Is the Australian Government about to create a level playing field and require Netflix to produce a minimum amount of Australian content like local TV networks including Foxtel, Seven and Nine?
Screen behemoth Netflix argues case against Australian content quota
Could Australia be the first country in the world to impose a local content quota on Netflix ? It’s a question being asked in media circles, and one that could soon be answered. The Turnbull government commenced a review of support for the screen content sector nearly a year ago.
That raised hopes within the film production community that streaming services such as Netflix and Stan (which is part owned by Fairfax Media, publisher of this column) could be forced to produce fixed amounts of Australian content, like their traditional TV rivals.
There’s even been industry chatter that some form of announcement on this, perhaps designed to dovetail with already confirmed tax incentives to lure Hollywood productions back to Australia, could be forthcoming in this week’s federal budget.
Well-placed government sources indicate that this is wishful thinking; we’ll only have to wait till tomorrow to find out.
For its part (and unsurprisingly), Netflix is adamant local content quotas – which have also been talked about in Europe and Canada – are a bad idea. The streaming video giant’s CEO Reed Hastings dismissed them at a company event I attended earlier this year, arguing they lead to perfunctory, low-quality shows.
Global public policy manager Josh Korn concurred in an interview last week. ‘‘ The market for Australian film production is growing,’’ he said. ‘‘ The government should recognise this when reviewing policies.’’
Netflix hasn’t produced an original Australian show yet, although two are in the works: Tidelands, a thriller set in Queensland, and an as-yet untitled project from comedian Chris Lillee.
The company, which expects to spend up to $US8 billion on content this year, has also provided financing for a handful of other Australian, mainly kids focused productions, alongside the ABC (New Legend of Monkey) and Seven (Beat Bugs).
It has also licensed a few Australian productions for their ‘‘ second run’’ .
And it will announce today that it has picked up rights to the acclaimed Australian romantic comedy Ali’s Wedding.
Still, the company that has completely upended Australia’s TV industry without permanently employing a single person here, spends far less on local shows than its rivals do, a reality which many in the industry are struggling to accept.
‘‘ There is more Australian content on the US Netflix library than there is on the Australian Netflix library,’’ Screen Producers Australia said last week in a submission to a (entirely separate) review of digital platforms by the competition regulator.
The lobby group for independent production houses argues Netflix should face similar local content obligations to those imposed on traditional players (for free-to-air broadcasters, 55 per cent of shows aired between 6am and midnight must be Australian).
The problem is, imposing a quota on a free-to-air TV channel, which is broadcasting 24 hours a day, is a very different thing to imposing a quota on a steaming service, which is viewed on demand.
Mandating streaming video providers include a certain percentage of Australian shows and movies in their catalogues could be futile if nobody watches them – a provider could buy up significant amounts of old content to satisfy such a requirement.
Forcing Netflix to spend a proportion of its Australian revenue on Australian content is another idea that may have merit. But there is some evidence that market forces are already working to achieve this.
A record $1.3 billion was actually spent on Australian dramatic productions last financial year, according to a Screen Australia report released in October. One of the factors behind this was the ‘‘ highest level of foreign spend in this country of $610 million’’ .
Netflix’s value proposition is increasingly about its original shows, which set it apart from its myriad rivals in streaming. These shows are crafted, in part, using the reams of data it collects on user preferences and behaviour. Shows are designed to appeal to subsets of subscribers, with budgets apportioned accordingly.
In other (admittedly larger) foreign markets, Netflix has produced originals designed for specific countries, which have found global appeal. These include Dark, a German-language sci-fi thriller that has won praise in the US, and reportedly has more viewers outside Germany than in it, and Ingobernable, a Mexican political thriller, has also drawn substantial audiences outside Mexico. Netflix says this is also the case for many of the Australian shows on its platform. It claims, for example, that for every 100 hours of Mako Mermaids: An H2O Adventure (a children’s show that originally aired on Ten) more than 95 hours are watched outside Australia.
It unashamedly hopes Tidelands and the Chris Lillee project don’t just appeal to Australians, but achieve global success as well. Luring Hollywood productions to Australia to sustain a local industry is one thing. Helping Australian creators tell Australian stories to the world is surely even more desirable. That’s why Netflix’s argument against a quota seems persuasive.
‘‘ Australia has the opportunity to set a positive global precedent to say ‘we are really confident in our creators and producers who have been very successful making content for the world stage’ ,’’ says Mr Korn.
This article is from the May 7, 2018 issue of The Age Digital Edition. To subscribe, visit https://theage.digitaleditions.com.au/.