Government killed the video star

One of the great products of capitalism is technological advancement and innovation, as enterprise and business when left free are able to unleash their creativity through their products and services. Such technological advancements have grown rapidly since the turn of the century, especially in media which has seen ground-breaking innovations like social media platforms and video streaming that have revolutionised industry practices.

These innovations have been disruptive for traditional media companies. We have seen the effects first-hand through the collapse of the Fairfax empire, and are witnessing the slow extinction of traditional free-to-air TV. While breakneck technological disruption is a major factor behind TV’s struggle, with an exodus of customers to online streaming giants such as Netflix and Stan, government regulation is also to blame as it has left companies less competitive and unresponsive to consumer tastes.

Most principally, it is local content rules applied to free-to-air television that mandate a quota of 55 percent Australian content between 6 am and 11 pm. This rule was designed to prop up the Australian production industry, but in an epic backfire, has actually accelerated the downfall of the TV medium in Australia. In a globalised world with technology at one’s fingertips, consumers have a plethora of content to choose from. Having half of television airtime compulsorily filled with Australian content rather than shows determined by market preferences, have already driven consumers to alternatives like Netflix and Stan which are more aligned to their tastes.

Local television content mandates mean that channels like Nine, Seven and Ten are forced to take up contracts worth over $3 billion in their efforts to comply. This is a sizeable pot of money that these broadcasters could use to acquire broadcast rights for popular shows to compete with Netflix’s content library and win back consumers.

Archaic regulation is also found in quotas for children’s programs. This even though we already have a government-funded children’s channel called ABC4Me, and are witnessing a whopping 30 percent decline in television viewership in the child demographic with many moving on to mobile phone content, gaming apps and animations created by companies such as Disney.

This is another glaring example of regulation trapping television stations into programming arrangements which are out of step with rapidly evolving consumer preferences, granting an advantage to Netflix with its more modern content, unconstrained from such restrictions.

The regulations also have failed in their original purpose of supporting original Australian drama as channels have filled the quota with reality tv shows such as The Block, Married at First Sight and a plethora of cooking shows. Television stations would rather air shows that cater to the lowest common denominator because they know arthouse dramas, whilst worthy of elitist awards, may not gain traction in the loungerooms of suburban middle Australia.

Meanwhile, Netflix and its ilk are left unconstrained in acquiring the latest award-winning serials from the US and UK, rather than subsidising unpopular content to prop up flailing television studios in Balmain and Ultimo. Arguably, the bleeding of viewers to streaming giants was an inevitability. Yet surely, the absence of content rules and its freeing up of airtime for television channels to use for shows more in vogue and in consumer demand, would’ve given them a fighting chance.

Local content rules were intended to promote the production of great Australian drama and film. Instead, they are forcing television stations to buy content that is unpopular with consumers, and this only benefits US multinational streaming companies. They have also held back Australian creators by conferring an artificial advantage that has prevented them from adapting rapidly to consumer tastes which they would be forced to do if they competed against global content without the mandates. Broadly, government interventions in the Arts such as public funding programs like Screen Australia grants, have for a long time favoured “artsy” content that aims to win obscure awards rather than content that actually delivers what mainstream audiences want or could be a viable commercial success in a truly independent Aussie media industry.

The government should stop trying to pick winners and let consumers decide whether to consume Australian content. If it’s good enough the market will reward it, and the commercial success of Mad Max, Rake, Red Dog and Blue Heelers is proof.

Local content rules should be repealed to let our television broadcasters and local creators compete on a level playing field in a changed media landscape that doesn’t hold them back from innovating to keep pace with the rest of the world. If rules designed in an era that preceded Netflix, smartphones, the internet and even pay television, continue- it will only accelerate the end of our cherished Australian broadcasters.

Rohan Indra

Rohan Indra

Rohan Indra is a Research Associate with the Australian Taxpayers’ Alliance.
Rohan Indra

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2 Comments on "Government killed the video star"

  1. Rohan,
    A first class article. I have shared.

  2. the grey man | 27/01/2019 at 8:36 pm | Reply

    I stopped watching TV, the programming was utter crap anyhow.

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