Safeguarding Australian content in a world of changing viewership

We need Australian stories on our screens. It’s important to Australia’s cultural identity – and, with the production sector employing 25,000 people, it’s important economically too.

That is why, for decades, there have been rules requiring commercial television networks to show specified amounts of Australian drama, documentaries and children’s content.

Meeting these "sub-quota" requirements, along with an overall requirement to show 55 per cent Australian content, costs Australia’s free-to-air television broadcasters tens of millions of dollars a year.

Yet audiences for free-to-air television are dropping sharply, down more than 30 per cent in five years. Revenue too is way down.

And in 2020 COVID-19 delivered a further revenue hit to the free-to-air broadcasters and most film and television production stopped due to social distancing rules. In response, as a short-term step, the government suspended the sub-quotas for 2020.

To help us develop a longer-term plan, Screen Australia and the Australian Communications and Media Authority issued an options paper about how to support Australian stories in the future.

As the options paper highlights, Australians are increasingly going to the fast-growing streaming video-on-demand platforms like Netflix, Disney Plus and Amazon Prime to watch drama.

The contrast between the heavily regulated television broadcasters and the largely unregulated streaming platforms is one reason why the Australian Competition and Consumer Commission recommended last year in its digital platforms inquiry that we should move towards "platform neutral" regulation of the media sector.

In consulting on the options paper, we heard some strong messages. The old division between film and television production has gone: today, the per-hour budgets for productions commissioned by streaming services can easily match those of feature films.

The streaming explosion has driven global demand for content, and hence a new export opportunity for the Australian screen production sector.

But there is a tension with the current rules for Australian content on free-to-air television, which encourage smaller-budget productions.

Children’s content is as vital as ever, but all of the most-watched, and most-loved shows are on the ABC. The rules force commercial broadcasters to make many hours of children’s TV, which hardly any child watches.

Having heard these messages, now the Morrison government is acting, with significant measures included in next week’s budget.

The producer offset for Australian-produced film and television content will be standardised at 30 per cent. Maintaining a higher level for film and a lower level for television makes no sense in today’s market.

From January 1 next year we will reinstate sub-quota requirements on commercial broadcasters, but they will be more flexible and less prescriptive.

Rather than a requirement for each of drama, children’s content, and documentaries, there will be a global requirement across the three types of content. It could be met entirely by drama, entirely by children’s content or with a mix of documentaries and other content.

The requirement will be in points not hours – with more points for more expensive productions. This means a stronger incentive to commission bigger-budget drama – which is more likely to be sold globally rather than only be seen in Australia.

Of course, as well as the sub-quotas, the broadcasters today face an overall requirement to show 55 per cent Australian content. That will not change.

We are increasing public support for Australian content, with an additional $30 million over two years to Screen Australia, and $20 million over two years for the Australian Children’s Television Foundation.

Screen Australia will also receive an extra $3 million to fund script development and quality screenwriting – an area where Australian productions often underinvest by global standards.

The market will determine where this content is best shown, be it on commercial television, the ABC or SBS, subscription television or streaming platforms. It is very likely it will appear on a mix of all of these.

We will also legislate to reduce the existing Australian content spend obligation on selected subscription television channels from 10 per cent to 5 per cent.

We will continue to look at ways to further harmonise the rules across television and the streaming platforms. As an immediate action we will ask the major streaming video platforms to report to the Australian government on their Australian activity levels and Australian content spend with effect from January 1, 2021.

As we said last year in responding to the ACCC’s recommendations, reforming media regulation will be a large and complex process which needs to be carefully considered, and done in stages.

There are more stages ahead, but we have moved quickly to introduce these measures following consultation this year. The film and television sectors have changed profoundly, but our policy goal has not. We want to see Australian stories on our screens in Australia, and around the world.

This article first appeared in the Sydney Morning Herald's online edition on 30/9/20