WEBVTT - The new rules for streaming services

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<v Speaker 1>Already, and this is the daily art.

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<v Speaker 2>This is the daily ohs oh, now it makes sense.

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<v Speaker 2>Good morning and welcome to the Daily Ours. It's Thursday,

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<v Speaker 2>the sixth of November. I'm Emma Gillespie.

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<v Speaker 1>I'm Lucy Tassel.

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<v Speaker 2>Think back to the last time you logged in to

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<v Speaker 2>your Netflix, Disney Plus or any streaming service and ask

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<v Speaker 2>yourself this, how much oussie content do you remember seeing?

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<v Speaker 2>If you're struggling to imagine a single local production, the

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<v Speaker 2>future could look very different. That's because, after years of discussion,

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<v Speaker 2>the federal government has announced it will introduce legislation requiring

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<v Speaker 2>streaming services to boost their spending on Oussie content. Today

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<v Speaker 2>we will explain everything you need to know about this announcement,

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<v Speaker 2>what it means for the film and television industry here,

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<v Speaker 2>and how the streamers themselves are responding. But first, today

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<v Speaker 2>is a big and excite day because we have a

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<v Speaker 2>culture newsletter. It's launching this afternoon. If you want to

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<v Speaker 2>be one of the first people in the country to

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<v Speaker 2>read it, sign up at the link in our show notes.

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<v Speaker 1>Okay, up, before we get into the details of this announcement,

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<v Speaker 1>can you explain what's the state of play in Australian media.

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<v Speaker 2>Yes. So some really important context for this story is

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<v Speaker 2>that for decades Australia has had really strong content requirements

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<v Speaker 2>for free to air television. So commercial free to air

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<v Speaker 2>the ABC and SBS have their own kind of charters

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<v Speaker 2>and requirements around local content, but commercial networks so seven,

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<v Speaker 2>nine and ten must broadcast an annual minimum of fifty

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<v Speaker 2>five percent Australian content between six am and midnight on

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<v Speaker 2>their primary channels, so more than half of their annual

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<v Speaker 2>content in those hours has to be Aussie programming. They

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<v Speaker 2>also have to meet minimum our requirements on their non

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<v Speaker 2>primary channels each year. So for example, Channel nine has

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<v Speaker 2>that fifty five percent requirement, but a channel like nine

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<v Speaker 2>GEM has slightly different rules.

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<v Speaker 1>Yeah.

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<v Speaker 2>PayTV like Foxtel also has obligations to invest in Australian content,

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<v Speaker 2>and these are rules that have been in place for decades.

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<v Speaker 2>They're considered an essential way to protect local productions that

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<v Speaker 2>might otherwise struggle to compete with the massive budgets of

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<v Speaker 2>overseas content, particularly out of the US and the UK.

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<v Speaker 1>You've mentioned freeware channels, and you've mentioned PATV channels, but

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<v Speaker 1>you haven't mentioned where I think I mean, I don't

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<v Speaker 1>know about the statistics, but where I think most Australians

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<v Speaker 1>are watching most of their TV these days, which is

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<v Speaker 1>streaming services. Do they have any requirements?

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<v Speaker 2>In short? No, And this is the gap that the

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<v Speaker 2>government is trying to close with this new policy. So

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<v Speaker 2>when streaming platforms arrived in Australia around ten years ago,

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<v Speaker 2>if you can believe, the likes of Netflix, Amazon's Prime

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<v Speaker 2>Video were able to build huge audiences without the same

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<v Speaker 2>obligation to invest in Australian stories as linear TV traditional

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<v Speaker 2>TV competitors, and as we've seen with many examples of

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<v Speaker 2>new media, digital media regulations basically just have not kept

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<v Speaker 2>up with the popularity and the boom of streaming. So

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<v Speaker 2>the television landscape has changed, but the rules haven't.

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<v Speaker 1>So what's the government's plan to change that?

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<v Speaker 2>So it's announced this proposal that would apply to streaming

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<v Speaker 2>services with more than one million Australian subscribers, so that's Netflix,

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<v Speaker 2>Disney Plus, Prime Video, probably Apple TV plus, although it

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<v Speaker 2>doesn't publish local subscriber numbers. These platforms, though, will need

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<v Speaker 2>to invest at least ten percent of their total Australian

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<v Speaker 2>expenditure or seven and a half percent of their Australian

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<v Speaker 2>revenue in new Aussie content. Now that content must be drama,

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<v Speaker 2>kids programming, documentaries or art and educational programs. And the

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<v Speaker 2>rule also requires post production to happen in Australia, which

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<v Speaker 2>is important because it opens more opportunities for more local

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<v Speaker 2>jobs editors, composers, etc. Now, when it comes to stand

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<v Speaker 2>and Paramount Plus, even though they are owned by Australian

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<v Speaker 2>freedowares nine and ten, they will also be subject to

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<v Speaker 2>these requirements.

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<v Speaker 1>I'm a little bit confused about how much streamers are

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<v Speaker 1>actually going to have to spend. So you mentioned ten

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<v Speaker 1>percent of expenditure and seven point five percent of revenue.

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<v Speaker 1>How will that actually work.

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<v Speaker 2>Yeah, it's confusing, let's be honest. But I dug into

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<v Speaker 2>this a little bit more. Expenditure refers to what a

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<v Speaker 2>platform spends on content shown in Australia, so, for example,

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<v Speaker 2>licensing fees what it costs them to secure the rights

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<v Speaker 2>to showing a program to Ossie audiences, whereas revenue refers

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<v Speaker 2>to how much money a streaming platform earns from its subscribers.

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<v Speaker 2>One of the government's proposal, platforms can choose which model

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<v Speaker 2>they want to follow. So for example, let's say streaming

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<v Speaker 2>service spends one hundred million dollars annually in total on

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<v Speaker 2>content for Australia. Their expenditure, they would need to ensure

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<v Speaker 2>at least ten million dollars a year is going towards

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<v Speaker 2>new Australian productions. Alternatively, if they generate one hundred million

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<v Speaker 2>dollars in revenue from Aussie subscribers, they would need to

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<v Speaker 2>invest at least seven and a half million dollars in

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<v Speaker 2>local content. So the idea here is, you know, giving

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<v Speaker 2>platforms some flexibility while ensuring that there is a meaningful

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<v Speaker 2>investment back into the Aussie industry. But in reality the

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<v Speaker 2>contributions from some of these platforms will be much bigger.

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<v Speaker 2>Let's look at Netflix. It reported local revenue of one

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<v Speaker 2>point three billion dollars expenses of about one point twenty

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<v Speaker 2>five billion dollars in the last financial year. So you

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<v Speaker 2>know we're talking about significant investment.

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<v Speaker 1>Yeah, and are we talking about all content from these

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<v Speaker 1>streamers or only new content.

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<v Speaker 2>New content specifically, So this isn't about streaming services increasing

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<v Speaker 2>their spend on Australian content that already exist. It's not

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<v Speaker 2>about Netflix saying okay, what are the pre existing Australian

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<v Speaker 2>shows that we can secure the rights to Arts. Minister

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<v Speaker 2>Tony Burke said that since coming here, these services have

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<v Speaker 2>created some extraordinary shows, but quote this obligation will ensure

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<v Speaker 2>that those stories, our stories continue to be made.

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<v Speaker 1>You mentioned that this is a proposal that's been kind

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<v Speaker 1>of just stating for a while. What's taken so long.

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<v Speaker 2>Debate has been going on around this for almost as

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<v Speaker 2>long as these platforms have been available here. There was

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<v Speaker 2>some momentum in twenty twenty one the former Coalition Governments,

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<v Speaker 2>Arts and Communications Minister Paul Fletcher put forward a five

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<v Speaker 2>percent proposal for local content quotas for streamers. The scheme

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<v Speaker 2>was voluntary, though, and it was criticized by labor as

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<v Speaker 2>not going far enough. In January twenty twenty three, the

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<v Speaker 2>Albaneze government actually committed to introducing streaming quotas. They said

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<v Speaker 2>a deadline of July one, twenty twenty four, but obviously

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<v Speaker 2>that came and went with no legislation, and over the

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<v Speaker 2>past two years there has been extensive consultation with the

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<v Speaker 2>streamers and free to air broadcasters and various industry bodies

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<v Speaker 2>as part of these efforts to kind of get this

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<v Speaker 2>off the ground, but clearly there have been several complications

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<v Speaker 2>along the way. One of the big concerns has been

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<v Speaker 2>around imposing content quotas on largely US owned platforms. There

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<v Speaker 2>was some tension around, you know, whether or not this

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<v Speaker 2>would violate the free trade agreement that exists between Australia

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<v Speaker 2>and the US. US government report on Foreign Trade Barriers

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<v Speaker 2>published in March actually highlighted the planned streaming quotas here,

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<v Speaker 2>warning the White House would quote continue to monitor the

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<v Speaker 2>issue to ensure Australia's compliance with the free trade agreement.

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<v Speaker 1>I mean, it's interesting to bring up the free trade

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<v Speaker 1>agreement because I was of the understanding that US tariffs

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<v Speaker 1>on Australia will also in violated of that free trade

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<v Speaker 1>agreement because they're making trade not free.

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<v Speaker 2>Well exactly. Obviously, since Donald Trump's reelection, the whole trade

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<v Speaker 2>conversation has been turned upside down a little bit. But

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<v Speaker 2>I guess the argument here could be that with those

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<v Speaker 2>added tensions because of ongoing tariff negotiations with Trump, you know,

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<v Speaker 2>could these quotas be seen as a potential provocation to

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<v Speaker 2>worsen or intensify strain on those other negotiations.

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<v Speaker 1>Okay, I see, let's talk about the streaming platforms themselves.

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<v Speaker 1>We haven't heard from them yet. What have they said

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<v Speaker 1>in response to this proposal.

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<v Speaker 2>So the streamers have been pushing back hard. They have

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<v Speaker 2>argued as a collective that they already invest heavily in

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<v Speaker 2>local content. So there's this industry body called the Australian

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<v Speaker 2>New Zealand Screen Association and they represent Netflix, Prime Video,

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<v Speaker 2>Disney Plus, Stan and Paramount Plus. All of those services

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<v Speaker 2>have teamed up to reject earlier versions of the quota proposals.

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<v Speaker 2>They actually published these findings as a group this year

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<v Speaker 2>through a report called Streaming for Australia, which highlighted what

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<v Speaker 2>it called quote evidence that demonstrates that the contribution we

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<v Speaker 2>have made to Australia's creative economy is meaningful. According to

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<v Speaker 2>the report, streaming services invested nearly three billion dollars on

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<v Speaker 2>new Australian and quote Australian related programs between twenty nineteen

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<v Speaker 2>and twenty twenty four to become quote the largest investors

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<v Speaker 2>in Australian content today. Netflix in particular warned all the

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<v Speaker 2>way back in twenty twenty one, when those first conversations

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<v Speaker 2>were happening with the Morrison government that mandatory quotas could

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<v Speaker 2>have serious negative consequences and quote inadvertently lead to a

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<v Speaker 2>reduction in the volume, variety and quality of Australian content

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<v Speaker 2>rather than increase it.

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<v Speaker 1>Okay, what has the Australian screen industry said.

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<v Speaker 2>Well, in contrast to how the streaming platforms have responded,

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<v Speaker 2>this has been a mostly positive response. Screen Produces Australia

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<v Speaker 2>called it a landmark announced after years of global streaming

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<v Speaker 2>services benefiting from local audiences quote without contributing fairly to

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<v Speaker 2>the creation of Australian stories. We reached out to independent

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<v Speaker 2>Aussie TV and film production company Wooden Horse Joint CEO

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<v Speaker 2>Richard Finlayson told TDA, Like most independent producers, Wooden Horse

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<v Speaker 2>quote welcomes the new quota requirement, but he said they

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<v Speaker 2>had hoped to see a higher percentage of revenue committed

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<v Speaker 2>to Australian content. Finlayson also noted that the French government

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<v Speaker 2>interestingly has enforced legislation requiring streamers to invest at least

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<v Speaker 2>twenty percent of local revenue in French and European content.

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<v Speaker 2>In a statement to TDA, he said, quote seven point

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<v Speaker 2>five percent feels like a low bar when you consider

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<v Speaker 2>that premium drama series are now costing between twenty five

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<v Speaker 2>to fifty million dollars. Yeah, okay, there's a lot of

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<v Speaker 2>money in streaming and streaming productions.

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<v Speaker 1>Yeah yeah. What have we heard from other political parties?

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<v Speaker 2>The Greens won the quota to be higher. They're calling

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<v Speaker 2>for a twenty percent reinvestment, like we have heard from

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<v Speaker 2>within the film industry. They also want a sub quota

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<v Speaker 2>specifically for children's television. I reached out to the Shadow

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<v Speaker 2>Minister for the Arts, Julian Lisa, and he said that

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<v Speaker 2>the Coalition has always fought hard for Australian creatives. He

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<v Speaker 2>accused Labor of spending four years basically doing nothing after

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<v Speaker 2>the Coalition first announced a plan for streaming services in

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<v Speaker 2>twenty twenty two. He said, quote the government's announcement leaves

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<v Speaker 2>many questions unanswered, like how much new money will actually

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<v Speaker 2>be invested into screen production and quote we need to

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<v Speaker 2>be sure that the announcement delivers for the Australian screen industry.

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<v Speaker 1>The Government obviously has a lot of hurdles to overcome

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<v Speaker 1>before this actually comes into effect. But when it does,

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<v Speaker 1>what do you think it'll look like?

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<v Speaker 2>In theory, the hope is or the hope from the

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<v Speaker 2>government is that we see a lot more Australian content

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<v Speaker 2>on the home pages of those streaming services we are

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<v Speaker 2>so familiar with, so you know, dramas, docos, kids shows,

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<v Speaker 2>more work for writers and actors, directors, crew members, all

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<v Speaker 2>the supporting businesses around film and television production Communications Minister

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<v Speaker 2>annaka Well's said quote, we want to make sure, no

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<v Speaker 2>matter which platform people are watching, Australian stories are part

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<v Speaker 2>of their experience. So the hope is, you know, with

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<v Speaker 2>more Aussie content being made, we will see more stories

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<v Speaker 2>that resonate with us. There's also a hope that you know,

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<v Speaker 2>this content will find international audiences and elevate the profile

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<v Speaker 2>and notoriety of Australian productions. I think it's also worth

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<v Speaker 2>flagging that there are a lot of practical details that

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<v Speaker 2>still remain unknown, things like exactly how spending will be audited,

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<v Speaker 2>what specifically qualifies as Australian content. But Lucy, it's been

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<v Speaker 2>a long and complicated process to get here. It's not

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<v Speaker 2>over yet, but the legislation is due to be tabled today,

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<v Speaker 2>so we will know a lot more pretty soon.

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<v Speaker 1>Thanks so much for explaining that, Emma, and if you

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<v Speaker 1>are interested in more culture stories, like this. You can

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<v Speaker 1>sign up to our new newsletter debuting today at the

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<v Speaker 1>link in our.

0:13:12.840 --> 0:13:16.000
<v Speaker 2>Bio TDA Culture I Get around It, Get around It.

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<v Speaker 1>We will be back this afternoon with the headlines. Until then,

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<v Speaker 1>have a great day. My name is Lily Maddon and

0:13:26.080 --> 0:13:29.840
<v Speaker 1>I'm a proud Dunda Bungelung Kalkudin woman from Gadighl Country.

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<v Speaker 1>The Daily oz acknowledges that this podcast is recorded on

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<v Speaker 1>the lands of the Gadighl people and pays respect to

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<v Speaker 1>all Aboriginal and Torres Strait Island and nations. We pay

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<v Speaker 1>our respects to the first peoples of these countries, both

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<v Speaker 1>past and present.