Producers support licence fee cut -if local content increases.

Producers are supporting FreeTV’s call to reconsider commercial licence fees -but have tied it to an increase to local content.

The government has agreed to review licence fees following commercial networks lobbying Canberra for reduced or abolished fees and pointing to their investment of $1.5B annually in content.

Screen Producers Australia CEO Matthew Deaner said, “There is no denying the crucial role that free-to-air commercial television plays in underwriting the production of local content. Their level of investment is unparalleled when compared to other platforms. We also recognise that the free-to-air broadcasters are subject to a regulatory regime which does not apply to emerging platforms in the video on demand space.

“However, the investment in drama, documentary and children’s production by commercial free-to-air television is around $160 million annually, less than half that spent by these broadcasters on sports.

“Screen Producers Australia is supportive of a reduction in licence fee requirements, given the increased pressure upon commercial free-to-air television particularly from video on demand but only if these reductions did not free up revenue that then facilitated a sports rights arms race at the expense of local content diversity – diversity that is clearly in the public interest. After all, there is still an obligation that commercial free-to-air television should continue to carry given its privileged and protected position in the market.”

Mr Deaner noted that a recent statement by Free TV Australia supported this view, with Free TV Australia agreeing that ‘many components of the regulatory regime are important, including obligations and commitments around local content and sports.’

 

He also noted content investment by streaming players such as Netflix remain largely focused on North America.

“Whilst this may broaden in time, the contribution made to local production by video on demand services is insignificant when compared to the more than $2 billion spent by free-to-air commercial and subscription television.”

SPA says data reported by Free TV Australia and Australian Communications and Media Authority shows that expenditure on local content is increasing but just one percent is spent on documentaries and nine percent on drama, while 28 percent is spent on sport.

“In real dollar terms, the level of annual expenditure by commercial free-to-air television in sports increased by 23 per cent whilst expenditure in drama fell by 6 per cent between 2010/11 to 2012/13,” Deaner said.

“It’s clear that sports rights, both the coverage and halo effect, has proven to be critical in the free-to-air broadcasting business model, but many in the industry are suggesting the cost is becoming almost untenable. As the major sports codes continue to negotiate upwards, we must ensure that audiences don’t lose out on access to new local drama, documentary and children’s programing.

“The Gillard Government gifted the commercial free-to-air sector stronger protections and greater regulatory flexibility in their 2013 reforms but they missed an opportunity to marry the licence fee reductions to an obligation to invest in diverse local content. As the Abbott Government considers further relaxations and reductions we urge them to assess the wider impacts.”

Meanwhile SPA has also established an office in Los Angeles, spearheaded by Simonne Overend, President of the LA-based Australians in Film, plus US representative for Essential Media in the US.

“This new US based representation for Screen Producers Australia reflects the growing focus of our members on the opportunities afforded by international markets to build co-productions and co-ventures,” Deaner said.