Senate Inquiry Into Australian Content on Broadcast, Radio and Streaming Services Film Victoria Submission – 12 February 2018

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Senate Inquiry Into Australian Content on Broadcast, Radio and Streaming Services Film Victoria Submission – 12 February 2018 Senate inquiry into Australian content on broadcast, radio and streaming services Film Victoria submission – 12 February 2018 / Australian content on broadcast and streaming services is subject to market failure and require continued Australian Government intervention. / These services provide accessible gateways for Australians to experience Australian stories that advance Australian culture and identity. / Without such intervention Australia risks dilution of its unique culture by global, commercial market forces. / Content sectors most at risk are adult and children’s drama, narrative comedy and documentary through which Australians have the benefit of seeing themselves represented on screen - their accents, humour, lifestyles, environments and history. Introduction / The Victorian Government has three agencies dedicated to supporting and developing Victoria’s screen industry. Film Victoria provides strategic leadership and assistance to Victorian creators of film, television and digital media by investing in projects, businesses and people, and promoting Victoria as a world-class production destination nationally and internationally. Docklands Studios Melbourne (DSM) is Victoria’s premier film and television production studio facility and the Australian Centre for the Moving Image (ACMI) is the national museum of film, television, digital games, digital culture and art. / Victorian Government support for the Victorian television industry is focused on the creation and production of television drama, narrative comedy and documentaries. These are generally high cost productions that rely on a degree of government financial support unlike other types of screen content such as reality television, news or sports. / The term “television” is used for convenience in this submission. It includes mini-series, series/serials, telemovies and online content (e.g. webisodes) for public and commercial broadcasters and streaming services. Increasingly, “television” content is being developed with one or more distribution platforms in mind. / While Australian television content is expensive for local broadcasters to commission compared to acquiring the equivalent imported content, it offers more cultural and social benefit. Very few television drama, narrative comedy, documentary and children’s programs would be produced and screened without government intervention in the marketplace. / The Victorian Government made submissions to the House of Representatives Standing Committee on Communication and the Arts Inquiry into factors contributing to the growth and sustainability of the Australian film and television industry and the Commonwealth Government’s Australian and Children’s Content Review. It is understood that these submissions will be referenced as part of this inquiry and are taken as read. / The Victorian Government welcomes another opportunity to highlight issues facing the Australian television industry, and independent production companies in particular. Many problems and possible solutions have been raised in the House of Representatives Inquiry and Content Review consultation process. We encourage the Commonwealth Government to consider any changes to the support it 1 provides in a holistic manner. We also urge the Commonwealth Government to make swift changes where the solution is clear and has strong industry support, and to undertake further examination and industry consultation on more contested issues. Current state and operation of the Australian television industry The television industry has changed rapidly / Technological advancements such as the introduction of mobile technology (e.g. smartphones), multi- channels (e.g. ELEVEN), catch up television (e.g. ABC iView), subscription video on demand (SVOD) services (e.g. Netflix) and internet enabled devices (e.g. Chromecast) have fundamentally changed the way we watch “television”. / As a result, audiences no longer passively consume whatever is broadcast to their television set by public and commercial broadcasters. Audiences today can choose the content they wish to watch on a platform, device, time and location of their choice. / The Australian Video Viewing Report Q2 2017 highlights this trend, for instance: - The total number of screens in Australian homes continues to rise. The average household had 6.6 screens in Q2 2017, compared to 6.0 screens in Q2 2015. - The ubiquity of mobile screens (e.g. smartphones, tablets) has contributed to the gradual and steady decline in time spent watching live and time-shifted broadcast television on television sets at home. - Australians aged 18+ spend on average 20 hours and 30 minutes (20:30) per month watching online video on a desktop, laptop, smartphone or tableti. / The Deloitte Media Consumer Survey 2016 also provides insight into audience trends: - Despite rapid change in the options for how we interact with and consume media, watching television on any device is still our preferred entertainment activity (62% of survey respondents rate it in their top three). - The popularity of streamed programming in Australia is growing and now accounts for 22% of our total viewing time (up from 18% in 2015). This is on par with the US (22%), where streaming services have been in the market longer. - 22% of respondents now have a SVOD subscription in their household, up from just 12% in 2015. This could be expected to increase further, given patterns in more mature SVOD markets such as the US (46%) or Norway (41%) where these services have been available since 2007 and 2012 respectively. - The emergence of live video presents social platforms as complements (or future alternatives) to both SVOD services and on demand free-to-air (FTA). / Audiences are benefiting from and helping to drive an era of high screen content consumption that is currently being experienced by the global television industry, with huge demand for new content in all forms across all platforms. For example: - The “Netflix effect” is driving a boom in scripted television production and back catalogue acquisition. The number of scripted shows in the US has more than doubled since 2010; 216 shows aired in 2010 compared to 455 in 2016, and over 500 shows were expected to air in 2017ii. SVOD players Netflix, Amazon and Hulu were expected to spend a combined US$13 billion on original content in 2017iii. Apple is the newest market entrant with plans to spend US$1 billion on original content in 2018iv but it remains to be seen whether it can leverage its considerable resources to successfully compete with subscription and streaming services. 2 - Reality television has become a staple of commercial FTA broadcasters due to its family friendly content and “water cooler” type content drawing large audiences for advertisers. Programs such as The Block, Masterchef and The Voice are routinely watched by audiences in excess of one million viewers every evening. Australian Ninja Warrior was a ratings success in 2017 and the finale was watched by over three million viewers. - Social media is driving the boom in short form “shareable” content. Each day, YouTube users watch more than a billion hours of videov and YouTube talent are becoming increasingly sophisticated at building and leveraging fan bases to create additional streams for commercial return. Commonwealth Government support for the Australian television industry is inadequate / The Australian television industry largely owes its existence to Commonwealth and State government support that emerged in the late 1960s and early 1970s, in recognition of the cultural need for Australian stories and the high cost of their production. Direct and indirect Commonwealth and State government support has helped to sustain the creation of screen content that is a product of – and which responds to – Australian culture. / Commonwealth Government support for the Australian television industry is wide-ranging and has generally been successful. However, many of the policy and regulatory settings have failed to keep pace with the technological and other changes that have impacted the industry and are out of date. / Changing technology and audience behaviour and the rise of SVOD services have disrupted traditional business models and made it more difficult for Australian production companies to compete locally and overseas. These interconnected trends have made it harder to finance and earn revenue from screen content because: - Audiences have fragmented across the increasing number of platforms and services available, which has increased competition for audiences to earn revenue through advertising or subscription fees. - Audiences have higher expectations of what a quality drama should be due to the popularity of large budget productions such as House of Cards and The Crown, which has increased local production values and costs. An hour of Australian drama television now typically costs at least $1 million to produce, compared with $750,000 in 2010/11. / The aim of government intervention is to support the production of Australian television content and to support business activity, IP ownership, employment and the telling of Australian stories. Without intervention, or as interventions become outdated, these impacts diminish. / Government intervention should guarantee a baseline of Australian television production through appropriate funding and regulation to: - Support a minimum and continuous pipeline of television production activity to sustain the local industry (economic outcomes). - Ensure Australians are able to see Australian
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