The digital trend, which was “empowering audiences and driving their expectations”, had major implications for local free-to-air and subscription television companies, he said this week.
Netflix, the world’s most popular on-demand subscription service, does not own the Australian content rights to most of its programs and has never launched in Australia.
However, the ‘geoblock’ that prevents Australians from accessing this service is easily bypassed with a VPN, or virtual private network. Many companies offer VPNs for just a few dollars a month and Netflix accepts payments from Australian credit cards.
“Netflix continues to shake up what we think of as TV, creating a massive social buzz around programming and showing that linear broadcasting is not necessary for big audiences and industry awards.” — Mark Scott
“VPNs allow Australians to access global content with ease — and at least allow some to assuage their consciences by paying Netflix for content,” said Mr Scott, before adding that illegal downloading has “exploded with no payment and, one suspects, no conscience pangs”.
“Netflix continues to shake up what we think of as TV, creating a massive social buzz around programming and showing that linear broadcasting is not necessary for big audiences and industry awards. Netflix talks of more than half of television content in the US being delivered through Internet streaming by 2016.”
The trend, he said, was placing consumers “in a position of great authority”.
In a wide-ranging speech delivered at Melbourne University’s Centre for Advancing Journalism, Mr Scott spoke of the challenges facing commercial media in Australia while describing the ABC as “a sure bet in the midst of the media storm”.
He envisioned a time when News Corp Australia would own the only daily newspaper in all capital cities except Perth.
“The once unthinkable now seems likely at some point with Fairfax, as the creation of the tabloids and the closing of the big printing presses seems set to be a forerunner to the shutting of print editions altogether most days of the week, at least at The Sydney Morning Herald and The Age. It is now a digital media business, not a newspaper business.
“It is good news for the News Corporation shareholders. The American evidence suggests that newspaper markets in most cities are shifting towards monopoly papers, and that in a reasonably sized city a single paper should be able to make a return.”
Mr Scott also noted that the 50 top rating television shows last year were all Australian, “and not one of those … was on the ABC”. “With so much global content available online and through mobile, the winning proposition in television appears to be Australian stories in a variety of forms,” Mr Scott told the audience of about 300 people. But, he added, there was “speculation about whether the market can sustain three free-to-air television networks, with Channel 10 pining for the days when younger audiences were less fickle and more loyal”.
Mr Scott wondered if Netflix had any intention of entering the Australian market officially. “Hulu [a similar service] and Netflix have been coming forever but may, for the present, be quite happy with the subscriber levels they already have here,” he said.
And those subscriber levels are impressive. The Australian recently reported that Netflix, which has subscriptions starting at about $9 per month (about $11 when the cost of the VPN is included), has between 50,000 and 200,000 subscribers in Australia.
Netflix produces a number of popular shows, including House of Cards, starring Kevin Spacey. Foxtel owns the exclusive Australian rights to this programme.
Mr Scott said when Australians access Netflix, the content owners still get paid. “The people upset are those who think they have exclusive rights — Foxtel,” he continued.
He was not concerned that people were using VPNs to access the ABC’s catchup service iView from other countries, saying he had seen little evidence of this.
The solution to Australia’s content conundrum was “global day and date release of content in multiple formats”. He cited the ABC’s decision to broadcast new episodes of Doctor Who in Australia at exactly the same time as the UK. He said the BBC had been “amazed” the ABC had wanted to broadcast one of their most popular programs at 5am. “The Whovians will be up,” said Mr Scott, “and if we don’t show it, they’ll find another way [to watch it].”