We just want to make people happy… a still from Rilakkuma and Kaoru, a stop motion series for Netflix. Image: Geektyrant.
The Netflix presence in Australia is being cemented with a ten person office in Sydney, complete with a head of publicity for original content in Sarah Haines, a familiar name from the same role at 20th Century Fox with a dash of the book trade and tertiary teaching to spice the brew.
The new director of public policy is Nick O’Donnell, who had that role for Asia Pacific and Japan for LinkedIn. He held a similar job at Yahoo, again for the Asia Pacific, after seven years as legal counsel, regulatory and business affairs at Seven Network.
More players, harder combat
If you wanted to weaponise the Netflix brand in the political debate about support for the screen sector, this is the crew you would choose. Make no mistake about it, there is a triangular battle between the commercial networks, the subscription streamers and the local production sector.
Here’s what everyone wants –
The networks: Level the playing field with the international companies, remove the burden of kid’s TV and drop quotas. We are suffering so much.
The streamers: We are just a business, we provide what people want, we will commission if we can make a profit, we are too complicated to regulate, don’t mention the Europeans.
The production sector: Up the tax benefits, make the broadcasters do Australian shows, do kids TV, regulate the streaming companies so they have to support production.
The government broadcasters: We know nothing about this. Give us money.
There is a fair amount of hope going down about this being a move to increase local content on Netflix, and certainly any kind of presence will help. A Conversation article notes that Netflix puts boots on the ground where they also commission content. But Netflix has taken the trouble to create its Sydney office as a fighting base. We understand the broadcasters have been lobbying like crazy. The screen sector is worried it is being outclassed.
The problem is the enigma that is Paul Fletcher, the new Federal minister. Mumbrella’s conversation with him a week ago revealed nothing about his attitude to content and focused on NBN and telcos. As a general principle he aims for competitive neutrality, where businesses stand or fall by their own judgement. That is not much to go on.
We can guess that balance sheets are more important than ratings and critical approval. The Australian Competition and Consumer Commission’s (ACCC) final conclusions in the Digital Platforms Enquiry are due in the minister’s office on June 30. The preliminary report, driven by its requirement to pay attention to news and journalistic content, stayed away from streaming and drama or entertainment content. Instead it is biting the bullet on the debate about regulating quality or at least providing a tax sweetener for mainstream providers.
This is catnip for Fletcher, so the regulation of cultural content could stay on the back burner. Some people are hoping that the ACCC report results will flush out the government’s position so that the industry can at least engage with Fletcher’s approach to the portfolio. But unicorns are really out of fashion at the moment.
The government has surrendered to the commercial broadcasters again and again over the last decade and a betting company would expect this to continue. The sector is prepared for the worst – and that is one reason why producers are hoping that Netflix will become more accessible.
But there is an important twist to this. While the Liberal Party has been deregulating the ownership of domestic media, it could be sniffy about overseas intrusions because they don’t pay tax. If they ask what the Googles and Netflixes of the world are giving back to a country where they make a tidy profit, the internationals may have to change the game. One way for the streaming companies is to commit to local content.
It is even possible that the new government could demand something that Screen Producers Australia has been campaigning for ever since the Labor Party started to ramp down the spectrum fees – Fletcher could ask the commercial broadcasters what they are going to provide in return.
Chaos in streaming land
It is difficult to work out what Netflix plans to do over the next year but we can expect nimble to be on their minds. Now Disney is becoming a separate streaming service, the entire empire of subscription video on demand will be in pieces and Disney can pick and choose its partners.
PwC Australia has released its annual analysis of media trend and outlook, and sees streaming in a state of flux. Netflix is the main international player, and customers are basically wanting to pay for two services. Who loses when Disney comes in? PwC is clear that customers see this as discretionary spending which is under pressure from a groaning local economy.
But that problem is repeated around the world, so globalism is not really a safety net. PwC also claims that new services are going for one form of revenue rather than a blend so its subscription, advertising/sponsorship or nowhere in a game of keep it simple, keep it pure. However, services are hybridising in a different way – they are combining on-demand and appointment viewing. The networks can be hunted by outsiders with the same passion for sport, game shows and reality TV which are their current core business.
We should remember too that Netflix has access to global knowledge. Besides its vaunted algorithms, it can compare models from around the world, which includes regional trading, the use of local languages, different production models and government control.
Australia is a really small player in a huge international game, which could leave either Netflix or Disney dominating that discretionary spending on entertainment, and we can’t ever rule out the possibility of spectacular wrecks when so much money is in so few hands.
If we are down to one player, would we prefer Netflix or Disney? Neither if they don’t commission here. But Netflix at least brings a strong brand which does support diversity – just look at its Asian offerings. Rilakkuma ahd Kaoru comes from Japan.
