Netflix argues against local content quota in Oz

Chiang Mai, Thailand - April 26, 2016: man hand holding screen shot of Netflix application showing on Asus Zenfone 2 mobile phone. Netflix is a global provider of streaming movies and TV series.

Netflix has publicly cautioned the Australian Government against imposing local content obligations on its Australian service, warning of its disruptive effect.

The streaming giant also asked the government to make production incentives available to Australian productions commissioned by Netflix and other online services.

Netflix, which reportedly has 3 million subscribers in Australia, clearly is worried about calls by Screen Producers Australia and other screen industry guilds to extend local content quotas to Netflix, Stan and other streaming platforms.

In a rare public disclosure, Netflix released its submission to the Australian and Children’s Screen Content Review being conducted by the Department of Communications and the Arts, Screen Australia and the Australian Communications and Media Authority (ACMA).

The review aims to come up with sustainable policies to ensure ongoing availability and production of local content, recognising that regulations and incentives were designed in a pre-digital era.

“Australia has talented creators whose content is already being distributed all over the globe on streaming services,” said Josh Korn, Netflix manager, global public policy and Corie Wright, director, global public policy.

“But reflexive application of regulations built for a market with limited organic demand, or predicated on technical or resource scarcity, can disrupt this virtuous cycle by distorting consumer-driven content buying decisions that have spurred growth of Australian content production and global distribution.”

The submission contends Australian production incentives discriminate based on the distribution channel.

Observing that producers are ineligible for incentives for productions commissioned or distributed by SVOD platforms, Netflix said, “There is a missed opportunity to better support producers who wish to target their content to audiences using streaming services.”

The company stressed its commitment to local production, citing Hoodlum’s Tidelands, its first Australian Netflix Original; Screentime’s Pine Gap, its first co-production with the ABC; and other commissions and co-pros including White Rabbit Project, Tales by Light, Wanted, Pacific Heat, The Letdown, Nowhere Boys, Cargo and Glitch.

Moreover Netflix pointed to the acquisition of second-run rights to shows such as Rake, Miss Fisher’s Murder Mysteries, Outback Truckers, The Code, Laid and The Moodys.

Netflix also spruiked its Australian kids originals including Beat Bugs, Bottersnikes & Gumbles, Kazoops!, Mako Mermaids: An H20 Adventure, Legend of Monkey and the recently announced untitled Motown project.

The submission is peppered with supportive quotes from the likes of Screen Australia’s Graeme Mason and Mike Cowap, Beyond’s John Luscombe and Beat Bugs producer Josh Wakely, which were cut-and-pasted from media stories.

Further underlining its involvement in the local industry, Netflix noted that its original features, Kitty Green’s Casting JonBenét, Angelina Jolie’s First They Killed My Father and David Ayer’s Bright used Australian post-production services

It concludes: “Netflix investments in Australia are significant. The Australian Netflix original co-productions and productions, as well as all of the second-run Australian content available to members around the world, provide organic financial support and global exposure to Australian creators.

“Netflix helps to bring Australian stories to our members around the world, supporting a virtuous cycle of content investment and innovation in Australia.

” The Internet is central to this inquiry. Unrestricted competition, broader distribution, and innovation have led to greater investment, higher quality production and broader distribution.”

As IF noted, more than 50 submissions have been made to the Content Review, which will report to government before the end of the year.