Simpsons Solicitors

Australian content: seeing ourselves on TV

March 17th 2010

A legal requirement on commercial television networks to broadcast minimum levels of local content has been part of the industry for half a century

How did quotas begin?
When Australian television began in 1956 the commercial broadcasters were initially required to employ “Australians, as far as possible in the production and presentation of programs”. But from the outset, the programming broadcast by our commercial stations was largely sourced from overseas. Most of that material was American situation comedy and drama series – 83% of the imported content – and the rest came from Great Britain. Throughout the first decade of Australian television it was American shows like Perry Mason and I Love Lucy that consistently rated among the nation’s favourite programmes. But public concern over the lack of local content mounted in the late 1960s and the government imposed a simple local content quota system on commercial television. Its stated aim was to help protect the Australian television industry from being swamped by much cheaper American programs. But there was resistance to the new content regulations from the commercial networks, symbolised by the famous industry anecdote that Sir Frank Packer’s Channel Nine added the hours of overnight test pattern transmission as part of their local content total. (Eventually the rules were changed to omit broadcasts between midnight and 6 am from the quota calculation.)

Why is there a quota?
The Broadcasting Services Act states that the object of the quota is to create television that develops and reflects a sense of Australian identity, character and cultural diversity by supporting the community’s continued access to television programs under Australian creative control. In practice, the quota system exists for economic reasons. It will always be far more expensive to produce original Australian content than to import overseas programs, mainly from the US, whose production costs have already been recovered from their vast domestic markets. A high-quality US series can be bought by Australian networks for a tenth the cost of producing an equivalent local drama.

What are the current local content requirements?
Australian commercial free-to-air television licensees – the Seven, Nine and Ten networks – are required to broadcast an annual minimum quota of 55% Australian programming between 6 am and midnight. That equates to around 10 hours a day. There are additional specific minimum annual sub-quotas for first-run Australian adult drama, documentary and children’s programs. Networks must broadcast 20 hours of first release documentary, 130 hours of first release children’s programs and 130 hours of preschool programs, including repeats. Between 80 and 258 hours of first release drama must be broadcast between 5pm and 11pm, depending on the type of drama program.

How is an Australian program defined?
This has long been a contentious issue in the local industry. In broad terms, an “Australian” program for the purposes of the quota calculation is one that is produced under the creative control of Australians. “Creative control” means that the producer, or producers, are Australian, and either the director or the writer are Australian. In addition, at least 50% of the leading actors and, in the case of a drama program, at least 75% of the major supporting cast are Australian. It must also have been produced without financial assistance from the government’s Television Production Fund.

How is the quota calculated?
Soon after their introduction, the regulators realised that setting a quota purely in terms of locally produced screen-time as a proportion of total transmission hours was not sufficient. Over the years, the legislation has been refined to give different forms of programming different weighting, but it’s far from simple. For example, in the genre area of local drama, the drama’s score equals a “format factor” multiplied by the program’s duration. To meet their content requirements, a network’s total drama scores for first release Australian programs, shown in prime time, must equal 860 over three years, and at least 250 per year. Then it gets complicated. The “format factor” for an Australian drama series or serial, produced at the rate of one hour or less a week, is worth 1 point. If it has been acquired from an independent producer for at least $300,000, add 3 more points, if not add 2.5 points. If it’s a feature film it’s worth 3.2 points, plus 4 more for rights of at least $150,000, and 2.5 if less. A drama that is a mini-series or telemovie under 90 minutes nabs 4 points.

Do the quotas apply to the ABC and SBS?
No. Successive governments have not felt the need to regulate the output of our public broadcasting networks because they don’t operate as businesses and their programming decisions are therefore not driven by a desire to make profits.

What about Pay TV?
The Australian content requirement on subscription television is based on revenues, and only applies to drama output. Pay TV channels predominately broadcasting drama are required to invest at least 10% of their total program expenditure on new Australian drama. But there is no requirement for that drama production to then be broadcast on a subscription television service.

Who regulates all this?
The Australian Communications and Media Authority (ACMA), a federal government statutory authority established in 2005 by the merger of the Australian Broadcasting Authority and the Australian Communications Authority. Networks are required to report their results to the ACMA in writing, and the Authority publishes compliance results annually on their website.

Do the networks comply?
Yes. For the 2008 calendar year, the Seven Network across Australia screened 65.5% Australian programming, Nine showed 61%, and Ten 56.4%. For children’s television all the networks screened 131 hours, almost bang on the legal requirement. Between 1999 and 2008, no network failed to meet their quota. In 1997, Seven had a shortfall of 30 minutes in Australian drama. ACMA accepted this was a miscalculation but the network was required to make up that time the following year.

A licence to broadcast
From the time Australia began to regulate radio 80 years ago the rationale has been that the airwaves are a limited public resource held in trust for the people of Australia by the government of the day. Accordingly, conditions of access were justified on the basis that licences needed to be limited for technical and economic reasons. Conditions to qualify for a grant or renewal of licence included being a “fit and proper person” to comply with the laws governing media in Australia. In reality, the system was one of the few ways for governments to gain leverage over the power of the main media proprietors. It’s also been a lucrative source of revenue. The federal government received $286.8 million in commercial television licence fees in 2008-09. The fees are calculated as a proportion of network revenues. But in February, the government announced it would offer licence fee rebates to broadcasters of 33% in 2010 and 50% in 2011 – a discount of more than $250 million. Minister for Communications, Stephen Conroy, said the rebate was partly a measure to protect Australian content.

Thank you to our client, The Week magazine, for allowing us to reproduce this article from this weeks edition.  www.theweek.com.au