Tue Jan 28

How taxpayers foot the bill for content that ends up locked behind paywalls

Written by Anna Potter, Professor in Digital Media and Cutural Studies, Queensland University of Technology

Headlines about Screen Australia’s latest annual Drama Report ^[1] have highlighted one particular figure: a 29% drop ^[2] in total industry expenditure compared to the year before.

But a closer look suggests this isn’t the most concerning finding. The report also reveals a significant chunk (42%) of the A$803 million spent on producing Australian TV drama in 2023–24 was funded by taxpayers.

What’s more – watching half of the Australian TV drama hours ^[3] broadcast in 2024 required a streaming subscription. Watching all of them required seven different subscriptions.

With Australians’ funding of this commercial, for-profit sector on the rise, we can’t help but ask: what do Australian viewers get in return?

Screen production challenged globally

Screen sectors globally are experiencing significant downturns because of changes in audience behaviour and advertiser spending. Various analyses suggest between 14%^[4] and 25%^[5] of all viewing is now comprised of videos from YouTube, TikTok, Facebook and Instagram.

Advertising revenue that once helped fund local drama has followed viewers to social media apps, imperilling Australia’s commercial broadcasters ^[6].

Traditionally, commissions from the three commercial broadcasters have supported Australia’s drama production sector. However, in 2021 the government significantly watered-down their quota obligations ^[7]. As a result, networks Seven, Nine and Ten commissioned just nine hours of new, non-soap drama in 2024.

The loss of commercial broadcasters from the production ecosystem has radically changed the sector’s dynamics. Streamers such as Netflix and Stan are now the largest investors in Australian drama, followed by the ABC.

Government subsidies for the sector have also grown considerably, partly due to rising production costs. Over the ten years leading up to 2023–24, federal spending on local TV drama production more than tripled ^[8], increasing by an average of 16.9% each year.

Yet, during that same period, the hours of TV drama produced fell by an average of 5.7% each year. In other words, we’re spending more on less. And as mentioned above, much of this declining TV drama slate ^[9] – which is heavily subsidised by government money – is ending up behind streamer paywalls.

The problem with current policy

Too much of Australia’s current screen funding is going towards stories that can’t be watched without a paid subscription.

Also, many of these stories have little to no connection to Australia. For instance NBC Universal’s Young Rock ^[10], which was produced in Australia, is about the childhood of American celebrity Dwayne “The Rock” Johnson. Similarly, Nautilus ^[11], which Disney originally commissioned and which was made in Australia, is loosely based on Jules Verne’s maritime adventure novel, 20,000 Leagues Under The Sea.

Since the 2000s, our screen industry has become far more global than national. Current policy largely funds television projects through tax rebates on production budget. And any scripted production made in Australia (and with a certain minimum budget) is eligible for this funding.

These rebates, combined with a lack of local content quotas for broadcasters and streamers, mean our current policy risks generously funding titles made by global corporations for international viewers.

The 2024 Drama Report highlights a need to carefully consider whether Australia’s policy for the sector is delivering for Australians.

It’s time to update the conditions of support, which were designed back when commercial broadcasters reliably commissioned some 300 hours of Australian drama each year. This is no longer the case.

Solutions for more Australian stories

So what needs to change? For a start, policy must offer greater support for dramas that tell compelling Australian stories in all their diversity.

Such dramas, which deliver significant cultural value to audiences, should receive higher levels of rebates than international stories filmed in Australia. The ABC and the SBS could lead the way in commissioning this content, as per their charter obligations ^[13].

The 2021 changes to Australian content regulations left the ABC as the principal provider of free local drama and children’s programs – but the ABC has limited resources. Rather than supporting international productions, local audiences might be better served if the government increased the ABC’s funding to produce minimum amounts of drama and children’s programs.

We also have to bring Australian drama out from behind streamer paywalls if they receive any kind of government support. They should be made available to local audiences for free within two years of their release.

This could be done through free-to-air television services, like ABC iView or SBS On Demand, or on a free platform built specifically for local content.

Policymakers will need to define production sector sustainability in a 21st century context. Australia has historically had many small production companies. However, the steep decline in local drama being produced suggests only a few companies will remain viable in the long term.

The scale of disruption facing local broadcasters and production companies needs to be matched by policy that’s fit for purpose, and which returns value to Australian communities.