Foxtel push to drop 10% Drama requirement

Foxtel wants to drop a minimum requirement to invest new Australian drama programs as part of a deregulation of local content.

But it still values the importance of Australian storytelling which resonate with its subscribers.

In its submission to a government option paper on local content, Foxtel aligns with Free TV commercial broadcasters in the removal of regulation. The Subscription TV provider says Foxtel is the most heavily regulated media business in Australia, arguing that the anti-siphoning list, the Australian content expenditure obligation and “significant captioning obligations relative to those imposed on the free to air broadcasters” inhibit their ability to compete with other platforms and broadcasters.

Under the New Eligible Drama Expenditure scheme Foxtel is required to spend at least 10% of total program expenditure on new Australian drama programs. Where it is unable to meet its obligations for one reporting period, these must be carried forward to the subsequent period.

In its submission, Foxtel argues the removal of the NEDE scheme will also allow for flexibility of investment on Australian content across a variety of genres.

“… Foxtel has proven success with Australian drama and the removal of the NEDE scheme does not mean that audiences will no longer see themselves represented on our screens, it simply provides Foxtel the freedom to compete unhindered in the way and manner we see fit,” it noted.

It also wants a review of the $440,000 license fee paid to producers for every hour of local drama, arguing it lacks flexibility.

“The $440,000 per hour licence fee requirement for drama makes sense for a traditional media structure that caters to mass audiences. Subscription television by nature does not adhere to this format, therefore the ‘one size fits all’ approach by Screen Australia results in subscription television services, such as Foxtel, being unable to take advantage of this option. And it is not just subscription broadcasters who do not fit this singular approach to the licence fees,” it stated.

“The model itself means that low cost production models and platforms who do not subscribe to the advertiser-funded mass audience approach are excluded.”

Foxtel, which has recently produced Upright, Lambs of God, Wentworth, Secret City, Mr. Inbetween, Fighting Season and the upcoming The End also noted there is no local content requirement on streaming services such as Netflix, Disney+, Amazon Prime and YouTube Premium.

“The fast uptake of these services by Australian audiences is having a direct effect on traditional broadcaster revenues and causing major structural change in the landscape. The sheer scale of large global companies such as Amazon and Netflix means these companies are able to invest in and make premium content at rates that Australian platforms cannot match. While Foxtel recognises the importance of providing viewers with content from a range of sources, it must be noted that there exists a perpetual imbalance in the landscape,” it continued.

Foxtel also stressed the impact of COVID-19 on its business. In recent months it has seen big staffing numbers depart the company while others were temporarily stood down.

“The impacts on the Foxtel Group have been significant with the loss of advertising revenue; the cessation of live sports coupled with closure of licenced venues which have severely impacted subscriber income and the almost instant onset of unemployment also impacting subscriptions. These have all had immediate financial impacts on Foxtel.”

While Free TV Australia also supports a Deregulated model moving forward, a slew of Australian screen guilds and associations representing producers, writers, actors and more, favour a different Model, which requires a minimum percentage of revenue invested into new Australian scripted content, regulated by ACMA, including with sub-quotas for new drama, documentary and children’s programs.