Netflix seeks voluntary Australian content spending scheme

Hannah Gadsby Comedy Special 2020

Hannah Gadsby.

Facing the prospect that the Federal Government will impose local content spending obligations on SVOD services, Netflix asserts it wants the right to negotiate how much it invests over the next three years.

In its submission to the government’s ‘Supporting Australian Stories on Our Screens’ options paper review, the streaming giant proposes a “flexible, reasonably-set voluntary investment model that meets cultural policy goals and incentivises wider investment.”

Netflix rejects option 3, which is favoured by Screen Producers Australia and all industry guilds and would require all delivery platforms to invest a minimum percentage of their Australian revenues into local scripted content, with annual sub-quotas for drama, documentary and children’s programs.

This model has “the potential to cause significant problems for the sector, including the reality that there is currently insufficient physical production capacity for this option to work meaningfully in practice,” it says, which arguably ignores the production sector’s ability to expand to meet growing demand.

“If every qualifying participant in the industry is required to make new Australian content, there are serious issues to be thought through about whether this new content could realistically be made, and at what price.”

Its submission criticises the options paper for failing to recognise the full extent of investments by Netflix and Australia’s broader streaming entertainment industry and factors such as export opportunities, international licensing, additional revenue streams and bigger budgets from co-productions which are not captured in Screen Australia’s methodology.

The streamer cites such initiatives as hiring Que Minh Luu as director, local originals for Australia; its $1 million donation to a COVID-19 film and TV emergency relief fund for displaced workers; and supporting the Bunya Talent Indigenous Hub.

Setting out an alternative model which will be strongly resisted by the production sector, Netflix wants the government to outline guiding principles for the streaming industry’s contributions to local content, which reflect that companies in that sector have vastly different business models, operating margins and economics.

‘Urzila Carlson: Overqualified Loser.’

Contributions could be made across a range of categories, at the discretion of each provider which would advise the government annually of its local investments and contributions, “in confidence where appropriate.”

The government would monitor and assess this information over three-to-five years to assess “whether companies were continuing to make a meaningful contribution, or whether more targeted regulatory action may be required.”

The streamer does support the harmonisation of the Producer Offset for film and television productions.

Emphasising the hefty investments in Netflix Australian Originals, it points to Clickbait, Hannah Gadsby’s Nanette and Douglas, Lunatics, The White Rabbit Project, Tidelands, Urzila Carlson: Overqualified Loser, The New Legend of Monkey series 2, which premieres in August, and Izzy Bee’s Koala World in September.

In addition, it has committed to an unspecified number of upcoming Original series that are yet to be announced.

Among the co-productions it highlighted are The Letdown, Pine Gap, Kazoops, Glitch, The Unlisted, The InBESTigators (all ABC), Bottersnikes & Gumbles, Zumbo’s Just Desserts, Beatbugs (Seven Network), Mako Mermaids: An H20 Adventure (Network 10), Alien TV (Nine) and feature acquisitions I Am Mother and Cargo.

In the last three years, Netflix said it has licensed more than 475 Australian titles.

A spokesperson told IF: “Netflix makes a significant contribution to Australia’s content production industries and will continue to do so. We support the adoption of a policy framework that formalises this commitment to give certainty on future investment levels in Australian content.

“We will continue to consult with the government and industry as the review progresses.”