New Oz Content Rules Cause Division

With the aim of “supporting Australian screen content” the Australian Federal Government has announced a restructure of local content regulations and is injecting AUD$53 million into the development and production of local film and television as part of the 2020-21 Federal Budget.

Minister for Communications, Cyber Safety and the Arts, the Hon Paul Fletcher MP, said that a vibrant local screen industry was essential to Australia’s cultural identity, while also supporting jobs and economic recovery following the COVID-19 pandemic.

“The Government is providing $30 million in funding to Screen Australia over two years to support the production of Australian drama, documentary and children’s film and television content,” Minister Fletcher said.

“Screen Australia will also receive an additional $3 million over three years to establish a competitive grants program to cultivate quality Australian screenwriting and script development.

“We are also providing $20 million to the Australian Children’s Television Foundation over two years to boost the development, production and distribution of high-quality Australian children’s content.”

As part of these changes, the Producer Offset – a key screen funding mechanism through which producers receive a refund of part of the production budget through the tax system – will be set at a harmonised 30 per cent for all domestic film and television production.

‘The old approach of treating film and television differently no longer makes sense. Increasing the offset to 30 per cent for television will mean additional funding for Australian television production – and in turn support higher production values and programs with a better prospect of being sold into the global content market, taking advantage of the opportunity created by the explosion of streaming video services like Netflix, Disney+, Stan and Amazon Prime.”

These measures will be complemented by changes to streamline and simplify the drama, documentaries and children’s content ‘sub-quota’ Australian content rules for broadcasters.

The sub-quotas were temporarily suspended as an emergency measure during COVID-19, but will be reintroduced from 1 January 2021.

Content will count towards the new, simplified requirement if it is either drama, or children’s content, or documentary content. With the minor exception of a cap on the number of hours of documentary content that can be counted towards meeting the requirement, the particular mix chosen will be a matter for each broadcaster based on its business strategy and judgement of audience appeal.

Commercial broadcasters will continue to be required to provide 55 per cent overall Australian content on their primary channels between 6:00 am and midnight, and to provide 1,460 hours of Australian content per year on their multi-channels.

The points scheme underpinning the sub-quotas will give more points to higher-budget productions, creating a stronger incentive to commission bigger budget drama which is more likely to be sold globally rather than only be seen in Australia.

The Government will also legislate to reduce the existing Australian content spend obligation on selected subscription television channels from ten per cent to five per cent.

The Government says it has moved quickly to implement this package of reforms in the first budget brought down after the Supporting Australian Stories on our Screens options paper and consultation process.

It forms part of the Government’s 2019 commitment, in response to the Australian Competition and Consumer Commission’s Digital Platforms Inquiry, to a staged process to reform media regulation towards an end state of a platform-neutral regulatory framework covering both online and offline delivery of media content to Australian consumers.

Work will continue under that process, including examining whether to introduce an Australian content spend obligation on streaming video on demand services above a minimum size threshold in the Australian market.

As an initial measure, the largest streaming video services will be asked to commence reporting to the Australian Communications and Media Authority on Australian content acquisition from the 2021 calendar year.

“The Government very much appreciates the strong engagement we received during our consultations this year,” Minister Fletcher said. “The views of stakeholders and interested parties were very clear – we need to continue our support for the production of Australian content, but we also need to remove unsustainable obligations on industry and tailor our interventions to match the new and diverse ways Australian content is being produced and consumed.”

“The measures announced today are designed to do just that. They begin to rebalance our regulatory framework and provide Australians with the opportunity to access Australian content across a range of media, regardless of whether they want to watch free-to-air television, subscription television or streaming services.”

Industry body Free TV Australia welcomed the Government’s announcement.

Free TV CEO Bridget Fair said, “Free TV broadcasters remain committed to making and broadcasting Australian content for a simple, powerful reason: Australians want to watch Australian programs. These reforms will deliver greater flexibility to respond to what our audiences demand.

“Today’s announcement is a huge positive for the Australian film and television production sector. The Government has combined a more flexible quota system with strong incentives for production of quality Australian programs in a way that should stimulate a broad range of Australian stories.

“The old quota system was collapsing under its own weight. There has long been a need for the onerous and outdated framework, in place since the 1980’s, to be updated. We commend Minister Fletcher for recognising the need to ensure the sustainability of the sector. The Government has carefully considered this issue and the Minister’s decision has simplified and modernised the quota framework while supporting Australian production with strong incentives and direct funding.

“By ensuring broadcasters are incentivised to make the programs that are most relevant to their audiences rather than slavishly meeting sub quota obligations, these reforms will assist to maintain the health and sustainability not only of commercial television broadcasters, but of the entire content production ecosystem.

The real winners in this reform package are TV audiences, who will continue to enjoy the Australian programs they love”, Ms Fair said.

Supporting Free TV, ViacomCBS Australia & New Zealand Chief Content Officer & EVP Beverley McGarvey said the announcements “… are a significant step forward for broadcasters, content providers, producers and, most importantly, Australian audiences in ensuring a sustainable and enduring local production industry.

“The reforms are a win for audiences, a win for networks and a win for the local production sector.

“They promise fairness and flexibility, allowing us to continue to invest in the programs our audiences love while giving them the choice of the time and the place that they choose to watch them.

“They also properly recognise the significant contributions that children’s content and long-running dramas make to the local production industry in the form of jobs and talent, rewarding our ongoing investment in popular Australian dramas such as Neighbours, while also incentivising our involvement in larger-scale productions such as The Secrets She Keeps and Five Bedrooms.

“Similarly, they properly reward our significant and growing investment in children’s television and encourage rolling investments in documentaries such as Todd Sampson’s BodyHack or Lindy Chamberlain: The True Story.

“At ViacomCBS, we’re proud of our commitment to the local production sector. Our content is watched by 20 million Australians every month across our brands on Free to Air, Pay TV and streaming platforms.”

However, not all stakeholders are pleased with the announcement with Screen producers Australia saying the various measures included concerning the regulation of Australian and children’s content could reduce the amount of Australian content being produced by at least fifty percent and remove thousands of jobs from the sector as well as opportunities for audiences across the world to engage with Australian stories.

“With the local screen industry already reeling from the impacts of COVID-19 and the freezing of contracting caused by the suspension of quotas since April, the announcement today is an unfortunate backward step and we predict will result in the demise of many Australian businesses and livelihoods,” said SPA CEO Matthew Deaner.

“Deregulation of legacy platforms without a transition plan into regulation of new platforms creates a disjointed and incomplete policy response that tinkers around the edges, appears to have been driven by old-world thinking and has scant regard to the future of Australian screen content. A once in a generation chance to reset the foundations for Australian stories for future generations and bring regulation into the 21st century has been presented to the Government in a unified way by the screen industry and the response presented today falls short and needs rethinking,” said Deaner.

“The effective abolition of children’s content quotas, the watering down of drama and documentary requirements and the halving of requirements for subscription TV doesn’t meet the Government’s articulated desire for forward-thinking policy-making. Instead, it presents as the adoption of the deregulation wish-list of legacy broadcasters and their owners and the international streaming companies,” said Deaner.

While SPA welcomes additional funding for Screen Australia and the Australian Children’s Television Foundation, it is concerned as to the effectiveness of this as a measure to meet the needs of Australia’s child audiences as it doesn’t in its own right trigger production and could amount simply to development of projects with no pathway to audiences.

According to SPA, there is the clear potential for the proposals to shrink the Australian production industry to an unsustainable size, and to lose the critical mass in economic activity needed to ensure viable screen businesses and employment opportunities. No amount of incentives can protect a sector that starts to structurally become reliant on irregular and patchy commissioning.

SPA says the voluntary reporting requirement for streaming services represents the greatest lost opportunity, and leaves these businesses free to reap rich benefits from the Australian market with no requirement to contribute back to Australian businesses, employment or culture. It will also see Australian audiences miss out on access to Australian content on the platforms which they are now using.

“As soon as the policy spotlight is off streaming services, there will be no incentive for them to commission in this market. Given the regulation outlined in other territories including across Europe and North America, Australia urgently needs a timeframe for transitioning streaming platforms into a regulated environment and without this, in the long run, we will become a backwater for investment,” Deaner said.

“We are also extremely concerned by the reduction in Producer Offset for feature film from 40% to 30%. The 40% offset for film had proven to be extremely successful and an integral part of financing for local features. We are not aware of any calls from any quarters for this vital financing lifeline to be reduced and the cut could mean the end of the line for so many great Australian feature films,” Deaner said.

SPA contends that these impacts were laid out in detail for the Government throughout its recent consultation process and the warning bell was rung many times by the industry. It says the Government has chosen not to liaise directly with industry on these specific measures announced today, which does not align with best practice policy-making.

SPA says other critical issues raised during the consultation process and in the Government’s discussion paper which have not been addressed include:

  • The inequality of bargaining relationships between commissioning platforms and content makers (an issue raised as part of the ACCC’s Digital Platforms Inquiry)
  • The loophole that allows New Zealand content to count as Australian
  • The need for a new pathway for children’s content
  • The need for minimum requirements and adequate funding for the national broadcasters
  • The need to harmonise regulation across legacy and new platforms
  • The need to reconsider and reform co-production arrangements and provide enhanced opportunities for export.

SPA says it will seek opportunities to highlight and mitigate the negative effects of these measures in the weeks and months ahead and look for opportunities to continue to prosecute the case for a sustainable forward thinking framework for the industry.

More information on the Government’s package can be found at www.communications.gov.au/what-we-do/television/modernising-australian-screen-content-settings 


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