Local content quotas still on the table despite US tariff threat

Quotas for streaming companies’ investment in local productions are set to be a priority for the second-term Albanese government, despite the proposed US tariffs.

Patrick Brammell and Harriet Dyer during shooting for season two of Colin From Accounts.

The hotly contested issue of Australian content quotas for international streaming companies is set to face increased scrutiny during the Albanese government’s second term, despite extensive delays and US President Donald Trump’s proposal to impose a 100 per cent tariff on all films “produced in foreign lands”.

“Nobody should be under any doubt that we will be standing up unequivocally for the rights of the Australian screen industry” Arts Minister Tony Burke said last week.

But local stakeholders are taking a wait-and-see approach to Trump’s tariff announcement, even though Australia could potentially be significantly affected.

Promised in Labor’s January 2023 National Cultural Policy, quotas on the amount of Australian screen content available or produced for platforms are being faced by streaming companies such as Netflix and Amazon Prime.

Australian soap opera Neighbours was cancelled by international streamer Amazon just two years after it was picked up. Picture: AFP

Commercial broadcasters in Australia are required to broadcast at least 55 per cent of local content between 6am and midnight on their primary channel, and about 22 per cent local on their non-primary channels.

But no such obligations currently apply to international streaming services, although Foxtel’s drama channels must spend at least 10 per cent of their program expenditure on Australian drama programs.

Labor failed to meet its own deadline of the middle of last year on the policy for streamers, while the requirements for free-to-air broadcasters and Foxtel have been in place on Australian broadcast television since 1992.

According to documents obtained under Freedom of Information, consultations on quota models have suggested a progressive percentage of investment in Australian content tied to the respective streamers’ number of Australian subscribers.

Boy Swallows Universe was adapted by Netflix into an eight-part limited series starring Travis Fimmel. Picture: Netflix

For example, a service with five million subscribers that spends $80m on drama programs for an Australian market would be obligated to spend $24m on Australian-made dramas.

An alternative model proposes a set 10 per cent of Australian revenue to be reinvested in Australian dramas.

The definition of local content under the policy is tight — the drama must be produced and post-produced locally with 50 per cent leading actors who are Australian, a 75 per cent Australian major supporting cast, an Australian producer and either a director or writer who is Australian.

The quotas have been recommended by multiple parliamentary inquiries and government reviews, and were set by the government “to commence no later than 1 July 2024”.

Mr Burke previously attributed their delay to Australia’s free trade agreement with the US.

Despite being filmed at the Sydney Opera House and starring an Australian comedian, the 2018 production Hannah Gadsby: Nanette would not qualify as local content. Picture: Netflix

“The push back and some of the arguments have been more difficult than I wanted them to be,” Mr Burke said in a radio interview last month.

“I absolutely share the frustration that we haven’t delivered on the timetable that was in the cultural policy.

“Effectively we’ve had to not simply do our consultation with the streaming companies, we’ve had to do it in the context of the free trade agreement with the United States as well.”

The Australia-US Free Trade Agreement, AUSFTA, restricts the ability of either government to favour digital products based on their national origin or to enforce percentages of domestic content. However, an annex to the agreement reserves the right of Australia to ensure local “interactive audio and/or video services” are not unreasonably denied to Australian consumers. AUSFTA was signed in 2004, prior to the widespread adoption of video streaming services.

Greens Senator Sarah Hanson-Young has criticised Labor’s inaction, saying “we should not be delaying this legislation based on who is in the White House”.

“Donald Trump is not our President and Australians won’t be bullied by Trump’s tech oligarchs,” she said. Ms Hanson-Young said the quotas were an investment in Australian jobs, as “streamers like Netflix, Amazon and Disney make mega profits off Australian subscribers without any regulation or requirement to invest in the local industry and Australian storytelling”.

Thomas Weatherall from Heartbreak High, revived by Netflix in 2022. Picture: Steve Pohlner

Senator Jacqui Lambie also slammed Mr Burke’s lack of action on the matter, saying the Minister for the Arts “believes in taking an arms-length approach – except apparently when he is wrapping them around the US streamers”.

“This government promised they would have Aussie content quotas in place by July 2024,” she said.

“It’s bloody shocking. Our film and TV industry, a lot of them small businesses, are on their knees. Meanwhile the US streamers are raking it in.”

Screen Producers Australia chief executive Matthew Deaner said current laws had “not kept up with changes in technology and audience behaviour, which has seen a big switch to streamers, particularly for drama, documentary, and children’s programs”.

“For that reason, Australian audiences find it harder and harder to find their own screen stories on these platforms,” he said.

Both Mr Deaner and Mr Burke have pointed to the economies of scale available to the US and UK in producing screen content at a cheaper price than Australia due to their larger populations.

These productions are then imported to Australia by streamers instead of commissioning local content.

“The experience of hearing stories that speak to the land on which you live in Australia is something we must not let go of,” Mr Burke said. “We don’t have that on streaming platforms yet.”