Netflix Executives Vow Long-Term Commitment to U.K. in Lords Hearing

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U.K. culture secretary Jeremy Wright earlier this year signaled that global streaming giants could face some form of regulation in the future.

U.K. politicians worried about the world's biggest streaming company and dangers it could pose to the country's media and entertainment industry can (Netflix and) chill. That was the message two top executives from Netflix's London office sent during a hearing of the U.K. parliament's House of Lords Communications Committee on Tuesday.

Netflix is committed to featuring British originals and creative voices, will continue to co-produce with local partners, and can self-regulate, Anne Mensah, vp content, and Benjamin King, director, public policy U.K. at the streamer, said during their appearance in parliament. The Tuesday hearing, which was webcast, was part of the committee's "inquiry on the future of public service broadcasting in the age of video on demand."

U.K. TV industry executives, including from the BBC and ITV, have in recent years often highlighted the increased competition for creative talent and projects from global streaming platforms, such as Netflix and Amazon. Some have also expressed concern that U.S.-headquartered streamers could continue growing their subscribers in Britain, and eating into U.K. companies' audience share, without a real commitment to local original programming and collaborations with producers and networks in the country. That, they argue, could put British production and network companies' future at risk.

Mensah said on Tuesday that such worries are unfounded. Netflix is committed to the U.K. long-term and to featuring British voices, whether established ones like Ricky Gervais or new ones, she said, highlighting that these voices often have global appeal. "The U.K. has a tradition that is long-standing that takes programs global," she explained.

Is there a risk that Netflix could stop spending in the U.K. over time, whether due to future competition or other reasons? "I truly believe we are here, and Netflix's commitment to the U.K. is for the long term," Mensah said. She added that she is committed to making the streamer feel like "a complementary player in the U.K. for the long-term" in terms of her commissioning strategy. Mensah noted that the BBC, Sky, Netflix and others all contribute their own content to the market and can co-exist.

Arguing that "it is not a zero-sum game," the exec also said she expects to help build creative talent in the country for the long-term. A young creator making a show for Netflix could in the future create for the BBC or HBO or so, she suggested.

Co-Productions Remain Key

While some have criticized Netflix for taking more global content rights on shows, Mensah said the streamer uses different financing and rights approaches on different projects. Co-productions "remain the lifeblood of what we do," she said, mentioning the co-production Dracula with the BBC and creator Steven Moffat as one high-profile recent example.

Netflix likes using different content production business models as "we are working [with partners] to find the best route to screen," said Mensah. Given how strong the U.K. TV sector is, if a project is better suited for the BBC, it should be able to end up there, the executive said, adding that fair compensation for more rights for Netflix is part of the company's approach.

Quota Questions and Regulation

When it comes to the possibility of Netflix facing increased regulation in the U.K. down the line, King pointed out that there is already a regulatory framework set out in European law, which the company is subject to. But Netflix is motivated to go "above and beyond that," he added. For example, King noted that the streaming giant has submitted itself to some self-regulation, such as earlier this year striking a deal with the British Board of Film Classification.

Discussing a new European content quota of 30 percent for streaming services, King said "we don't know yet how that is going to be calculated," but Netflix execs have "every confidence that we will be able to meet that quota, because fundamentally what motivates and incentivizes our commissioning strategy is what we know our members want to watch," and local and regional content performs strongly.

Some in the U.K. have suggested streaming services should face regulation similar to public service broadcasters. "In many ways, what we do is materially different" from what traditional TV networks do, King argued though. For example, Netflix isn't airing news, live shows or advertising, making it an entertainment company more than an information or media company, he argued. "We have every incentive to hold ourselves to the highest levels of content standards, audience protection and so forth, because it is existentially important to our brand that our members have every confidence when they use our service," King added.

U.K. culture secretary Jeremy Wright earlier this year lauded streaming giants Netflix and Amazon for their growing role in Britain's media landscape, but also signaled that they could face some form of regulation in the future. "We must ... make sure that our concept of broadcasting, and our policies towards it, recognize and reflect the growing impact of the digital world," he said. "For relatively new on-demand platforms, rules are in many areas not as robust."

Wright didn't make specific proposals, but hinted that streamers could be required to represent the diversity of Britain just like public service broadcasters, such as the BBC, ITV, Channel 4 and Viacom's Channel 5. "We place high expectations on our public service broadcasters to reflect and represent the full diversity of the U.K.'s nations and regions, and in doing so creating a product that often appeals across the globe," he said. "On-demand platforms undoubtedly have global appeal. But it is worth thinking about how we can encourage them to develop in a way that means the content produced here truly reflects U.K. audiences."

Asked about a potential levy on streaming companies that some have suggested, King said, "I am not convinced that a compelling case for the introduction of a levy is actually being made." Instead, he argued that it seems like "a solution in search of a problem," highlighting that content funding in the U.K. is at an all-time high. A levy wouldn't be an incentive to invest in different content as audience tastes are the key driver here, he added. "Where levies have been introduced ... we are very happy to abide by those rules," but some streamers could be disincentivized by such levies, King concluded.

The U.K. as a Key Production Location

King also highlighted on Tuesday that Britain is the streamer's third-largest production market behind the U.S. and Canada, acknowledging that Netflix had an advantage in the fact that it is not driven by traditional TV ratings pressures. He and Mensah said the company looks at quantitative and qualitative data in judging the popularity and success of its programming.

Mensah also noted the benefits of Netflix's bigger U.K. presence these days, such as allowing commissions to be decided locally instead of from the company's California headquarters. "We can [meet] at the same time and with the same understanding of the U.K. as the creatives we want to work with," she said. "You can do that better if you have deep roots in the industry." The exec added that she hopes to make the creative process and collaboration "easy for British talent," whether they want to work with Netflix in the U.K., other European countries, or elsewhere.

Mensah lauded British public service broadcasters for their work attracting young audiences with shows from EastEnders to Love Island. But these audiences as early adopters of new media and platforms naturally have turned to Netflix in big numbers as well, she said when asked why the streamer has been so successful with young viewers.

Streaming Competition

Mensah also lauded Netflix for diverse commissioning and other teams, which, she argued, allows new voices to come to the platform. Sex Education was written by a first-time female creator, for example, namely Laurie Nunn, Mensah highlighted. "I like to think that we don't pigeonhole young people," but public service broadcasters do it well too, she said. "For me, this is about collaboration, not competition" between Netflix and U.K. networks.

King during his appearance also answered a question about new streaming services coming from the likes of Walt Disney and Apple, saying there was intense competition and more to come, but Netflix was looking forward to that.

In similar hearings in front of the committee last week, Amazon Studios director of European originals Georgia Brown and Apple’s creative director, Europe, worldwide video Jay Hunt also discussed their companies' video strategies and their focus in terms of programming rights.

Hunt said that, "we are not averse to co-productions at all," adding: "The priority is to find innovative content." And Brown said that Amazon was also "more than happy for [independent production firms] to keep rights and monetize them," adding: "We're not working to a worldwide model and completely understand that producers need a line of income."