Free TV Australia and Netflix express concerns over green paper reforms

Free TV Australia believes the proposals outlined in the Federal Government’s media reform green paper will not meet the needs of viewers or the broadcast sector, but says there is “time to get this right”.

Global streamer Netflix has also unsurprisingly voiced its opposition to the paper, which it describes as “inflexible and overly prescriptive”.

Unlike the screen guilds, Free TV does not support the proposed content obligations for SVOD and AVOD platforms, citing the potential for “significantly increased” pressure on “already scarce” production facilities; subsequent rising production costs; a potential decrease in the diversity of content available to Australian consumers; and a move to more “globalised” local content to the detriment of production of local cultural material.

The lobby group also believes that imposing regulatory obligations on SVODs could disincentivise existing co-production arrangements, as seen between Netflix and Network 10 on the teen mystery drama Dive Club.

The view is shared by Netflix, which argues in its submission that the measures within the green paper carry “significant, unintended consequences” for FTA broadcasters, as well as production companies finding opportunities within the streaming sector.

The streamer highlighted its investment of more than $111 million in Australian adult drama and children’s content across 2019/2020 as evidence of its “growing contribution” to Australian content. Some $33 million went to first-run Australian children’s content, with the streaming noting Screen Australia’s total investment in children’s drama in 2019/20 across all platforms was $46 million.

The green paper considers the examples of proposed local content obligations in other jurisdictions, such as Canada and France, as international precedents for proposal.

But Netflix notes that Canada’s draft bill for the proposal does not make specific reference to how much VOD services are required to invest in local content, while France’s consideration of a 20 per cent local content obligation is out of step with fellow EU member states, many of which have no system of levies or investment obligations.

The streamer says it will continue to invest “aggressively” in Australian content via its full-time content team on the ground.

Free TV warned that globalising trends in TV production and distribution could pose a threat to the ongoing production of Australian content, saying there is a “very real prospect” of the value from Australian creative industries, particularly the free-to-air broadcast system, being moved to other jurisdictions – specifically to providers and platforms based in the US.

While the industry body acknowledges that global platforms such as Netflix and Amazon are valuable to the Australian production industry, it says they cannot replace the benefit delivered by national broadcasters, which “consistently exceed” their 55 per cent local content quota.

In its submission, Free TV identified the prominence of FTA content as the “single most important regulatory issue” facing broadcasters in the current climate, calling for amendments to Broadcasting Services Act to incorporate a regulatory framework that requires broadcasters’ content to be “accessible and discoverable” across connected TVs and other devices.

Other proposals within the submission include a proper review of the existing commercial broadcast tax, which says is “significantly higher” in Australia than other jurisdictions, as well as prioritising net neutrality, by which all internet data is treated equally.

Free TV chairman Greg Hywood said the measures were part of a technology and regulatory pathway that recognised the “central role” that free-to-air services currently play in Australia.

“Free-to-air television delivers critical services that no other platform does – free, ubiquitous locally relevant viewing to all Australian homes ,” he said.

“The upheaval in the media sector has only elevated the need for the strong and sustainable local services that people can go to for trusted news and public service information, to tune in to homegrown Australian stories and to watch iconic sporting events as a nation – no matter where they live or how much they earn.”

‘One of the most lucrative markets in the world’

The Media, Entertainment & Arts Alliance (MEAA) says it is concerned Netflix has been joined by free-to-air commercial television networks in opposing content obligations.

The union for Australian screen performers and crew believes revenue and audiences for SVOD providers are rapidly increasing, making Australia one of the most lucrative markets in the world.

Chief executive Paul Murphy said they should subsequently be required to invest a proportion of those earnings back into Australian content.

“Australian content rules, expressed either as hours per year or as a proportion of company revenues, should be seen as an indispensable cost of doing business in Australia,” he said.

“The government’s media reform green paper talks at length about the merits of requiring the production of Australian content.

“It acknowledges that Australia is a relatively small marketplace and that without content rules, broadcasters and operators would either stop or massively reduce investment in screen productions.

“We need to heed the warnings in the green paper and get cracking on establishing an new and fair way for multi-billion-dollar companies to better serve the Australian market.”

Find the Free TV submission here.