Global video streaming services under government microscope on Australian content

The federal government is eyeing a local content obligation for global video streaming services, as part of a new industry support package.

The federal government will step up its probe of a potential minimum Australian content spend obligation on streaming video services such as Netflix, Disney+ or Amazon Prime as part of a $53m industry support package outlined ahead of next week’s budget.

Australian broadcasters welcomed the package, which will also see an overhaul of content quotas and incentives introduced for Australian productions.

From January, the largest streaming giants will be asked to begin reporting their local content acquisition to the Australian Communications and Media Authority part of an initial measure.

Communications Minister Paul Fletcher said on Wednesday the Coalition’s engagement with stakeholders revealed the importance of supporting the production of Australia content and simplifying industry regulations.

“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,” he said.

The changes will also see the producer offset — a screen funding mechanism in which producers receive a refund of the production budget via tax — set at 30 per cent for both domestic film and television content.

‘The old approach of treating film and television differently no longer makes sense,” Mr Fletcher said.

“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.”

Content quotas for drama, documentaries and children’s production shelved during the COVID-19 pandemic will be reinstated from January 1.

Commercial broadcasters will continue to be required to provide 55 per cent of overall Australian content on their main channels between 6am and midnight. But the simplified requirements mean content can count towards the quota if it is drama, children’s content or a documentary, meaning the mix can be chosen by each channel to suit their audience. Subscription television channels will have the Australian content spend obligation reduced from 10 per cent to 5 per cent.

Under the Broadcasting Services Act, commercial TV broadcasters must air a minimum of 55 per cent Australian content on their primary channel, plus an additional 1460 hours on secondary channels annually between 6am and midnight. The same rules don’t apply to subscription streaming players

Nine and Seven West Media welcomed the changes announced by the Morrison government, saying the greater flexibility would allow the company to invest in programs that audiences wanted.

“The increase to the producer offset tax incentive production for TV series in particular, is a great result for the whole sector, that will fuel strong investment and growth in a sector that has been hard hit by the impacts of COVID-19,” Seven West chief executive James Warburton said.

Nine chief executive Hugh Marks said the reforms were vital for Australia’s production sector.

“Nine welcomes this important step in the vital reform needed for our local production sector. It will not only provide a much needed boost to local content production but enable us to better compete in the global content industry,” he said.

Foxtel Group chief executive Patrick Delany said the package would result in more Australian-made stories on screens.

“The government’s package represents a starting point for Foxtel’s future investment in award-winning Australian drama and entertainment. They provide us with flexibility as we plan new productions,” he said. Foxtel is majority owned by News Corp, publisher of The Australian.

ViacomCBS Australia & New Zealand chief content officer Beverley McGarvey described the reforms as 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.” she said.

As part of the package to support the industry recover from the COVID-19 pandemic, the government will provide Screen Australia with $30m in funding for the production of Australian drama, documentary and children’s content.

An additional $3m will be delivered to the funding body over three years to establish a grants program for Australia screenwriting and script development.

The government will also allocate $20m to the Australian Children’s Television Foundation over two years for to develop kids‘ content.

COVID-19 disrupted Australia’s local film industry, with lockdowns and social distancing requirements halting productions at the beginning of the pandemic.

In July, the Morrison government boosted the budget of its screen initiative by $400m to attract big-budget productions to Australia.