Patrick O’Donovan, the media minister, had previously said that he was not in favour of introducing such a levy – citing a possible increase in cost that would be passed on to consumers
Meghan Markle in her ‘With Love, Meghan’ lifestyle series on Netflix
A so-called Netflix levy could lead to lower value or quality programming being available to an Irish audience, some subscription services have warned.
It comes in a report which has recommended that Ireland should introduce such a levy on paid media providers, in order to improve the investment in domestic productions.
Patrick O’Donovan, the media minister, had previously said that he was not in favour of introducing such a levy – citing a possible increase in cost that would be passed on to consumers.
A report on the feasibility of such a levy, prepared for Coimisiún na Meán, has said that Ireland should introduce such a levy at the “at the earliest possible date”.
The report, which was compiled by Nordcity Limited and Saffrey LLP, said that the levy should be introduced at a rate of 0.5pc of gross turnover on ad revenue earned, 0.5pc of pay-TV subscription revenue, and 3pc of video-on-demand revenue.
It said that “these rates could be gradually increased to 1pc, 1pc and 5pc, respectively”.
The report said that the Irish Government believed that “Irish households are likely to ultimately pay for the levy themselves through higher subscription fees”.
This reflects the position outlined by Mr O’Donovan, who had expressed concerns about the levy being passed on to consumers.
But the report found that “the assumption of 100pc pass-through to subscribers was not unanimously confirmed” by media service providers.
Subscription services told the report that they “take into account a variety of factors when setting their consumer rates and the levy would be one of those factors”.
“Some [media service providers] suggested that instead of raising prices in Ireland, they may reduce their existing content spend in Ireland and/or commission content of lower value/quality,” the report said.
Others said that in countries where the financial obligations of European media services directives were hard to meet, “they had reduced content commissioning and increased content licensing”.
The report recommended that the levy would apply to the income of media providers, but smaller companies with less turnover could be offered exemptions.
It said that the money generated by such a levy would help domestic Irish productions to pursue “creative excellence while also forging more international partnerships.”
The report said that this would improve the financial stability of the domestic production sector.
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