Content Quotas for Television and Eligibility for Subsidy for Film and Television

Generally

Australia has a strong quota system for commercial free-to-air television broadcasting. It comprises an overall transmission quota of 55 per cent between the hours of 6 a.m. and midnight with subquotas for adult drama, documentary and children’s programs. There is a further quota for television commercials of 80 per cent. Compliance with the overall transmission quota is adequate with broadcasters often exceeding the quota. Exceeding the subquotas is less common, particularly with respect to children’s programs and documentaries.

Compliance is overseen by the Australian Communications and Media Authority and compliance results are published annually.

The AUSFTA allows the application of the current quota arrangements to a secondary channel and in the event a network has a primary channel and more than nine secondary channels, to an additional secondary channel (often referred to as multichannels). It allows for the advertising quota to be applied to two secondary channels regardless of the number of secondary channels attached to the primary channel.

In respect of subscription television, there is an expenditure requirement of 10 per cent that applies only to predominantly drama channels. The AUSFTA allows for this requirement to be increased to 20 per cent and to be applied at the rate of 10 per cent to arts, children’s, documentary and educational channels.

All the above are subject to ratchet provisions referred to earlier – “use it or lose it”. In the event existing quotas are lowered, they cannot be later increased. In the event they are abolished, they cannot later be reintroduced.

What is important for the music sector in respect of television quotas and subsidy for the film and television sector is what is defined as an Australian program.

Television Commercials
The definition of a complying commercial can be found at the ACMA website. Item 6 sets out those elements that are considered. The music – composition and performance – is optional providing sufficient other elements are Australian.¹

Australian Television Programs
The definition of a complying Australian television program can be found at ACMA website. As can be seen, music is not a defining element.

Australian film and television programs eligible for the Producer Offset
While the music can be considered it is not determinative. A summary of the eligibility requirements can be found at Appendix A below.

Official Coproduction Program
Certification as an official coproduction allows eligibility as an Australian program for the television quota and access to subsidy. Again, music is considered but it is optional. A summary of the program and the points system can be found at Appendix B.

Location and Post, Visual and Digital Effects (PVD) Offsets
These offsets are designed to attract offshore production to Australia. The offsets, like the Producer Offset, are made available after lodgement of tax returns. As the Location Offset aims to attract offshore productions to film in Australia, it is rare that the music industry will see any benefit. The PVD Offset looks at attracting offshore productions to Australia to undertake postproduction. The usual beneficiaries are those in visual effects. However, it is also common for Asian productions to mix in Australia and sometimes to record their music tracks. For an explanation of eligibility criteria, the definition of Qualifying Australian Production Expenditure and so on, see the Screen Australia website.

Development Funding
Screen Australia and the various state film funding agencies provide funds to develop film scripts and scripts for certain television program types. Eligibility criteria vary. Typically, in the absence of a project proceeding to production, development funds are not recoupable.

Production Funding
Screen Australia and the various state film funding agencies provide investment in feature films and certain television program types. Eligibility criteria vary. Most look for a market place attachment and funding from other sources. Market place attachments for television production are typically television network presales and for feature films can be presales, distribution guarantees, distribution advances and the like.

Appendix A: The Significantly Australian Content Test

Matters taken into account as explained by Screen Australia.

The subject matter of the film

• Screen Australia interprets “subject matter of the film” as requiring it to determine if the “look and feel of the film” is sufficiently Australian or the film has a significant creative connection with Australia. For example:
  • Is the film about Australia or Australians
  • Does it reflect a cultural background that is particular to Australia or Australians
  • Does it reveal some aspect of Australia’s or Australian’s cultural background or experience, or
  • Did the project originate in Australia and/or was it developed by Australians?
• Screen Australia anticipates that it would need to consider some or all of the following factors:
  • Whether the film is based on an Australian story
  • The extent to which the film is about Australian characters
  • The extent to which the film is set in Australia
  • Whether the core origination of the project took place in Australia or under Australian control, and
  • The length and extent of association of Australian citizens or residents have had in the film’s development.
  • Other relevant factors may be identified which are peculiar to an individual project.’ ….. “Films that have poor Australian subject matter will have difficulty meeting the SAC test. They will need to perform very strongly against all of the other matters to satisfy the SAC test.”

The place where the film was made

• The film needs to be produced to a significant extent in Australia — considers preproduction, production and postproduction.

The nationalities and places of residence of the persons who took part in the making of the film

• Principally consider whether participants are Australian citizens or Australian permanent residents but will consider persons who are neither “but are nonetheless resident in Australia”.
• Producer, writer and director “will be considered to be particularly important” along with lead cast members
• Will “also consider the nationality and place of residence of key creative heads of department, such as director of photography, production designer, editor, costume designer and composer”

The details of the production expenditure incurred in respect of the film

Any other matters that Screen Australia considers relevant, including:

• “the impact of the project on creating a sustainable Australian film and television production industry”
• “whether it supports the development and employment of Australian key creatives to make Australian films”
• copyright ownership
• creative control, recoupment and profit participation

Appendix B: Official Co-production Program Administered by Screen Australia

Source: Screen Australia.

Australian Qualifying Points

These guidelines introduce the term ‘Australian Qualifying Points’ (AQP), which are the creative points allocated to the Australian side of a co-production. As a percentage of the total creative points the AQP must reach at least the minimum contribution level prescribed by the relevant co-production arrangement.

As noted above, the AQP must also be reasonably similar proportionally to the financial contribution that the Australian co-producer makes to the co-production – for example, if the Australian co-producer contributes half the finance, then half the points should be AQP. Subject to the minimum contribution allowed in the relevant co-production arrangement (as outlined in section 3.6 above), these guidelines, allow a 5 per cent margin (either way), so if the Australian co-producer’s financial contribution is 60 per cent, the AQP can be between 55 and 65 per cent.

Key creative roles are allocated a points value. If the person filling that role is an Australian national or permanent resident, a point is scored for that role. Please note that:

• producers do not attract points because there must be, by definition, one from each of the co-producing countries;
• an individual cannot be treated as two nationalities in one application;
• splitting of points may be approved on a case-by-case basis (for example, where each co-producing country has one writer each engaged on a television series);
• revoicing or narrating in the language of each co-production country will result in the points being split, ie for an animation, voice cast is allocated 3 points, so if one voice track is undertaken in Australia and one track in the co-producing country, then the project scores 1.5 of AQP; and
• for feature films and television drama, if the film is a majority Australian co-production (ie Australian financial contribution is greater than 50 per cent), at least one of the four lead roles must be filled by an Australian national or permanent resident (ie there must be at least one point for key cast).

Completing the Test

Different points tests apply for drama (the same test applies to both feature films and TV drama), documentaries and TV animation, reflecting the differences in the key creatives/technical personnel for these different types of project. Each of the tests aims to provide a degree of flexibility by allowing a certain number of discretionary points to be claimed.

Each test has a set number of roles that are always counted (top-line key creative roles). These roles attract “compulsory points”. In addition, the Australian co-producer may select roles in the discretionary point section to make up the level of points required for the film. However, where an Australian co-producer selects a role for a discretionary point, but Screen Australia does not consider the role to be a key creative role, Screen Australia reserves the right not to accept the allocated discretionary points.

In addition, each test includes a potential point for “Other creative role”. If an Australian co-producer wishes to claim this point, the Australian co-producer must convince Screen Australia that the role in question is particularly important for the film. For example, if the film is a martial arts feature, it may be possible to allocate a point to the fight choreographer; or for a musical, to the musical director or choreographer.

Points Values

Author

Lynn Gailey. 20 March 2012.