Welcome to this meeting of the Culture, Media and Sport Committee. My name is James Frith. I am the understudy for Dame Caroline Dinenage. Apologies that you do not have the governess, but she is elsewhere. It is an honour to be in the Chair for this session today. Today we are pleased to welcome one of the country’s leading television producers, Jane Featherstone, to give evidence to our inquiry on British film and high-end television. As co-founder of the independent production company, SISTER, Jane has been behind some of the biggest shows to hit our TV screens, from the widely acclaimed “Chernobyl” to the more recent Netflix hit, “Black Doves”, which some of us enjoyed immensely over the holidays just past; others are yet to enjoy it. We are grateful to you for being willing to come and discuss the outlook for high-end television production in the UK, and the realities of life as an independent producer. Thank you for being here, Jane. Before we begin, do Members wish to declare any registration of interests? No? Good. Thank you. How would you characterise the health of the high-end TV production sector in the UK today, Jane?

I am going to go into that, but first I just want to say thank you very much for having me. I do appreciate that at the beginning of the year you all have a very full inbox, so I truly appreciate the interest in our sector and I am very grateful to be here representing producers—not officially, but my peers and I talk a lot. So thank you, I appreciate your time. It is a multifarious picture at the moment. In some ways the business is doing incredibly well. You see that on your screens and you see how much content is being made. I think some of you are newer to this Committee, and I gather there were some changes, obviously, when the new Government came in. If I am repeating things that have already been said, forgive me, but I think it is important to get some of the history right. The sector is in a moment of flux and even since you started this inquiry 14 months ago, I think, things have evolved so quickly. It is such a fast-moving business, particularly driven by technology. So 25, 30 years ago when I started as a young producer from Leeds University coming out, trying to work in the industry, I got my first job with a company called Hat Trick, which Jimmy Mulville runs, which is one of the very first independents to come into being enabled by Channel 4’s existence. I worked there on “Have I Got News For You” and “Whose Line Is It Anyway?” and those things as a runner. I worked my way up then and wanted to make scripted drama. In that time—it is now nearly 34 years I have been doing this—I have seen such huge changes. A little bit of history for you: the 2003 terms of trade, which allowed independent producers to own rights in the work that they made in partnership with the broadcasters—largely then public service broadcasters, because that was all that was available—enabled such a vibrant market for us. It is one of the core reasons why we are all here today with this thriving—although at a turning point—market, which we have to look at, and I will come to shortly. That was 2003, and then two things happened: Netflix came to the UK as a streamer in around 2012, 2013, and in 2013 the tax incentive was granted to our industry at approximately 25%. I think 24.9%—I am not quite sure why it works out that way, but it does. That was hugely significant for inward investment, and hugely significant for us as an independent production company. I was then running a company called Kudos, which I had set up the drama department for. We made “Spooks”, “Hustle”, “Life on Mars”, “Broadchurch” and many big other shows, including “Utopia” for Channel 4. We were able, on the back of the terms of trade, to become creative entrepreneurs. What that meant was that I had confidence in building a business and employing many people on permanent contracts—we had, I think, 35 at Kudos—and thousands on freelance contracts. We were able to invest in the future of our industry and our company, because I knew that those rights in success—shows like “Spooks” and “Hustle” sold around the world—meant that profit came back to the BBC, to us, and to the distributor who had paid the advance and helped put that funding together. That was 2013. Now, where we are, viewing habits are driven by technology. I will not be the first person to say that technology drives such enormous change and we are seeing it rapidly now. It has changed viewing habits beyond what we could have expected, to the point now where I think 80% of viewing on Netflix or on the streamers you watch, is non-UK content, and 10% of viewing is British content on those streamers. It is the reverse of the public service. That is the background of the state of play, of where we are in terms of viewing habits. There are many other factors. Advertising revenue has gone right down in terms of Channel 4 and ITV; I think it is down by 20% and 16%. I am a practitioner, a producer, so these are not my figures; I am quoting other people, and obviously you will get the accurate ones, but I know that has gone down significantly. This has left a two-tier system where the streamers, in particular led by Netflix but all of the streamers to a degree, have deep pockets. In order to make a name for themselves, to establish themselves as an attractive place for subscribers to want to come and pay £14, £15 a month, you have to provide high-end content that those audiences want to watch. There was what was called an arms race—I think that is probably one way of looking at it—about five or six years ago, where a huge amount of money was pumped by the streamers into content. Britain, because of our tax incentive but also because of our incredible pipeline of talent and our infrastructure and our cultural heritage—I really want to come on to that, so I must not forget—combined with our English language, but primarily the other things I believe, made Britain such an attractive place. We have practitioners who are excellent and they trust us to deliver on that content. We—me included—at SISTER were very happy to work with the streamers and we have made “Eric”, “Black Doves” and “KAOS” over the last two or three years for them. We have made “The Power” for Amazon. But we have also made “This Is Going to Hurt”, “The Split” and “Flowers” for Channel 4, and “Don’t Forget the Driver”, which was a small BBC2 show set in Bognor Regis, which we filmed down there. We are now making a show called “Cold Water” with Andy Lincoln for ITV. That mixed economy has been critical to us, but we are now at a tipping point where costs and budgets have been pushed up by streamers but also by the situation post-Covid, post-strikes—all sorts of things have pushed those costs up. We estimate at SISTER—my team did some work for us—that costs below the line have gone up around 40%. Below the line is everybody, the production costs. That does not include cast, writers, producers; those costs are called above the line, and they have gone up even more, probably 50% to 60%. We are at a place now where budgets have become so high that it has priced the public service broadcasters pretty much out of the market. That was quite a long answer but it is an important context.

Excellent, very thorough, thank you for setting an excellent backdrop for us to move into. In practical terms for you, given this state of flux and the situation you describe in your last point from a monetary point of view, has fundraising become even more dominant in your role ahead of production? Also, does this hit factory record, make you more or less risk averse?

It is a really good question, James. I would like to think that we are very risk friendly as a company, but I have to be honest and say that in the last 18 months I have felt less inclined to take those risks, because I do not feel as confident about the sustainability of our business model currently. Having set up and run two large successful multimillion pound ventures, which have been entirely British owned and used British brilliant talent both in front of and behind the camera, I now feel less safe than I did about investing long term for the future. That is for two reasons. The first is cost inflation, which affects everybody, by the way. This is no one’s fault; things evolve in this way. Cost inflation has gone that way, particularly post-Covid and post the strikes, but we are now at a stage where for the public service broadcasters—at the moment we have three or four shows that we are making for the BBC and ITV, and are in development with some of the other public service buyers—we are struggling to even get the financing together. Eighteen months ago, that would have still been possible. Again forgive me if you know all of this, but just to give you a couple of examples. We have a show at the moment by a brilliant writer called Dennis Kelly, who wrote “Utopia” for us, for Channel 4. He is a world-class, brilliant A-list writer. The scripts are exceptional. The BBC give us what is now called a green light—a green light used to be where you would say, “Way hay, we have a commission and off we go now and let’s make the show.” Now we get a green light and we ask, “How are we going to fund it?” because a green light is not a traditional green light now; it is, “Here is 30% of the budget.” Given where budgets have got to, a public service broadcaster can only afford to put in 30% to 40% of the budget. Of course each case is different and they can choose what they put in, but there are strict limits on how much they can spend, which leaves us with a gap of 60% of the budget, which is more like an indie film. I know you have been hearing from a lot of practitioners in the independent film sector, and I believe that we are now getting closer to that model at that lower cost end of the programming budgets. Say something is under £3 million an hour, which sounds like a lot of money but, as you know, productions employ 40 to 500 people, depending on the nature of the work involved. That is money that used to be found, thanks to the tax break—thank goodness it is there; I would love to come back to how we can make even better use of that incentive—but also from distribution money. As you know, that were lots of independent distributors, including the BBC, ITV, NBC, All3Media, many different places, and they would look at the script, work out its saleability around the world, do projections and say, “We think this will sell to this number of countries at this amount and we will give you an advance,” which you put into your budget of, say, £200,000 to £600,000. Sometimes more if it has A-list talent. Those distribution advances have collapsed, in many ways. They are still trying to put that money in, but the appetite for British content—I am talking not global, and we should maybe talk about what the differences are between those two—is such that it’s very hard now to sell abroad in the way that it used to. Something like “Mr Bates”, for example, which you will all be very aware of, did not sell to many countries at all.

Thank you, Jane. We have a lot of questions to get through. I assure you we are going to cover much of the things you have referenced in wanting to come back to.

There is obviously a lot of consideration, a lot of benefits to the UK economy and society from your industry. There is employment, there is export earnings, and then there are important cultural benefits both to domestic audiences and, we feel, as part of our projection in the world. I wondered which of those things—there may be others that I have omitted that you should add to that list—do you think we are punching above our weight and which could we do better on?

I think our talent base in this country is absolutely world class and equal to Hollywood in every single way in terms of our creative talent—behind the scenes, our acting talent, but also our crews and the infrastructure. We have a remarkable talent base, so I think that is critical. That has enabled us in the past to attract players. The streamers come here for all of those things, there is no doubt in my mind, plus the tax break. There is no doubt that combination. We punch above our weight in talent and the soft power of those things, but that is what is now at risk, I would argue. That pipeline of talent has been fed—”Top Boy”, “Black Mirror”, all of these shows were financed and supported by British public service broadcasters, Nicole Taylor, the writer from “One Day”, came through the BBC. There are many examples where talent that is now global, including film talent, started in television. I think we punch above our weight in talent. Our studio infrastructure is excellent and we are still investing in skills, although we need to do more on that, but we are at risk of losing the social and cultural relevance of our work and that is the piece that, like you, I feel passionately about, which is why I am happy to speak about it today. Because if we do not protect that cultural, creative ecology we will lose it. One thing that I want to say is that what is on screen today has taken three years to get there. So any decision we make now will not be seen for three years, but if we do not make it now, we will find ourselves looking on our screens in three years’ time without the work that we are now still proud of and still exists, but will not in three years’ time.

How much does it matter where the investment ultimately comes from? In other words, should we worry that so much British high-end television is made with American money?

I do not think it matters where the money comes from to some degree. It matters what we make. At the moment, because of where the money is coming from, which is largely global inward investment, that is serving a global audience largely. Primarily, Netflix and Amazon need to serve their British audience too, but the costs of that production means it has to be successful around the world. What we are not doing is making sure that we are able to serve that British audience with British content, which would be “Sherwood”, “Mr Bates”, “Derry Girls” and so on, all of those brilliant British shows. That is what is at risk now.

Would you point to a year in the future where you project that for telly in general it will no longer be viable to produce content, programmes, entertainment shows specifically, for a country the size of ours?

In specific examples, next year, and I am not exaggerating. The BBC can answer for themselves, but I am absolutely aware they have a multiple number of shows that, through absolutely no fault of their own, they cannot fund, which makes it very difficult to see how they can continue. Those things, as I say, take two to three years to come to the screens. Where the BBC, Channel 4 and ITV are sitting, in order to compete with the global content of streamers and their global budgets, they feel they also need to make that high production level content that audiences have got used to, and that means, I believe, that those public service broadcasters are having to funnel more money into that competitive area. That means money is being taken away from other areas. Again I am not the BBC and I do not work for them, and I have not, but I know that that is something that they have to look at.

There obviously has been a lot of money sloshing around. You used the term “arms race”, but you might call it a land grab. We have even heard the parallel of the South Sea bubble: not everybody is watching all of these programmes and there are very high production values, very high production costs. Obviously, if that is true, it is not sustainable and there will be a shakeout at some point. If that shakeout comes, what do you think the consequences will be and for whom?

I think that you are absolutely right, the shakeout does have to come. There were too many programmes being made, which was a competitive situation about five years ago. Too much money was being ploughed in. Now there is a serious contraction happening and everybody overspent in order to suddenly gain that audience. Now there is a huge reduction, which meant that we were funnelling people, ideas, talent through to that big bubble and now many of those people are out of work We need to find an equilibrium, and I think the market will balance itself out. I do believe that the market has the capability to do that, but the risk is that the market itself will not take care of the British content. That is the bit that I think we need to look at and that is the bit that I would argue is most at risk.

My final question related to that: where does all this leave the public service broadcaster? All of them in some ways have been in partnerships with the big streamers, but you mentioned amazing content like “Mr Bates”, which I cannot imagine originating from a multinational based in the United States. What does all this mean for them? Can they compete when audiences become used to these incredibly high production values with the associated costs?

I think we can still make incredibly high production values with the public service broadcasters. You look at “Dr Who”, which is now a co-production, but for many years was not. You look at “Sherwood” recently, James Graham’s piece set in Nottinghamshire, which I thought was extraordinary. Those things still feel incredibly classy because the talent that we have writes great work, which attracts great actors and people want to work for the public service broadcasters. But we do need to somehow rebalance and that is where I argue the tax incentive can help to rebalance. I would argue there is a carrot version of using that to help those broadcasters come up to a level where they can compete at a more—the other thing that is happening is the streamers are bringing budgets down because they were too expensive for them as well. There will be an equalisation that will start to happen slowly. I am just worried that if we do not act quickly it will be too late and that talent pool will be lost. That is the reason they come here. That is the virtuous circle. They come here for what the public service broadcasters give us and that is what we are in danger of losing.

Netflix have told us that they offer quite flexible deals with producers. How does that sit with you? Does that chime with you?

It would be hard to argue they are fully flexible, if I am honest. There has in the past been some negotiation around bits of rights around the edges but the reality is for most of the streamers their business model requires them to own pretty much all the rights. What you have is the cost-plus model, which I am sure you are all aware of, which is where we produce something. I just want to add that SISTER and other companies like Bad Wolf—I know Jane has been in and Andy Harries—are fully fledged production entities. We have full services: HR PR, production, post-production, everything; we provide the entire service from idea to delivery. We are not one producer. We have a large company. The deals that we can now establish with the streamers are largely based on one fee that you get. In success, there is not much of an uplift. What makes it difficult for us is to build long-term sustainable businesses. We have effectively gone from being a manufacturing industry to a service industry in respect to the streamers. The terms of trade, which give us rights, still apply to the public service broadcasters. So the rights are not as flexible as I think they might argue for us.

If you carried out a production that went particularly well for a streamer, is it scalable in terms of the reward and the benefits to yourself?

There is a contractual percentage uplift on a second series, which is in recommission. You get that reward, which is a small percentage, and that is what you get in success. But their argument, which I do understand, is that you are getting money up front before you know the show is a success on the first series. That would be their argument. In the past, it has been interesting. Those have been higher percentages of the total budget, those premiums. They are now coming down, for all the reasons we have talked about—costs have got too high. That is not to say that that model is not sustainable. I do not think it is necessarily appropriate to try to impose the terms of trade on the streamers, but I do think we can rebalance the market to enable there to be more competition elsewhere. That it is a carrot incentive rather than a stick to beat them with because they have brought in a lot of work here and they are committed to this country and to our talent. It is in their interest, truly, to have a functioning system. I believe they believe that; the streamers. They know how valuable the British ecosystem is and they do not want to see it fail.

In a scenario of subsequent seasons, how do you feel as a producer? Do you feel empowered in terms of approaching subsequent seasons?

Personally, for me, having been doing this a long time, I feel like a producer for hire now rather than a creative entrepreneur. I like building things. I like building companies that have value and growth. I like using British talent to do that. While a show like “Black Doves” I am incredibly proud of, we do not own that show. Everybody gives over their rights in perpetuity to the streamers. But we would not have been able to afford to make that show with anybody else. Netflix enabled us to do that. It is a complex relationship. They are my buyer and we make a lot of work with them. I think—we may come on to this—the market will take care of some of that. I believe there is more competition coming, precisely for the reasons we have talked about. Our industry is attractive. We have an incredible talent base. Other companies—Disney, Paramount, Apple, Amazon—are all going to be spending more money here for all the reasons that we have talked about, including the tax incentive. I would hope that creates more of a competitive environment where all the streamers can start to see the value of working with your producers to build something sustainable for the long term. The less money we make each year, the less money I can invest in development and talent, which is actively how I am currently feeling.

If a production did not do as well, did not sell as well, how do you typically within the industry approach it? Do you have the capability to sell that content elsewhere to other regions?

There is something called a hold back, which is the rights owner or the financier—they all have different deals—do not allow you to do anything with those rights until after a specific time. Again, I do not want to quote the exact years because I am not on the operational side in this way, but I think it is five years for some of them and it is longer—10 years—for some of the streamers. For the BBC I think it is one year. That means that the reality of selling something to somewhere else is very unlikely but you look at something like “Top Boy” and “Black Mirror”, which were Channel 4 shows that had been decommissioned by Channel 4—I imagine also partly based on budget for those shows—and then were picked up by Netflix and turned into big hits as well. We do not have the ability to get secondary sales, which is what I think you are asking, from our content on the streamers at the moment.

Just on IP, we have talked about a shakeout coming and a renegotiation, the success of season one and what comes next. Part of the rejig or the reconfig that is going to happen, whether that is on the numbers of programmes or the funding settlements or the co-production trends, do you think there is an inevitability to Netflix and other streamers having to bend a little better on sharing of IP or how long they lock you in for? How much swagger does a television production company get with a hit in season one to claim renegotiation on IP for season two plus?

On the second point, we have a contract so we are standing by our contract with Netflix. I think that is appropriate. I would like the market circumstances to change sufficiently whereby we are able to negotiate better deals. Again, that is Netflix’s global model. I understand why they do that. They are paying a lot of money. But it is not sustainable for us. However, as I said, competition is coming so I do feel confident. But only if we apply the right level of tax incentive to the UK market so that things are rebalanced. That is the significant other part.

Before I come to Paul, what and who is the competition coming?

The other streamers, so more inward investment. I think this year—2025 now we are now in, aren’t we—is going to be a big year. We have got Marvel, Star Wars, Lord of the Rings, a lot of those big IPs—again they are IP, I am sure we will come on to original versus IP—are coming to the UK. Either they have been here already or they are bringing new franchises to the country, which is great. I do also believe and know that the other streamers are going to be coming here. Disney and Amazon are serious about getting more of the market share of the audience in this country and that means they will have to invest to do that. That will, in theory, create a market where the streamers have to be more flexible with their rights. Also I think it is in no one’s interest truly to have things sitting on a shelf for a long time. Netflix, above all, benefit from the secondary rights. You look at shows that are made elsewhere, “Suits” is a huge example. It has been massively successful to drive subscription but was made elsewhere, so that is a secondary buy for them. The secondary market will revive in some capacity, I believe.

“Black Doves” is fantastic. It kept us going over Christmas as well. Can I just push you a bit on the fact you are a creative entrepreneur and you are talking a lot about competitive advantage that we need as the UK but also, as you were saying to Damian, the idea of protecting a cultural heritage, protecting an indigenous industry? The idea of quotas and levies has been mooted and is used by other European countries who want to eat a bit of our lunch, so they are having a streamer levy. Some people have suggested that we should have a streamer levy here. Obviously the streamers push back a bit against that. What is your view on that? How would that help or hinder what you do?

I do not think it is the right thing to do to bring in a streamer levy at the moment. As I said, the market, I think, is shifting. We have been in such a particular place for the last three or four years, and Netflix has had a huge advantage in this territory. It came here first, it spent the most money, so it is further ahead, and it is a global business, as you know. It is a hugely successful and incredibly brilliant organisation in many ways. I think the market will take care of some of that. I worry about the regulation and legislation, and I do fear that may have unintended consequences that will not be the right thing for our industry. What I said is I feel there is a way of rebalancing the tax incentive that already exists to bring it up to the level of the indie film incentive, which is 40%, and apply that to specifically public service broadcasting and nations and regions out of London. The 25% is a minimum that everyone can still get and it is simple and everybody is eligible for that. Then there are additional points available if you are working with a public service broadcaster, say 30% of the budget, and they are the editorial lead on something and/or you have nations and regions productions, which will encourage more of the nation as a whole of the UK to benefit from this. I think those are incentives to rebalance rather than quotas, which I fear will not do what we need them to do or as quickly.

You mentioned quotas. I imagine you would then be against this idea of having the “made outside London” quotas that are applied to public service broadcasters; you would not want to see them applied to streamers?

I know that Netflix would argue, and if think you look at a lot of what they have been making, they make a lot outside London anyway. I think they do and it serves them to do that. They want to speak to their whole audience as well, and I believe they do. But I believe the incentive, this additional tax break—if we were treated in the same way that independent film has been, below £15 million, which is the area I am talking about; it is that very tough lower cost budget in television that we are talking about—would be sufficient to rebalance.

You anticipated my next question. Obviously you would quite like to see the TV tax credit match the independent film tax credit, but can I ask you a little bit about how that might help all those companies that are working in the low-cost area in Britain? Obviously we talk about high-end TV but a lot of the companies are making cheaper TV on very shoestring budgets, which the Americans actually cannot believe that we do these amazing productions on those budgets. But yet we do because we have the great writing and acting and other talent. How would the tax credit change help those companies at that level?

I think this Committee is about high-end television and film ultimately, and those things are not in the high-end television bracket, but I believe the regionality of the spend, you create clusters there. We have made something in Glasgow last year. We are shooting in Manchester and in Liverpool this year, and in Bristol as well. Particularly those cities in Cardiff, obviously Jane Tranter has been here talking about Cardiff. Those cities are incredibly valuable cultural clusters and the more we are incentivised to shoot in those places, the more you can create an industry that is sustainable. I do also think the BBC and the other public services, as I said, are allocating some of their production budget spend, which I think for the BBC has come down £155 million in the last two years of their origination spend. They are having to allocate more of that to compete in this 9 o’clock—what was 9 o’clock—area. If they were able to access a higher tax break that meant that they did not have to steal from one side to pay the other, more money would be spent elsewhere in helping those businesses. The reality is there are probably too many indies that over the years have grown up as part of the system, which is very difficult to sustain given the amount of commissioning that is available. That is a very sad thing to say and, as you know, there have been some closures recently of indies, which is difficult for the business.

Finally, are there any other financial incentives that Government could introduce to help independent companies like yours other than changing the tax credit?

I think that is the most effective one. What has been so efficient about the way it was brought in in 2013 and the reason for the support it has had from everybody over the last 15 years, is it is very easy to use. It is simple. Your eligibility is clear. That is important for inward investment. If they are going to commit to this country long term and investment—as I said it is a slow business—they need to know that in five years’ time this is not going to suddenly be removed. I think that commitment to the long term. But also—and they may not say this—I know that those streamers run by British people in this country believe fundamentally in the value of that public service to their own pipeline. They know how valuable it is and I believe will support any move to incentivise further success for them.

You mentioned a couple of times the fantastic talent we have here in the UK. I just wondered, do you think you, as a producer, have what you need at the moment in order to continue to develop that talent pool? You have talked about tax incentives. What is it that you are missing? What do you have? Talk us through it, please.

The industry has done a very good job of self-training. Again, the public service broadcasters do a lot of training. I think the BBC puts in 1% of its origination budget into training, which is £20 million a year, or £19.5 million a year, which is hugely valuable. The streamers also now contribute to training. There are two areas that I think we are missing. One is leadership. We are good at entry and we are quite good at mid-range freelance training, whether that is crew training, craft skills, makeup, camera, all of those areas, which are critical by the way as well. In addition, we need to train leadership and I do not think we are making sure that we are. That mid-range of producers and directors and leaders, we have to do that and that never seems to feature in any of the training, and I never quite understand why. Secondly, there is AI, which again I am sure we will come on to. As I have been really thinking about coming here today and working out the gaps that we need, there is no question—as you know, the old adage, it is not AI who will take your job, it is someone who knows how to use AI who will take your job. Our industry is an industry that can and will use AI and already is, particularly the creator economy on YouTube, by just using it without any consideration of regulation at all. Assuming we get regulation that is meaningful and works and does the job in terms of IP ownership and protections and all of those things, which I know you are all looking at and so are many people, we then have to train to use it. We have an opportunity in this country, as with many things, to be ahead of the game. I have not heard anyone talk about training for AI. I am a governor of a school, the London Screen Academy in north London, which was an academy school set up to train children, 16 to 18, for our industry from under-represented groups. We are now talking about putting AI as part of the curriculum. I would argue, in the way that computer science came in—however many years ago, I cannot remember—45 years ago when I started primary school, that we need to put AI at the centre of education, training, understanding it and embracing it. I think that is critical. I have not seen that on any of the skills references at all. There probably are not teachers to teach it yet, honestly. But it is going to move so rapidly. I look at my teenage children, who are 14 and 15, and they know how to use AI in a way that I simply cannot. We are trying at SISTER. We have a task force. We are trying to educate ourselves. But I want to train that generation so that they learn how to use it well and with the right ethical framework around it.

You referenced your work as a governor of that school. It is really great to hear that that school is doing so much for under-represented communities. Do you think within the industry here in the UK we are doing enough to not only grow that new talent, which we will need for the future, but also to invest in a way that ensures that it is a diverse and wide pool of talent?

We are never doing enough. No, we are definitely not. I am going to go back one point if I may, which is to say why that is important. Damian, you started with this, which is really critical. We are in a divided country/world at the moment and we know that we are heading into a period of challenge that has not been seen for a long time. We are already in it for many people. Storytelling does help us hold a mirror to our lives. I know this is obvious, it is woolly stuff and it is a bit fluffy but it is critical and it must not be undervalued. I feel as a creative practitioner that the philosophical argument has to be made more than it is rather than—the commercial argument I think is clear honestly. It is so clear there are so many statistics. But the philosophical argument is we have to create stories that are about the country we live in and represent the people who live here. Fundamentally, we have to do more in front of the camera and behind the scenes. However, back to the earlier point, the pipeline, the facility of the training grounds. On shows like “Hustle” and “Spooks”, we trained up so many writers, so many directors and so many producers because they were long-running and sustainable. We are now not able to do that in a way because the public service broadcasters who make that content are not making as much of it and cannot afford to make as much anymore. The training grounds are not there. The will is there. We are not providing the opportunities in the pipeline. We need to do that. We need to continue to make sure that diversity of all voices, socioeconomic, is a huge issue in our industry, as well. James Graham talked about that in Edinburgh in the summer. But that is absolutely critical to social cohesion. We must not underestimate the value of that.

In terms of thinking about how we are training people up, the voluntary skills levy, obviously that plays a big role in that. Do you think it is enough? Do you think it should be compulsory?

Yes, absolutely. I cannot see any reason why it is not. We pay into it at SISTER, always have, and commit to many other forms of training as well. I believe, again, that they all believe in training and, I guess, those people who do not pay into it would argue that they are doing training elsewhere. I know that Georgia Brown has been in to see you, and the task force that they have set up. I do think, particularly when you look at AI and leadership, you need an industry-wide approach to those things. I would hope it would not stop those streamers or other broadcasters continuing to invest outside of that scheme, but that compulsory levy would give everyone a feeling of being united in a common purpose. I do think that is really valuable. It creates a friction at the moment, which I do not understand, it is such a small amount of money, relatively. Then we could allocate some of that to AI leadership. We need to do continued diversity training, all of those things. We need to do more; we absolutely do. It is difficult because at the moment people are unemployed. That is what is challenging. That is why this twin track of our industry, we need to keep growing it so that in three years’ time those people are in work—we have enough jobs. We cannot stop skilling just because we are in this slump. I talk really fast, I promised I would talk more slowly.

There is absolutely no question that our industry working practices are incredibly intense and very challenging, particularly for families. You have to travel a lot and it is very difficult to marry that sometimes with a normal existence; truly it is. Yes, we have to change those working practices. When I started producing, six days a week was the norm, and we were doing 12 hours a day on camera, which meant you would often arrive an hour before and an hour later, and then you would travel home, so that is effectively a 16-hour day. I am not saying it is all fine now and it was terrible then. It was really terrible then and is better now the five-day week is here. But anything that we do has to be done in the knowledge that it will push budgets up. That is not to say that it should not be done but we have to understand that that is what it will do. One of the ways to counter that is to create these clusters as well as to create successful areas of production where people do not have to travel as much, where you can build. The studio system is more efficient in some ways, although for something like “Black Doves”, it was not worth us building very much because it was all on location, and that is the nature of that show in London. Sometimes that is the creative content of something. But if you can build those clusters, as Jane has in Wales, there is an ability for there to be more job sharing potentially, for there to be shorter hours, for there to be more time between jobs for freelancers. Yes, we absolutely have to do that but we have to acknowledge that there will be a cost increase. People have looked at the four-day week for filming. I think that feels unobtainable at the moment. Everyone is always very ambitious on a film set as well and that makes it difficult to do that. I do not know, I would be interested to know what you all think about that. I think it is a real tough one.

I think it would be part of it. It would help but I do not think it would solve the problem. I do think retention is an issue. But we can deal with some of those issues with other things; more mental health training, more understanding of job sharing, which we have been trying to do on “Cold Water”, this show for ITV. We have been having job sharing in post-production, which we have not done very much before and is working and has been very effective. I think we can allow for more of that. That is harder in the key creative roles. You cannot change your cinematographer midway through a week; that is difficult. But I think we can be more resourceful about how we approach those things. We are trying. Bectu at the moment, as you know, is struggling to get its freelancers work. The banding is problematic as well for that. The budget banding, as you know, is challenging.

To Zöe’s point about training, I think we have to continue to increase the training opportunities at a junior level. We now often have lots of entrants coming in, and the LSA is a feeder to the industry, and there are many more schemes than there were 10 years ago, so people are putting a foot through the door and they are enjoying it but they are not necessarily getting the step up. It is the step from entrance, those further steps up the ladder, where I think we need to have more mentoring. That makes a huge difference in terms of industry professionals and practitioners taking on more mentoring of people coming in through those training schemes that can really help. We have to continue to make sure that the training on sets—we bring people in short-term contracts—that we can provide some more permanent employment. Again, as an independent production company, we employ 45 people permanently but many others on longer contracts. The more sustainable my business feels, the more I can employ people on a permanent basis, and that was Jane’s point as well at Bad Wolf. If you feel you have a sustainable business, you are going to employ more people on permanent jobs as well. We need people in senior positions that are the gatekeepers who are from those backgrounds, who can start to make those choices, and that is why the leadership piece is critical.

Yes, I think we are. My mum was a nurse and my dad was an engineer, so when I started I had no connections. I am from Croydon. I grew up in Croydon and I had no connection to the business whatsoever, but got in at various places, as a runner with Hat Trick, and worked my way up through that. I think we have to—I am sorry I have lost my track with the question.

That is the point, I think, is that there are not very many companies who do that and can do that. Many freelancers like being freelance. They do not want to have a permanent contract, they like being freelance but they want the conditions and their working environment to be one where they feel safe to come to work, happy to come to work, well paid, well treated and respected. I do think things like the job sharing, the mentoring and leadership training can help change the look of the industry. The socioeconomic is a huge issue.

With the earlier Croydon connection; Natasha.

I forgot to declare that I used to work at Channel 4 and my husband still works there. We were talking about tech earlier, around AI and the way that is changing the industry and shaping the work that you do and other professionals are doing. You mentioned you have a taskforce in your organisation. I was interested in what kind of work you are doing and what are you looking into there?

We, possibly behind the curve, realised about nine months ago that we need to get on top of this. I would not say that we are necessarily the industry leaders in understanding AI, but we have realised in our business that we have been using it for a long time and have not called it AI, but VFX and CG. That is effectively a version of AI. “Chernobyl” had thousands and thousands of VFX shots in it; DNEG, a brilliant British company, did the VFX for that. We realised we needed to understand it, so we have been bringing in experts to talk to us. We are trying out various tools within the company about how we might use it safely, what it means. We use it for presentations internally. We have never used it for anything editorial, and I would want to understand what the regulatory framework was around protecting all of us at the moment. You heard, I am sure, on the radio this morning that the BBC News app has been mistreated by the Apple AI News app. We basically have to understand. So our task force is trying to bring in people to talk to us, trying to work out how we, as a company, might use it in an effective, fair and correct way. One of the things is we have a development budget, which again, as a production entity, I have the means to be able to fund development ourselves currently. We are talking about allocating a portion of that to an AI project to understand it, to experiment for ourselves, to understand what that means. We are learning, Natasha, and I do not have all the answers, but we need to embrace it. In the creator economy on YouTube, it is everywhere. You do not know what is and what is not AI. I absolutely want to understand when I am being shown something. We were looking at the whales yesterday off the coast of Sussex—I do not know if you saw—there were some humpback whales swimming along the coast of Sussex and my partner said, “There are whales in Sussex,” and I said it is AI. It wasn’t, but that showed just the way I was already not quite trusting what I was seeing.

Last month we had a session with the industry around AI. There was a very strong sense that the industry is calling out for regulation.

Please help.

Or some sort of guidance and framework. There was a discussion around having a similar scheme to the Albert certificate for AI. Would you welcome that?

Yes, absolutely. We are part of the Albert scheme. We try to apply that to all our productions. I think we are one of the very first companies to do that. I am really proud of our team at SISTER who do that. I would very much welcome being part of an AI regulatory framework that helps us all understand and learn from it. But we need to move really quickly. It is so fast, isn’t it? I do not know if you heard Geoffrey Hinton on the radio over Christmas—I will not depress you all. Go and listen to it. He was one of the godfathers of AI, a highly educated and informed professor, and he said he believed there was a serious risk of human extinction in 30 years from AI. I do not believe that, and I think he is trying to wake us all up, but there is no question. Do you believe that, Damian? I hope not, but I do think get ahead or lose.

There is as well the discussion around opportunities to do things like speed up post-production with the evidence.

Yes, absolutely.

But also, back to that point around training, that thing you just said, “Get ahead or get behind,” I think for children—like I know growing up in Croydon it would be good to see the industry trying again to bring in that training to places like that because it will create that divide again.

I would say it all starts at school honestly, everything does, and also our cultural heritage starts in our schools as you all know. I know there is such wide support for the arts and education in our schools which, is by the way, the reason our pipeline works. That is worth saying. The other thing is theatre, which I just want to remind myself that that is critical. AI, I believe, needs to be taught in schools as a meaningful subject now. We need to understand it. I have absolutely no expertise in what that would look like but I cannot believe we shouldn’t make it part of our curriculum.

I may come to a former Education Secretary.

Not on that point.

That may be completely wrong, Damian, but I feel like computer science we should just get it right in there right now.

I think you are right. I would love more kids to be studying computer science. You talk about the difficulty of finding teachers to teach AI; computer science itself is actually very difficult to recruit teachers for because of course there are massive job opportunities in your industry and elsewhere. The question I want to ask was just to link a couple of these topics together. Much earlier we were talking about the international nature of the market, the economics of that and more recently with AI. Do you think we will soon see AI being deployed to take, say, an American programme or a British programme or, indeed, a non-English language programme, and changing the script, changing the cultural references, to make it saleable in 50 different countries as if it were a domestic production?

Part of the strikes recently have been around this subject in America, as you know. So the WGA, which is the Writers Guild of America, tends to lead on the IP of writing in terms of our industry, and has put in place very clear safeguards. That was part of the negotiations.

You have to change for the dubbing anyway.

Exactly. That would just be for the English language version. For the dubbing version, I can absolutely see a point where a computer works out what those references should be and changes that, and potentially voices it. Because obviously everything is dubbed and we are getting to the place where voices are—when an actor commits to a contract they know that their voice will be dubbed in a foreign language, and that is part of their contractual requirements. But it could well be there is a place where that happens again, which is why we have to start to regulate. That may be a good thing. That may speed up the process. There is something called localisation. When we deliver a programme in English, it has to be dubbed. It has to be translated. It has to be all of those things. I am sure, I do not know, but I cannot imagine that the industry will not start to use AI to do some of those translations and some of those things. I think it is the IP bit that is the most frightening for all of us. Knowing what is real and what is not, and understanding the IP, not just for the value chain, which is really critical, but that sense of control over your content and something you have made as a creator—it’s critical to get on top of that, and we are not there yet, are we?

Before we conclude, is there anything that you would like to add that we have not raised?

I am just going to reiterate, if you do not mind, the 40% tax break. I do think it was a powerful statement that the Committee and the Budget committed to that for independent film. We are now scrabbling around trying to get the funding together for lower cost drama. I would look seriously at increasing that to 40%. As we know, the GVA on £1.50 spent of the tax break is £6.60 GVA to the economy. It seems like a no brainer to me. But I would, as I said, put in levers. It has been a blunt tool. I would put in levers that mean it can be public service-based to get extra points, which would be, say, when they put in 30% of the budget approximately—and you would work that out—and nations and regions, and that that is available to anybody. It may encourage the streamers to co-produce more, which used to be the model, again. Secondly, AI training and leadership. Finally, with the BBC in particular, it is important to remember the narrative around them, how much work they do behind the scenes that fuels our pipeline. I know there are times when the BBC is not always the most popular place, but I do believe we have to change the narrative around it and make sure that it can be supported. It is a jewel, it is precious, and our ecology, our cultural relevance is so precious. I really, really think we have to be very, very vehement in defending that and doing all we can to rebalance.

You have that firmly on the record as well, thank you, Jane. I would like to thank you, on behalf of the Committee, for being so open and comprehensive in your assessment of the challenges facing domestic high-end television production. It is an important essential part of our screen industries and we will be sure to reflect that and everything that we have heard throughout the remaining stages of our inquiry. Thank you so much for being with us today, thank you to the team.