Could Netflix receive an Aussie content quota?


The boss of Netflix has hit back at suggestions that the streaming service should be subject to local content quotas.

Speaking at an international media briefing in California, CEO Reed Hastings said Netflix should not be held in the same light as pay TV company Foxtel and other local free-to-air networks. Foxtel and these networks must produce a fixed quota of Australian content under federal law.

Foxtel is subject to a 10 per cent local content quota, while free-to-air networks must hit 55 per cent between 6am and midnight on their primary channels. They must also provide at least 1,460 hours of local Australian programming per annum on their non-primary channels.

This is something that Mr Hastings said was a flawed model.

“Quotas are well-intentioned ways for governments to try to make sure there’s investment in local content, to try to strengthen local culture… but like most things, the regulations often backfire,” he said.

Mr Hastings also cited Canada as a country where local content quotas are ineffective.

“What happens is a whole lot of not-very-high-quality content gets produced to comply with a quota, which doesn’t really reinforce [local] content,” he said.

A study conducted by academics at RMIT in Victoria found that Australian content amounts to 2-2.5 per cent of the overall Netflix Australia catalogue. It found that local rival Stan featured 9.5 per cent Aussie content.

Netflix currently has one wholly-commissioned Australian production, a fantasy-crime series called Tidelands, which was shot in Queensland.

In 2018, Netflix is expected to have a library of 700 original shows and is expected to spend about USD $8 billion on content, according to Netflix CFO David Wells.

“People are interested in stories – they don’t necessarily care where they came from,” Mr Wells said.

How popular is streaming in Australia?

Streaming is gaining a strong foothold in Australian homes and Netflix still leads the charge. Netflix is reported to have 118 million subscribers globally, but little light is shed on its Australian subscriber base. However, local rival Stan is reported to have 930,000 subscribers.

Netflix is reported to have a market penetration of 30 per cent in Australian households, which means that upwards of around 7 million Australians have access to or watch Netflix.

This signifies a shift in Australian TV viewing habits. A Canstar Blue survey found that 60 per cent of adults watch streaming services more than free-to-air TV. And just under a quarter also have multiple streaming subscriptions.

Netflix dominated Canstar Blue’s latest paid TV ratings with five stars for overall satisfaction, value for money, range of content and ease of sign up.

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