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Some $1.17 billion was spent on drama production in Australia in the last financial year – the second highest year on record and more than 50 per cent up on the previous year – driven by all-time high expenditure on local content and significantly bolstered levels of foreign spend.
That’s according Screen Australia’s annual Drama Report, released today, which details expenditure on all local and foreign drama production, across film, TV, and online, as well in post-production, digital and visual effects (PDV).
A record $768 million was spent on local projects in 2018-19, driven by a record $334 million expenditure in TV drama, as well as a five-year high spend on features at $229 million. Children’s TV drama is also at a 10 year high at $95 million across 15 projects; a 95 per cent increase on last year.
Significantly, the spend on foreign shoot and PDV-titles is up three times on last year at $410 million. This includes $297 million spent on titles that shot here like Dora and the Lost City of Gold, Monster Problems and Godzilla vs. Kong and $113 million on PDV only titles.
Screen Australia chief operating officer Michael Brealey tells IF he is particularly pleased to see expenditure up across local features and television.
He attributes the record TV drama spend largely to the commercial networks bolstering their expenditure, as well as the ABC maintaining a strong commitment to local drama in the face of significant financial pressures.
“Australian audiences still want to have Australian stories, and the commissioners know that and are playing to that need.”
Given market forces, as well as the commissioning strategies and commercial fortunes of the broadcasters, Brealey posits it is difficult to forecast or guarantee such expenditure can be maintained steadily into the future.
However, he says: “What we do know is that we’ve got the regulatory safety net of quotas. The ABC has a charter, SBS have a charter and they’re both committed to local [content]. All of these things provide a pretty solid foundation for the continuation of a certain level of spend.”
Some 37 TV dramas went into production last financial year including Upright, Stateless, Seachange, The Hunting and The Secret She Keeps. Total hours increased to 441, attributed to the production of longer mini-series such as the 10 ep Les Norton and My Life Is Murder. Collectively, titles had budgets of $335 million, and the average cost-per hour sits at a high of $760,000.
Brealey attributes rising costs to both inflationary pressures and the trend towards premium drama. However, he notes that series like ABC’s Total Control, which screened at the Toronto International Film Festival, often have potential to travel. Notably, foreign investment in Australian television and online drama is at an 18 year high; predominantly from distributors.
‘The Hunting’.The largest contribution of finance came from the commercial broadcasters, while the ABC made the largest contribution by a single broadcaster. Finance from subscription television broadcasters (excluding SVODs), like Foxtel, declined for the third year to reach a five-year low.
In children’s TV, 15 projects went into production, including two official co-pros. Significantly, seven of the projects were live-action, with 61 hours produced, the highest level since 2012-13.
Some of the boost in children’s spend may be attributed to the fact that 2018 also marked the beginning of a new three year cycle in the commercial broadcaster’s first release children’s drama requirements; Nine had three titles in production including Alice Miranda Friends Forever, Alien TV and Dumbotz, while Seven had Drop Dead Weird and Kitty is Not A Cat, and Network 10 Random & Whacky. Foxtel also financed Monster Beach.
However, the ABC commissioned the bulk of children’s slate, including Bluey, Hardball, Itch, The Unlisted, 100% Wolf and Mustangs FC (Season 2). NITV was the first release broadcaster for the second series of Little J & Big Cuz, also financed by the ABC.
Twenty-eight local digital projects went into production last year, including ABC’s Content and Sarah’s Channel, SBS’s Robbie Hood, Stan’s Bloom and Australian-NZ co-pro The New Legends of Monkey (series 2) for Netflix.
While budgets remained steady at $53 million, spend was down 25 per cent on last year at $40 million.
Notably, investment in local production from Australian and foreign SVOD dropped to $19 million from $30 million last year, though total budget, hours and the number of titles remained steady.
At present, streaming services have no local content obligations – unlike commercial broadcasters. That fact is bugbear for both the networks (who call for a level playing field) and content creators alike, with the guilds forming the Make It Australian campaign two years ago to lobby the government to see obligations placed on Netflix and its ilk.
Free TV Australia said the report showed there was a need to address the sustainability of the content regulatory framework.
“While our competitors are free to respond to changes in audience demand, we are still operating under an onerous and very restrictive regulatory framework that was created in the 1990s and doesn’t acknowledge that viewers have moved on,” said CEO Bridget Fair.
“The production industry in Australia is thriving and there is no shortage of high quality Australian content available for local audiences. Free TV broadcasters need additional flexibility to adapt to modern viewing habits and we urge the government to modernise the framework to enable broadcasters to continue delivering the content that audiences want to watch.”
For Screen Producers Australia, one of the most striking facets of the report was the fact that the number of titles increased for online compared to the previous year, but that expenditure went down.
CEO Matthew Deaner said: “Given the growth in online streaming platforms, this is where the real opportunity lies to take Australian stories to the world and gain from all the cultural and export benefits that this brings, but only if we get the regulatory settings right.”
In film, 33 features went into production, including three official co-productions. The five year high in expenditure was driven by titles such as Peter Rabbit 2, The Dry, Miss Fisher and the Crypt of Tears, as well as three co-productions, Dirt Music (UK), Escape from Pretoria (UK) and Buckley’s Chance (Canada).
Collectively, the 33 films had total budgets of $316 million. Seventy-nine per cent of all films were made for less than $10 million, and 2018-19 saw fewer titles in upper and lower budget ranges: less than 6 per cent of films were made under $1 million (20 per cent in 2017/18), and 21 per cent for over $10 million (25 per cent in 2017/18).
While foreign investors provided the majority of finance for feature films ($115 million for 17 titles), finance from government sources is at a 10 year high at $46 million; $24 million from Screen Australia for 20 films and $22 million from the state agencies for 25.
“We understand that the feature film marketplace is extremely challenging and it’s really difficult to raise finance. It’s understandable that you’re seeing a lot of productions that are focused in that mid-budget range, mid-to-low – focused on Australian stories specifically – coming to us because it’s really difficult to raise international finance,” Brealey says.
The agency has identified a potential need to increase or focus the support it gives filmmakers in finding alternative finance streams.
“You might be an expert filmmaker, but that accessing finance piece is another skill set. As an agency, we should be helping people to identify where they need to go, what they need to talk about, what deal points they need to be making. We’re very much aware of that, we need to figure out how we do it with the sector.”
The increase in foreign expenditure is attributed in the report to the introduction of the Location Incentive Program, a lowered dollar, the introduction of PDV rebates in NSW and Queensland, and the Federal Government allowing series made for streaming platforms to be eligible for the Location and PDV Offsets.
Whether levels of foreign spend can remain stable is questionable: it was revealed in Senate Estimates last week that there is just $18 million remaining in the $140 million Location Incentive Program, despite the fact that the fund is due to run until 2023.
However, Brealey points out that while the government has “front-loaded” the scheme, many of the projects that have been funded so far, such as Thor: Love and Thunder and the recently announced The Alchemyst, will not start production until late 2020 or 2021, so there should be some spread of production over time.
As is typical, New South Wales accounted for the greatest share of expenditure in Australia with $369 million (31 per cent), while Victoria captured 30 per cent; a record high of $350 million. Due to bolstered levels of foreign production, Queensland drew 24 per cent at $287 million, while South Australia captured a record $110 million (9 per cent) due to PDV work.
Read the full report.