The Aussie Balancing Act

Television in Australia has been big business for the past two or three decades, with children's programming alone accounting for more than US$28 million in annual production activity last year. But a weakened advertising market and some significant changes to the Australian Broadcasting Authority's Children's Television Standards (CTS) act are making it harder for both broadcasters and producers to ante up enough funding to get new projects off the ground.
November 22, 2002

Television in Australia has been big business for the past two or three decades, with children’s programming alone accounting for more than US$28 million in annual production activity last year. But a weakened advertising market and some significant changes to the Australian Broadcasting Authority’s Children’s Television Standards (CTS) act are making it harder for both broadcasters and producers to ante up enough funding to get new projects off the ground.

First implemented in 1990 to ensure that Australian kids were getting enough programming options that reflected their own culture – and to bolster the domestic production industry – the CTS has always been a hotly contested initiative. On one side of the issue, the terrestrial broadcasters affected by the standards and quotas (Seven Network, Nine Network and Network Ten) refute the need for the guidelines period. But they also argue that the local production community is unable to finance enough good children’s programming to meet their mandated buying needs.

On the flip side, the producers claim the broadcasters’ position stems from a desire to save money rather than any actual lack of high-quality homegrown kids fare. ‘Our argument is simple,’ said Joanne Yates, executive director of the Screen Producers Association of Australia, in February. ‘Australian kids deserve to see Australian-made kids television – television that is made specifically for them, that speaks in their language, and that educates and entertains them.’

These opposing lines of argument have been delivered with steadily increasing volume during the past year, as the ABA set about reviewing the CTS policies. At the end of the process, the ABA decided to lower the minimum number of locally-produced kids programming hours that commercial nets are required to pick up each year from 32 to 25.

The ABA still mandates a total of 96 hours over three years, so the new minimum could pose problems for the domestic production community. Theoretically, nets could operate lean in the first two years and pad the third, but ‘it’s a big risk,’ says Noel Price, executive producer at Southern Star: ‘If they manage it badly, they could find that there are no financed shows available for pick-up in the third year, leaving them in breach of their license.’

It could also force nets to pay exorbitant license fees in the third year to make their quota. ‘If they all went down this path, it could be a disaster because they’d all be competing for the same shows,’ adds Price. ‘One has to assume the nets will be sensible and manage the spread properly to minimize the risks.’

The ABA has also decided to scrap the mandated minimum license fee of US$25,000 per half hour that commercial nets were required to pay for kids shows. Interestingly, this figure has oft been criticized by production industry players as not reflective of the ‘real costs of production’ since it usually only amounts to 15% of the average kids budget (according to a brief issued by the ABA in July).

‘The removal of the minimum license fee is no great tragedy as it was below what was being paid for most, if not all, shows,’ says Price. ‘The going rate is between US$31,000 and US$42,000 per half hour, which is well above the old minimum.’ But since the ABA minimum only applied to producers not seeking financing from the Australian Film Financing Commission (which invests in four or five 13 x half-hour kids projects each year, on the condition that each project secures a minimum Australian broadcast license fee of US$42,000 per half hour), the loss of the ABA minimum may encourage commercial casters to acquire children’s drama shows that are not funded by the FFC.

‘Certainly, companies such as Yoram Gross-EM.TV have financed their animated series without FFC investment in the past, so without the ABA minimum, they’ll now have more flexibility in dealing with the networks,’ says Mark Gravas, a principal at Sydney-based animation house Kapow Pictures. ‘But the big question is – how many children’s drama shows can actually be produced without FFC financing?’

The Australian Film Finance Commission

In a tough financing climate that leaves Aussie producers with little alternative but to seek co-pro opps in territories like Canada (where government funding is more accessible), the FFC remains integral to fostering the production of local childrens drama programs – with a few catches.

The FFC won’t invest more than 50% in a children’s series – specifically, it won’t invest more than US$2.2 million for 26 half hours or US$1.1 million for 13. It expects a domestic presale of not less than US$42,000 per half hour, as well as a presale in a major overseas territory.

General FFC guidelines for co-pro involvement cover the overall level of Australian content, the participation of Australians in key creative roles, whether the project originated in Australia, and where it’s going to be shot.

Yet even if a producer jumps the FFC’s funding hurdles, the ABA’s CTS act continues to compress project target demos. The act identifies three broad and overlapping age bands for child viewers: five to seven, seven to 11, and 10 to 13. The definition of ‘children’ was specifically not broadened in the CTS amendments to include 14-year-olds or the ‘youth demographic’ because ‘the intention is to ensure that children have access to Australian drama that is ‘child-specific.’ This should not be lost in the desire to broadcast more commercially attractive programs of general appeal.’ So reads article number 3.10 of the ABA’s Proposed Amendments that came out in July.

In its quest to steer Australian kids producers away from commercially-driven projects with these guidelines, the ABA has triggered a preponderance of lighter, non-action fare for preschoolers and younger kids, leaving viewers in the tween-and-up bracket with comparatively few homegrown animated shows to watch. On the live-action front, domestic shows tend to be so Australian that garnering international interest is often only possible once the show has run for a while domestically, so the initial financing conundrum remains for these projects.

The insular nature of the Australian market is a real problem, says Southern Star’s Price: ‘We’ve had to plug into the rest of the world without losing our Aussiness,’ trying to achieve a balance between cultural heritage and internationally-viable concepts. As a major international distributor of English-language programming, Southern Star has a leg or two up on some of Australia’s local producers, but even a company of its size finds it difficult to secure co-producers on the global market.

Bridging the geographical divide

Seeking to promote Australian animation companies as solid potential partners in international co-pros is Tim Brooke-Hunt and his Sydney-based company Pacific Vision. According to Brooke-Hunt, a 20-year industry veteran with stints at Yoram-Gross Village Roadshow and Burbank Films in Sydney under his belt, there are a number of excellent reasons why companies should invest in projects Down Under. For one thing, the value of the Australian dollar (AUS$1 equals US$0.50 these days) means many currencies will go farther there. For live-action projects, location-shooting costs are low compared to other territories. And as far as animation goes, there’s a huge pool of local talent that has learned the ropes working for the Australian branches of Hanna-Barbera (which closed about a decade ago) and Disney, which still employs more than 300 animators.

Andrew Horne, the founder of Sydney’s Freerange Animation who recently relocated to Toronto, Canada to take a creative director post at Cuppa Coffee Animation, explains that Disney works on the old studio system whereby the bulk of hiring is for entry-level positions with an eye to training employees up. Many animators who eventually didn’t want to work in the larger system anymore broke away to start their own companies or work for smaller boutique houses.

According to Brooke-Hunt, the main factor preventing a greater level of international co-production activity that involves partners Down Under is the tyranny of distance. It makes international companies loath to trawl the Aussie production waters, and it makes domestic producers hard-pressed to front the travel expenses to sell their completed shows and pitch their developing concepts globally. So Brooke-Hunt does it for them, or at least he uses his contacts and savvy to facilitate the process.

The success of Yakkity Yak, a co-pro between Kapow Pictures and Studio B in Vancouver, Canada, is a testament to the effectiveness of Brooke-Hunt’s middleman services. He first spied the project at Kapow when he was in the midst of launching Pacific Vision, and he immediately approached Studio B and Nick Australia with the concept. Nick GM Catherine Nebauer signed on right away for around 15% of the budget. The 2-D animated show is now well into production and is slated to debut on Teletoon in February.

Brooke-Hunt does caution, however, that financing Yakkity was uncommonly easy; it was the right project shown to the right people at the right time – and it didn’t hurt that Canada and Australia have a co-production treaty.

ABC Australia

Although it’s not mandated by CTS, kids ratings leader ABC Australia is a strict self-regulator. Roughly 37% of the channel’s weekly 32-hour kids schedule is currently comprised of local content – including shows like Old Tom (EM.TV/Yoram Gross and France-based Millimages), Bananas in Pyjamas (produced by the ABC) and Tracey McBean (Denmark’s Egmont Imagination and Southern Star) – with its annual average running at 25%. The pubcaster is always looking for new domestically-produced content, but ABC Kids programmer Dierdre Brennan is focused on growing the brand and audience beyond preschool right now, particularly via the ABC Kids digital network (which is actually housed on both digital and terrestrial platforms). Because the guidelines of the quota system encourage the production of preschool and youngish kids programming, Australia has turned into a farming system for those demographic genres over the years, and there have traditionally been fewer older-skewing shows available.

It should be noted that free-to-air carriers like the ABC or one of the three terrestrial commercial nets is crucial to the success of a television-based kids property in Australia because the cable infrastructure is extremely under-developed. While 100% of the population of just under 20 million people has access to free-to-air channels, only 21% of all Australian homes and roughly 28% of homes with children get cable/satellite services, which is where pay-TV channels like Cartoon Network (Foxtel/Austar/Optus), Nickelodeon (Foxtel/Austar), Disney (Foxtel/Austar/Optus) and Fox Kids (Foxtel) are found.

Geographic location and low cable penetration may be considerable speed bumps on the road to international co-pro progress, but the reality remains that no territory can afford to operate on an insular level. All co-pro avenues must be explored, and Australia’s favorable dollar, coupled with its competitive production costs, may soon convince more producers to traverse the ‘tyranny of distance’ and take a chance with a growing market.

Editor’s note: The electronic version of this article has been edited from the original print version in order to correct or clarify some information that it contained.

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