The Realities of a SVOD World

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I’ve been watching the debates raging across the Tasman as the Austalian screen industry seeks to ensure the future of Australian content in the face of the realities of SVOD.

Research company Roy Morgan reported in March 2019 that nearly 14 million Australians now have access to some form of Pay TV/Subscription TV, up 11.8% on a year ago.

Netflix with over 11.2 million subscribers had growth on a year ago of 25.2%, with Australian-owned Stan at 2.6 million subscribers seeing a 45.2% increase.

YouTube Premium and Amazon Prime also had significant increases.

Australian broadcasting standards require all commercial free-to-air television licensees to broadcast an annual minimum transmission quota of 55 per cent Australian programming between 6 am and midnight. In addition, there are specific minimum annual sub-quotas for first-run Australian adult drama, documentary and children’s programs.

SVODs in Australia have no Australian content requirement.

Australian commercial broadcasters sought in 2017 to have the quota removed for Australian children’s content. The Australian screen industry united against this, decrying what they said would be the almost complete annihilation of Australian children’s programming.

Then in 2017 the Australian Directors’ Guild; Australian Writers’ Guild;  Media, Entertainment & Arts Alliance and Screen Producers Australia joined together to launch the ‘Make It Australia’ campaign to lobby the Government for support for the sector in the wake of sustained funding cuts and changed viewing habits, which of course includes the rise of SVODs.

They called for no more cuts to SBS, the ABC and Screen Australia; a raising of tax incentives for Australian TV and foreign productions; a cementing of the commercial free-to-air Australian content quota at 55%; and new regulations for Subscription Video on Demand (SVOD) providers.

The Australian Government launched in 2017 an Australian and Children’s Content Review.

In March of 2019, the Senate Committee released its Review paper. Among the recommendations was a call to force streaming services such as Netflix and Stan (and Amazon and any others who might enter the space) to spend a minimum 10 per cent of income earned in Australia on original Australian content. They would also be obliged to promote that content to their subscribers. The other recommendations:

  • The current quota system being preserved.
  • Examining other Terms of Trade provisions and implementing them.
  • Introducing a single Producer Offset of 40%.*
  • Ceasing recognising New Zealand content as Australian.**
  • Increasing the Location Offset to 30%
  • Decoupling the Location and Post, Digital and Visual Effects (PDV) Offset.
  • Platform Neutral Location and ODV Offsets.

*The Producer Offset, Australia’s version of the NZ Screen Production Grant, sits at 20% for TV.

**This refers to Project Blue Sky, which allowed NZ content to be recognised as Australian content because of the Closer Economic Relations (CER) agreement between the two countries.

What did they Australian Government do in response? It allowed streamers that operate behind a paywall access to the production incentive for content they make in Australia, which of course includes international productions shooting there.

“The Government’s policy announcement is inexplicable and one-dimensional given how many times our local sector has called for urgent intervention”, said Austrlian Directors Guild CEO, Kingston Anderson.

“Our screen incentives need to be updated across the board, not just those that apply to international production. This decision shows a tremendous lack of confidence in the ability of Australians to tell our stories in our own voices.”

You are possibly wondering why at this point I am so wrapped up in what’s going on in Australia? It’s because I feel it’s clearly indicative of what we face and have essentially been ignoring till now. The 10-year screen strategy recently called for by the NZ Government is a chance to address the many problems the onslaught of foreign content and SVODs are having on the NZ screen industry. We only have to look across the Tassie for some insights and thoughts on how to address the issues.

 

Tui Ruwhiu
Exeuctive Director