AUSTRALIAN GOVERNMENT
Netflix and other global streaming services could be forced to spend millions of dollars on Australian programs and films under major changes to media laws proposed by the federal government that could level the regulatory playing field with free-to-air TV networks.
The government is also considering scrapping annual broadcast spectrum taxes for commercial TV networks and replacing them with a new licensing regime which could save broadcasters up to $12 million each year.
Netflix and other global streaming services could be forced to meet Australian content quotas under the proposed changes.
Federal Communications and Arts Minister Paul Fletcher, who will launch a green paper with the proposed reforms on Friday, said the economic impact of the COVID-19 pandemic had reinforced the need for regulatory action to help the TV industry.
"What we are proposing would rebalance Australia's media regulations so that the industry can continue to support jobs, connect communities, and keep Australian stories on our screens regardless of whether they prefer to watch free-to-air television, subscription television or video-on-demand services," Mr Fletcher said.
The green paper proposes creating a law that requires streaming services to invest a percentage of their Australian revenue on local content, either in the form of commissions, co-productions or acquisitions of content. However, it stops short of stipulating what the percentage should be.
"We're seeking feedback on all of the proposals including the percentage rate," Mr Fletcher said.
Communications Minister Paul Fletcher will release the green paper on Friday with several proposed changes to media laws.
Communications Minister Paul Fletcher will release the green paper on Friday with several proposed changes to media laws.
He said the content obligation would not apply to streaming services such as Stan, which is part of a group that has a broadcasting licence and is already subject to Australian content obligations.
A 2017 federal parliamentary inquiry into the Australian film and television industry recommended subscription streaming services invest 10 per cent of the revenues they earn in Australia in new local content. But when the government announced plans for changes to rules around content in September, it did not outline any plans for streaming services to meet a local content quota.
Under the plans announced two months ago, Mr Fletcher said commercial broadcasters would no longer be required to create a certain amount of hours of local children's content and drama. But 55 per cent of total content on a free-to-air broadcaster must be Australian.
Mr Fletcher said Netflix was an "increasingly significant acquirer of Australian content" and there was a possibility it would already meet a content obligation should one be imposed.
Other streaming services operating in Australia include Foxtel's Binge, Disney Plus, Amazon's Prime Video, and Apple TV. The streaming services are expected to oppose any move to regulate their local content.
In a joint submission to a federal government options paper earlier this year, Netflix, Stan, Prime Video and Disney Plus said "we strongly believe that there is no market failure to address" and claimed each company "already makes a significant contribution to Australia's screen production industry".
As part of the proposed reforms, free-to-air TV networks would also be given the choice to opt-in to a new broadcasting licence in exchange for transitioning to using less radiofrequency spectrum. The spectrum made available would be sold to telecommunications companies and used for their rollout of 5G, which will deliver faster mobile network speeds.
Mr Fletcher said broadcasters could move to transmission arrangements which used less spectrum but which maintain their service levels at close to current levels, with a minimal impact on viewers.
Media companies such as Nine, Seven West Media and Network Ten were put under financial pressure this year due to sharp falls in advertising spend caused by the crisis. Regional broadcasters such as Prime Media, WIN Corp and Southern Cross Austereo were also badly affected and were forced to slash jobs or put staff on JobKeeper to adapt to the market conditions. The government provide some interim relief to cope with the financial pressure such as the removal of spectrum licence fees.
Spectrum fees were introduced after the abolishment of broadcast licence fees back in 2017. The fee is dependent on a range of factors, including how much spectrum a network has and its strength, but broadcasters have advocated for these to be removed altogether.
Should sufficient numbers of industry players opt for the new licence, the government is further proposing to allocate some of the proceeds from the auction of the extra spectrum to establish trust funds to support the Australian media and production sectors.
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SA GOVERNMENT
The Department of Communications and Digital Technologies said that it plans to enforce local content quotas on streaming services such as Netflix.
The proposal is contained in the department’s white paper on Audio and Audio-visual Content Services policy framework which is currently open for public comment. The department presented the framework to parliament on Wednesday (25 November).
In his presentation, the department’s chief director of broadcasting policy Collin Mashile said that local content should be ‘enabled’ by further policy interventions within the audiovisual broadcasting space.
“Where video-on-demand subscription services come and operate in South Africa, everything that they show to South Africans in terms of their catalogue – 30% of that catalogue must be South African content,” Mashile said.
“What this means is that we are trying to create opportunities for the production and creative industry sector.”
While US-based streaming services like Netflix have increased local content output in recent years, making just under a third of all content on the platform local may prove particularly onerous for the streaming giant.
Mashile addressed this by pointing to the popularity of local shows in South Africa. “We were asked where we got the idea that South Africans are interested in this 30%,” he said. “The most popular shows in every country remain the local shows.”
The White Paper also broadens definition of a “broadcasting service” to include online broadcasting services.
By implication, that would require the payment of a license fee for the viewing any “broadcasting services” which would include a streaming services, regardless of the device on which it is viewed.
In an op-ed published at the start of November, the SABC’s head of TV licences Sylvia Tladi said that changes need to be made to South Africa’s broadcasting regulations – including an expanded definition of a ‘TV set’ or now, a broadcasting device.
Some of the devices which are being considered under this expanded definition include: Laptops; Tablets; IPTV; Internet; Decoders; Set-top boxes; Smartphones.
Tladi said that these devices, which have resulted in new media platforms and content dissemination channels, have a direct impact on TV licence legislation.
She said that the SABC’s submission also calls for an overhauled TV licence fee system and changes to the legislation regarding public funding strategies envisaged by TV licences.
“To ensure maximum compliance with legislative requirements concerning the payment of TV licence fees, the SABC proposes that the act should place stricter obligations on all relevant stakeholders or role players because the ‘traditional’ television set is no longer the only means of receiving a television broadcast.
“Therefore, to administer compliance on the payment of licence fees, the SABC is of the view that other entities must be compelled to report on the sale, lease or usage of these ‘television sets’ or ‘viewing devices’.
