and strategically important role being reflected in the viewing figures they are commanding during this time. As the BBC’s own Annual Plan highlights, “even at the height of lockdown when VOD growth was sharpest - the BBC is roughly 24% of all UK video, audio and online time spent by the average adult in a week”.5 9. SVoD services do not generally offer the same mix of content as broadcasters, and as well as being global leaders in a wide range of programming areas including news, sport, live entertainment, events of national importance, soaps, and educational programming, the PSBs continue to be essential to maintaining and growing the creatively and commercially dynamic 3 https://www.ofcom.org.uk/__data/assets/pdf_file/0013/192100/psb-five-year-review.pdf (p56) 4 https://www.ofcom.org.uk/__data/assets/pdf_file/0022/124078/report-bbc-representation-portrayal.pdf 5 https://www.bbc.co.uk/mediacentre/latestnews/2020/annual-plan production landscape here. Indeed, this is one of many reasons that Netflix has chosen to make the UK its home. 10. Commercially, Netflix has been one of the PSBs’ biggest customers in recent years, licensing extensive catalogues of UK content from producers for exhibition in the UK - often on a non- exclusive basis - and around the world, including titles like Line of Duty, Sherlock, Luther, Happy Valley, Peaky Blinders (all on BBC One), and The Great British Bake Off (Channel 4) - recent research from Ofcom estimated a total of 1,276 hours of content on Netflix from UK PSBs.6 But we also value them deeply as creative partners, as our ongoing commitment to co-producing with them proves. 11. Building on the success of past projects including Black Earth Rising, Bodyguard, Collateral, Kiss Me First, Troy: Fall of a City, Wanderlust and Watership Down, we have consistently invested in co-productions with the BBC and other PSBs. In the past six months alone the following co-pros have all premiered on the PSB channels: Dracula and Giri/Haji, both with the BBC; Feel Good, a co-production with Channel 4; and season 2 of The End of The F***ing World, another co- production with C4, which had an Emmy-nominated and Peabody-winning first season. 12. Later this year BBC One will premiere The Serpent, an eight part series produced by Mammoth Screen, part of ITV Studios before it launches on Netflix around the world. We have also announced our first natural history co-production with the BBC, a three-part series with Sir David Attenborough called Life In Colour, which will explore how colour plays a vital role in animal interactions using new cameras built specifically for the show.7 This ongoing partnership across a growing number of formats underlines the mutually beneficial model it offers - and not only for Netflix. Recent research highlighted the increasing volume of co-commissions year-on- year from 16 in 2014 to 30 in 2018, with the BBC consistently the biggest co-commissioner over this period.8 13. Netflix also takes several steps to help our members in the UK discover UK-originated productions on our service. First, we organise content into thousands of genres and micro- genres to offer recommendations best suited to a particular member. These include “British” categories such as “BAFTA award-winning British TV programmes” and “Critically acclaimed British TV dramas”. Second, our UK members can locate British themed and produced films and TV shows in our application drop-down menus where “British” is featured prominently as a genre. Members can also use search terms such as “British”, “BBC” and “Channel 4” in the search bar to discover specific UK content. 6 https://www.ofcom.org.uk/__data/assets/pdf_file/0013/192100/psb-five-year-review.pdf 7 https://deadline.com/2019/09/bbc-and-netlfix-team-david-attenborough-life-in-colour-1202746331/ 8 https://www.coba.org.uk/coba_latest/new-era-for-british-tv-drama-as-co-commissioning-reaches-record- high/ 14. The impact of these measures is demonstrated in Ofcom’s own five-year review of Public Service Broadcasting (2014-18), which concludes that the ‘second window’ on streaming services helps drive engagement with PSB content, particularly among 16-34 year olds who are more likely to watch BBC content on SVoD services than through BBC iPlayer and that on average, content from the BBC, ITV and Channel 4 made up 3% of SVoD catalogues, but 8% of viewing in 2019. This can have a secondary benefit for the PSBs as archived box sets on SVoD can also draw audiences into new series on PSB channels by allowing viewers to discover content and catch up on old episodes before the latest series launches on linear.9 The role of the PSBs and Netflix in the broader landscape for content production 15. The UK has a competitive, mixed ecology in the audiovisual sector, of which the PSBs are a fundamental part. Diverse investment and structured public policy interventions have facilitated the evolution of a rich blend of public and private companies and a successful independent production sector.
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