Executive summary

SVOD (subscription video-on-demand) portals represent a new and disruptive category of entertainment service. The two leading SVOD portals in Australia are Netflix and Stan. Netflix – which is not an Australian media company and cannot easily be regulated under Australian law – is unquestionably a central player in Australia’s audiovisual future. Stan, Australia’s first local SVOD, has led the way in commissioning Australian content for exclusive digital release. This submission contains findings from independent academic research we have been conducting since 2015 into SVOD services and related public policy issues, both in Australia and overseas. Through this research we have been able to gain an understanding of the relative value of local content within current SVOD business models. Given that both Netflix and Stan are pure-play over-the-top (OTT) operations – and therefore immune from Australian content quotas – we believe such research can help policymakers to identify “Australian content types or formats… the market [is] likely to deliver and/or fail to deliver in the absence of Government support” (Review Consultation Paper, pg. 11).

Our submission addresses Q2 and Q6 from the Review’s terms of reference. We present findings from a content analysis of the Netflix and Stan catalogs and discuss related discoverability issues. Note that Foxtel – a legacy pay-TV company already subject to Australian content requirements – is not considered here.

Key findings:

• The Australian Netflix catalog presently features around 2.0%-2.5% Australian content. The level of Australian content on Stan is higher (9.5%), though its catalog is smaller.
• Stan has led the way in producing the first Australian SVOD originals. These comprise less than 1% of its total catalog. Netflix has two Australian originals in production.
• SVOD services are reliant on a wider ecology of broadcast and film production. SVOD augments but does not replace older media. Existing policy frameworks therefore remain essential for satisfying the Review’s objectives regarding Australian content.
• In the absence of regulation, the SVOD market is unlikely to generate significant investment in new Australian content, though it adds some value to existing content rights. This underlines the need to preserve the Australian content quota framework in broadcast television.
• Netflix is increasingly important for the international distribution of Australian content.