(Image: Bluey)

The collapse of Australia’s once-mighty free-to-air television networks has been accompanied in recent years by a steady flow of regulatory and financial assistance from the federal government.

Cutting and then abolishing licence fees, cutting and then suspending spectrum fees, handouts of tens of millions of dollars to News Corp’s Foxtel, softening rules on pay TV advertising, changing media ownership rules to allow more mergers. Taxpayers have given up $2 billion in the past decade to help Seven, Nine and Ten out, and been rewarded with basket case television companies and an ever-shrinking media sector.

The latest help from Communications Minister Paul Fletcher, announced yesterday but inevitably dropped to one of the beneficiaries, Nine, is to give networks more “flexibility” in how they meet their local content requirements.

“Flexibility” is one of those words that ought to always come with an Abbottesque array of a dozen red flags indicating a scam is being perpetrated.

The “flexibility” is that networks won’t have to produce children’s content any more as part of their local content requirement — just meet an unchanged overall requirement that 55% of all content on Australian television must be local and a mixture of Australian drama, children’s content and documentaries. Some drama requirements for pay TV will also be relaxed.

Children’s content doesn’t make money for the networks, because it’s relatively little-watched, outside prime time, and there are strict limitations on what you can advertise to the audience. The only way to not lose money is to screen cheap content that is basically an an extended ad for an existing kids’ franchise.

The change will free up the networks to devote more money to tired old reality formats like Seven’s My Kitchen Rules, House Rules, Plate of Origin, The Block, The Bachelor and Survivor.

The announcement came with some extra funding for Screen Australia and the Australian Children’s Television Foundation to make more “quality content” and pre-empt industry complaints about falling network spending on drama.

Unsurprisingly, there’s not a single cent of extra funding for the powerhouse of children’s content, the ABC.

The national broadcaster regards quality children’s programming as one of its core roles — rightly so, given the lack of incentives for commercial broadcasters to screen content that’s not designed to sell toys and sugar. Courtesy of its kids’ multichannel and ABC iview, the ABC is more than ever the default platform for Australian parents.

And while many of its kids’ shows are produced outside the ABC (such as international hit Bluey, which was renewed for a third season today with added investment from BBC Studios), the ABC takes risks the commercial networks now avoid as they struggle to conserve cash and make duds out of dying formats.

Enabling the ABC to play to its strength in kids’ content would be the most sensible way to address what will become a growing gap on commercial networks. But this is a government that wants to destroy the ABC, not fund it.

Fletcher is still formally umming and ahhing on the push from commercial networks to force streaming services like Netflix, Apple TV, Amazon Prime, CBS All Access, or even the locally-owned Stan, to meet local content rules. For the moment, they will only be asked to tell the government how much they spend on Australian content.

The government knows that it can’t force streaming companies to meet local content rules, given the small size of the Australian market and the reality that these companies are based offshore and could ignore any directive to spend a certain amount in Australia. The only real sanction the government has would be to cut off access to them in Australia by ordering Telstra, Optus and other cable groups to do so, and even then such a ban would be trivially easy to evade.

Even so, it would make Australia a laughing stock and infuriate the more than 9 million streaming subscribers in this country. There are limits to how far the government is prepared to go to look after its media mates.