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More speculation on outlook for Stan, levy on Netflix.

Media reports suggest further change looming in the streaming sector.

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There is more speculation today on possible changes in the streaming sector, with Stan facing the potential loss of US content deals and the possibility of a new levy on players such as Netflix.

Disney and CBS-owned Showtime are big suppliers to Stan but with Disney+ expected to launch and CBS All Access now in Australia, The Australian reports Stan is set to face its sternest test with new competition.

Efforts have been under way to find an equity or content partner for Nine-owed Stan in a bid to see it through what is shaping as a period of dramatic change in the market, that could include some consolidation of the local players.

Costs to acquire programs for aggregators such as Stan are expected to rise from here as prod­uction houses such as Disney, HBO and CBS pull content back from licencing partners to establish their own “channel” offerings.

There is chatter Stan has already been advised it will lose Disney content, but nothing has been confirmed.

Meanwhile newly-installed Communications Minister Paul Fletcher has indicated the Morrison government could support a new levy on digital video streamers to make up for lost revenue streams from struggling traditional broadcasters.

It follows ongoing grievances from broadcasters and producers about the lack of local content obligations in streaming.

“You try and have the most consistent approach between different users of that asset. So I can find myself saying I think a principle of competitive neutrality is a very desirable thing,” he told The Australian.

“The more you can have companies that are in the same market subject to broadly the same set of regulatory requirements and obligations the better.”

Last week Netflix was reportedly setting up a Sydney-based team of around 10 staff.

17 Responses

  1. Why bring in a levy on streaming services,that only hurts the consumer.I thought this government was opposed to raising taxes.But apparently their opposition is very selective.

  2. Problem with a Levy is it can hand the space to a competitor, for instance Amazon can make up the short fall in other ways, it’s why the service is so cheap now because it is kind of a side business to get customer to their main business. Same with Disney, it can push it’s films through it’s service and get people to the cinema plus then throw in merchandise sales. Disney+ as a Family only one screams kids wanting the latest merchandise, if it uses Hulu for it’s adult stuff here same applies, basically if Disney can throw money into sponsoring a stadium in Melbourne they can absorb a levy.

  3. The broadcast networks have minimum local content requirements as a condition of their spectrum licenses. If they don’t like it, they should drop their broadcast content and switch to streaming only, I’m sure the public can find a better use for that spectrum.

    1. The only problem with that is the significant digital divide that exists. A lot of elderly, disabled, and people in prison don’t have access to the internet at all but do have FTA TV.

      A lot of rural, poor, unemployed/underemployed and homeless people also have access to TV and Internet but not enough bandwidth to be able to stream. eg if you are homeless you maybe “couch surfing” or in a shelter, and have your mobile as your only internet.

      There’s a lot to consider here.

        1. Not just speed, but also the allowances. Satellite NBN has very low data allowances to the point where you can get more gigs for less money from your mobile provider (assuming you have reception)

          I have a lot of respect for the elderly and how eager they are to learn. There is a huge number of elderly people who can stream no problem. It’s hard to get recent stats, the last known numbers from March 2018 were that 40% of Over 65s don’t have internet access.

          However with time that number will inevitably drop through natural attrition.

          Another group that may have a problem with FTA dropping off would be grey nomads, however those who love their TV tend to have foxtel setup in their vehicle for use anywhere. Some also have VAST.

          1. Are you guys saying that perhaps if they stopped their terrestrial broadcast, and switched to streaming only, that would reduce their reach to the population? Therefore putting them at a competitive disadvantage vis-a-vis their current situation?

            Huh, perhaps then they should stop whining about Netflix being at a competitive advantage by not having to produce local content. Seven had a go at the Netflix business model with Presto, which had no requirement for local content. They didn’t find it so easy.

  4. I’ve been reading with interest Media strategist Steven Allen’s comments regarding this issue and I tend to agree with him. Actors, writers and producers are flocking to streaming services because they have creative control over their creation plus they feel like the 3 main commercial networks in Australia have deserted any ideas of telling Australian stories. Of course FTA will now complain about the cost of producing new content but back in the day when drowning in revenue they had no such concerns. Markets change. Technology is evolving at a rapid pace. Shape up or ship out is the old adage. As for the Minister considering a levy on Netflix, stupid beyond belief.

  5. The real issue is like most everything else in Australia is that our low population base makes doing business expensive especially with the infrastructure required over vast distances, the NBN is a good example of the waste and inefficiency that results. Small audiences is why Foxtel/Newscorp needed to maintain a Pay TV monopoly and higher fees, the main terrestrial channels need their advertising revenue but change was inevitable they will have to live with that, Stan will need to find a partner to afford better content or match other competitors by finding audiences outside Australia as will Foxtel.
    Introducing a levy will not please consumers or give any reprieve to Australian content producers, viewers will look elsewhere, using VPN’s, no one involved in the Australian TV industry will be any better off.

    1. NZ has a much smaller population than us but they have their local netflix competitor Lightbox

      The SVOD for Sky in NZ is called “Neon” so lightbox has nothing to do with them.

      Stan can survive in the local market without Disney (there is plenty of other kids content they can license and I don’t believe Stan have lost Disney just yet anyway – they can fight to keep it)

      FTA networks can survive too, by focusing on live sport, local news, and australian stories. Also they need to consider an ad free paid service. 7 was rumoured to try this in 2017 (along with a “freemium” model where users pay to get access to content before it’s on linear TV and offline downloads) but never did it.

      Consumers use ad blockers, that’s a reality. If 7 and 9 try a paid ad free option for catch up I’m sure it will be popular (but please don’t price it at $10 – in the USA the $5-6 mark works…

  6. Fletcher says he wants a “consistent approach” and “the same set of regulatory requirements and obligations”. So he wants a levy on Netflix. There is no levy. Commercial FTA is required to produce and a certain amount of Australian Drama and be 55% local content on their main channels in primetime. Secondary channels are treated differently and repeats count. Foxtel channels are required to spend a percentage of their budget on Australian production. And under the TPP NZ content is Australian. A levy would just be paid by consumers and be solely of benefit to Foxtel and a few producers.

    Fletcher seems to be confusing local content requirements with the insanity he was talking about last week where he said he expects a global agreement to levy everything on the Internet within a year.

  7. Levy! Call a spade a spade. The word you want is tax! Let’s also bring back protection for the car industry and the clothing footwear and textile industry. OMG!

  8. How about you skip the levy and impose a minimum local content on them? Then people might one day actually have a local, scripted alternative to all the reality shows that are on at 7:30pm from these struggling traditional broadcasters.

  9. Why place a levy on Netflix?
    Traditional broadcasters need to pick their game up and stop showing the reality crap and they might get more viewership

    1. When 2 million people turn on their TVs to watch “reality crap”, traditional broadcasters will keep making it.
      If you don’t like “reality” then don’t watch it…… and maybe tell the other 2 million people not to watch too.

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