By Bess Keaney
The explosion in popularity of online and subscription streaming services is heralding a ‘golden age’ of television. We ask alumni working in film and television what this means for Australia and the regulation of the industry.
In the 2017-18 financial year, Netflix subscriptions in Australia grew by nearly 30 per cent. 9.8 million Australians – almost 40 per cent of the nation – now have a subscription in their household.
Netflix’s catalogue of original productions and content licensed from other studios has provided the blueprint for the burgeoning subscription video-on-demand (SVOD) market across the globe. The Silicon Valley company leads Channel Nine-owned Stan in subscriptions among the SVOD platforms in Australia, with Foxtel’s standalone subscription service, Foxtel Now, and Amazon Prime growing in the market.
Andrea Denholm (GDipCommLaw 1996), Partner and Executive Producer at Princess Pictures in Melbourne, says the proliferation of online streaming services is opening up new avenues for Australian film and television content. Stan has been producing original content since 2015; this year, Netflix commenced production on Tidelands, its first fully-funded series in Australia.
“Australia’s small population and the economics of TV production have meant the local market has been characterised by a small number of commissioning bodies and a need to raise deficit finance for drama,” Denholm says.
“The entry into the market of SVODs and other platforms has created new opportunities for original commissions and new partnerships.”
Denholm, who began producing while working as General Counsel for the production company behind SeaChange, recalls a time when that program would draw audiences in excess of two million – a figure now “unheard of” for Australian drama, she says.
“It’s really indicative of how the landscape has changed.
Australia continues to generate world-class content but the audience is increasingly fragmented across a growing number of platforms.
Jonathan Gill (BA(Hons) 1986, LLB(Hons) 1988, LLM 1992), Director at Carrick Gill Smyth and former Legal Counsel at Channel Ten, says television’s shift online has disrupted the business model of the broadcast networks.
“When I started in television it was called ‘rivers of gold’ because, really, there were only three commercial networks and with the public broadcasters these were the only home-based audiovisual material,” Gill says.
The shift is also posing problems from a regulatory perspective. The subscription streaming services are currently not beholden to any of the requirements imposed on Australian broadcast and pay television services that are designed to keep Australian production sustainable.
In submissions to the 2017 Australian and Children’s Screen Content Review, the commercial free-to-air broadcasters united in their call for the relaxation of broadcast quotas, which require that they program at least 55 per cent of Australian content between 6.00am and midnight.
They cited changing audience viewing habits, increased competition from online services and the high cost of producing Australian content.
But Denholm cautions against removing the regulations altogether.
“While the regulation may need reform in the context of the changed landscape, protections are still necessary – they were hard wrought and they were put in place for a reason,” she says.
Commercial pressures, despite good intentions and despite audience desires, would put at risk the amount of Australian content that would be made in the absence of any regulation.
There’s a “crisis” currently afflicting the children’s live-action genre, according to Denholm, with funding cuts to the ABC – historically the stalwart of Australian children’s television – and the commercial free-to air networks lobbying for the removal of their children’s content quotas.
“While the disrupted environment presents exciting new platforms and possibilities, when it comes to ensuring Australian children are able to see themselves, their stories and their society reflected in what they watch, the market is failing,” Denholm says.
“Kids are inundated with content from overseas, particularly American content and animation.
“Meanwhile the local industry, once a children’s TV powerhouse, faces an increasingly uphill battle to finance quality live action content.”
According to Gill, it’s important for all audiences – not just children – to have a mirror held up to themselves.
“It plays an important role in nation-building,” he says.
Stories about our past are really fundamental to keeping an identity about who we are.
According to Anna Ryan (BA 2005, LLB(Hons) 2005), Senior Legal Counsel at Foxtel, local content remains a major subscription driver for Australian audiences.
“It’s something that people really enjoy, seeing their own stories on the screen,” she says.
Unlike the free-to-air networks, Foxtel’s requirements for local content production are regulated by expenditure: 10 per cent of capital spent on each of its drama channels must be directed towards scripted Australian drama, comedy or children’s content. Across all genres, Ryan estimates that the subscription TV industry has spent $6 billion on Australian content in the past decade with programs including Picnic at Hanging Rock, Love My Way and Wentworth – the latter having won ‘most popular drama’ at the 2018 Logie Awards.
Ryan says that the costs associated with local content production speak to the importance of having strong piracy protections in place. She says the site-blocking laws introduced as an amendment to the Copyright Act in 2016, which have been used to block access to piracy websites by users of the major internet service providers, are crucial to the health of the industry.
“Because a program like Picnic at Hanging Rock is so expensive to make, you’ve got to make sure that there are avenues available to ensure that people are watching the content legally.
“If people are going online and just downloading via the Pirate Bay, that investment is not being recouped.”
Being able to access content legally has proven a significant factor in piracy behaviour in Australia. The Online & On Demand report, conducted by Nielsen in 2017, revealed that only 17 per cent of respondents reported using unofficial streams or downloads, a decrease from 43 per cent in 2014, the year before Stan and Netflix launched in Australia.
“That [decline in piracy] is due to the new site-blocking laws, but also because there are these new streaming services available,” Ryan says.
And with audiences seemingly comfortable with the price tag attached to their subscriptions, a pool of revenue is being created for the production of high-quality content. Seasons one and two of Netflix’s The Crown are to date the most expensive series ever made.
"People are paying for television and realising that for quality services there is a price that might be attached to that," Ryan says.
The challenge, according to Gill, is how to channel this revenue to ensure that the Australian film and television industry remains competitive.
In Canada, after lobbying by broadcasters and industry, Netflix has committed to spending $500 million on original productions. The European Parliament is likewise in the process of finalising laws that would extend local broadcast quotas to the online providers, requiring a certain percentage of their available catalogues to be content produced in local territories.
In Australia, key bodies within the arts and entertainment industry have launched the ‘Make It Australian’ campaign, calling for well-funded public broadcasters and screen agencies, competitive tax incentives, and the evolution of content rules to cover not just broadcasters but online streaming services and telecommunications providers.
“If you accept that local content is vital… it’s a question of what is the most appropriate regulation in the new environment,” Denholm says.
For Gill, one of the greatest priorities is “a secure form of financing for the Australian filmmaking industry”.
“Some financing stream that is not within the usual government processes but is somehow separated out,” he says.
With Disney signalling intentions to launch its own standalone streaming service in coming years, the online market is set to get even more crowded. According to Gill, the future of television is bright – it just remains to be seen how the Australian industry adapts to changing modes of consumption.
“I think we will always want to watch good-quality, linear, narrative driven stories,” he says.
“It’s [about] redoing business models to take account of and react to changing technology and changing audience viewing habits.”
Banner image: Almost 40 per cent of Australians now have a Netflix subscription in their household, according to Roy Morgan Research. Image credit: Pexels
This article originally appeared in MLS News, Issue 20, November 2018