Producers warn Oz could become a ‘dumping ground’ if quotas are removed

03 October, 2017 by Don Groves

Without government intervention Australia would become a dumping ground for content from bigger English-speaking markets, according to Screen Producers Australia.

Market forces alone can’t supply audiences with a diversity of quality Australian content, SPA contends, pointing to mini-series, which had an average budget of $1.36 million an hour in 2016, and telemovies which cost $1.53 million.


Against that, networks can buy an international drama for as little as $5,000 an hour.

In its submission to the Australian and Children’s Screen Content Review SPA warned: “Without government intervention, the market is likely to deliver sport, news and current affairs, reality television and infomercials.”

The body contrasted the growth in spending by the commercial networks on light entertainment and foreign drama since 2009-10 with a commensurate decrease in spending on local drama.

SPA restated its call to retain the local content requirements on the broadcasters and to apply the quotas to the ABS and SBS, while noting SBS’s proposal for a fully-funded Australian content quota.

In common with Free TV Australia, the producers group advocated harmonising the film and TV producer offsets at 40 per cent and removing the 65-episode cap on drama series eligible for the offset.

However it opposed Free TV’s push to enable production companies owned by broadcasters to qualify for the offset.

“Adopting a 40 per cent rate for Australian productions would greatly contribute to the growth and sustainability of the industry,” it said. “It would also remove the antiquated requirement for a theatrical release for films, which is a barrier to growth in the new streaming market.”

SPA also reiterated its long-standing plea for the government to close the loophole which allows commercial broadcasters to buy second-run, cheap New Zealand programs which qualify as Australian content.

In 2015, the networks screened 135 hours of Kiwi programming. Hypothetically, that would represent a loss to the Australian production industry of $184.6 million if that content were replaced by Australian miniseries.

In its submission SPA expressed concern about the idea of a flat 30 per cent for the producer, location and PDV offsets, which was raised in discussions with the review taskforce.

To try to quantify the potential impact, it looked at the 22 films produced in the 2015-16 financial year which each had an average budget of $9.4 million, of which the producer tax rebate contributed 31 per cent.

Lowering the Producer Offset to 30 per cent would result in a total contribution to budgets of 21 per cent and a drop in aggregate budgets to $186.3 million (from $206.8 million).

The result would be a reduction of three films, from 22 to 19, it forecasted, observing: “At current figures, 22 films a year is barely able to sustain the creative workforce on an ongoing basis.”

SPA also recommended:

  • The government ensure fair contracting in the market, potentially through UK-style legislated terms of trade.
  • The PDV Offset, which is limited to productions for a television commission or a cinema release, should be platform agnostic, which would thus include streaming content.
  • Lifting the minimum expenditure requirement on subscription broadcasters’’ predominantly drama channels to 20 per cent and extending the obligation from broadcast channels to associated video on demand services, as well as imposing specific obligations to documentary, children’s and arts content.
  • Ensuring Australians have greater access to Australian-produced drama, documentary and children’s content through an expenditure and promotion requirement on new market entrants calculated on the basis of revenue generated in Australia.
  • Concerned about the impact of Brexit on Australian-UK co-productions, SPA urges government to negotiate a co-production agreement with the European Union, potentially as part of the Australia-EU Free Trade Agreement.