Aussies give Netflix $1 billion a year – let’s ask for half of it back
During the week, local peak body Screen Producers Australia teamed up with 19 other screen organisations from Europe, New Zealand, Canada, a place named ‘Ireland’, and Spain, and demanded legislation that requires Netflix, Amazon, Disney, and other streamers to invest a percentage of its earnings in each territory back into local productions.
The various peak bodies issued a dot-point list of demands, the main one being “all platforms that derive financial benefit from conducting business in the local market should financially contribute, proportionally, to the creation of new local content for the benefit of local audiences.”
Pleasingly, the Australian government is ahead of the international curve in regards to this issue. It has already committed to introducing a local content quota for all streaming services operating in the country by mid-2024.
What this will look like, however, is anyone’s guess. It’s unlikely to be based on the total percentage of content available; this works for linear television, because it’s limited by time, but with over 2,000 titles available on Netflix in Australia alone, not to mention the other services, we’d have to start cloning Georgie Parkers to reach any meaningful quota.
It’s more likely to be based on local revenue. Screen Producers Australia want 20% of all money made by streaming services in Australia poured back into local productions, while the streaming services are hoping it’s closer to 2%.
Free-to-air commercial television networks are currently required to air 55% local Australian content between 6am and midnight (on their main channel), so it’s long been a matter of ‘when’, rather than ‘if’, a local quota will be enforced upon streaming services. Netflix launched locally in early 2015, so they’ve had a free run for close to nine years.
And what a run. Netflix made $1.06 billion in Australia during the 2022 calendar year. For the sake of neatness, let’s let them keep the stray sixty million, and round it to a ‘billi’, to quote Lil Wayne.
If the SPA get their way, that’s $200 million that Netflix would have to pour back into the Australian film and television industry, as well as the dozens of other industries that hover in its orbit, each year.
2024 is close to three weeks old now, which means that the mainstream media has already started to cluck over the upcoming May budget announcement. Over the next few months, you’ll hear the phrase ‘stimulate the economy’ more than you’ll hear your own name, and although unemployment is hovering at a half-century low, ‘job creation’ will also be said so often the syllables will stop sounding like actual words any more.
You know an easy way to stimulate the economy? Job creation. Forcing overseas streaming services to re-invest the millions of dollars they are making in our country, into making Australian content.
The Federal Government is slowly getting better at supporting the arts. Last May’s budget saw $960 million earmarked for the cultural sector, which was pleasing, despite a lot of it being for projects that were announced months earlier.
With groceries currently at 2034 prices and the Earth’s disintegration well ahead of schedule, arts funding will no doubt take a back seat in the upcoming budget, and it will be hard for reasonable minded people to argue that funding an oboe recital is more important than lifting the Job Seeker payment. Winston Churchill said “the arts are essential to any complete national life”, but it’s a hard sell when pensioners are eating pet food. So, the government will need some workarounds.
On a state level, Chris Minns has already kicked a significant goal for the arts by removing the archaic restrictions on the amount of live concerts ‘allowed’ to be held at the SCG. Until this week, the stadium was only ‘allowed’ to host four concerts per year – this has now been boosted to 20 each year (or one extra-long Springsteen gig), a massive shot in the arm for the arts, and an estimated $120 million a year injection into the economy.
And how much did Minns spend on this seismic shift in the city’s culture? Well, he would have gotten an Uber to Moore Park for the announcement, and maybe a Fanta while there… Other than that?
It was an easy win. So are content quotas, especially when enforced on multinational conglomerates.
The Australian film and screen industry is also extremely healthy at the moment.
Expenditure on scripted screen production in Australia has been higher in the last two financial years than ever before. In 2021/22, $2.43 billion (a record) was spent across 171 titles, while in the 2022/23 financial year, $2.34 billion went into (a record) 213 local productions.
In addition, an extra $809 million (also a record) came in from overseas films shooting in Australia during the year. The Fall Guy; Godzilla x Kong; and Kingdom of the Planet of the Apes all turned Sydney into the latest Hollywood backlot, while the recently-opened rom-com Anyone But You saw Sydney Sweeney overshadowed by Sydney Harbour in her own film.
Meanwhile, Bluey is our biggest export since penicillin, locally produced series Boy Swallows Universe is currently one of the five most-watched shows globally on Netflix (as was Fisk last year), and the two biggest movie stars in the world – Margot Robbie and Chris Hemsworth – did their early training on the sets of Neighbours and Home and Away.
A robust local industry pays for itself a thousand times over. But why not let Netflix and Disney pay for it?
And why not go big on the content quotas? If Netflix are raking in a billion dollars a year from Australia – one of its smaller markets – then perhaps they can reinvest half of it?
It’s a drop in the ocean for them. Globally, Netflix earned A$48 billion in 2022 from its subscribers.
Suddenly, $200 million a year doesn’t seem enough.
France is leading the world on content quotas. They were the first to legislate a local percentage for streamers such as Netflix – 25% of local revenue – while French free-to-air television networks are required to air 40% original French-language programming.
Why don’t we lead the way? Make Netflix spend 50% of its Australian revenue on funding local content. If not by commissioning it directly, then at least by licensing it.
There’d have to be some prominence framework in place much like the commercial free-to-air TV networks are demanding for overseas television manufacturers – we cannot allow Netflix to simply license old episodes of A Country Practice and bury them deep in an ever-collapsing menu system in order to jump through a hoop.
No! We need ‘Carl Barron vs Skippy’ or whatever future productions come from this windfall, in prime position in the menu, alongside the international blockbusters and inbred-murderer documentaries on offer.
Of course, Netflix and the like will argue it’s not sustainable. They’ll threaten to pull out of the Australian market. They’ll warn they will be forced to pass on the costs to the subscribers.
To this argument, my reply is an impersonation of Adam Sandler yelling ‘horse shit’, taken from the 1999 cinematic classic Big Daddy.
Netlfix won’t ever pull out of the Australian market. If they do, the space they occupy in our streaming market will simply be taken up by their competitors. Same deal if they hike costs too much. And if all the overseas streaming services band together and all agree to rise costs? That’s called ‘collusion’, which is illegal, and punishable by water-boarding (Note to self: check this legal fact).
Anthony Albanese might wear a Midnight Oil t-shirt, and I once saw him DJ at a charity footy game, but he hasn’t done enough to support the local arts yet.
A bold, world-leading law that demands that streaming services invest in the cultural advancement of the countries they operate in is not a big ask.
If Netflix want a happy marriage with Australia, they should give us half.
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I think what you mean is that Aussie’s don’t want to be force-fed under-funded Aussie content. Doubt anyone would have a problem with Aussie content that has the production budgets we see from content produced in the States or the UK. Recent locally produced stuff like Boy Swallows Universe, Colin from Accounts and Latecomers have shown what’s possible. Get some extra funding in and we could consistently be producing really high calibre stuff that people would be more than happy to watch on the daily.
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I wish commentators would quote correct values. From their 2022 accounts, it looks like revenue is around A$48bn, but their actual earnings (i.e. profit) is around A$8bn – still a lot, but far less than the author implies.
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A Netflix made period accurate series based on the ‘Tomorrow When the War Began’ would be pretty good.
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Ah no thanks, Australia want Netflix for the lack of forced fed Aussie content, otherwise they’d watch FTA.. nice try tho.
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So the angle of this article is to try and get funding for Australian film projects you netflix would have to make deals with government-funded film producers to cover the cost enough which would only make them both richer
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