As TV times change, global streaming giants must not shun Australian content

Not so long ago, television in Australia was vastly different from today.

There was no SBS. ABC, Seven, Nine and Ten had one channel each.  

First release movies on TV were a rare treat, generally reserved for the prime 8:30 pm Sunday night viewing slot.

There was no catch-up TV. Shows came on at the scheduled time; you either watched at that time or you missed the show.

There were no smart TVs, there were no streaming services and the idea of binge watching a series was unheard of.

Much has changed. SBS started in 1978. Pay TV came along in 1995. In 2001, we got digital television, and the networks became multi-channel. 

But nothing has matched the change seen in the last few years, with the arrival of video delivered over the internet, and the explosion of streaming video.  

Streaming video on demand (SVOD) providers like Netflix, Amazon and Disney+ have built a huge market in a very short time, in Australia and globally. The pandemic has further boosted their growth.

As recently as 2014, barely 1 per cent of Australians subscribed to a streaming service.

Today, according to Deloitte’s latest media consumer survey, reported here in The Australian last week, four out of five Australian households now have at least one paid digital entertainment subscription—and most have more than two. An estimated 70% of Australians now subscribe to at least one SVOD service. 

While Australian owned businesses like Stan, Binge and Kayo have an important presence in the Australian SVOD market, the giant foreign owned providers Netflix, Disney+ and Amazon Prime Video dominate.

Netflix has 6 million subscriptions, Amazon Prime Video 2.9 million, Disney+ 2.6 million and Stan 2.4 million.

Meanwhile research from Kantar found that 1.4 million Australian households added at least one new video subscription service in the three months to June 2021. Netflix made up almost 22 per cent of new subscriptions; Amazon Prime Video and Disney+ were the next most common new subscriptions.

In other words, as the Australian SVOD market grows, the giant global players are maintaining and even strengthening their position.

More choice for Australian consumers is a good thing.

But of course the SVODs are competing for eyeballs and revenue with traditional Australian owned television networks, which raises the question of whether that competition is on fair terms.

This is a question the Morrison Government examines in our recently issued Green Paper on Media Reform.

A key principle -- as the Australian Competition and Consumer Commission recommended in its Final Report for the Digital Platforms Inquiry -- is the harmonisation of media regulation. The goal is that businesses competing to serve the same customers face, as much as possible, the same regulatory requirements.

That is certainly not the case when it comes to Australian content requirements.

Holders of free to air and subscription television licences-- such as Seven, Nine, Ten and Foxtel -- by law must show minimum amounts of Australian content. The global SVODs face no such requirement.

With each passing year, as the global SVODs build more subscribers in Australia, and increase the revenue they are taking out of the local market, this looks more anomalous.

It also raises significant cultural policy issues. If we think it is important that at least some of what Australian audiences see on Seven or Nine or Ten or Foxtel is Australian content, why is it not equally important that they can see Australian content on SVOD services?

And it raises important questions about the Australian screen production industry.  Its traditional market, free to air television, is flat or declining, but the SVOD sector is booming.  Do the SVODs have sufficient incentive to buy shows from Australian producers? 

As a first step, last year I requested Australia’s four largest SVODs to report to the Australian Communications and Media Authority (ACMA) on their investment in Australian content.

ACMA recently released aggregated data which showed that four providers—Amazon Prime Video, Disney, Netflix and Stan—spent over $150 million on Australian programs in 2019-20.  

But more may be required. The Green Paper proposed a formal Australian content spend requirement on the global SVODs. Right now we are examining the responses to this proposal received through our consultation process.

We do not want to overburden a young, fast growing sector. But the latest numbers on the SVODs’ audience numbers and expenditure suggest that is not a high risk.  

Television has changed beyond recognition in the past forty years. Our media rules need to keep up with that change -- and that work is a focus for the Morrison Government.

A version of this article appeared in The Australian on 27 September 2021