This is a year that will make or break the independent Australian production industry.
Australian film and television production companies are now competing in a global marketplace for funding and distribution. Our industry is becoming increasingly outwardly focused.
Technology offers opportunities, but also threats. The history of the screen industry is a history of technological advancement. Technology enables producers to create new and exciting screen experiences, with virtual reality the latest frontier. But technology companies are disrupting existing business practices in the screen industry and shaping the world to benefit their shareholders and the government is going along for the ride. The Productivity Commission's report into intellectual property arrangements is an egregious gift to Silicon Valley and an attack on Australian content creators.
On the funding side, this government has made relentless cuts to the eligible pool of local funding for Australian productions. Because of cuts to Screen Australia, the ABC and SBS, increasingly Australian producers must look overseas for funding and distribution options.
Here, a tension emerges between protectionism and internationalism. To attract funding from overseas a production needs to have big-name talent, an A-list actor or director. Yet our 1970s-era protectionist model for entertainment visas means unions have too much control over the artists who come to Australia. Productions move to more friendly regulatory environments, like New Zealand or Canada.
The government also gives New Zealand producers a free kick by allowing New Zealand content to be counted as Australian for Australian content quotas. To acquit their quotas, commercial television broadcasters buy cheap second-run New Zealand content instead of commissioning Australian content. In 2015, the Seven Network broadcast New Zealand from Above and it counted as an Australian program. The Australian government has a better policy for the New Zealand production industry than the New Zealand government.
On the distribution side, our industry is weighted towards supply: there are many sellers and few buyers. This gives the broadcasters, distributors and streaming-on-demand platforms great bargaining power. I see increasingly bad deals being offered to producers as new industry standards are set unilaterally by the buyers, to the detriment of the local production industry. It's death by a thousand cuts.
At the same time, the government eases pressure for the commercial television broadcasters by reducing their spectrum licence fees. Any pressure relief is welcome, but there is no requirement to pass this windfall on to the Australian screen industry, and it winds up as dividends to shareholders. When broadcasters feel pressure, producers feel it doubly through reduced licence fees and worse and worse deals being offered. Trickle-down economics doesn't work.
The government has announced a parliamentary inquiry into factors contributing to the growth and sustainability of the Australian film and television industry. This is a positive step. However, this year the government will respond to the Productivity Commission's report. There is also likely to be a review of Australian content. If this happens, it will look at children's content quotas and there are increasing calls from parts of the screen sector to have them removed.
We need more from a government that has done little in four years to support the independent screen sector. Reductions in broadcast licence fees and bringing Thor, Alien and Aquaman to Australia are all examples of short-term, trickle-down sugar hits, which are welcome in the absence of a broader vision for our industry.
To that end, we stand ready to work with the government, Labor, the Greens and the crossbench on a screen industry policy. We need to address the competitiveness of our industry internationally and address some long-term systemic disadvantages for our industry.
It is important that the government gets the policy settings right in this term of Parliament. If not, very soon we won't have an independent Australian production industry to produce great Australian stories.