AustrAliAn screensAustrAliAn stories

AustrAliAn screens AustrAliAn stories

Frequently Asked Questions Why is Australian content so important?Australian audiences expect and demand access to quality original local stories that reflect and contribute to the development of national identity, character and diversity.l Australian content brings us together as a community

and as a nation Images on television help define who we are, shape our voice,

bring us together and showcase our talents to the world. l Australian content is important for the strength of our

democracy Content informs us, shapes our views and assists us to

participate in the important events of our nation. It enables our voice to be heard in the discussion of how we want to be governed, the values we hold and where we head as a nation. We are not just talking here about the nightly news. Dramas such as Offspring and Tangle add to the national discussion on the controversial issues of the day such as euthanasia, work rights and gay marriage. Without this continued voice, our democracy will be poorer.

l Australian content enables us to express ourselves as Australians

As performers, writers, editors directors and producers we represent Australia’s collective need to express our unique perspective to each other and the world. Before regulations were put in place we were subject to British and US television and did not get a chance to define ourselves and our worldview. Take the ability to express ourselves away and we all lose.

What did the Government’s Convergence Review Committee recommend?The government’s own Convergence Review Committee has warned that the increased choice offered by multi-channels is reducing the proportion of Australian content shown on commercial free-to-air networks and argued that there needs to be a greater contribution from free-to-air broadcasters. The committee recommended a 50 per cent increase in levels of Australian drama, documentaries and children’s television.

What is the industry calling for?The Australian production industry is united in calling for meaningful implementation of regulation for Australian content as recommended in the government’s own Convergence Review Recommendation 18.

Recommendation 18 states “that the following transitional arrangements should apply for commercial free-to-air and subscription television broadcasters until they are included within the uniform content scheme: a. For commercial free-to-air television broadcasters: i. The existing 55 per cent transmission quota that is

imposed on each broadcaster’s primary channel should continue.

ii. There should be a 50 per cent increase in Australian sub-quota content obligations for drama, documentary and children’s content to reflect the two additional channels each broadcaster currently operates that do not attract any quotas.

iii. The broadcasters should be able to count Australian content shown on their digital multichannels towards meeting the expanded sub-quota obligations.

iv. The existing 80 per cent quota for Australian-produced advertising on each broadcaster’s primary channel should be maintained.

b. For subscription television providers: i. The 10 per cent minimum expenditure requirement on

eligible drama channels should be maintained. ii. A 10 per cent minimum expenditure requirement

should be placed on children’s and documentary channels.”

What new rules has the Government introduced?In November 2012, following a review of the media and communications environment known as the Convergence Review, the Federal Government introduced new Australian content rules for the free-to-air multi-channels (including Go, Gem, 7mate, 7Two, One and Eleven). These include:l a local content requirement for each commercial

multichannel of 730 hours in 2013, increasing to 1095 hours in 2014 and to 1460 hours in 2015;

l an incentive for first-release drama by allowing an hour of first release drama premiered on a digital multichannel to count for two hours under the transmission hours requirement for multi-channels; and

l introducing greater flexibility into the current arrangements for sub-quotas.

These new rules have been introduced in exchange for a $142 million a year reduction in licence fees for the commercial television networks.

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AustrAliAn screens AustrAliAn stories

New rules to support the screening of Australian content sound great – so what’s wrong with them?The government claims that the new rules will “ensure quality Australian content stays on Australian television.” They do nothing of the sort. The minimum hours requirement will allow the commercial networks to show less Australian content than they are showing at the moment. The commercial networks transmitted more Australian content in 2011 than they will be required to in the final year of the government’s scheme as demonstrated in the graph below:

What’s more the minimum hours requirement can be met by screening news, sport, reality TV, repeats of old Australian drama, even cheap New Zealand programming which qualifies as Australian under treaty arrangement.

The proposed regulation for Australian content on the multi-channels is also very low in terms of the overall hours. The proposed regulation will only require the networks to screen local content for 12% of the total broadcast hours across their multi-channels between 6am and midnight. This is compared to the 55% requirement for Australian content during the same period on the primary channels as can be seen below:

What will be the effect of the incentive for first-release drama?Put simply, the incentive whereby one hour of local drama will equal two hours of other Australian content will be ineffective because of the high cost of making drama in Australia. It costs a lot more to make one hour of Australian drama than to simply buy an hour of drama from the US. A TV series costing several million dollars per hour to produce in the US is sold to an Australian broadcaster for between $30,0000–$100,000 an hour. In contrast, an Australian series can cost between $600,000 to $1 million dollars an hour, to which the Australian broadcaster contribute around $450,000 per hour on average. Receiving double the points just isn’t enough to encourage the networks to produce new drama.

What will the greater flexibility for the sub-quotas mean?There has been no clarity around this announcement but it is highly likely that the Minister for Communications is contemplating allowing the commercial networks to spread their ‘first run’ original content requirements from their primary channel across all of their digital channels.

This will dilute the presence of Australian productions on the main channel and lead to the Australian content being ghettoised on the multi-channels. It could also lead to lower levels of investment in Australian content. This is because the commercial networks are unlikely to commission the quality productions with high production values for the multi-channels which charge lower advertising rates. If this is a consequence of the decision, it will lead to a downturn in the production industry.

So why are the networks receiving a licence fee cut?The government claims that “without adjustments to the current rules, the industry could be forced to drop quality Australian content as cost-cutting bites into programming.” The commercial free-to-air television sector is under pressure from the structural changes taking place in the media due to the convergence of content delivery platforms and changing consumer habits. It is also under pressure due to excessive debt levels.

The industry strongly supports moves to ensure a healthy, financially viable television industry. But assuming that cash in broadcasters’ pockets will translate into new Australian stories is demonstrably and historically false. For decades the commercial networks have only just shown the minimum first run Australian content required. The rules outlined above are highly unlikely to lead to any additional Australian content to be screened on the multi-channels.

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AustrAliAn screens AustrAliAn stories

But don’t the networks already do enough?There is no doubt that the commercial television networks do invest in a lot of Australian content. Free-to-air claimed $1.23bn in 2010-11. But these numbers include sport, news, and all of the network infrastructure costs. Only a fraction of this investment is dedicated to drama, a smaller amount to documentary and even less is provided for children’s content.

We understand that broadcasters are commercial entities and private equity owners don’t like the idea of spending more than they have to on the riskier forms of Australian programming. But commercial free-to-air businesses remain strong. There are only three of them with a fourth network having recently been ruled out. They have a combined annual revenue of between $3.5 billion and $4bn and advertising earnings are projected to rise to $3.53bn in 2016. The free-to-air multi-channels are raking in new dollars - in their launch year an additional $110 million - and unlike in most other countries, they didn’t have to pay for the spectrum they are using.

They’ve already received a licence fee rebate of $250m in the past few years and in a tight budget they even received another $53.5m from the government to move off the spectrum they had already agreed to vacate.

The broadcasters have first dibs at sports rights to make profitable Australian sport content courtesy of regulation. So is it really a problem that another form of regulation might

require minimal increased investment in content that is a little riskier than sport? Remember, too, that broadcasters are still subsidised through tax incentives and direct investment for making this programming.

The networks benefit from a uniquely protected oligopolistic position. They are given that protection for cultural, not commercial, reasons. These regulations are supposed to serve the Australian public. The token Australian content transmission hours and financially unrealistic incentives for the multi-channels do not represent the kind of meaningful regulation the Australian public deserves in return for the benefits given to the commercial networks

What can I do?The most important thing you can do is be engaged in the discussion, talk to your peers about the issues and keep in touch with your representative guild, association or union. You can do this in the following ways:

1 Like us on Facebook at www.facebook.com/AusScreensAusStories

2 Follow the campaign on twitter @AusScreens and join the #converg conversation The Department of Broadband, Communications and the Digital Economy have conveniently created the #converg hashtag to help them listen to our views. Tell them that you don’t support government’s decision to give the commercial networks a free ride and let them know that Australian content means the world to us.

3 Sign the petition at http://www.communityrun.org/ Sign our online petition which calls on the Government and all members of parliament to act in the interests of Australian audiences to ensure both the ongoing viability of the Australian content industry and increased levels of Australian content in a converged world.

4 Write to your local member Send a message expressing your support for Australian stories on our screens directly to your local member of parliament. Not sure who to send it to? You can search for your local member by name, postcode or electorate via this website: www.aph.gov.au/Senators_and_Members/Members Click on their name to find their email details.

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The screen industry is calling for more local programs, such as Offspring (pictured)

AustrAliAn screens AustrAliAn stories

Other Background Questions

What is the Convergence Review?The Convergence Review is a review established by the Australian Government to examine the policy and regulatory frameworks that apply to the converged media and communications landscape in Australia. The Convergence Review Committee was chaired by Glen Boreham with Malcolm Long and Louise McElvogue as committee members. The committee handed its final report to government on 30 March 2012, which can be downloaded here: http://www.dbcde.gov.au/digital_economy/convergence_review

What is convergence?Convergence is the short hand way of saying that television, mobile phones and the Internet are coming together in the way they function. For example, TV shows like Underbelly or the nightly news can now be watched on television, phones and online. The digital technology associated with convergence also means that we can interact with content - think tweeting on your mobile while watching Q&A on the ABC’s iview, or playing the children’s TV show Me & My Monsters game online. An important aspect of convergence is that the content we want can now be delivered to us in an increasing number of ways – via the air, telephone cables, optic fibre networks and satellites.

Why does convergence matter?Convergence fundamentally changes the environment for the continued production and screening of Australian content.For the past 50 years, our TV screens have been filled with successful Australian dramas (Neighbours, Home & Away and Packed to the Rafters), children’s TV (Dance Academy, HI 5 and the Saddle Club), documentaries (Rats in the Ranks, The Leyland Brothers and Border Security), sports, news, gameshows, lifestyle programs and reality TV. More recently on subscription television there have been significant levels of Australian content like Tangle, Love My Way and Stupid, Stupid Man.

The reason we get to see our own stories, our own voices and even our own news is that the Government has regulated the television networks to ensure that they produce and program this content. Without these regulations the networks wouldn’t screen anywhere near the same level that they do - it just wouldn’t make economic sense. Buying in a television program like Doctor Who from the UK or Law and Order from the US – is much, much cheaper than producing the same hour of programming in Australia. This is because the US and UK producers would have covered their production costs in their home market and can afford to sell the programs at cheap rates across the world.

The Convergence Review commissioned PriceWaterhouseCoopers to provide a report on what impact the removal of Australian content regulations would have

on commercial television network programming. Based on current program acquisition costs and the availability of global programs, PriceWaterhouseCoopers estimated that Australian content would fall by 43% if regulation were removed.

Currently the regulations in place ensure that 55 per cent of the total content on TV including news, sport, drama, games shows, etc is Australian. Within that 55 per cent, there are also separate rules to ensure that particular levels of drama, children’s content and documentaries are produced so that Australians have access to our own culture and stories.

However convergence changes the playing field. The current regulations were introduced at a time where

there was only a handful of broadcasters (ABC, 7 9, 10 and SBS) and one delivery service – TV which was and still is free and over the air. But now there are 20 free to air channels (think of the new Go!, 7mate, 11 and ABC 2, 3 and News 24 channels), a multitude of subscription television channels (Screentime, Fox 8, etc), video-on-demand (ABC iview, catchup TV), video and TV services streaming on the Internet (known as IPTV or Internet Protocol TV), mobile phones with their own video services, games consoles such as the Playstation, XBox or Wii, DVDs, laptops, iPads, iPhones, Blackberries, Foxtel IQ … the list is seemingly endless and continues to grow. The establishment of the National Broadband Network, with its high speed downloads, will see to that.

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Seven Network’s Winners & Losers

AustrAliAn screens AustrAliAn stories

Regulating the TV networks to ensure the creation of Australian content was easy with only the licensing of three TV networks to deal with. It is now very, very different. The technological changes alter how and where we get our content and place pressures on the existing business models and consequently the regulations. As audiences move away from the main channels and start watching other services like 11, catch-up TV, and DVDs, the mass audiences that the TV networks could traditionally offer to advertisers are now potentially whittled away thus creating potential issues for the networks ongoing viability.

Practically speaking, we all now have access to a whole new universe of content sources from around the world. The threat is that it may not only drown out our unique Australian voice but silence it altogether.

Convergence also impacts upon the cross media ownership laws – laws that aim to ensure diversity in the ownership of media companies and therefore a diversity of perspectives. Our news media is dominated by two giant players Fairfax and News Ltd who are now able to provide online video, audio, news content through their websites. These media ownership rules will need to be looked at and alternative safeguards considered to ensure we all have the opportunity to hear a diverse range of Australian news reporting and opinions rather than from just a handful of players.

Having access to the universe of content sounds great – so why should we care?It’s true that getting instant access to your favourite US television show, European news or comedy program at any time is an exciting prospect and we cannot and would not want to stop that.

The question we all face is: how do we ensure Australians continue to be seen and heard in the future?

Left to the market, Australian content will wither and disappear. Continued government intervention is essential to ensure that Australians get access to their own stories.

The Government has long acknowledged in its broadcasting legislation that “television is a powerful medium with the potential to influence public opinion, and that television has a role to play in promoting Australia’s cultural identity.”

But we need to remind the Government why Australian content is as important as ever.

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