‘Companies are going to fold’: Guilds push for urgency and certainty on SVOD regulation

AWG executive director Claire Pullen, SPA president Tracey Vieira and ADG executive director Alaric McAusland.

In the lead up to the federal election, the fight to regulate streaming services looks poised to get noisier: Australian Directors Guild (ADG) executive director Alaric McAusland told Screen Forever yesterday that the industry was currently “way too polite” to government on the issue.

He said the ‘production void’ flagged by the ADG and Screen Producers Australia (SPA) at last year’s conference – created by delay between the government’s relaxation of local content quotas for commercial free-to-air broadcasters and any imposition of obligations on streamers – was coming into “disastrous” effect and needed to be urgently rectified lest companies fold.

Last month, in response to its 2020 green paper, the government put forward to industry the ‘Streaming Services Reporting and Investment Scheme’, in which large-scale SVOD services such as Netflix, Amazon Prime Video, and Disney+ would be asked to report annually to the Australian Communications and Media Authority (ACMA) on their Australian content spend.

If a service’s investment on content was below 5 per cent of their gross Australian revenue, then the government would then be able to impose a formal requirement on that service.

The 5 per cent level proposed is a far cry short of the hopes of SPA and the industry guilds, who had suggested SVOD/AVOD services with at least 500,000 subscribers or $50 million in annual Australian revenue be required to spend 20 per cent of that revenue on new Australian commissions.

Opening the conference on Monday, SPA CEO Matthew Deaner lambasted government’s “slow, protracted and largely ineffective proposals” to ensure streamers commission local content.

On a panel with other industry leaders the next day SVOD regulation was again on the agenda. McAusland refused to mince words when he called the government’s scheme “derelict”, and lambasted the lack of urgency to enact reform.

“We’re sitting in this regulatory void – with reduced production activity coming out of the free-to-airs – for what, one year, two years, three years?

“Companies are going to fold on this. People are going to walk away from their businesses because of this. Let’s make no bones about it – this is a disaster. Until we get to the point where this is enacted quickly, effectively, at the right measure… Bryan Brown adequately put it: we back go to government every three years to remind them how important screen culture is – why should we have to?

“It is set in stone, the fundamentals about economics, jobs growth and most importantly the cultural residue that our industry leaves behind – our sense of identity and exporting that to the rest of the world. Why do we have to keep on reminding government of it?”

Speaking on the same panel, South Australian Film Corporation CEO Kate Croser flagged the current environment meant there was a ‘middle-tier’ of production companies that have “nowhere to go right now”.

“Whilst there’s a huge amount of opportunity, and new buyers are always welcome in the market, the access to those opportunities is not equal to all the players… What’s happening with the drop in the FTA means that the competition for public broadcaster slots is increasing. And yet, at the same time, we haven’t yet seen equivalent uptick in the commissions from SVODs.”

SPA president and Hoodlum Entertainment chief content officer Tracey Vieira agreed, noting that unless streamers are pushed to meet numbers, it will be harder for less established players to get a foot in the door.

“It will be those who have got the records, those with all the credits. And it will be a small number of companies – because it’s not a high number at 5 per cent. We won’t see those businesses coming through. We won’t see people coming through. We will have companies disappear, really quickly.”

In addition to 5 per cent not being enough, Vieira flagged there was too much ministerial discretion built into the scheme as it stands.

“The one thing, whether you’re a streamer, producer, or an agency, that we need is certainty… We don’t have certainty in the current proposal, even if it is 5 per cent, because of the amount of ministerial discretion that is still proposed. If the SVODs don’t meet those requirements, the Minister gets to decide if they will need to or not.

“It means nothing may happen… It may mean we get a Minister who says ‘It’s not enough, let’s have another review and we go through this process again. I don’t know about other people in this room, but I have review fatigue.”

Australian Writers Guild executive director Claire Pullen said there seemed a deliberate lack of clarity from government about why it wants to regulate SVODs – whether for economic or cultural reasons, or both – and how it would then do so. She noted the industry had to come together more effectively to present a message to government.

“We need to start with that clarity about what the purpose of the regulation is. And from my position, it’s really clear: I want it to deliver jobs for my members,” she said.

“I’m not convinced 5 per cent is survivable for the industry.”

In addition to the conversation around regulation, Vieira also flagged concern for producers in their dealmaking with SVODs, and the need for terms of trade and market oversight.

“Producers have very little power in the deals when we’re dealing with streamers. We are in the situation now where the IP doesn’t necessarily stay with producers,” she said.

“We need terms of trade. We need some production. We need to know we have some involvement in managing that creative; ensuring that our projects continue to have a life and it’s not a one-off fee for coming on board.”

Screen Australia CEO Graeme Mason said he was terrified by some of the deals producers are currently being strong-armed into taking – deals that two years ago the agency would have “laughed out of the room”, and five years ago he would have thought existed only in “fantasy land”.

“The deals are so consistently tough,” he said.

While he noted it was primarily producers impacted, in that they are not holding onto IP, Screen Australia and the state agencies are unable on such deals to make equity investments, and instead, have to change their funding to grants.

“That is a really challenging situation to be in… If anyone looked at that and worked out that the governments, taxpayers, are funding 70 per cent of a budget… that’s a lot of taxpayer money going away. That’s really concerning.”

The government has published a discussion paper around the Streaming Services Reporting and Investment Scheme, open to industry submission until April 24.