‘Storm Boy’.
A record $718 million was spent on Australian feature films, TV dramas and online programs in 2017-18, up 7 per cent on the prior year, mostly due to a boom in co-productions.
But a lack of Hollywood films shot in Australia resulted in overall investment falling 37 per cent from $1.3 billion on 166 screen productions in 2016-17 to $814 million on 133 titles. 
Those are among the main take-outs of Screen Australia’s annual Drama Report released today, along with a drop in the number of Australian features and TV dramas.
With Dora the Explorer shooting in Queensland and Legendary Entertainment’s Godzilla vs. Kong and ABC Studios International’s Reef Break also secured for that state thanks to the Federal Government’s Location Incentive Program, the agency is confident there will be a rebound in foreign production in 2018-19.
Screen Australia chief operating officer Michael Brealey tells IF: “It’s fantastic to see record expenditure on Australian projects demonstrating the demand for local content remains high.
“Television/online combined for drama is pretty steady. There is more expenditure per hour which tells me the networks are looking to make more premium-style content as they try to compete on a global stage. In children’s, spending was up but the hours were down by 36 per cent, largely due to the downturn in animation.
“It’s extremely challenging for the commercial free-to-air networks in the kids’ space. We all recognise the cultural value of having kids watch Australian content but that’s the policy challenge for governments.” 
The Australian Children’s Television Foundation lamented Screen Australia’s diminishing investment in children’s drama, especially in second and subsequent series, arguing that makes it harder to finance both high concept, high volume series and distinctly Australian projects with no international support.
“This downward pressure is happening right at the time when high quality, high concept children’s drama is in demand,” says ACTF CEO Jenny Buckland. “It’s no coincidence that The Bureau of Magical Things is 20 episodes, not 26. Screen Australia effectively no longer invests in 26 x half hour live action children’s series”.
Screen Producers Australia CEO Matt Deaner welcomed the increase in local production but said: “Regulatory models need to be adapted to ensure our children continue to have access to Australian stories across a variety of platforms and formats. This is in stark contrast to the regulatory approach in the UK, which recently launched a £60 million fund for children’s programming.
“Expenditure on online drama now exceeds children’s TV drama. This is an early sign of the shift in audiences towards online, highlighting the importance of local content obligations for new market entrants such as SVODs.”
While the Location Incentive Program has been focused on foreign film productions, Deaner asserts more work needs to be done to support the sustainability of the local industry.
Brealey points to a buoyant production sector across Australia, ranging from Storm Boy in South Australia to Doctor Doctor in New South Wales, Top End Wedding in the Northern Territory, Chinese co-production The Whistleblower in Victoria, the third series of Rosehaven in Tasmania, Tidelands in Queensland and the 30-episode ABC serial The Heights in Western Australia.
In 2017-18, 38 Australian features went into production, 11 fewer than the previous year. But spending on Australian feature films rose by 12 per cent on last year to $321 million. The vast majority of features – 71 per cent – had budgets of below $10 million and there was a smaller proportion of films – just 16 per cent – costing below $1 million.
However co-production feature spending hit an all-time high of $143 million, driven by Chinese co-pros The Whistleblower, At Last and Legend of Sun and Moon plus the French co-production Slam and Irish co-pro Animals.
Despite what Screen Australia CEO Graeme Mason has rightly described as a market failure for distributing indie Oz films, the agency does not plan to change the mix between feature, TV and online investment.
Brealey says: “We are not changing the funding programs at the moment. We are led by demand. If there is a drop off somewhere we look at how we can support it but we are not looking to radically change our investment profile away from features. It all depends on what’s coming through the pipeline.”
‘Bluey’
Australian TV drama production was down 8 per cent on last year’s record, with 423 hours of content with combined budgets of $301 million and an Australian spend of $295 million on 36 dramas including Mystery Road, Playing for Keeps and Lambs of God. The decline in hours is due to the growing trend to shorter-running series and miniseries, of which almost a third ran for less than five hours. However the average cost per hour for miniseries jumped from $1.352 million the previous year to $1.567 million.
Ten children’s television programs went into production, generating 71 hours of content including Ludo Studio’s Bluey (five-year average 109 hours), with a local spend of $49 million (five-year average of $56 million).
Expenditure on 18 Australian online dramas more than trebled to $53 million. There were seven fewer online titles but spending jumped due to bigger budgets and longer episodes. Screen Australia includes the Netflix-commissioned Tidelands and an untitled Chris Lilley project and Stan’s Romper Stomper as well as shows such as SBS’s Homecoming Queens and ABC iview’s Deadlock in this category. 
Foreign TV drama shoot activity accounted for $4 million in Australian spending in 2017-18, below the five-year average of $16 million.
Post, digital and visual effects (PDV) spending on Australian and foreign drama titles was up by 11 per cent to a new record of $284 million, 27 per cent above the five-year average of $224 million.
That was generated by a PDV spend on Australian titles including Hotel Mumbai, Ladies in Black, Peter Rabbit and The Nightingale of $173 million and $101 million from foreign PDV-only features.
New South Wales again accounted for the largest share of total expenditure in Australia (37 per cent), followed by Victoria (30 per cent), Queensland (17 per cent), South Australia (10 per cent), Western Australia (5 per cent) and Tasmania/NT (1 per cent). WA and SA both had record spends.