Government relaxes drama and children’s quotas, harmonises Producer Offsets

Minister for Communications, Urban Infrastrucutre

Paul Fletcher.

In a major overhaul of the regulatory system, the Federal Government is scrapping the fixed quotas for local drama, children’s programming and documentary and harmonising the film and TV Producer Offsets at 30 per cent.

Ignoring the vast majority of submissions to its Supporting Australian Stories on our Screens Options Paper review, the government has elected not to impose local content spending obligations on SVOD platforms.

Instead, it will merely ask the streaming services to report their Australian acquisitions to the Australian Communications and Media Authority from next year.

Foxtel is a major beneficiary of the reforms as the requirement to allocate 10 per cent of the revenues of its drama channels on local content will be halved from next July.

Setting the Producer Offsets for film, TV and docs at 30 per cent from July 1 2021 will be welcomed by TV producers but will almost certainly make it much tougher for feature film producers to finance their projects.

However that does mean the requirement to release feature films in cinemas is being abolished, answering the prayers of many producers.

Softening the blows to an extent, the 2020-2021 Budget to be delivered on October 6 will deliver an extra $53 million for the development and production of local film and television content.

Screen Australia will get $30 million over two years to support the production of Australian drama, documentary and children’s film and TV content.

The agency will also receive an additional $3 million over three years to establish a competitive grants program to cultivate quality Australian screenwriting and script development.

The Australian Children’s Television Foundation will get $20 million over two years to boost the development, production and distribution of Australian children’s content.

In an unhappy co-incidence, the reform blueprint was released on the day the Make it Australian campaign planned an event where Hoodlum CEO Tracey Vieira, writer-director Mithila Gupta and Australian Small Business and Family Enterprise Ombudsman Kate Carnell among others were to stress the importance of reinstating the content quotas.

Communications and Arts Minister Paul Fletcher said: “The old approach of treating film and television differently no longer makes sense. Increasing the offset to 30 per cent for television will mean additional funding for Australian television production – and in turn support higher production values and programs with a better prospect of being sold into the global content market, taking advantage of the opportunity created by the explosion of streaming video services like Netflix, Disney+, Stan and Amazon Prime.”

Commercial broadcasters will continue to be required to provide 55 per cent overall Australian content on their primary channels between 6 am and midnight and to screen 1,460 hours of Australian content per year on their multi-channels.

The sub-quotas were temporarily suspended as an emergency measure during COVID-19 but will be reintroduced from January 1.

From that date broadcasters can can meet their annual quota of 250 points with any combination of genres. However, a maximum of 50 points will awarded to commissioned documentaries. Networks will be able to meet their modified quota obligations on their primary or multi-channels.

The points scheme for the sub-quotas will give more points to higher-budget productions, which the government says will create a stronger incentive to commission bigger budget drama which is more likely to be sold globally rather than just in Australia.

This ignores the fact it is virtually impossible to finance dramas purely in Australia so the vast majority already secure international broadcasters or co-financiers.

Foxtel CEO Patrick Delany welcomed the measures as a good outcome which will see more home-grown stories on screens, telling IF: “Foxtel looks forward to the opportunity to work closely with Screen Australia to kick-start new productions and employment in the creative sector, which have been severely impacted by COVID-19 restrictions.

“We also look forward to featuring the results of work between our channel partners and the Australian Children’s Television Foundation on Foxtel.

“The government’s package represents a starting point for Foxtel’s future investment in award-winning Australian drama and entertainment. They provide us with flexibility as we plan new productions, and importantly they recognise television is now producing world-class drama that is much-loved in Australia and sought after internationally.”

Among other measures, the Producer Offset’s 65 hour cap for drama series will be removed and the minimum expenditure thresholds for feature length content and the Post, Digital and Visual Effects (PDV) Offset will be doubled to $1 million.

Fletcher said the government will continue to examine whether to introduce an Australian content spend obligation on the larger SVOD services.

“The government very much appreciates the strong engagement we received during our consultations this year,” he said.

“The views of stakeholders and interested parties were very clear – we need to continue our support for the production of Australian content, but we also need to remove unsustainable obligations on industry and tailor our interventions to match the new and diverse ways Australian content is being produced and consumed.”

“The measures announced today are designed to do just that. They begin to rebalance our regulatory framework and provide Australians with the opportunity to access Australian content across a range of media, regardless of whether they want to watch free-to-air television, subscription television or streaming services.”

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