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25 November 2017
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2003

AFC calls for cultural exemptions in Trade Agreements at Cannes International Film Festival

19 May 2003

At a briefing today for the international film and television industry and journalists at the Cannes International Film Festival, the Australian Film Commission (AFC) again called for explicit recognition in trade agreements of the special status of culture.

The AFC briefing coincides with the commencement today in Hawaii of a further round of negotiations for a Free Trade Agreement between Australia and the United States.

The AFC is the Australian government's development agency for the film, television, and interactive media industry.

"The Australian screen industry is an industry of national importance and it requires regulation and subsidy in order to prosper," said Maureen Barron, Chair of the AFC.

"For over 40 years, successive Australian Governments have supported our cultural industries via a matrix of regulation and subsidy. Government support for Australia's audiovisual industries through regulation and subsidy exists solely because they deliver cultural outcomes."

It is internationally recognised that Australia already has a liberal services trade environment, as evidenced by the local audiovisual industry's acknowledged place in the global economy and the amount of non-Australian, especially US, material already on our screens.

"The AFC is not opposed to free trade agreements but we are arguing for explicit recognition in trade agreements of the special status of culture. We believe that cultural policy measures can co-exist with trade disciplines. Australia's measures are designed to deliver on its cultural policy objectives and are transparent, modest, targeted, do not exclude foreign material, and still leave Australia significantly open to international trade," said Ms Barron.

Australian television screens are dominated by non-Australian programs, mostly American: 63.4% of our new television programs in 2002 originated from outside the region. Only 28% of new hours of TV originated from non-US sources. This compares to approximately 1.5% of new television programs being foreign-sourced in the US and 4.3% in the UK.
(source: EURODATA TV/MEDIAMETRIE - New on the Air Survey 2002)

Around 250 feature films are released into the Australian market each year, of which around 70% are from the US and 10% are Australian.

The dominance of the US and the vast discrepancies of market power mean regulation and subsidy are essential if Australian audiences are to have access to minimum levels of Australian content.

The Australian Government's support measures for the audiovisual sector are similar to those operating in most developed nations. India and the US are the only two film producing nations that do not have mechanisms in place for supporting a local film and television industry.

Such interventions are required to deal with market failure. This is the reality for Australian audiovisual productions. For example:

- The costs of television production in the US and UK are substantially or fully recovered from their domestic market. So US and UK television product is sold into the Australian market at a fraction of the real costs of production.

- A US series costing US$1million per hour, fully financed out of the US market, can be sold to an Australian broadcaster for US$20,000 to US$65,000 per hour.

- An Australian series costing about US$300,000 an hour can be pre-sold to an Australian broadcaster for half that amount and must be deficit funded against potential overseas sales by the Australian production company.

- Australian films last year grossed about US$25m, or about 5% of the total box office. The annual local share has not exceeded 10% over the last decade.

Also speaking at the briefing was Australian producer Andrew Mason, in Cannes for the launch of The Matrix Reloaded, made in Australia in 2002: "The international profile of the Australian industry and the depth of talent that it produces is quite disproportionate to the population and the size of the industry," said Mr Mason. "Last year's record 12 Oscar nominations for Australian films and filmmakers is just one example. No other country outside the US achieves this. It is the success of our local industry that provides the launching pad for the high profile Australian film creators and performers, and the local industry can only survive and prosper with continued regulation and subsidy."

The AFC has also cautioned against any US proposition that the existing classification of audiovisual services under the GATS needs to be reviewed.

The AFC maintains that cultural goods and services such as books, videos, DVDs, music and downloadable films are now traded via e-commerce with few, if any, barriers and that these goods and services do not lose their cultural characteristics because of the means by which they are traded.

Media Enquiries:
Tracey Mair
TM Publicity
For the Australian Film Commission
Ph: 0419 221 493
Email: traceym@tmpublicity.com

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