Could Trump’s tariffs spell disaster for Australia’s screen industry?

When Netflix announced last week there would be no second season of its Outback saga Territory, it sent shockwaves through the local industry.

The show had been a global top 10 hit. At a little under $40 million for its six episodes, it was expensive but not compared with what the streamer typically spends. Besides, most of that money was on the screen; it looked terrific.

This week, when Netflix released its latest half-yearly global viewing results, the confusion was only compounded. Territory sat at a respectable No. 45 in the second half of 2024, with 19.5 million people watching the full series. To put that in context, the critically lauded second season of The Diplomat, released a week after the Aussie show, came in at No. 42, with 20.2 million full-season views.

Sam Delich and Kylah Day in Territory. Netflix declined to commission a second series, despite its global success.Credit: Netflix

For years, local film and TV producers have been pushing for quotas to ensure international streamers commit to making Australian drama. And for years, the streamers have insisted they don’t need to be regulated because they’re just dying to make great Aussie content. But here was proof of the producers’ worst fears: if a bona fide hit like Territory is vulnerable, what hope for everyone else?

As one industry veteran put it, speaking anonymously so as not to jeopardise the chance of any future dealings with Netflix, “everyone is just flabbergasted”.

The Territory news broke the same day word filtered out from Britain that Neighbours was being axed (again), this time by the streamer – Amazon’s now-defunct ad-supported Freevee service – that had paid the bulk of its production costs since its resurrection two years ago. Unless another white knight rides to the rescue, it will soon disappear from Ten, too.

Streaming was supposed to be the salvation of Australian film and television, filling the gap created as free-to-air commercial broadcasters abandoned drama and comedy in favour of reality and sport. But with the exception of Stan (which is, like this masthead, owned by Nine, and in 2024 commissioned almost half of all new Australian scripted content on streaming), its commitment to local drama can’t be taken for granted.

Miranda Otto, Sherry-Lee Watson, Will McDonald and Noah Taylor in Thou Shalt Not Steal, one of Stan’s recent local commissions.Credit: Stan

The federal government had promised to have quotas on subscription video- on-demand (SVOD) operators such as Netflix, Prime, Disney and Apple in place by July 1 last year. But as Hollywood pushed back, claiming any regulation would be a breach of the Australia-US Free Trade Agreement (AUSFTA) signed in 2004, Arts Minister Tony Burke quietly allowed his own deadline to pass.

Last November, Burke told this masthead, “We’re continuing to consult [with streamers]. It’s important to get this right.” But there’s a growing fear in the industry that the window to impose quotas may now have passed.

Last weekend, Donald Trump appeared to slam it shut when he issued a presidential memorandum titled “Defending American companies and innovators from overseas extortion and unfair fines and penalties”. Full of hostile rhetoric that suggested attempts to regulate foreign markets “violate American sovereignty”, Trump promised to take “responsive actions” to any such moves.

Though it was issued in relation to tech companies, and Trump is no fan of Hollywood generally, the edict clearly signals the possibility that any moves to regulate the streamers (which are both content companies and tech companies) could be met with a hostile response.

“That’s extremely aggressive language,” Emma Shortis, director of the Australia Institute’s international and security affairs program, says of Trump’s memorandum. “I certainly think there is a risk of retaliation [against quotas].”

The most likely form would be tariffs, not on Australian screen content, the export value of which pales in comparison with imported content from the US, but in some unrelated area, perhaps agriculture or mining. And in such a scenario, Shortis argues, cultural production could be sacrificed for the ostensibly “greater good”.

“There’s a sense that the Australian government has to pick its battles with the Trump administration,” she says. “And I think there’s a risk that it would make calculations about necessary trade-offs, or needing to set issues aside for a time while it deals with arguably more pressing things the Trump administration is doing.

“But you can also flip that and say the Australian government just handed over $800 million to the US naval-building industry, so there are some trade-offs that might come the other way as well.”

In 2022, Paul Fletcher, the arts and communications minister under the Coalition government, proposed a levy of 5 per cent of the streamers’ Australian revenue. It would be a minimum spend and voluntarily administered, a plan that producers felt was too weak. In the run-up to the election, Labor promised to do better without committing to a figure or a model. The Greens and the industry – through lobby group Screen Producers Australia, the MEAA union and various professional guilds – argued (and still do) for 20 per cent.

‘We’re trying to make sure everything we do … can match anything internationally. We have to go out there and take risks. But we need confidence that there’s a reliable market’.

Rob Gibson, Easy Tiger

In office, Labor has struggled to find a model that is both fair and consistent, given the differences between streaming business models and the conditions that apply to FTA and subscription broadcasters. And it is genuinely complex. But Burke’s insistence that “we get the model right” has so far left the industry with no model at all.

It’s not just producers who want clarity, though. The streamers do, too.

“We think we’re investing a lot and doing good stuff in Australia,” says one source, speaking on condition of anonymity. “We just want to know: ‘is it enough, and if not, how much more do we have to do?’ And also, ‘what’s going to count as Australian content?’

“I think we all kind of want the same thing,” the source added, “which is more good Australian content, right?”

Rob Gibson, whose Easy Tiger production company made Territory, believes that’s absolutely achievable – with help.

“We’re trying to make sure everything we do is done at a level of quality that can match anything internationally,” he says. “We have to put our arses on the line and go out there and take the risks. That’s what producing is. But, you know, we need confidence that there’s a reliable market locally.”

For its part, the government insists quotas are still on the table.

Grilled in Senate estimates by the Greens’ Sarah Hanson-Young and the Nationals’ Perin Davey this week, Labor’s Jenny McCallister held to the party line. “We are committed to introducing Australian content requirements on streaming services to ensure that we have local content and stories,” she said. “This is taking longer than we would like … we are progressing this, but it is necessary to get it right.”

Screen Producers Australia chief executive Matthew Deaner is trying to keep calm and hopes the government really does carry on towards a viable outcome.

While acknowledging the stymying efforts of the studios and the tougher rhetoric of the Trump administration, Deaner insists, “At this point, not a lot in practice has shifted”.

He does concede, though, that there is “continuing uncertainty for the entire sector as to how this will all play out”, and that the cancellation of Neighbours and non-renewal of Territory “is a concern, and does signal the urgent need for local content contribution rules to be put in place”.

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