SPA calls for broadcasters to invest more in local content

31 May, 2015 by Press Release

Screen Producers Australia CEO Matthew Deaner has argued that any reduction in free-to-air broadcasters' license fees must see a commensurate increase in investment in diverse local content.

“There is no denying the crucial role that free-to-air commercial television plays in underwriting the production of local content. Their level of investment is unparalleled when compared to other platforms. We also recognise that the free-to-air broadcasters are subject to a regulatory regime which does not apply to emerging platforms in the video on demand space,” Deaner said.


“However, the investment in drama, documentary and children’s production by commercial free-to-air television is around $160 million annually, less than half that spent by these broadcasters on sports.

“Screen Producers Australia is supportive of a reduction in licence fee requirements, given the increased pressure upon commercial free-to-air television particularly from video on demand but only if these reductions did not free up revenue that then facilitated a sports rights arms race at the expense of local content diversity – diversity that is clearly in the public interest. After all, there is still an obligation that commercial free-to-air television should continue to carry given its privileged and protected position in the market.”

Deaner noted that a recent statement by Free TV Australia supported this view, with Free TV Australia agreeing that ‘many components of the regulatory regime are important, including obligations and commitments around local content and sports.’

“From anti-siphoning to sub-quota obligations, there has historically been a delicate balance of Government regulation and interventions to ensure that commercial free-to-air television investments in local production are wide ranging, across low cost per hour genres like news and current affairs to higher cost content like documentaries and drama,” Mr Deaner said

“In a challenging advertising market and with increased pressure, it is understandable that the industry will need to reflect on the regulatory regime going forward and to consider in what areas there may need to be more flexibility. However, this must be done with caution so as not to upset the careful balance that has ensured that there has been significant investment in local content by commercial free to air networks and great Australian stories to be enjoyed by Australian audiences.”

Deaner said that in Australia, like many other markets, there has been a great deal of speculation about the commissioning opportunities from video on demand services such as Netflix.

“However, their commissions remain largely focused on North America. Whilst this may broaden in time, the contribution made to local production by video on demand services is insignificant when compared to the more than $2 billion spent by free-to-air commercial and subscription television.”

The most recent data reported by Free TV Australia and Australian Communications and Media Authority shows that expenditure on local content is increasing on commercial free-to-air television. However, of this, just one percent of local production is spent on documentaries and nine percent on drama. By comparison, 28% is spent on sports.

“In real dollar terms, the level of annual expenditure by commercial free-to-air television in sports increased by 23% whilst expenditure in drama fell by 6% between 2010/11 to 2012/13,” Mr Deaner said.

“It’s clear that sports rights, both the coverage and halo effect, has proven to be critical in the free-to-air broadcasting business model, but many in the industry are suggesting the cost is becoming almost untenable. As the major sports codes continue to negotiate upwards, we must ensure that audiences don’t lose out on access to new local drama, documentary and children’s programing.

“The Gillard Government gifted the commercial free-to-air sector stronger protections and greater regulatory flexibility in their 2013 reforms but they missed an opportunity to marry the licence fee reductions to an obligation to invest in diverse local content. As the Abbott Government considers further relaxations and reductions we urge them to assess the wider impacts.

“The independent production sector also contributes a positive return to the Australian economy by employing thousands of Australians and returning millions in trade to the economy through investment in content, businesses and format sales. Our content is internationally respected, delivering far-reaching outcomes from tourism to diplomacy. Government interventions in the screen industry are critical to maintaining these local and international cultural and commercial objectives."








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