Streaming services like Netflix should be forced to spend 20% of local revenue on Australian content, a new government report suggests

Streaming services like Netflix should be forced to spend 20% of local revenue on Australian content, a new government report suggests

(Photo Illustration by Chesnot/Getty Images)

• A federal inquiry into the future of the arts in Australia has recommended 20% levy on local revenue from streaming services.
• The recommendations mark an upgrade from previous requirements on streamers to self-report their spend for two years from January 2021.
• The report pointed to the more than 45% increase in subscription rates for streaming services since the start of the pandemic as evidence of the proportion of Australian entertainment spending allocated to streaming platforms.
• Visit Business Insider Australia’s homepage for more stories.

Following a surge in spending on streaming since the start of the pandemic, a long-awaited parliamentary report has called for streaming services to commit 20% of their local revenue to Australian content.

Global streaming giants, including Netflix, Stan and Disney+, should be forced to invest this local revenue in new Australian drama, documentaries and children’s programs, the report from a bipartisan parliamentary committee recommended.

The call for an Australian content requirement on streaming services makes it the most stringent demand for regulation of such services yet to come out of Parliament House.

It follows a brutal two years for the Australian arts sector, which suffered $24 billion in lost output as a result of pandemic lockdowns.

The federal inquiry, which began its investigation into the state of the creative industries moving forward in late 2020, followed pressure from a wide array of industry leaders, artists and performers for greater support following its loss of revenue and infrastructure since the start of the pandemic.

One of the key conclusions about how to take the sector forward was that art unique to Australia be given “consideration and greater recognition,” the report said.

“Australia’s cultural identity evolves as creative workers continue to represent Australian life and tell Australian stories,” it said.

While the committee acknowledged the community and wellbeing benefits of many Australians, it highlighted the need to invest financially in the sector as part of wider efforts to push forward the economic recovery through arts and entertainment spending.

80% of Australians pay for streaming

When the pandemic hit in 2020, an additional 14.5 million Australians forked out for access to a TV subscription service.

The average number of streaming subscriptions reached 3.1 million in June 2021, up from 2.8 million in June 2020.

Two years on, streaming platforms have been cemented as a core part of Australia’s entertainment spending, with Deloitte’s annual media consumer survey finding the average Australian household now has 2.3 streaming service subscriptions.

Furthermore, it found households are paying an average of $55 a month on digital entertainment, with a massive 80% of Australian households now subscribing to at least one paid streaming service.

The move toward spending on streaming platforms highlighted the need for government policy around how the revenue from global streaming giants related to the state of Australia’s wider creative industries.

The report, which recognised that “Australians have increasingly relied on the arts during periods of self-isolation and lockdowns,” pointed to the more than 45% increase in subscription rates for streaming services as evidence of an imperative for streaming services to invest in Australian content.

The call for a 20% levy on local revenue is in line with the approach taken in both Canada and Europe, and is in line with what industry lobby group Screen Producers Australia has publicly called for.

Previous inquiries and reports have called for a levy of 10%, and when the federal government released its reform package last September, there was no obligation on the streamers other than the requirement to self-report their spend for two years from January 2021.

The report also recommended the word “arts” be restored to the title of its government department, where it is currently buried within the Department of Infrastructure, Transport, Regional Development and Communications.

Committee member MP Josh Burns said it was “significant and symbolic” that the word was missing, and Australia needed “a re-established, named department of the arts to give it the proper significance that it deserves.”

A spokesperson for arts minister Paul Fletcher said, “The government thanks the committee for its work and will consider the report in the usual way.”