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Dare to Stream: Australian Content Quota Confirmed For Film and TV Streaming Services

  • 7 October 2024
  • Posted by Studio Legal

Written by Lucy Diggle and Principal, Jennifer Tutty

Late last month, Minister for the Arts, Tony Burke, announced Australia’s New Cultural Policy, ‘Revive’. This 5-year plan is intended to reset Australia’s broader cultural strategy and reverse significant funding cuts to the arts industry.

Among many other exciting initiatives, the policy release includes plans for an Australian content quota for global streaming services such as Disney+, Netflix and Amazon Prime Video.

While the pandemic saw a large increase in international productions being made on Australian soil, this new development will guarantee more stability and longer-term investment in the local screen sector. This includes the creation of more jobs on Australian productions and within post-production services. Additionally, it will increase the number of film and tv shows showcasing and investing in Australian talent, writers, producers and locations.

As coverage of this development continues to unfold, we’re here to break down what it means for the Australian film and television industry.  

The Story So Far…

Before we dive into the new policy, let’s take a look at Australia’s regulation of the screen industry so far, and outline how the proposal for local content quotas has become a hot topic of media reform in recent years. 

Key Players in the Australian Screen Industry

Australia’s screen landscape includes a number of key groups

– Commercial broadcasters (eg. Channels Seven, Nine, Ten)

– Public Broadcasters (eg. ABC and SBS)

– Subscription television providers (eg. Foxtel)

In recent years, with the rise of digital distribution, this space has also grown to include another group: Subscription Video on Demand Services (SVOD services), also known as streaming services.

SVODS are platforms that give subscribers access to on-demand video content via an internet stream. Think Netflix, Disney+, Amazon Prime, Stan, Apple TV+ (and don’t forget… your sister’s boyfriend’s cousin’s Paramount+ subscription that you have on hand!).

Regulation of Screen Content in Australia: The Current Framework

Regulating local content is an important way of underpinning Australia’s cultural identity and ensuring that Australians see themselves reflected onscreen.

Since the early 1990s, the Broadcasting Services Act 1992 (Cth) (Broadcasting Act) has been the key source of regulation, with commercial and subscription broadcasters being subject to Australian content requirements.

Under the Broadcasting Act:

– Commercial broadcasters (e.g. Channel 7) must comply with a transmission quota, which requires 55% of their output to be Australian content.

– Subscription broadcasters (e.g. Foxtel) are required to invest at least 10% of their program expenditure on new Australian television dramas.

– Public broadcasters (e.g. the ABC) are exempt from content quotas and are instead regulated by their respective charters.

SVOD services (a relatively new type of model) fall outside the definition of a ‘broadcasting service’. This is because they deliver content via the internet. Therefore, since the launch of Netflix in 2015, SVODs haven’t been subject to any Australian content requirements under the Broadcasting Act.

Calls to Address this Regulatory Gap – Introducing Local Content Quotas?

With more and more SVODS entering (and dominating!) the Australian market, stakeholders have been consistently calling for action to address this regulatory gap, to increase the inclusion of Australian content on our screens.

While this point has been the subject of numerous reform processes in recent years, the most concrete proposal came last year with the government’s Streaming Services Reporting and Investment Scheme.

This two-tiered scheme proposed obligations on SVODs to:

– Report their investment in Australian content; or

– Be formally regulated if investment was less than 5%

This proposal was met with widespread criticism across the Australian screen industry.

Representatives complained that the scheme was weak, and the suggested 5% quota for streaming services was inadequate when compared with the 55% transmission quota for commercial broadcasters.

While these debates took place, the dominance of streaming services continued to rise. In 2021, the Australian SVOD market grew nearly 50%, making it a $2.4 billion dollar industry.

As more and more streaming services continue to pop up on our screens, the recent change of Australia’s federal government presented a fresh opportunity to properly address the issue.  

This brings us to the recent ‘Revive’ policy announcement!

What is the ‘Revive’ Policy?

The recent announcement has confirmed the implementation of Australian content quotas for SVODs by 1 July 2024.

Further details of the framework are yet to be released, however consultation with industry stakeholders (think Disney+ and Netflix) is set to take place over the next 6 months.

What form will these regulations take?

The regulations seem to be shaping up to be a revenue levy.

A revenue levy would require that a percentage of a streaming platform’s Australian-derived revenue (predominantly, the money it makes from Australian subscribers) be spent on local television and film.

There are estimates that a levy of 20% would result in around $500 million a year being injected into Australia’s entertainment industry. Additionally, it would create around 10,000 jobs in the sector.

Things we will be keeping a close eye on

We are interested in seeing how this new quota or ‘levy’ is implemented. We suspect that the many different monetisation models of the streaming services may make this a complex process.

For example, Disney+ and Netflix are direct to consumer services. Subscribers pay a fee in return for access to the service.

However, an Amazon Prime subscription is linked with its e-commerce company, (because a subscription entitles you to free delivery of goods). Similarly, Apple TV+ is free for Apple customers who purchase the latest model of any new Apple device.

Therefore, it will be interesting to see how the new regulations are constructed in a way that applies to all of these different models.   

New content regulations may also threaten the competitive advantage of Australian streamers who already prioritise Australian content, such as Stan. If other streamers are required to increase their Australian production expenditure, will this mean players like Stan suffer a hit to their subscriber-base?

For now, we are pleased that the changes are at last underway! Here’s to a local screen industry that amplifies the voices of Australian storytellers and on-screen representation of Australian stories.

Written by Lucy Diggle and Principal, Jennifer Tutty.

Published 20 February 2023

Further Information:

We regularly assist clients in the media and entertainment industry. If this is you (and you’re looking for legal advice or assistance), please contact us through our online form or via email at hello@studiolegal.com.au.

Photo by Nabil Saleh on Unsplash.

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The information in this article is of a general nature. It does not constitute formal legal advice and should not be relied on as such. Please see the full disclaimer in our website terms. Please contact Studio Legal if you are seeking advice about a specific legal matter.