Opinion: Make it Australian, or Make it in Australia?

Anthony Hayes' 'Gold' starring Zac Efron.

Australia is in the midst of a production boom. Marcus Gillezeau, an International Digital Emmy and AACTA Award-winning independent producer, writer and EP examines how Australian creatives can use this moment for long-term benefit.

Scan the headlines and you’d be aware Australia is currently experiencing an unprecedented boom in production. The list of TV series and feature films being shot here, starring a host of A-list international and Australian cast, is clearly fantastic for service companies, crew and actors. Domestic production also appears to be continuing alongside, and many production companies report ‘things are going well’.

Given the current focus on Australia as a production destination, what are the current opportunities for local producers to forge international partnerships and turn the boom in to long-term sustainable growth? How do we capitalise on this moment and the global content boom, ensure we are more than a backlot to Hollywood, and continue to make quality Australian content?

Back in 2019, it was predicted that the streaming services (SVOD/AVOD) and major studios planned to spend a staggering $25 billion on original content globally. With several major studios launching their SVOD offerings in early 2020, the need for new content to attract subscribers was critical to their success. A slew of announcements of impossibly high-budget TV series and straight-to-streaming features followed, and production was soon underway in the US and Europe. Soon after that, the inevitable spill-over of runway production began and enquiries about shooting in Australia grew.

Then, as we all know, COVID hit. It became clear that commencing on a shoot that could be shut down at a moment’s notice was too great a risk for most investors and the industry was virtually shut down overnight. As early as May 2020, it became clear that Australia had emerged as a safe shooting destination given our handle on the virus. One of the first projects to relocate was Made Up Stories and Blossom Films’ Hulu series Nine Perfect Strangers, starring and produced by Nicole Kidman, with fellow Aussie producer Bruna Papandrea.

In July, the Federal Government announced a $400 million extension of the Location Incentive Program, designed partly to capitalise on the country’s success in containing the pandemic. Since then, some 13 international projects have been secured.

International production is clearly a good thing for the screen industry in so far as it creates jobs, sees money spent and increases our skills base. While the projects are ‘international’ and in most cases are not Australian stories, there are Australians behind many of them. Made Up Stories (behind Nine Perfect Strangers and Pieces of Her) is a US-Australian company. The Tourist, for Stan and the BBC, is an Australian-UK co-pro, Chris Hemsworth is a producer on Escape From Spiderhead and Irreverant comes out of Matchbox Pictures. Perhaps this forecasts the next step in the internationalisation of Australian screen production?

Australian production companies were initially hit hard by the shutdown, along with their regular crew, many of whom were not eligible for JobKeeper. However, by July the Federal Government announced a $50 million ‘Temporary Interruption Fund’, to be administered by Screen Australia, with the aim of covering productions should key cast or crew contract COVID-19. Screen Australia also launched a COVID-19 Budget Support Fund, to help greenlit projects restart and launched the Premium Plus fund, redirecting investment funding to story development to ensure that when production was viable projects could get up and running quickly. Since then, Australian production has ramped up again. However, anecdotally it still appears some Australian crew and production companies are missing out on the boom, especially in factual entertainment and documentary.

Another set of factors beyond COVID entered the equation when the Federal Government announced a raft of well-overdue changes to media laws, incentives and the Producer Offset in late September.

After a decade or more of lobbying, the free-to-air networks and Foxtel were relieved of what they argued were onerous and anti-competitive Australian content quota requirements. The fixed quota requirements became genre agnostic; broadcasters can meet their annual quota of 250 points with any combination of genres.  

Additionally, after years of lobbying by SPA and the guilds for an increase to the 20 per cent television Producer Offset, to bring it in line with the feature film offset of 40 per cent, the government announced that instead it was going to ‘harmonise’ the two by making them both 30 per cent. Since then, the government has walked back some of that proposal, opting to leave the film offset at 40 per cent, but still proceeding with an increase to the TV offset to 30 per cent.

Theoretically, the move should generate an uptick for TV production, and potentially an increase in straight-to-streaming films like Sunburnt Christmas or Jen Peedom’s Tenzing Norgay bio-pic through the Obama’s Netflix deal. An optimistic outlook should point toward the potential for Australian producers to tap the cash-rich SVODs with Australian IP projects. 

In announcing the changes to the Producer Offset Communications and Arts Minister Paul Fletcher said: “The old approach of treating film and television differently no longer makes sense. Increasing the offset… 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…”

Of course, timing is everything and in this case the timing of the increase to the TV offset couldn’t be better.

Indeed, the irony in the global shutdown of the industry is that the studios and streaming platforms need original content more than ever. COVID lockdowns and more time at home has seen viewers content consumption skyrocket. New-entrant streamers such as AppleTV+, Disney+, NBC Universal’s Peacock, HBO Max, Acorn and Binge need to attract viewers to sign-up and subscribe by offering original content.

With the new 30 per cent Producer Offset, increased direct government agency funding and other incentives, the potential opportunity for Australian production companies and above-the-line content makers to benefit should be real. However, currently, the large global streamers operating in Australia are not obligated to commission any Australian content.

Whilst Stan has proven that having an offering of Australian content is more attractive for subscribers, with no legislative requirement for global streamers to commission originals, the potential for the so-called ‘production boom’ to be short lived is high. A shift in the exchange rate, global production ramping up in late 2021, and likely increases in incentives and stimulus packages in the USA and Europe are all potential threats to international productions choosing to shoot in Australia. This, combined with the recent introduction of regulation requiring streamers in Europe to have a minimum of 30 per cent local, discoverable content on their platforms will likely lead to production staying in those countries.

In a recent Green Paper, the Federal Government proposed global streamers operating in Australia, with revenues above $100 million, be obligated to commission and invest in original content. Whilst it is still unknown as to what form this might take, it’s likely to be a percentage of their total annual subscription revenue. Currently France requires a minimum of 16 per cent of revenue to be spent on local, discoverable content; Canada has proposed a requirement to invest in local programming and Germany requires Netflix and Amazon to invest in its film funding agency. In Australia, a requirement of 15 per cent of streamer’s subscription revenue would generate up to $250 million of investment in original content. With federal and state-based tax incentives and direct agency investment, a further $150 million of government investment could be triggered, bringing the total increase in production expenditure to $400 million on original Australian content.

This scenario is clearly fantastic for the smart producer and production company that has the skills, track record and capacity to develop projects of a scale that is globally competitive. However, the question arises as to how many large-scale Australian projects are likely to be produced in any one year, and therefore how many production companies will benefit? How will the small to mid-size production companies that have been the engine of content production for free-to-air and subscription TV over the last 40 years fair? It’s possible that many of these companies will have to merge or partner with larger production companies. The small production companies who were hardest hit by COVID will likely fold or need to quickly transition in to becoming contract producers. Limited commissions of original content might also impact the opportunities for Australian writers and directors if only a handful of originals are commissioned each year.

These concerns may be mitigated by the stabilisation of the government incentives for the next 5–7 years, leading to long-term investment by the international studios and streamers. Sustained growth could also incentivise state governments to increase capacity by investing in facilities such as studios, increasing direct investment in productions, and most importantly, in training. Capacity is as much about ensuring we have the depth of crews, producers, directors, writers and actors as it is in bricks-and-mortar facilities. International productions are required in some cases to invest in training, however there is the potential for the emerging and professional training pathways to be more sophisticated and better integrated with the film and TV educational institutions. A long-term view on this will be essential to ensuring the boom in production can be translated into a longer lasting growth in the screen sector. Exporting production services, as well as original Australian IP needs the kind of comprehensive strategic approach that future-focused-sectors – such as the creative industries – demand if they’re to be sustainable and truly take advantage of the increase in content expenditure that is likely to continue well in the future.

Meanwhile, for writers, producers and directors if we keep thinking ‘big’ and investing ‘big’ in project development we may well be able to ride both the short-term and long-term content boom and see Australia become a global screen production powerhouse of original content. 

An original version of this story appeared in IF Magazine #199. Subscribe to the magazine here.

  1. Hi Marcus, this neglects that Aussie talent agents are now behaving like US agents and demanding that drama projects be “green lit/fully financed” before letting their actors “read” scripts and/or demanding pay-or-play offers, which don’t fit with out funding structures. The tax offsets all require attachment of both local distributors and international sales. So if the local distributors don’t answer calls / emails or provide a means of submitting projects – so that local producers can, at the very least get Expressions of Interest – there is no where for Aussie drama producers to go. I’d love to submit to Netflix and Stan etc – but they don’t answer emails – even for top Aussie producers. Local broadcasters only want series – not features. You cite that Nicole K and Hemsworth are “producers” – however really these are not locally produced projects – at best they are star passion projects. But ultimately wouldn’t have been made without those “stars”. Even Bruna has spent the better part of the last decade in the USA etc – she’s made her career elsewhere and then came home – she wasn’t home grown.

    1. Hi LfO, you make a series of really good points. It’s good to learn about the issues that our local producers are experiencing and the issues that they’re facing as a result of the so-called ‘boom’ in international production. That was the certainly the intent of this opinion piece, was to get a conversation going, but also looking for the opportunities and the solutions we need to ensure our own above-the-line are not left on the outer. I’d be interested to know what mechanisms and policies could be introduced by the funding agencies and potentially in legislation to ensure we’re able to compete.

  2. Great feedback and thank you from an intending Producer of a “high octane” espionage feature film at polished script stage.

  3. This makes me sick!
    Films would cost a tenth to make if it weren’t for sycophantic hangers-on acting as ‘consultants’ and ‘producers’, accessing tax breaks and funding.
    Take the politics and talentless out of film!

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