Extending local content obligations to streaming platforms could “poke the bear” by provoking a tariff-minded US government, an expert has warned as new rules force streaming services to commit millions to Australian shows, movies, and documentaries.

That obligation – which was originally floated in 2023 and revived during the recent federal election – will require streaming services with over 1 million subscribers to invest at least 10 per cent of their total Australian expenditure, or 7.5 per cent of revenue, on local content.

This includes drama, children’s programming, documentary, arts, and educational programs – funding local storytelling that, Minister for the Arts Tony Burke said, “helps shape our national identity, define who we are and make us recognisable on the international stage.”

Aussie-produced shows like Apple Cider Vinegar, Boy Swallows Universe, and Bump have been well received, with Son of a Donkey and Mystify: Michael Hutchence in the Netflix Top 10 as Paramount+’s Ghosts: Australia and Stan’s Watching You also winning over viewers.

Indeed, with streamers now sharing ratings through the Streamscape video ratings panel launched earlier this year, streaming viewers are becoming even more important to advertisers and studios who have an interest in keeping viewers coming back.

“We should never underestimate how important it is for Australians to see themselves on screen,” Burke said, adding that “it helps us to better understand ourselves, [understand] our neighbours better, and allows the world to see us.”

Levelling the playing field

Investment in Australian content slumped by nearly 30 per cent during the 2023-24 financial year, according to the latest investment tracker from Screen Australia, which in September announced $12.8 million in new funding for 46 new Australian shows and films.

Some $1.7 billion was spent on drama production in Australia that year, but the new obligations will increase this by bringing streaming services in line with free-to-air (FTA) broadcasters whose licenses who have long carried local content requirements.

Commercial television licensees must broadcast 55 per cent Australian content between 6am and midnight on their primary channels, and 1,460 hours of Australian content between 6am and midnight on non-primary channels.

That regime also includes a points system that incentivises investment in local content, requiring networks to broadcast at least 250 points of first-release Australian programs each year – with a points schedule weighted towards more expensive drama productions.

Apple Cider Vinegar was a huge hit for Netflix. Photo: Netflix

While the nature of streaming makes broadcast hours irrelevant, the new rules will require Netflix – with 6.4 million Australian subscribers and reported local revenues of $1.3 billion last year – to spend at least $97.5 million on local content.

Amazon Prime Video, whose revenue surged 39 per cent to $480.4 million last year, would have to spend at least $36 million while the requirements would also hit Stan – which already invests relatively heavily in local content – as well as Kayo Sports and Binge.

Some 54.6 million Australians subscribe across all streaming services, Telsyte recently reported, with the subscription video on demand (SVOD) market growing by 5 per cent last year to 26.6 million and 47 per cent of users calling their service “non-negotiable”.

Poking the bear

Local content requirements are nothing new, but their application to major streamers – all subsidiaries of US-based global tech giants – comes just weeks after US President Donald Trump announced 100 per cent tariffs on movies made outside the US.

That came months after the prospect of local content obligations became a cause celebre for US lobby groups, which urged Trump to push back against such controls in the wake of the news funding requirements of Australia’s contentious News Media Bargaining Code.

In a fluid tariff environment the new rules “could become a contentious matter,” Cox Media media economist Peter Cox told Information Age, noting “it makes me wonder if they’ve really thought about it hard enough… do they really want to poke the bear at the moment?”

Australia’s partnership with the US – in particular, the AUKUS pact for which Trump recently reiterated his support – has kept Trump from exerting pressure on Australian policies, but “we’ve got to be careful that this doesn’t provide him with that opportunity,” Cox added.

“The devil will be in the detail” as legislation is pushed through Parliament, he said, noting that – whatever the political implications – shows like Outback Truckers and Territory, and today’s drone-driven production style, do play a significant role promoting Australia.

While Australia “is all about the capital cities,” Cox said, the camera loves expansive outback settings: “it romanticises our view of Australia, just like the Wild West romanticised the image of America.”