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When Will Netflix Start Investing In Australian Content Feature
  • When will Netflix start investing in Australian content?

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    Posted on: 07/10/2016

    With the announcement that Presto will soon shut-up screen, film critic and writer Lauren Carroll Harris wonders when overseas streaming services will start contributing to Australian screen content.

    The imminent closure of Presto, Foxtel and Seven West Media’s movie streaming service, has brought the spotlight back to the future of Australia’s rapidly shifting video-on-demand market. But Presto’s demise within the streaming wars aside, there are bigger issues at stake for Australian film culture: namely, when local VOD providers will start investing directly and consistently in the industry they are changing by funding their own new, original Australian film and television.

    With gains in sales, users and profits, VOD remains a small yet growing market in Australia, continuing to change how local film and television is distributed and how production funds are recouped. But over 18 months since Netflix’s official arrival down under, rumblings are building that the service – the largest of the VOD sites available in Australia – isn’t giving enough back to the local industry. VOD services like Netflix are not under the same mandates as their broadcast counterparts, a wasted opportunity that threatens to undermine long-term investment in the local screen industry and lags behind a wave of global momentum toward incentivising and obligating VOS investment in domestic sectors.

    In January 2016, Netflix’s chief content officer Ted Sarandos said that by the end of the year the service would have spent US$6 billion on content, including acquisition and original programming. In June he revealed his plan to spend even more. But none of that has gone to original Australian productions, and a search of Netflix’s library this week, comprised of around 1500 offerings, showed 26 Australian feature films and 18 television programs and comedy specials.

    Netflix joins Channel Nine and Fairfax’s venture Stan as the main players in a streaming landscape that is fluctuating all the time: Presto will be replaced with a Foxtel-only service soon, and Quickflix and Dendy Direct round out the options on offer. Of these, only Stan has produced original Australian content. Forthcoming Australian thriller called The Second will stream on Stan at the same time as it screens in select theatres. The site already screens its own new local series Wolf Creek and No Activity. However, Stan is not funding The Second, whose $1million budget is fully supported by Screen Queensland.

    Wolf Creek Actress Stan Steraming Tv Show BlogLucy Fry and John Jarratt in Stan's Wolf Creek mini-series

    The lag in local investment is particularly stark when compared to other regions. The European Commission, for instance, is discussing ways to compel VOD services to provide at least 20% of European content in their libraries, to help create a level playing field with the rest of Europe’s audiovisual media landscape, and to encourage the development of the industry; vitally, it also wants Netflix to shift its search algorithms to ensure European content is as easy to discover as US titles.

    Locally, the Screen Producers of Australia (SPA) called several months ago for government and industry to have a conversation about the obligations of VOD platforms like Netflix to start funding original Australian content  –  a call that hasn’t yet been met with a response. According to Matthew Deaner, the CEO of SPA, the small local industry is particularly vulnerable to disruptions. “Businesses come in and restructure the local market,” he told me. “There hasn’t been a discussion by government in Australia about where this industry is headed. If you are in this market and providing audiovisual content how are you going to contribute in some way to Australia and pay your fare share in a level playing field?”

    Specifically, introducing a quota of Australian content in VOD catalogues, committing to producing new Australian content and providing rebates for original content form the main suggestions SPA wants discussed to create an equitable playing field for Australian producers in a rapidly changing media landscape.

    These three measures would help more fully bring media regulation into the digital era and build a long-term partnership between the new VOD players and local producers. “[Otherwise] you get very erratic investment in the industry,” says Deaner, “and if you’re trying to establish a long-term industry, erratic investment is a big problem.” In that sense, the issue of local investment is not just one of obligation, but of creating a structure to stimulate the newer, digital parts of the media landscape to the advantage of all involved.

    No Activity Stan Streaming Australian Comedy BlogPatrick Brammall and Darren Gilshenan in Stan's No Activity

    A local content quota and commitment to invest production funds in new programs would follow similar precedents in broadcast television. Commercial free-to-air television stations must broadcast at least 55 per cent Australian programming between 6am and midnight, with specific sub-quotas for drama, children’s shows and documentaries. These quotas do not apply to subscription channels broadcasting drama programs, which instead must invest 10% of their total program expenditure on creating new local dramas. The ABC and SBS are not subject to either of these measures, rather they are both required to broadcast culturally diverse and multicultural programming.

    The blurry crux of the issue is whether the public-interest purpose of the local content conditions – to develop and reflect a “sense of Australian identity, character and cultural diversity, by supporting the community’s continued access to television programs produced under Australian creative control”, according to the Australian Media Communications Authority – applies to other distribution mediums apart from television, that is, whether the principle holds in a digital era.

    It’s currently unclear whether the precedents from commercial and pay television can and should apply to the digital players. The categorical difference between VOD platforms (internet TV) and traditional stations (‘linear TV’) is that the latter are broadcasters whose licenses depend on meeting legislated investments in the local industry – obligations that don’t apply to streaming portals, despite Netflix CEO’s Reed Hastings description of his site as an “internet television network”.

    It’s not just screen producers who see the benefits of investment. Queensland Premier and Minister for Arts Annastacia Palaszczuk recently hosted a reception with the heads of major studios in America, in an attempt to lure them to shoot films and series in Queensland. “We are also looking at films with Stan, shows with Netflix,” she said in July.  A spokesperson from the Premier’s office told me it is too early to say if there would be any new local productions among the slate, or if they would be overseas productions shot locally, along the lines of Disney’s Thor: Ragnarok currently shooting on the Gold Coast. Likewise, Netflix has not commented.

    The situation may change again when OzFlix.tv enters the market – a planned VOD platform featuring only Australian films. Though it follows a pay-per-view model, rather than the Netflix-style ‘subscribe for all access’ version, OzFlix’s co-founder and CEO Ron Brown told me that the service is planning to commission documentary/factual specials next year, in the form of both one-offs and series.

    Given the current popularity and quality of long-form Australian storytelling, like Foxtel’s recent mystery-drama The Kettering Incident, original local content could be a wise area of investment for a burgeoning media company like Netflix, which Deaner sees as a partner in the local screen industry.

    “It could be a good commercial decision, too, because people will connect with that content,” said Deaner. “This is a really valuable opportunity for Netflix. They can invest in creating great Australian content and it can add to the library of rich content. It’s a credit to Netflix that they are interested in the market.”

    - Lauren Carroll Harris

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