Australia last week took another step towards imposing Australian content obligations on streaming services. A small step.
The government’s Revive national cultural policy included a commitment to 'introduce requirements for Australian screen content on streaming platforms'. There’s not much more in the way of detail, but there was a pledge to introduce these obligations in the third quarter of this year, to take effect from 1 July next year. As we wait for the consultation on the design of the new scheme, it’s worth recalling where the previous Coalition government got to on this issue, and how that differs from the Australian content rules that apply to free-to-air commercial TV and to pay TV.
First, the scheme with the longest history is of course the Australian content rules for commercial TV. In 2020 there was a big change in the obligations placed on free TV for both Australian content and children’s programs. The new Australian Content and Children’s Television Standards brought an easing of the requirements so that broadcasters now need to reach 250 points annually of first-release Australian content in a points scheme that values some genres (for example, high-budget feature films) more than others. Previously, there were more onerous sub-quotas that applied separately to adult drama and children’s programs. And this is in addition to the overall transmission quota of 55% Australian programs from 6am to midnight, set out in the Broadcasting Services Act (BSA).
In contrast to these broadcast quotas, the pay TV industry (meaning Foxtel and its drama channels) needs to make a financial investment in Australian content. Under the New Eligible Drama Expenditure (NEDE) Scheme in the BSA, an amount equal to 10% of the total program expenditure of each drama channel needs to be invested in eligible Australian drama programs. The Coalition planned to lower the pay TV expenditure rate to 5%, but this never happened.
Late in its last term, and off the back of previous work by the ACMA and Screen Australia, the Coalition issued a discussion paper that set out the basic design of a proposed new scheme for streaming services. Like the NEDE scheme for pay TV, it was based on financial investment in new Australian programs, rather than content quotas. And like the planned changes to the NEDE scheme, the threshold investment rate was 5% (this time, of Australian revenue). But unlike both the pay TV and commercial TV schemes – which are enforced through licence conditions – the only hard regulatory obligation was a requirement to report on investment. An enforceable 5% levy would only apply if a streaming service was designated (there’s that word again) as a ‘Tier 2’ service because it hadn’t reported or because its investment levels hadn’t reached 5%.
At the time the Coalition left government, the crucial and unknown element was the investment level that would be imposed on streamers who were moved into Tier 2. The then government stated it would not necessarily be 5%, leaving the question open. And this is exactly the point at which the ALP government has now arrived. Although the design of the scheme overall might not look anything like that proposed by the Coalition, the key question of how much streaming services will be required to invest is open for debate. The production sector is lobbying for a 20% levy, showing there will be wildly varying views on where to set the threshold, while the commercial TV sector is wary of the increased costs in acquiring Australian content.
While the rate of investment is probably the most important policy issue, the Coalition’s 2022 consultation paper showed there’s several other design elements that need addressing. More on that from us when we hear more from the government.
Derek Wilding, CMT Co-Director