Image 20150401 21743 goxxbf.jpg?ixlib=rb 1.1

What do Netflix, Stan and Presto mean for Australian TV?

Are new video-on-demand services really ‘breathing new life’ into Australian content? LoKan Sardari

What do Netflix, Stan and Presto mean for Australian TV?

The recent arrival of subscription video on demand (SVOD) services Netflix, Stan and Presto have huge implications for what we currently call “television” in Australia. They could radically disrupt the business models of both free-to-air (FTA) and subscription television (STV).

They could change where and how viewers look for and watch content. And they could also transform screen production and the established system of rules and regulations around the financing and availability of new Australian content.

Unlike FTA and STV broadcasters, SVOD services such as Netflix, Stan and Presto are not required to fund or provide access to Australian programs. The new services are delivered online – sometimes called “over the top” – and therefore are not subject to the same regulations as free-to-air, cable or satellite broadcasters.

At present, the SVOD providers cannot be compelled to include Australian shows in their offerings. In fact they all do, to some extent, since viewers have shown over many years that they want and will watch Australian content – on television, at least.

All of the new services offer some Australian content, although viewers may be surprised to see the same shows turning up on different services. This is because many of the deals for Australian content are non-exclusive, meaning lower licence fee income for copyright owners, but broader availability.

Non-exclusivity is not a regulated condition for the operation of SVOD services – yet – but this is a step the government might consider taking in order to ensure that Australian content is widely available and easily discoverable.

In Canada, long a model and comparator for Australian broadcasting regulation, some similar services are required to make all new Canadian feature films available to viewers, while “exclusive” content is only permitted if it can be “accessed by subscribers of more than one mobile or Internet service provider”.

Canadian regulations are more advanced – and more complex – because services like those newly available to Australian consumers have been around for a number of years. There are different rules for licensed VOD services that require subscription to a proprietary STV or internet service – roughly the equivalent of Foxtel Go – than for “over the top” services.

In Canada, the former type of service must make financial and inventory commitments to Canadian content, while the latter are largely exempt.

Paul Townsend

As in Australia, funding for Canadian content is a mix of direct and indirect financial inputs, much of which is provided by the federal and provincial governments. Some broadcasters are required to screen minimum amounts of Canadian content (as are the commercial FTAs in Australia), and some are required to make financial contributions to Canadian content production (as are Foxtel’s predominantly drama channels here).

But the Canadian regulator has recently acknowledged that the game has changed. The CRTC has proposed a significant shift in the emphasis of Canadian content regulations, from a focus on quantity to a focus on quality. Practically, this means that more services will face expenditure requirements, while exhibition requirements will be loosened or eliminated.

Paradoxically this may work against the other main intent of Canadian regulation, which is to make Canadian content accessible and available.

Given the Canadian lead, it is highly likely that such proposals may become part of the Australian policy debate. The nascent services have the potential, over time, to compete against the incumbent broadcasters on an even footing. But this is still some way off.

The potential to enhance competition could be stifled by any decision to regulate SVOD and FTA/STV as “like services”. At a later date, once the industry has become established, the question of Australian content regulation could be revisited.

Brian J. Matis

The treatment of STV services provides a precedent here. When STV was introduced in the mid-1990s, the new services were not made subject to the same regulations as FTAs. It was acknowledged then that the regulatory burden could stifle the emerging industry and inhibit the development of innovative services and content.

Some years later, an expenditure quota was imposed on channels screening drama and documentary as a means to support new Australian content.

The producer lobby, long among the strongest supporters of Australian content regulations on broadcast television are not (yet) calling for government intervention on SVOD. Last week Screen Producers’ Australia chief executive Matthew Deaner cautiously welcomed Netflix:

We are pleased to see a new player like Netflix enter our expanding market and we trust that this will not just provide an avenue for imported content and local catalogue titles, but also will result in a valuable contribution to Australian screens through original local production.

In an interview with ABC News Breakfast last week, Netflix CEO Reed Hastings hinted that Netflix would in future look at investing in local content production perhaps along the lines of its work in the UK.

There, Netflix has purchased international rights to new BBC dramas Happy Valley and season two of The Fall. Ted Sarandos, Netflix’s chief content officer, told triplej’s Hack program that they are:

open to producing original content in Australia as soon as we can find a great story and a great storyteller.

At present, though, Netflix sees its main contribution being the service’s ability to put Australian programs in front of a global audience. Or, in Sarandos’s words, “breathing new life” into Australian content by making it available to more than 50 million subscribers in more than 40 countries.

Mikaela Danvers

Given that much of the Australian content on the new SVODs comes from the ABC, viewers may ask why they’re paying to watch programs they could see free on ABC iView. The answer, in part, is that iView does not always provide unlimited access to full seasons of series.

Where FTA and STV serve snack-sized, time-restricted diets of programming, SVOD’s multi-course feasts seek to satisfy the new phenomenon of binge viewing.

The SVOD services’ content libraries are substantial and will continue to grow as they become more established. But despite the hype, the prospect of (legally) viewing “what I want, when I want it, wherever” is still some way off. This is especially true if what you want is Australian content.

Many older Australian films and television programs are not and may never be available on any service in any form except perhaps short clips on YouTube. Viewing the long-form versions those that are available may entail a long wait for content to load and a short viewing experience if you have a low-speed broadband service with a capped monthly download limit.

Meanwhile, FTA and STV seem set to remain the principal venues for original Australian content, at least as long as the current regulations remain in place.