Could Netflix And Stan Be Forced To Play Ball With Free-To-Air?

This is a photograph of a small retro television from the 1980s in front of a vintage wood paneled wall.

Streaming giants like Netflix and Stan may be obligated to spend a portion of their revenue on local Australia content under a new proposal from the minister for communications.

On Wednesday, the Morrison government announced a package of measures to help sustain Australian media businesses as they do their vital work of keeping the community informed during the COVID-19 pandemic.

At the same time, communications minister Paul Fletcher released an options paper looking into the future of the screen industry.

The paper is part of the government’s response to the ACCC’s Digital Platforms Inquiry in December 2019 and addresses the local content quota that has been part of the Australian media landscape for decades.

In the inquiry, the government identified Australian content obligations as one of the first issues it would focus on and that it would release an options paper co-authored by the ACMA and Screen Australia to look at how best to support Australian stories on our screens in a modern, multi-platform environment.

On the release of the paper, Fletcher said: “In the last few weeks we have seen very sharp drops in advertising revenue for broadcasters; film and television productions suspending operations due to social distancing requirements; and businesses throughout these sectors facing very difficult trading conditions. It is an exceptionally difficult time for the broadcasting and production sectors—although we know that a time will come when productions can resume.

“Some have argued that this is not the time to consider what our future policy framework should be to support Australian stories on screens. I respectfully disagree. In my view, there has never been a more important time for us to consider this issue—looking at both the immediate pressures, and the longer term.

“COVID-19 has only reinforced the economic trends described in this options paper. Broadcast television is under greater pressure than before; streaming services are expanding further. This only accentuates the disparity in regulatory treatment they receive.”

Fletcher said the government needs to do two things: address the immediate pressures and use this time constructively to plan for the recovery period.

He added: “The broadcasting and production sectors will play an important role in the recovery of our nation, so we need these sectors to be in the strongest position possible. The technology may change, the industry structure may change, but our goal is constant: great Australian stories are seen by viewers in Australia and around the world.”

There is no denying traditional free-to-air broadcasters are declining in both revenue and viewership, while Netflix, Stand and Disney+ are dominating global and local viewing habits.

However, traditional broadcasters are obligated to fulfill a quota of local content, an outdated requirement, according to many industry personnel. Meanwhile, streaming services have no similar obligations.

The options paper states this is unfair, while it also suggested three-quarters of Australian are in favour of the government providing support to the Australian screen production industry. And, while Netflix and Stan have invested in local productions, it’s not much.

The options paper also highlights that without government-mandated local content quotas, there would be almost no Australian content available.

The solution? The paper highlights a few. Do nothing, ask streaming services to voluntarily create local content or, put the same obligations on Netflix and Stan as free-to-air broadcasters.

This would work by requiring streaming services to put some of their Australian revenue into creating local content, either through their own production houses or through contributing to an Australian production fund.

There are still some unanswered questions, with Fletcher asking to hear from anyone who has an interest in the media and screen sector to offer their views on the options paper. Submissions are due by COB Friday 12 June 2020.

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