ABC boss proposes forcing Netflix to contribute to creation of Australian content with new fund

ABC boss Mark Scott has floated a proposal of forcing online giants like Netflix to contribute to a digital content fund which would help pay for original Australian TV and video content.

ABC boss Mark Scott

ABC boss Mark Scott

During a speech at Macquarie University this evening Scott also predicted plans to reform media reform would remain stalled, but warned that may also harm Australian storytelling.

Scott called for debate on the idea of a digital content fund which would include companies like Netflix, Apple and Google contributing a “percentage of revenue” to support the creation of local content.

“Netflix was until recently exempt from GST. Costings done by the Parliamentary Budget Office showed that GST on Netflix, which is supposed to come into force in two years, would raise $3.2 billion in GST revenue over a decade.”

During the annual Brian Johns AO lecture – named after the former managing director of the ABC – Scott called for a policy response from government to ensure the likes of Netflix, which only formally launched in Australia in March, contributed to creating Australian content.

“The Netflix effect is rapidly changing the way Australians feel about paying for video content, not just on their smart TVs but mobile devices,” he said. “And because the Netflix business model is based on content with international appeal, amortising the cost of producing that content across hundreds of markets, Australian content will struggle to remain just that, uniquely Australian.”

Scott acknowledged taxing the likes of Netflix and Google would be challenging and argued that he personally was in favour of a producer rebate which Scott argues would encourage the creation of more Australian content.

“Some will argue that Netflix and others should simply be required to spend a certain amount of local revenue on local content,” said Scott.

“But ‘Force Netflix’ might be a bit like ‘Tax Google’: a simple two-word policy statement that sounds good in theory but is far harder to implement in practice,” he said.

“Some may call for most standardised local content requirements across all providers: pay, free-to-air or SVOD. That will redistribute the current burden, but most likely see less quality Australian content on free-to-air TV.

“As I said, levelling the playing field on the producer rebate would make it easier for networks to afford more Australian content, on a platform that really engages audiences at scale.”

Scott cited the success of ABC TV shows like The Slap, Utopia, Rake and The Code to argue that rebates and Screen Australia funding should be geared to television and online viewing.

“To encourage film and TV production, we currently have a system of tax offsets in place for producers. But under the current rules, Australian film attracts twice the level of offset as TV, even though Australian film attracts a fraction of the audience,” he said.

Scott, who announced this week he will step down in 2016, added that the ABC should not be the only place where Australian content is made.

He also cited the example of the pay-TV operator Foxtel saying: “We can’t ask or expect Foxtel to deliver the same cultural impact on this investment—or the best return on Screen Australia’s investment… local drama does not press its way on to Foxtel’s most watched list.

“It is washed away by all that is offered, on all the other channels. And while Australian identity is shaped through the involvement of every Australian, productions on Foxtel are not available to every Australian; only those willing and able to pay for subscriptions.”

Scott concluded by noting it is likely hoped-for media reform would continue to be stalled as Canberra waits for the media to achieve “consensus”.

“I have heard politicians say they are ready to legislate once media executives have agreed on a course of action. Giving the animosity and competitive egos that linger in this sector, this is an unlikely prospect, this millennium at least,” said Scott.

“When policy reform can be stymied by lunches in New York and dinners in Broome then you know that the cycle of inaction will most likely continue,” he added, referencing recent dinners between Coalition politicians with News Corp’s Rupert Murdoch in New York and Seven’s Kerry Stokes in Broome.

“You cannot stop the technological revolution. You should not stop companies acting rationally in the interest of their shareholders.

“What is needed is a collective will to work through all the options and to answer the one critical question: who will tell the Australian stories?

“The stories that matter most to the Australian people: the way we understand ourselves, each other, our history and our place in the world.”

Nic Christensen 


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