17 FEB 2021

PAUL FLETCHER, Minister for Communications, Urban Infrastructure, Cities and the Arts: I’m very pleased to be able to speak to you today by video at the Screen Forever Conference. The last 12 months have been tough for many Australians, and the screen industry is no exception. When COVID-19 hit and production came to a sudden halt on most film and TV sets around Australia, things looked grim for the Australian screen sector. But nearly a year down the track and the story is very different – Australia’s screen production is steaming ahead. For that we can thank, first of all, everybody who works in the Australian screen sector. Rather than throwing in the towel when productions were halted and financing dried up, you quickly worked out how to reposition and get started again.

Led by the Australian Film Television and Radio School and Screen Australia a group of industry professionals quickly developed guidelines for COVID-safe productions. At the same time industry leaders alerted the Morrison government to a major threat – insurers would not provide cover against productions being halted if key cast members caught COVID. In turn, without insurance, screen financiers would not release cash to allow productions to commence. We worked with industry to develop a solution – a $50 million Temporary Interruption Fund administered by Screen Australia to fill the gap insurers would not. To date the scheme has allowed projects with combined production budgets of over $330 million to start or restart.

As COVID raged in Europe and the US, by mid-2020 it was increasingly clear that Australia’s careful management of the pandemic gave us a big opportunity to attract global productions to shoot in Australia. The Morrison government moved quickly to sees this once-in-a-century opportunity, announcing in July an additional $400 million in funding to extend the Location Incentive Program until 2026-27.

Within a few weeks we were signing up major productions. Of course, I recognise that we need to encourage and stimulate Australian productions as well as international ones. It’s great if there are more jobs and opportunities for Australian key grips, gaffers and best boys, but we also want more jobs and opportunities for Australian writers, directors and producers. Attracting more foreign productions can help materially in achieving those objectives as well. First, it builds the overall ecosystem. If more productions shoot in Australia it means a bigger screen sector and more opportunities for people at all stages of their career within the sector. Secondly, it provides opportunities for training and skills development for screen professionals on productions often bigger in scale than might otherwise be available to work on in Australia. That’s why our government requires international producers receiving Location Incentive funding to provide internships and training opportunities. One of the five criteria for assessing productions covers how many Australian cast and crew will be employed and what training and skills development will be available, including internships and similar programs.

Thirdly, it’s important to note that some of the productions funded under the Location Incentive include significant elements of Australian creative control. One example is Irreverent, one of three scripted television series being produced in Brisbane by Universal Studio Group. Irreverent was developed by the Australian-based film and television production company, Matchbox Pictures, and tells an Australian story set in far north Queensland. These are important and exciting projects, and it’s great to see them underway. But there is more work to do across the screen sector, and particularly in broadcasting. In my view the fact that we’ve had a crisis with COVID is no reason to press pause on reform. Indeed, on the contrary, it makes the reform process even more important.

I’d like to take a moment to give you my perspective on where we’ve come from, where we are now and where we need to go. In the past decade we’ve seen digital technologies drastically alter the global media landscape. Many of these changes have been positive and have included new business opportunities, efficiencies in advertising and more compelling content options for consumers. But we’ve also seen challenges within our domestic market with advertising-based business models unable to deliver the returns necessary to justify investment in many genres of media content. While free to air television maintains a stronghold on news and current affairs viewership, the overall audience for linear free to air television has declined at an annual rate of 6 per cent from 2014 to 2019. We’re now seeing people increasingly turning to online subscription services to access genres like drama, comedy, action and documentary. The shift is particularly stark in younger age groups.

In the first quarter of 2020 almost 70 per cent of Australians aged over 14 used a description video on demand service, up from just over 20 per cent in the first quarter of 2016. Online and on demand viewing give audiences the power to choose what they watch and when they watch it. And because these platforms are in strong competition with each other, they regularly release new content to attract viewers and thereby try and lock them in to their particular platform rather than having them look elsewhere. As evidence underlying this point, a recent media content consumption survey commissioned by my department found that 60 per cent of respondents used an online subscription service to watch screen content. Only a decade ago, of course, almost all of these people would have consumed the majority of their screen content on free to air television. And those eyeballs, in turn, contributed to high ratings, in turn, revenues of the networks and, in turn, what the networks could pay for quality Australian content. But this business model has been fundamentally challenged by the arrival of the streaming services with the inevitable flow-on consequences for our screen production sector.

So, what are we doing about this issue? Well, because the way that Australians consume screen content is changing we need to make sure that our incentives and our regulations are changing as well. As new ways of delivering content have continued to expand the market, the government has faced a choice – we could sit here and do nothing, but the prognosis for the screen sector in Australia would be quite grim. We could sit back and simply watch while the variety of Australian content declines, jobs are lost and fewer Australian voices and stories are heard. Alternatively, we could engage with the opportunities that change presents and set out to preserve the vibrancy and quality of the Australian screen sector. For me, the choice was very clear: we needed to lean in and take action rather than sitting back and doing nothing. The Australian screen sector, after all, plays an important role in creating jobs and stimulating the economy just as, and arguably even more importantly, it plays a vital role in shaping Australia’s national identity and in reflecting the diversity of our population.

The Morrison government is committed to the Australian screen sector continuing to play both of these roles effectively. That’s why we’ve chosen to take decisive action embarking on a significant and multi-year process of industry reform. In September last year I announced that Australia’s screen content regulation would be modernised to address the most acute points of regulatory imbalance. I also announced the injection of an additional $53 million of funding delivered through Screen Australia and the Australian Children’s Television Foundation to support the production of quality Australian drama, documentary and children’s film and television content and to establish a script writing and script development fund. I also announced the harmonising of the producer offset to a uniform 30 per cent for all domestic film and television production along with other complementary amendments to target government support and encourage the creation of screen content.

In addition, our government continues to invest significantly in the screen sector, providing support through both direct funding as well as tax offsets and regulation. In 2019-20, $439 million in funding was delivered, supporting content production, the promotion of Australia as a film destination and the training of screen practitioners. The measures that I announced last year are important and they’re designed to provide support for the industry in a particularly challenging year. But when we are seeing the scale of change that we are seeing in this industry we also need to look at the broader regulatory environment within which the screen sector operates. That’s why on 27 November last year I released our government’s media reform green paper. The reforms in this paper are intended to better support the entire Australian media sector and enhance the range and quality of services and content available to all Australians. Our aim is to place the Australian media sector on a more sustainable financial footing, harmonise the media regulatory framework and deliver positive public policy outcomes through the way that we use radio frequency spectrum.

The green paper sets out a reform agenda for the media industry with proposals to reshape media regulation in this country to level the playing field and make sure that quality Australian content features prominently across all platforms. Of course, we’ll be engaging in two-way dialogue with the broadcasting, media and the screen sectors to get people’s views, to hear people’s ideas as we develop up these proposals. As part of the reform agenda we’re proposing to introduce a new class of commercial television broadcasting licence. The proposal is that this new licence would continue to be subject to the 55 per cent overall Australian content requirement and the new more flexible sub-quota arrangements for children’s drama and documentary content which took effect from 1 January this year. The system would be designed to encourage broadcasters to invest in the content that their audiences want while providing incentives for high-value production.

The green paper also sets out proposals which would encourage commercial broadcasters to enter into multiplex sharing arrangements for their radio frequency spectrum. If they were to take up this offer it would allow the spectrum to be used for a range of purposes, but it would also allow the funding of significant new measures supporting the media sector and the screen sector. For example, a proportion of the revenue obtained could fund public policy objectives – public policy initiatives, such as the Create Australia Screen Trust, which would provide support for the continued production of Australian content. The green paper also contains a proposal that large subscription video on demand services – or SVODS – and advertising video on demand services – or AVODS – which operate in Australia should be required to invest a proportion of their Australian revenues in Australian content. This proposal would support the continuing creation of Australian stories on our screens as SVOD and AVOD services grow in popularity with Australian consumers. At the moment SVODs and AVODs face no regulatory requirement to provide Australian content, even though they’re competing with commercial and subscription broadcasters who do face such requirements. SVODs currently offer only limited amounts of Australian content, and much of this tends to be older programming.

We know the Australian public values Australian stories on screen and wants to see more of them. As a first step to achieving these objectives, on 30 September last year I announced that large subscription video on demand services would be required to report to the Australian Communications and Media Authority on their investment in Australian content. What was then set out in the green paper builds on that initial requirement with the proposal that large SVODs and AVODs face a formal regulatory requirement to invest in Australian content. The proposal is that the obligation would apply to large services operating in Australia or targeting Australian audiences that have the reach and capacity to make a meaningful contribution to the provision of Australian content. The providers meeting the relevant thresholds would initially face a requirement to report on their investment levels. If they failed to meet the relevant threshold over a period of time we would introduce a formal regulatory obligation.

These reforms, as set out in the green paper, are significant and complex and there will be a development process, including interaction with the media sector, the broadcasting sector and the screen sector as we develop and refine these ideas before we are in a position to consider legislating them. I certainly look forward to working with people represented at this conference as we develop and finalise these ideas. Australia is fortunate to have a world-class screen sector with talented writers, directors, producers, actors and skilled and hard-working crew. We have extraordinary scenery and locations, great studios, and our careful management of COVID has given us another advantage in the global fight to attract our share of global screen activity.

We know that the global demand for screen content is exploding with free to air and subscription television, streaming services, cinemas and many other markets for content. 2020 has been a remarkable year for the Australian screen sector. The COVID pandemic which at first seemed to be very grim news has turned out to create exciting new opportunities. At the same time, our government has already announced and implemented some significant reform measures for the media, broadcasting and screen sectors. And in the green paper we’ve set out a further menu of policy measures on which we’re seeking feedback from all stakeholders, including, of course, industry participants.

I conclude by congratulating the creative and hard-working people of the Australian film and television sector who’ve leapt on the opportunities that this unlikely past 12 months has created. More strength to your arm, and the Australian Government is backing you all the way.

End of Transcript.