Stop making drama about regulation: Sue McCreadie

Monday, 21 May 2012

Since the release of the Convergence Review's final report, the television networks have hit the opinion pages with the all too familiar pieces detailing the evils of regulation.

One piece, in last Monday's Media from Channel 10, described the recommended 50 per cent increase in the networks' subquota arrangements (drama, documentary and children's content) as an "arbitrary" response to a non-existent problem.

If only it were that simple.

For a long time - actually, since the introduction of Australian content requirements - the broadcasters, free and pay alike, have claimed that they would gladly invest in Australian content and that regulation is simply not needed. This is arguably the case when it comes to sport and news content (as long as reporting can be centralised as much as possible to offset costs), infotainment and reality shows (the last two being OK as long as the format is well known and tested in overseas markets).

But the likelihood that broadcasters will continue to support other genres drops off significantly.

Australian documentary often involves expensive original development and is more risky.

Drama, too, involves some big and expensive risks with investment in original screenplays when US content deals can provide programs like Two and a Half Men for about a tenth of the price.

And then there is Australian children's content, which simply doesn't pay, particularly when there is no junk food advertising.

As PwC concluded in its analysis released in the final convergence report, without existing Australian content requirements documentaries would plummet by 50 per cent, drama by a whopping 90 per cent and children's content would simply not exist. This is a very real problem.

The free-to-air networks' digital multi-channels, have carried next to no Australian content, with the exception of Neighbours.

Why? Because there are no Australian content requirements and, without exception, the only networks investing in Australian content are those required to do so.

Australians watch more than three hours of television every day, so they should be able to find a healthy mix of Australian content on these new channels and not just a smattering of repeats and advertorials.

Of course, we understand that broadcasters are commercial entities and private equity owners don't like the idea of spending more than they have to on the riskier forms of Australian programming.

But commercial free-to-air businesses are strong. There are only three of them, they have a combined annual revenue of between $3.5 billion and $4bn and they earned more than $2bn in the second half of last year from advertising.

The free-to-air multi-channels are raking in new dollars - in their launch year an additional $110 million - and unlike in most other countries, they didn't have to pay for the spectrum they are using.

They've received a licence fee rebate of $250m in the past few years and in a tight budget they even received another $53.5m from the government to move off the spectrum they had already agreed to vacate.

The broadcasters have first dibs at sports rights to make profitable Australian sport content courtesy of regulation. So is it really a problem that another form of regulation might require minimal increased investment in content that is a little riskier than sport?

Remember, too, that broadcasters are still subsidised through tax incentives and direct investment for making this programming.

Both free-to-air and subscription television do invest in a lot of Australian content. Free-to-air claimed $1.23bn in 2010-11 and subscription $600m in the same year.

But it's the easy, less risky content that these numbers are padded with. Only a fraction of this investment is dedicated to drama, a smaller amount to documentary and even less is provided for children's content.

No one disputes that Australians love Australian television shows. But without government support and regulation, Australians will no longer have this choice.

Sue McCreadie is director of Actors Equity