Changes Down Under

Australia will be a territory to watch this year, as the land of strong tax incentives and co-pro treaties anticipates new convergence policies and lobbies for higher rebates.
February 1, 2012

Less than a day after emailing Australian producer Jonathan Shiff for this story, he calls back at 7:30 a.m. local time—from the jungle. His Sydney-based prodco is on location north of Cairns, Queensland for Reef Doctors, a family-targeted action/adventure TV movie set to air on Australia’s Network 10. The co-pro with ZDF is the first primetime drama for Shiff, who has carved out a niche over the last 27 years with live-action tween series such as Ocean Girl, The Elephant Princess and H2O: Just Add Water. Shiff is also gearing up on pre-production for an H2O spin-off, Mako Mermaids, also being co-produced with ZDF.

Jonathan M. Shiff Productions is one of several Australian kids prodcos that collectively create 20% of the country’s annual content output. Australian content requirements, which mandate that children’s broadcasters screen at least 96 hours of first-release home-grown children’s programming over a three-year period, have helped drive the domestic production industry. As well, the territory’s strong subsidies, tax credits and co-production treaties have made Australians attractive international partners.

However, fluctuations in Australian currency have many producers lobbying to increase the producer offset rebate in order to stay competitive in the global market. And an upcoming convergence review that will incorporate emerging digital platforms into regulations for tax incentive schemes has Aussies anticipating how these changes will affect the kids industry.

Offsetting costs
Shiff says his days of shooting series against stunning Australian vistas may be coming to an end. He’s worried that the comparatively strong Australian dollar, which at press time was averaging about AUS$1 to US$1.05, could have a crippling effect on the local production industry. He’s currently scouting Hawaiian and Canadian spots as potential shooting locations in the event that Australia proves too expensive.

And Shiff’s one of the more fortunate ones. He has the track record to score presales that garner the minimum license fee of AUS$100,000 per half hour required to qualify for deficit financing from industry org Screen Australia. But he says an erosion of 40% in financing due to the current exchange rates has lowered the margins on live-action productions. So Shiff, along with several other kids producers, is crossing his fingers in the hopes that SA’s producer offset is bumped up from 20% to 40%. Increasing the rebate, which is a paid out for a percentage of qualifying Australian spend on TV production, would give indie prodcos a needed financial boost, helping to further attract co-pro partners and keep production Down Under.

Getting Aussie air time
Inking an official co-pro deal requires getting an Australian broadcaster on-board at the outset. In the country’s competitive landscape, it’s easier said than done, especially for nascent indie producers. Last fall, Richmond-based 1440 Productions came home from Cannes with the MIP Junior Kids Jury award for its 26 x half-hour western-meets-sci-fi series Dig Deep Creek. But while interest from potential partners for the live-actioner has been high, MD Kristy Fuller says the project hasn’t yet secured a domestic broadcaster and has stalled as a consequence.

“We don’t have a proven track record,” admits Fuller, which is something Australian broadcasters often bank on. She contends that thanks to their track records and regulatory quotas, some established producers in Australia have become complacent, checking off the boxes on Australian content requirements rather than driving innovation. “Where we shine is that we are forced to come up with the most innovative shows that we can, because we don’t have those prior credits,” she says. While the MIP Junior award has given her team more exposure in Australia, fuelling talks with broadcasters and soliciting interest from other production companies, Fuller says her team will seek private funding outside of Australia to get the project completed if need be.

Digital convergence
Also this year, for the first time ever, a review is underway that will see digital platforms and services subjected to the same regulatory requirements as Australian free-to-air and subscription TV content. The new broader policy could potentially make videogames, apps and interactive online content eligible for the tax offset that was previously only available to TV and film producers.

It remains to be seen if the developments are good news for producers like Joanna Werner of Werner Film Productions, who has created an immersive online experience to accompany Dance Academy (the hit show is headed into its third series for ABC Australia). The first series’ site, which Werner describes as “big and expensive,” even picked up a Kidscreen Award for Best Website in 2011. Visitors to the current iteration have their own room at the boarding house, share photos and earn membership to access behind-the-scenes footage and how-to-dance video clips that roll out during the season.

“The regulations were developed before these platforms, and so, in some ways, the policy is old and doesn’t hold up to the future,” says Jenny Buckland, CEO of the Australian Children’s Television Foundation, which worked with Werner to help produce and finance Dance Academy.

Changes abroad
The review also stands to affect Australia’s free-to-air broadcasters that meet their children’s drama quota through airing content on limited kid-specific timeslots. “Regulations could be loosened up so that you could screen kids shows on a digital channel and have it count for your content quota,” notes Buckland.

Deirdre Brennan, GM and director of channels and branded services for Australasia at BBC Worldwide, says expanding platforms and new technologies is something to embrace, but she remains skeptical of changing the infrastructure that supports children’s production without serious discussion and consultation from the industry.

“The quota system that sits with the commercial-free channels, and which has been the mainstay of local production funding is vital,” says Brennan. “I would be wary of changes made to that system that aren’t fully informed.” The results of the convergence review won’t be released for at least another six months, but an interim report being compiled now will give the Australian production industry an opportunity to weigh in.

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