ABC Boss Calls For Tax Breaks For Local TV To Fight “Netflix Effect”

Outgoing ABC managing director Mark Scott has called on incoming prime minister Malcolm Turnbull to raise the tax offset for television production from 20 to 40 per cent to counter the “Netflix effect”.

In a speech last night on the state of Australian media, Scott argued local TV production houses could no longer compete with all the content coming in from SVOD and cheaper locations to make content such as New Zealand.

He believed networks were good at using sport and news to attract audiences; however, quality story telling and drama was becoming too expensive to produce and were at risk of being ignored by networks. “There is such a hunger for Australian stories in all their guises, beyond reality and sport,” he said before adding that he felt the ABC was doing a reasonable job at local TV while Seven, Nine and Ten had much work to do.

Scott said local TV was “burning” and governments could no longer sit back and watch it go up in smoke. He cited recent research by Citi Bank that showed that the US video streamer Netflix had 35 per cent penetration in the Australian market after a mere five months.

Scott’s gripe was that the Australian film industry gets twice the tax breaks as the local television industry yet attracts “a fraction of the audience” that TV does.

“The Netflix “effect” as the industry now refers to our insatiable appetite for on-demand video services has seen a doubling of broadband traffic over our fixed-line services,” Scott said at a lecture at Sydney’s Macquarie University last night.

“The Netflix effect is rapidly changing the way Australians feel about paying for video content, not just on their smart TVs but mobile devices. And because the Netflix business model is based on content with international appeal, amortising the cost of producing that content across hundreds of markets, Australian content will struggle to remain just that, uniquely Australian.

“Matching TV’s offset to film’s 40 per cent is a policy imperative, as nothing comes close to the impact or cultural clout of television in storytelling. Again, we need to connect our stories with audiences to really nourish and sustain our culture,” he said.

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