Inquiry Into Australian Content on Broadcast, Radio and Streaming Services 2017

Home , Blue Murder (miniseries), Frontline (season 3)

Australian Broadcasting Corporation

Submission to the

Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services 2017

January 2018

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

Australian Broadcasting Corporation Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

January 2018

Executive Summary

• Australian storytelling and creative content provides important social and cultural outcomes and is worth preserving, promoting and supporting.

• In a world of abundance, it is critical that Australian creative content continues to be distinctive, accessible and discoverable.

• In an increasingly globalised market featuring a small number of dominant multinational players, market solutions are insufficient to ensure optimal public outcomes.

• Public broadcasting is integral to a healthy, vibrant Australian creative ecosystem.

• The Australian Broadcasting Corporation is unrivalled in its commitment to Australian content across television, news, radio and online, investing more in program hours and funding than any other organisation.

• Like all broadcasters, the ABC is evolving to meet audience needs and expectations. This requires a balanced approach as well as investment in new programs, platforms and technology.

• The regulatory and support framework must demonstrably recognise the important role played by public broadcasting in helping to deliver the social and cultural benefits of Australian content.

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

Introduction

The Australian Broadcasting Corporation (ABC) submits this paper for consideration to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services. This submission considers the Terms of Reference of the Inquiry and sets out the ABC’s manifest commitment to the creation, production and delivery of Australian content and the integral part the Corporation plays in the sustainability of viable and diverse Australian creative industries.

It is somewhat ironic that in a world where audiences can access content from anywhere across the globe at any time, the need for meaningful storytelling has become more acute. Storytelling devoid of emotional touchpoints created through shared experience, understood references or connection to time and place can be regarded as little more than an ephemeral distraction. In particular, audiences connect most with stories, voices and culture that represent them and reflect their lived experiences.

In support of this view, the November 2016 Measuring the Cultural Value of Australia’s Screen Sector report identified that those surveyed expressed a strong preference for Australian content, with 64 per cent saying that local content accounted for up to half of their media diet, and 22 per cent reporting that most or all of their viewing was Australian.1

The report also identified that access to original Australian content is particularly crucial for young audiences, who in their formative years are beginning to search for understanding about the community around them. The report states:

Strong evidence exists to demonstrate the particular importance of quality children’s content in general, and this is underlined in the Australian context by the impact of a number of high quality productions. These include Little Lunch, which helps children to understand the world around them, as well as help with school preparedness; Round the Twist, which influenced a generation, and remains popular to this day; and Paper Planes, with its focus on ingenuity and resilience. In general, it is apparent that while any high-quality and well-designed children’s production has value for childhood development, domestically made ones are most important.2

Throughout its history, ABC programs have been synonymous with Australian life and resonate deeply across generations. From The Argonauts to Little Lunch, children have grown up with the ABC, and how many Australians can’t sing the Play School theme song? ABC comedy programs like The Gillies Report, The Late Show, Aunty Jack, The Games, Frontline and Kath and Kim have helped us laugh at ourselves and satirised the ridiculous and the powerful. The ABC’s rich heritage of news and investigative current affairs programs like Four Corners, This Day Tonight, PM, 7.30 and AM have kept the same powerful to account, while programs such as The Country Hour (Australia’s longest-running radio program), Landline, Back Roads and A Big Country have documented life in rural and regional Australia to the benefit of all Australians.

1 Olsberg SPI, Measuring the Cultural Value of Australia’s Screen Sector, P. 1 2 Olsberg SPI, Measuring the Cultural Value of Australia’s Screen Sector, P. 56 3

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

The ABC began as a radio network in 1932 and the medium continues to be a key platform for the Corporation, as the most direct and personal way to connect with audiences. From the long-running serial Blue Hills, Australia All Over, Grandstand, Conversations, people tune to ABC radio programs in homes, cars, sheds, and now mobile phones across the country.

The ABC has supported Australian music from the earliest days of radio through to Six O’Clock Rock, Countdown, Recovery, Saturday Night Country, Rage, triple j Unearthed and through the Corporation’s longstanding relationship with state symphony orchestras and other Australian classical music ensembles. Currently, Classic FM records and broadcasts 300 classical music concerts a year from around Australia, ensuring the talents of local performers can be heard across the country. Similarly, the national expansion of triple j in the 1980s and 1990s brought independent contemporary Australian music to regions across Australia, and helped inspire the formation of countless local bands.

The ABC is also responsible for an array of highly-regarded drama programs, from the trailblazing Stormy Petrel in 1960, to Bellbird, Police Rescue, Power Without Glory, Brides of Christ, Blue Murder, Something In The Air, The Slap, ANZAC Girls, Redfern Now and Rake. These stories of Australia have made us laugh and cry and brought Australian accents into loungerooms across Australia for over 50 years.

These cultural touchstones are only a few among a host of iconic ABC programs that have entertained, enriched our lives, informed who we are as a society, and fostered civic life and a robust yet cohesive liberal democracy.

Australian storytelling is in the Corporation’s DNA and central to its strategic goal “to be the source of Australian conversations, culture and stories”. This remit is underpinned by the ABC Act and Charter, which provides clear direction on the ABC’s activities. The ABC Charter, contained in Section 6 of the Australian Broadcasting Corporation Act (1983), speaks directly to the focal point of the Inquiry in calling for the ABC to broadcast “programs that contribute to a sense of national identity and inform and entertain, and reflect the cultural diversity of, the Australian community”.

The ABC has set a course to ensure it continues to play a vital role in producing, commissioning and broadcasting Australian content for decades to come. The ABC’s Investing in Audiences strategy, announced in March 2017, has two central strategic pillars specifically addressing this objective: • Creating extraordinary relevant and valued content; and • Delivering an outstanding audience experience.3

The ABC’s content strategy is firmly aligned with public policy outcomes and recognises that the Corporation sits within a broader industry ecology. The complexities and challenges of creative industry economics require the ABC to collaborate with numerous partners. It does so willingly and with a strong sense of public purpose. It consults regularly with its partners and through its Annual Report and other accountability mechanisms, provides information on its strategy and expenditure.

3 http://about.abc.net.au/press-releases/50-million-audience-investment-in-abc-transformation/ 4

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

As domestic commercial broadcasters come under increasing revenue pressure, they have on occasions called for reductions in ABC funding or a narrowing of the ABC’s Charter obligations. The ABC has been familiar with such attacks since its inception in 1932.4 Considering the ABC and these commercial entities have existed side by side for more than 80 years, it is difficult to find their arguments credible, even more so when they have grown to become global media conglomerates. Clearly it is not the ABC stifling domestic revenues, but the multinational companies that have been at the forefront of digital innovation and adaption, sometimes abbreviated to the five known as FAANGs (Facebook, Amazon, Apple, Netflix and Google).

In fact, the ABC notes a report commissioned by the BBC which found that public broadcasters contribute considerably to the broader domestic commercial sector:

“Overall, countries with well-funded public broadcasters, investing in high-quality, diverse news content, tend also to have commercial markets which generate strong revenues and levels of investment in high-quality, diverse new content. This pattern is most pronounced in the Nordic countries, Australia and the UK.” 5

Britain is a clear case in point, with the market working as a ‘virtuous circle’ with the public and private sectors competing for audiences but not for funding sources, resulting in innovative programming that is recognised globally for its diversity and quality.

The ABC is cognisant that its Charter requires the Corporation to deliver quality programs of both broad appeal and specialised interest. The legislation establishes that the ABC isn’t relegated to a ‘market failure’ broadcaster and is obliged to provide a diverse range of programs that cater to mass and niche audiences. Ultimately, the ABC Board and management are responsible for determining the best use of available resources to meet these twin obligations, based on assessments of competing imperatives and the challenges of a transitional landscape.

A global cultural marketplace

As technology overcomes global physical distance and artificial regulatory barriers and Australia moves into an internationally converged media and entertainment environment, the domestic industry faces the challenges of both increasing production costs and the diminution of aggregated audiences.

In particular, in this transitional period and as mass audience engagement fractures, television broadcasters continue to bear the cost of maintaining traditional distribution infrastructure while also investing in digital platforms. This issue is compounded by the rising cost of program production, primarily in the television drama genre.

4 http://www.abc.net.au/news/2017-06-01/how-the-newspapers-tried-to-kill-abc-news-before-it-even- began/8568482 5 https://downloads.bbc.co.uk/aboutthebbc/insidethebbc/howwework/reports/pdf/bbc_report_public_and _private_broadcasting_across_the_world.pdf

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

Screen Australia’s 2015-16 Drama Report noted a 21 per cent increase in the hourly cost of television drama (combined adult and children) production in Australia from 2011-12 to 2015- 16. There was a rise of 27 per cent in hourly production costs for adult mini-series drama programs (programs categorised as ‘quality’ series of up to 13 one-hour episodes).6 The report estimates that the hourly cost of such locally-produced programs is now $1.37 million.

In this environment, domestic commercial broadcasters are increasingly reliant on appointment TV in the form of international reality format programs and live sport. According to AdNews, in 2016, 80 per cent of the 50 top rating TV programs were reality and sports programs, with these formats also holding all but one of the top 10 positions. Drama accounted for 14 per cent of the remaining top 50 programs, while the balance was in news and current affairs programs.

The dearth of drama programming in the list is concerning for a number of reasons. As AdNews stated in its report:

“The lack of Aussie dramas reflects two stark realities for TV networks – that they are very costly to produce compared to reality TV and they often struggle to pull in huge ratings. This means dramas deliver lower returns on investment than other programs and are riskier to produce.”7

While drama is relatively expensive to produce and does not provide a commercial return on investment comparative to reality and sports content, genres such as documentary and factual and children’s content provide even less commercial return. In the context of this Inquiry, while reality TV and live sport have their merits, this type of content can contribute only so much to the social, cultural and intellectual life of Australian society.

Even the Productivity Commission, with its market-based approach to policy, is sceptical of arguments that audience preference for quality local content will push broadcasters into delivering social and cultural goods by market means. In its submission to the Convergence Review, the Commission noted:

“The broadcaster’s main concern is the program’s ability to generate a profit – that is, by advertising revenue relative to its cost. High cost programs with social and cultural value may be vulnerable to replacement by programs with a better revenue-to-cost ratio, even if the alternative is less popular with viewers and advertisers.”

While the ABC does not have the same pressing commercial imperatives of other domestic broadcasters, it is also in the midst of the gradual transition of media from broadcast to Internet protocol (IP) delivery of content. As a public broadcaster, we are particularly conscious of serving the expectations and requirements of traditional audiences while also attracting and retaining new digital audiences.

6 Screen Australia, The Drama Report 2015/16, November 2016 https://www.screenaustralia.gov.au/fact- finders/reports-and-key-issues/reports-and-discussion-papers/drama-report-2015-16 7 http://www.adnews.com.au/news/adnews-analysis-the-top-50-tv-programs-of-2016

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

The ABC has responded to this bifurcation in the aforementioned Investing in Audiences initiative and the recently announced content restructure.8

The ABC’s overarching strategy focusses on: • Distinctive, high-quality Australian productions. • Maximising the funding the ABC is given through leveraged partnerships with other creative organisations. • Delivering the audience experience the public expect. • Making Australian content as visible and accessible to audiences as possible.

Although these goals contain multiple challenges and logistical obstacles, they also present significant opportunities. With the abundance of content available to audiences across the world, the offer of distinctive high-quality Australian content is a point of differentiation and attractive selling point. According to Netflix, people’s content tastes are universally distributed, regardless of nationality or ethnic differences. For example, in 2016, Netflix noted that 90 per cent of its Japanese anime shows were watched by Netflix viewers who lived outside of Japan.9

There are clear economic incentives and domestic cultural benefits in the investment in Australian content production, however it is noteworthy that the international export of content can also deliver a strategic benefit. The British government has recognised this, and as part of its 2015 National Security Strategy and Strategic Defence and Security Review, announced an investment of £34 million in 2016-17 and £85 million each year from 2017-18 in the BBC’s international digital, TV and radio services.10 This increased focus on international broadcasting was made in recognition of the security, economic and cultural benefits of the BBC’s ‘soft power’ influence.

Australia’s creative industries abound with internationally-recognised talent and the ability for digital technology in particular to bypass national boundaries provides greater opportunities for Australian content, stories and culture to more easily become internationalised.

As Australia’s pre-eminent public broadcaster, the ABC has a proven record in its commitment to international broadcasting. The ABC commits the Corporation to international broadcasting and states that the ABC is obliged:

To transmit to countries outside Australia broadcasting programs of news, current affairs, entertainment and cultural enrichment that will: i. Encourage awareness of Australia and an international understanding of Australian attitudes on world affairs; and ii. Enable Australian citizens living or travelling outside Australia to obtain information about Australian affairs and Australian attitudes on world affairs11

8 http://about.abc.net.au/press-releases/audience-behaviour-drives-new-abc-structure/ 9 http://www.afr.com/technology/reed-hastings-on-netflixs-global-algorithim-20160326-gnrq9m#ixzz4tGhYtyOP 10https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/555607/2015_Strategi c_Defence_and_Security_Review.pdf 11 Australian Broadcasting Corporation Act 1983 (Cth) s 6. 7

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

The provision of the ABC’s services to the Asia-Pacific and beyond over many decades has demonstrably strengthened Australia’s engagement with our international neighbours, and the Corporation is uniquely placed to continue to serve the Australian public and domestic creative industries as a as a key deliverer of Australian content to the rest of the world.

International comparisons

National responses to the increasing globalisation of content and the dominance of multinational players have met with varying degrees of success. To date, protectionist actions and regulation have either failed or stalled. For example, when Spain sought to impose a ‘Google tax’ in 2014, requiring Google to pay for the publication of local content, Google simply closed its news service in Spain. This resulted in substantial damage to the Spanish news industry, with significant loss of traffic and revenue, and the closure of many smaller publishers.12

Both France and Germany have sought to impose levies on Netflix, with the revenue raised to be used to fund local productions, while the European Union has sought to impose 30 per cent local content quotas on Over the Top streaming services such as Amazon and Netflix.13 These issues are being contested by the streaming services, and Netflix has stated that as an online service it is not subject to traditional broadcast media regulation such as quotas or content levies, just as they are not eligible for regulatory benefits that traditional media enjoy.

In September 2017, the Canadian government and Netflix announced the launch of Netflix Canada, the first Netflix production company outside the United States. Under the agreement with the Canadian government, Netflix will invest a minimum of CAD $500 million over five years in original productions in Canada.14

However, there has been criticism of this deal from some sectors due to its lack of detail, particularly whether Netflix would be required to create Canadian content or only produce content there, such as when American productions shoot in Canadian locations. There is also a view that Netflix is gaining an edge over homegrown companies, since the agreement doesn't require the company to pay corporate tax or sales tax on its Canadian subscriptions.

The recently elected New Zealand government has taken a different approach to supporting local content production by announcing that it will increase funding by $38 million a year to the public broadcasting entities, Radio New Zealand and New Zealand On Air. This is a funding increase of close to 30 per cent, and has been initiated to resource public media to “strengthen national identity” and “tell our stories and inform our democracy”.15

12 https://arstechnica.com/tech-policy/2015/07/new-study-shows-spains-google-tax-has-been-a- disaster-for-publishers/ 13 https://www.theregister.co.uk/2017/05/25/eu_pegs_homegrown_netflix_quota_at_30pc/ 14 https://www.canada.ca/en/canadian- heritage/news/2017/09/launch_of_netflixcanadaarecognitionofcanadascreativetalentandits.html 15 http://www.labour.org.nz/broadcasting

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

In May 2017, the Australian government announced a package of reforms to address those same challenges and “improve the sustainability of Australia’s free-to-air broadcasting sector, support the creation of high quality Australian content and modernise broadcasting and content regulation”.16

These reforms include:

• The abolition of commercial broadcasting licence fees and datacasting charges. • Amendments to the anti-siphoning scheme and list. • The repeal of the two out of three and 75 per cent audience reach media ownership rules. • Government funding to support subscription TV broadcasts of women’s and niche sports.

In one respect or another, these initiatives have given additional financial and regulatory succour to the commercial broadcasting sector in Australia. In terms of the licence fee relief, commercial broadcasters have been required to pay a proportion of their gross earnings in return for the use of spectrum since 1964. With the passage of the Broadcasting Legislation Amendment (Broadcasting Reform) Bill 2017, these fees have been abolished and replaced with a transmitter licence tax, with an estimated saving to the commercial networks of $90 million per annum and loss of $417 million in Commonwealth revenue over forward estimates.17

The sports package consists of government funding of $30 million over four years to Fox Sports to enhance coverage of women’s, niche and high participation sports, and to build their profile. Currently, it is estimated that Fox Sports has an estimated subscriber base of less than 30 per cent of Australian households.18

The removal of the two-out-of-three media ownership provisions has opened up opportunities for media outlets to merge or for larger companies to swallow up smaller players in the market. The intention of this reform is to ensure that Australian media companies can remain competitive on a global playing field, but also has the potential to further concentrate the domestic market.

In response to the current Australian and Children’s Screen Content Review, the Australian free-to-air commercial television networks have sought further substantial changes to the local content regulatory framework. This includes scrapping current obligations to broadcast a mandated number of hours of children’s television and changing the definition of first run Australian drama and documentaries for quota purposes.

16 http://mitchfifield.com/Media/MediaReleases/tabid/70/articleType/ArticleView/articleId/1352/Major- reforms-to-support-Australian-broadcasters.aspx 17 http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r5907 18 http://www.businessfirstmagazine.com.au/netflix-foxtel/9894/ 9

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

Both the changes legislated last year and these proposed changes are intended to give Australian commercial broadcasters financial relief and ensure that they have long-term viability in a global environment, so that Australian content continues to be produced and made accessible to audiences.

In comparison, in Britain the BBC serves as the most critical bulwark against global threats to local content production. The financial investment the United Kingdom and other European countries make in public broadcasting is indicative of the integral part these broadcasters play in the maintenance of adequate levels of local content and contribution to the national culture.

Considering the intent of this Inquiry and Australia’s approach to date in bolstering the viability of local broadcasters, it is worth noting the comparable public funding commitment made in the UK and Australia. Although there are some marked differences in the two organisations in regard to history, comparative domestic media markets, geography and funding mechanisms, both the ABC and BBC have the same fundamental purpose as public broadcasters – to inform, educate and entertain and to reflect and represent the respective culture and identity of those countries.

An additional difference is the populations of the UK and Australia, with the ABC serving one- third of the population of the UK. However, it is notable that on a per capita basis the ABC operates with only one-eighth of the total income that the BBC receives.

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

Moreover, when comparing other nations’ public broadcasters with the ABC, the ABC’s funding per capita is almost 35 per cent less than the average public funding of the following 18 countries.

Over recent decades the ABC’s real funding has continued to diminish and in the last five years alone, has been reduced by over $200 million. The Corporation’s success in recent years has been achieved despite these changes in funding circumstances and crucially, the Corporation continues to maintain the very high levels of value, trust, quality, and independence that Australians expect from their public broadcaster. ABC and independent analysis of public perceptions of the Corporation identify:

• Over 80 per cent of Australians trust the ABC. This is compared with an average trust of 57 per cent that Australians have in commercial media. • 78 per cent of people believe the ABC does a good job covering regional Australia. This compares to 62 per cent for commercial media. • 82 per cent value the ABC, and 87 per cent believe the ABC provides quality programming. • 78 per cent of people regard the ABC to be distinctively Australian and contributing to Australia’s national identify • 78 per cent of people believe the ABC reflects the cultural diversity of the Australian community 11

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

• 76 per cent of people consider the ABC encourages and promotes Australian performing arts such as music and drama • 82 per of people consider the ABC provides programs of an educational nature.

The ABC’s investment in Australian content

The high levels of public trust in and appreciation for the ABC is a result of and reciprocated through the ABC’s commitment to its social contract with the Australian community. This commitment is evident in the investment the ABC makes in key genres like drama, education, science, music, documentaries and children’s content, and in the development of services like iview, ABC Listen, the ABC App and ABC Radio’s podcasting fund, which supports emerging local podcasters.19

The ABC has been at the forefront of digital broadcasting in Australia, not only as it is part of its Charter remit, but as the Corporation recognised early that it would be necessary to invest in digital platforms to meet future audience demands and expectations.

ABC iview is a case in point. It was launched in 2008 with a small amount of funding identified through internal savings and a significant amount of innovative thinking. Although there was limited audience interest in video-on-demand in 2008, today iview attracts more than 50 million monthly plays. Independent research also identifies that iview is the leading Australian streaming service, with 57 per cent of Australians using iview and 93 per cent of viewers believing iview provides a good user experience.20

The ABC has also taken a leading role in creating and commissioning Australian “digital first” content for the iview platform. Pop-Ability was developed as an iview first program and other recent digital first or digital exclusive programs include Goober, Noirhouse and Hello Stranger.

The “digital-first” programs are primarily short, “snackable” content, aimed at audiences who have moved away from linear television schedules in search of alternate fare. Much of the content produced through this initiative is from new entrants as the ABC believes it has an important role in fostering the next wave of screen creators, including using the platform to showcase the work of Australian Film and Television School (AFTRS) students.

Through iview, the ABC was also an early adopter of allowing immediate access to complete program seasons as the Corporation recognises that increasingly high quality, high-cost production is digital-first and Over-The-Top platforms a primary destination for audiences.

The ABC continues to set digital investment as a priority in recognition that the Corporation must continually adapt to respond to technological advances, audience behaviours and the growing popularity of international services.

19 http://about.abc.net.au/press-releases/abc-announces-one-million-dollar-podcasting-fund/ 20 http://www.bandt.com.au/media/infographic-12 12

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

Genre investment

Over the past two ABC funding trienniums (2009/10 to 2015/16), the ABC has committed over $640 million to the creation of 2,179 hours of Australian screen content. Through collaboration with industry partners this has created over $1.2 billion worth of Australian production, including:

• $289 million towards 492 hours of first release Australian fiction (including drama and narrative comedy) valued at more than $510 million in total. Of this: o drama comprised 328 hours, with an ABC contribution of $222 million, valued at $389 million in total. o narrative comedy comprised 164 hours, with an ABC contribution of $67 million contribution, valued at $121 million. • $84 million of ABC investment towards 659 hours of children’s content, including children’s drama, valued at more than $263 million in total. • $58 million of ABC investment towards 337 hours of documentaries, valued at $158 million in total. • $210 million of ABC investment towards 692 hours of other programming across the remaining genres of arts, Indigenous, factual and entertainment, valued at $302 million in total.

In focussing on drama, it is telling that Screen Australia reports that over the period 2012-13 to 2016-17, the ABC averaged an annual investment of $115 million in Australian drama content. This compares with the commercial FTA networks individual annual average of $72 million.21

The ABC continues its significant investment across genres that have traditionally engaged mass audiences - entertainment, comedy, drama, children’s and factual. However, it is also just as focused on investment in specialist content genres such as the arts, education, science, religion and ethics, which make the ABC a distinctive contributor to the Australian landscape.

The ABC plays a critical role in starting national conversations and raising awareness of fundamental social issues. From matters as important to the national identity as Indigenous reconciliation22, through to programs like War on Waste and You Can’t Ask That the ABC is trusted to open the public discourse on complex social matters.

The ABC’s participation in Science Week23, the Catalyst program, and the multi-platform approach to the Stargazing24 program are indicative of the ABC’s commitment to promoting science in Australia and showcasing the work and achievements of local scientists.

21 Screen Australia Drama Report 2017, P. 20 22 http://about.abc.net.au/press-releases/abc-focuses-on-indigenous-milestones-in-2017/ 23 http://about.abc.net.au/press-releases/abc-celebrates-national-science-week/ 24 http://about.abc.net.au/press-releases/stargazing-across-the-abc/

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

More broadly, education continues to be a key component of the ABC’s program offerings, and the Corporation has recently announced a relaunched ABC Education initiative, which includes a one-stop online site for teachers, parents and children as well as the return of Australia’s only children’s news and current affairs program, Behind the News (BTN).25

Music investment

The ABC is proud of its commitment to Australia music, which is delivered to audiences across a range of platforms and radio networks. The variety of music offered by the ABC is unparalleled, from country to jazz, classical to roots, hip-hop and metal. The extent of Australian music played in comparison with the commercial broadcaster quota requirements is outlined in the following section, but suffice to say that

As a case in point, triple j Unearthed was established in 1995 and continues to serve as the home of independent Australian artists. Unearthed only plays Australian music and provides a direct line through to the audience for artists who may not otherwise have had a platform to do so.

Apart from its radio and digital networks, the ABC also celebrates Australian music through dedicated programming during Ausmusic Month,26 supports young classical musicians through the Young Performers Awards, contributes to music festivals across the country and hosts One Night Stand, a free Australian music concert held in a different regional town each year.

Finally, ABC Music is a leading independent record label in the Australian market. It releases music across a range of genres from children’s, classics, jazz, and country, through to the triple j imprint. The label represents leading classical music artists and Australian classical music organisations, including symphony orchestras and ensembles, and contributes to the fulfilment of the ABC Charter obligation to encourage and promote the musical, dramatic and other performing arts in Australia.

Regional investment

The ABC has been at the centre of rural and regional life since its earliest days, and in recent years has only strengthened its commitment to serving rural and regional Australians. These additional structural and financial commitments include: • The establishment of a dedicated regional division in July 2015 – ensuring regional news, issues and events receive more coverage than ever locally, regionally and on a national level across all platforms.27 • The Connecting Communities package - the ABC’s biggest single investment in regional news and information, announced in March 2017.28

25 https://tv.press.abc.net.au/abc-launches-new-destination-for-australian-education 26 http://about.abc.net.au/press-releases/abc-celebrates-ausmusic-month-2/ 27 http://about.abc.net.au/press-releases/new-abc-division-to-champion-regional-voices/ 28 http://about.abc.net.au/press-releases/building-the-abcs-services-in-regional-and-remote-australia/ 14

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

Programs like Landline, Taste of Landline, Back Roads, Australia All Over and Saturday Night Country are uniquely Australian. Critically, they don’t just serve regional and rural audiences, but bring their stories and issues to national audiences.

Regulatory frameworks

A flourishing artistic and cultural environment helps sustain a distinctive and cohesive society. Since the 1970s, Australia’s successful creative industries has increasingly created a prism for how Australians see themselves and how we project ourselves onto the world stage.

The television, music and film industries that were incubated in the early 1970s and thrived throughout the 1980s and beyond were primarily created through effective cooperation between producers, broadcasters and government agencies. As commercial broadcasters provide a means of mass communications and as they have traditionally used public spectrum to do so, these industries have also been regulated by government.

As set out above, new global players to the market, however, do not carry an equal regulatory burden and are increasingly impacting the financial sustainability of the local market. In order to ensure local industries are able to reach their full potential and deliver significant cultural and economic benefits to all Australians, it is arguable that there would be significant economic and social benefits if local broadcasters and producers were better able to compete with international players. However, this should be weighed against the fact that proscriptive regulation of international companies has met with little success.

Also, given the small size of the Australian market and the significant quantities of content produced in larger English language markets such as the United States and the United Kingdom, it is unlikely that Australia would produce the quantity, quality and variety of local content required to achieve cultural benefits without government support and/or regulatory intervention.

Without some form of policy intervention, either through subsidies, incentives or regulation, commercial investment in the local production of genres such as drama, children’s and documentary programs will significantly diminish, leading to decreased program hours and increased production costs. This would have an adverse audience outcome and an adverse impact on these industries, shrinking the sector, leading to a smaller pool of Australian cultural talent, increasing barriers to new entrants and creating greater reliance on those local production companies backed by international distributors.

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

The ABC’s view continues to be consistent with its response on this issue to the Convergence Review:

“Maintaining levels of Australian content on Australian screens must draw a balance between the financial impost of regulation, the right settings to promote commercial viability and the need to fulfil our long held cultural objectives of producing and transmitting significant levels of Australian content.”29

The ABC notes that the current commercial quota system is imperfect and there have been calls for either the abolition of local quotas or significant diminution in the local content requirements placed on commercial broadcasters. The United Kingdom’s experience when the Broadcasting Act was changed in 2003 to remove the requirement for commercial networks Channel Five and ITV to mandatorily carry children’s programmes is a salutary lesson in response to such calls. OfCom reported that the abolition of commercial children’s content quotas was an abject failure in the UK and resulted in the total spend on children’s programming falling in real terms by 22 per cent and the number of hours of first-run content halving. OfCom also found that as a result of the decision, ninety per cent of children’s content across the affected broadcasters was repeat programming.30

The ABC also notes that there have been calls from some sectors for the public broadcasters to be subject to a local quota system. The ABC has argued consistently that any proposed application of the commercial quotas to the ABC fails to recognise the unique settings that apply to the operation of the Corporation. Unlike its commercial colleagues, the ABC has Charter requirements to provide specialised programming in niche content. Applying quotas directly would impinge on the Corporation’s independence by effectively ensuring that Parliament can determine what portion of the budget is spent on certain types of programming.

Ultimately, the ABC’s level of investment in Australian content isn’t driven by quotas (as much as some critics would like it to be), but by the availability of funding. In any case, as is evidenced in Tables 1 and 2 below, the ABC generally meets or exceeds the commercial broadcasting quota targets, balanced across the programming slate each year.

29 ABC Submission to the Convergence Review, p.2 30 Ofcom Public Service Broadcasting Report 2013: https://www.ofcom.org.uk/__data/assets/pdf_file/0024/69522/children.pdf 16

ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

Table 1 - Australian content - commercial television quota comparison

Content Standard Commercial ABC TV 2015-1 6 ABC TV 201 6-17 broadcaster requirement (calendar year) Australian content 55 per cent 69 per cent 69 per cent primary channel First release Australian 20 hours 44 hours 50 hours documentary Australian children's P 130 hours 1,392 hours 1,486.5 hours content Australian children's C 260 hours 1,422.9 hours 1,469.8 hours content First release Australian 25 hours 31.7 hours 36.5 hours children's drama First release Australian 250 points 249.8 points 204.4 points drama

While ABC TV did not reach the threshold commercial point score for first release Australian drama in 2016-17, it is projected to surpass 250 points in 2017-18. This is indicative of the fact that television commissioning is dynamic, and each year programming is based on competing priorities across genres, the pool of new program proposals and ideas, and also that the point score is based on a weighting that favours certain formats.

Table 2 - Australian content - commercial radio quota compari son

ABC network Commercial broadcaster ABC 201 6-17 result comparative genre Australian reauirement ABC RN Not less than 20 per cent 38 per cent ABC Local Radio Not less than 20 per cent 45.6 per cent ABC Classic FM Not aoolicable 46 per cent triple i Not less than 25 per cent 51.5 per cent Double J Not less than 25 per cent 35.3 per cent ABC Jazz Not less than 5 per cent 23.3 per cent ABC Country Not less than 20 per cent 57.4 per cent triple j Unearthed Not less than 25 per cent 100 per cent

Despite funding challenges, disruptive technological changes and evolving audience behaviours and expectations, the ABC continues to maintain its unmatched commitment to Australian content across its programs and platforms.

17 ABC Submission to the Senate Environment and Communications References Committee Inquiry into Australian content on broadcast, radio and streaming services

Closing comments

The creation and distribution of Australian content and a strong and vibrant production sector is fundamental to Australia’s national identity and shared cultural heritage. In creating content of cultural significance, these industries also provide numerous employment opportunities across metropolitan and regional Australia and foster and develop talent, creating employment pathways in a range of professions and trades. The ABC plays a pivotal role within this system.

The ABC’s position as one of Australia’s most valued and important cultural institutions enables it to act as the source of national conversations, stories and culture, and it delivers an unparalleled range of quality Australian programs and content in this service. In a fragmented market place where we have dominant international players, homogenised content and domestic commercial services that are retreating from distinctive Australian programs, it has never been more important to have sufficiently resourced public broadcasters.

The ABC considers that continued and sustained government support, including funding for public broadcasting, is required to maintain the appropriate level of Australian content, including children’s, drama, documentaries and musical content. The ABC enters its next triennial funding phase in 2019-20, and the outcomes from this process will be crucial in ensuring investment in Australian content is secured as domestic creative industries, audiences and broadcasters face an uncertain future.