Screen Australia and ACMA set out four reform models

Minister for Communications, Cyber Safety and the Arts Paul Fletcher. 

With the Federal Government having indicated its commitment to developing a ‘platform-neutral’ media framework, a paper by Screen Australia and the ACMA has set out four potential models for how local screen content could be regulated and incentivised into the future.

The options paper, released today, comes off the back of the ACCC’s Digital Platforms Inquiry. It is seen as a first step towards government determining future content obligations on free-to-air TV, and whether there should be local content requirements imposed on currently unregulated SVOD services like Netflix and Stan.

The release of the paper coincides with government, as an emergency measure in response to COVID-19, suspending local drama, children’s and documentary content quotas for 2020 – given almost all production has halted.

In announcing both the relief measure and the paper, Minister for Communications, Cyber Safety and the Arts Paul Fletcher said the COVID-19 crisis had made it even more evident that traditional FTA broadcasters cannot sustainably compete against new digital platforms.

“These arrangements threaten the sustainability of television broadcasters – and in turn the sustainability of the film and television content production sector,” he said.

“We need to re-emerge from COVID-19 with a regulatory framework suited to the twenty-first century that recognises today’s competitive landscape – where television broadcasters compete with streaming services and a myriad of other internet-based businesses – and which positions both the television sector and the content production sector for a sustainable future.”

In this sense, consultation on the Screen Australia and ACMA options paper will be fast-tracked. For the next eight weeks, the government will invite formal submissions and will hold consultation with key stakeholders, including ministerial roundtables.

While options paper makes no formal recommendations as such, it does argue that if government wants to sustain the economic and cultural benefits delivered by the screen sector, urgent reform that reflects the contemporary context is required.

It proposes that heavily regulating FTA networks, who are under severe commercial pressure, while allowing the booming streaming sector to remain unregulated, will not allow for a level playing field. A platform neutral funding model and a modern, consistent approach to offsets – Producer, Location and PDV – could assist Australian content to be more competitive.

The four models 

The first model explored by Screen Australia and ACMA is the maintenance of the status quo – to prevail if no future regulatory option can be implemented. It’s an option they posit is unlikely to lead to innovation or longer-term growth.

“If current regulatory and funding arrangements remain unchanged, in our view the ecosystem that supports Australian content will contract. In response, production levels may fall to a new ‘floor’, cheaper productions may be used to fill quotas and international production may leave Australia with a downward impact on jobs in the sector,” the paper states.

A second model proposes minimal change, designed to simply “fine-tune and modernise” existing arrangements.

Under this model, streaming platforms would be asked to set voluntary content investment undertakings with ACMA.

For the broadcasters, quota and sub-quota requirements would be revised and more flexibly applied, and requirement for pre-school (P) programming removed. For Foxtel, expenditure requirements would be revised, and there would be flexibility to acquit obligations across program genres.

In terms of offsets, there’d be a flat a single flat rate applying to feature length films and children’s content, regardless of platform. Other offset rates would be unchanged.

Model three proposes significant reform, designed to “establish platform-neutral, future facing obligations and incentives that take into account individual platform offerings and audience engagement.”

It would see all commercial content service providers, including subscription services, invest a percentage of revenue into new Australian content. This would be either through content available on their Australian services or an equivalent contribution to a new Australian Production Fund. Alternatively, services could negotiate individual Australian content investment plans in line with expectations set by the ACMA.

Under this third model, ABC and SBS would be allocated funding for children’s programming, in order to counterbalance the likely reduction in children’s content on commercial networks.

Further, the Producer, Location and PDV offsets would be levelled at a single rate across all platforms, with modified thresholds. There would be the potential for a ‘cultural uplift’ of features and children’s content.

The fourth option? Complete deregulation of the sector, with all content obligations removed. Screen Australia’s direct funding and the offsets would be scrapped, or offsets provided at a single rate to projects of scale which attract significant market investment.

Industry response

Australian Children’s Television Foundation (ACTF) CEO Jenny Buckland tells IF that in essence, only options two or three – minimal or significant reform – are actually viable. Options one and four please no one and would likely lead to the dismantling of the industry.

“So we really need to interrogate options 2 and 3 now, but also take into account the massive disruption of 2020 and how we get our productive industry back.”

The Media, Entertainment and Arts Alliance (MEAA) has stated that while some of the proposals in the four models should be ruled out, such as total deregulation, the options paper presents a range of viable positions. The MEAA is in favour of platform neutral regulation, with obligations that are “meaningful” rather than all platforms subjected to a potentially diluted regime.

CEO Paul Murphy said: “The sector has been pummelled by the coronavirus. As we look to the future, one of the most significant pathways to resuming production and getting our creative workforce back in business will be strong, fit-for-purpose content regulations that apply to all platforms in a balanced manner.”

Seven, Nine and 10, as well as Screen Producers Australia (SPA) have also welcomed the release of the paper. However, SPA has slammed the government’s temporary suspension of content quotas, and has separately called for the government to implement a $1 billion screen content fund to assist with the fallout of COVID-19 on the sector.

“An immediate crisis is unfolding in the production sector, and bold and decisive Government intervention is required to secure the future of the screen industry and harness its ability to gear up and return to making great local content as soon as possible,” said CEO Matthew Deaner.

Read the full paper and make a submission here.