6.24 The ALRC recommends that the Classification of Media Content Act (the new Act) should provide that the following content, subject to some exemptions, should be required to be classified before it is sold, screened, provided online or otherwise distributed to the Australian public:
- feature films;
- television programs; and
- computer games likely to be classified MA 15+ or higher.
6.25 However, the new Act should also provide that this content is only required to be classified if it is both:
- made and distributed on a commercial basis; and
- likely to have a significant Australian audience.
6.26 This rule is platform-neutral—which means it applies to films, television programs and computer games that are broadcast and distributed online, as well as those shown in cinemas and sold on DVD and other media.
6.27 The ALRC also recommends that the new Act should define ‘feature film’ and ‘television program’ and include illustrative examples. Examples of television programs would include situation comedies, documentaries, children’s programs, drama and factual content.
6.28 This is the content the ALRC recommends should be required to be classified. However, as discussed below, content providers should be encouraged to voluntarily classify other media content.
6.29 Feature films have been classified in Australia since the 1950s, and they are classified in many other countries, even where there is no legal obligation to do so. Consumers appear to demand classification information for films more than they demand it for other content such as books, magazines and websites. This may be because moving images can have a greater impact on viewers than still images and text.
6.30 The ALRC recommends that feature films should continue to be required to be classified, if they are made and distributed on a commercial basis and likely to have a significant Australian audience.
6.31 Existing classification laws do not limit the films that must be classified to ‘feature films’. Rather, all unclassified ‘films’ (other than exempt films) must be classified, and film is defined broadly to include:
a cinematograph film, a slide, video tape and video disc and any other form of recording from which a visual image, including a computer generated image, can be produced (together with its sound track).
6.32 If these laws were applied to online content, they would apply to millions of online film clips—and perhaps even websites. The ALRC recommends that a narrower range of film be required to be classified. In defining ‘feature film’, drafters of the new Act may draw upon the definition of ‘work’ in the Classification (Publications, Films and Computer Games) Act 1995 (Cth) (Classification Act), which provides that a ‘work’ includes:
a cinematic composition that appears to be:
(i) self-contained; and
(ii) produced for viewing as a discrete entity.
6.33 The duration of a film may also be a useful way of targeting the films for which Australians seek classification information. The new Act should not place a classification obligation on providers of short film-like content, commonly user-generated and distributed on video-sharing websites, which cannot feasibly be classified and for which Australians do not seem to expect classification information. The ALRC proposes that the new Act should provide that only feature films of a minimum duration, perhaps one hour, must be classified.
6.34 Television programs, other than exempt programs, are now classified before they are broadcast in Australia. The ALRC recommends that they continue to be classified, but regardless of whether they are broadcast, or distributed online, on physical media such as DVD, or otherwise (and only if they are made and distributed on a commercial basis and likely to have a significant Australian audience). As noted throughout this Report, if classification obligations do not apply to certain online content—such as television content delivered through Internet Protocol television (IPTV)—then this obligation will become increasingly less effective and relevant. The ALRC uses the phrase ‘television program’ in the absence of a popularly understood, media-neutral alternative phrase.
6.35 Free TV Australia (Free TV) expressed concern that referring to television content may be unfair, even if the intent is to create a platform-neutral law:
The ‘television program’ definition, combined with the platform-neutral approach, means that in practice, the only online content that will require classification is content produced by Free TV members and similar established Australian content providers. … The result is in an unfair regulatory impost on Free TV members and other traditional television content providers. … Jurisdictional issues will mean that Australian businesses are the only ones who can be subject to enforcement and compliance activities. …
In an online environment, Free TV members are just like any other content provider—they are not licensed, or using spectrum, and the content in question is nonlinear ‘pull’ content, as opposed to traditional linear broadcasting.
6.36 Free TV’s preferred solution to this problem is ‘to remove online content from the scope of must classify and make it a voluntary classification category, with a requirement to classify high level material likely to be MA 15+ or greater’.
6.37 However, in the ALRC’s view, removing online content from the scope of the laws concerning what must be classified would mean that, in time, much of the content that Australians now receive classification information about, would no longer be classified. Many of the films now sold on DVD with classification information, would be sold online without classification information. This would also leave Australia with platform-specific classification laws that will quickly become obsolete.
6.38 The ALRC does not propose that established Australian content providers, such as television networks, should have a greater regulatory burden than other content providers—unless, as discussed further below, the content they provide has a significant Australian audience, and the content others provide does not.
6.39 Australians continue to value classification information for computer games. Along with films and television programs, computer games are among the content for which distributors in many parts of the world are expected to provide classification information.
6.40 The obligation to classify and mark computer games has been clearly applied to console and PC-based games sold in Australia since the 1990s. In the ALRC’s view, many computer games distributed online, or able to be played online, should also be classified. However, if online and mobile games were required to be classified, then the scope of computer games that must be classified will need to be otherwise narrowed. There are many thousands of small games, often played online or on mobile devices and developed by small developers or individuals, which should not be subject to a costly classification obligation.
6.41 In the Classification Act, ‘computer game’ is defined in part to mean:
a computer program and any associated data capable of generating a display on a computer monitor, television screen, liquid crystal display or similar medium that allows the playing of an interactive game.
6.42 This definition—and the obligation to classify computer games in state and territory classification enforcement legislation—would capture not only console games, but online games and computer game ‘apps’. The ALRC recommends that the obligation to classify computer games in the new Act should also be platform neutral, and apply to online and offline games. However, the obligation to classify computer games might usefully be drafted to apply only to computer game ‘works’, as this term is defined in the Classification Act—that is, to computer games ‘produced for playing as a discrete entity’.
6.43 The obligation to classify computer games in the new Act should also only apply to games. This should go without saying, but the definition of computer game in the Classification Act is arguably quite broad, so much so that accounting software, for example, must be explicitly exempted from the definition.
Likely to be MA 15+ or higher
6.44 The need to warn consumers and protect children might suggest that it is more important for content providers to give classification information about high-level content. This idea is reflected in existing laws that provide that only ‘submittable publications’—which includes publications not suitable for minors, such as sexually explicit magazines—must be classified before they are sold in Australia.
6.45 It may be that some content does not need to be classified at all, because it is likely to have only a negligible impact on any viewer. A former Director of the Board, John Dickie, suggested that ‘there is a large amount of material—publications, instructional films, low level computer games and puzzles—which really do not have to be classified’.The Interactive Games and Entertainment Association (iGEA) submitted that ‘small online content products’ should only require classification if they ‘have the potential to be classified within a restricted category’.
6.46 Rather than exempt all of these games from the classification obligation, including higher-level games, or introduce a category of ‘small online content product’ or ‘small and simple computer game’, the ALRC proposes that only those games likely to have one of the higher classifications should be classified.
6.47 In the Discussion Paper, the ALRC proposed that only computer games likely to be MA 15+ or higher must be classified. This is a platform-neutral law, which means it would apply to online computer games, often not classified in Australia. However, it also means that most of the games that are now sold in stores in Australia would no longer be required to be classified, and would therefore only be classified if distributors chose to have them classified.
6.48 The Arts Law Centre supported the proposal, and submitted that, ‘given the large number of games created and made available in Australia each year’,
it is sensible to focus the efforts of a government classifier on contentious content and require the classification of contentious content only. Such an approach removes cost and legal burden from small game developers and individuals and imposes it only where necessary, specifically for games that include contentious or adult content.
6.49 Telstra also supported the ALRC’s proposal, noting that
while large numbers of mobile and tablet games and apps are now being produced by small providers, very few contain content that would be likely to pose any concern for consumers. Targeting this classification obligation on the relatively small sub-set of content that contains content that is likely to be of concern is a cost effective approach to addressing this issue.
6.50 Civil Liberties Australia, however, argued that it was more important to provide classification information for lower-level games, to help parents and guardians choose content for children. FamilyVoice Australia submitted that parents are ‘just as concerned to know which games are suitable for children of a particular age as they are to have this information about feature films and television programs’:
Indeed given the interactive nature of computer games and their potential to influence behaviour this information is perhaps even more important for computer games than more passive forms of media.
6.51 Similarly, the Board submitted that ‘parents and guardians actively seek out sound, reliable and consistent classification information … particularly when they are looking to purchase or provide to children.’ The Board also stressed that it cannot be assumed that lower-level content is easy or straightforward to classify:
G/PG material is arguably the material on which parents and caregivers place most emphasis in terms of reliable, independent, expert classification information.
6.52 The Australian Children’s Commissioners and Guardians expressed its concerns about M computer games, and submitted that the proposal ‘may limit the ability of the public to make informed choices about their computer game purchases’.
6.53 In the ALRC’s view, only computer games likely to be classified MA 15+ or higher should be required to be classified (and, as discussed below, only if they are made and distributed on a commercial basis and likely to have a significant Australian audience). These are the games that parents and guardians arguably most need to be warned about—the games with strong or high levels of violence, coarse language and other impactful content. Classifying such games is not primarily for the benefit of 15 year olds, or the parents of 15 year olds, but rather for the benefit of younger minors and their parents, who should be warned that MA 15+ and R 18+ games can have strong or high level violence, coarse language and other content, and are considered not suitable for persons under 15 and 18 respectively. Mandating that such warnings, through classification information, be provided is consistent with the ALRC’s principles for reform concerning protecting children from material likely to harm or disturb them.
6.54 Content providers may also choose to classify other lower-level computer games voluntarily. The iGEA expressed its support for voluntary classification for most games, submitting that its members ‘understand the value of ensuring that consumers are provided with classification information regardless of whether it is a legal requirement’.In the United States computer games are classified voluntarily in response to market demand; large retail outlets such as Walmart will reportedly only stock computer games that have been classified by the Entertainment Software Ratings Board. As discussed later in this chapter, industry codes might facilitate this voluntary classification of lower-level computer games in Australia.
Made and distributed on a commercial basis
6.55 The ALRC recommends that only films, television programs and computer games that are made and distributed on a commercial basis should be required to be classified before being distributed in Australia. This means that usually only persons carrying on a business producing or distributing media content would be subject to the obligation to have content classified.
6.56 Classifying content comes at a considerable cost, particularly when done by an independent statutory body. Large organisations and companies, such as television networks and the major distributors of films and computer games, will often have the resources to ensure their material is classified and, under a new scheme, may also be able to employ their own classifiers for some content. Smaller content providers, individuals, and producers of user-generated content, however, may not be able to bear the cost of having their content classified. Civil Liberties Australia submitted that:
It is unfair to hold an individual or small group to the same standards as a corporation that has the time and resources to advertise and comprehensively research issues … When profit motive is the dominant factor in producing content, classification becomes more justifiable as a feature of fair trading.
6.57 However, many submissions argued that market position or reach should not have a bearing on whether content should be classified. The iGEA said that classification laws should be capable of being applied to ‘all content producers, regardless of their size or market position’. FamilyVoice Australia stated that there was no reason to limit the classification obligation to content produced commercially:
This firstly ensures that material that exceeds community standards is not classified and is not able to be sold, broadcast or exhibited. Secondly, it enables access to material not suitable for children, or for children below a certain age, to be legally restricted. Thirdly, it provides a very useful advisory service that enables individuals to select what they wish to view and assists parents to monitor and control the media their children access.
6.58 A number of submissions noted the difficulty of distinguishing content produced on a commercial basis from other content. The Board, for example, submitted:
‘Commercial’ could encompass a wide variety of revenue-raising business models, from traditional pay-per-view (rental/hire/purchase/download), to those that operate for a profit and charge a fee (eg subscription fees, bundled service fees) or rely on advertising revenue (where content may be free to view but carries paid advertising).
6.59 Some pointed out that many YouTube clips are very popular, and amateur content providers have been known to earn a considerable income from their content. Free TV submitted:
YouTube earns money from advertising, even though the producers of the content often receive no financial benefits. Some YouTube ‘vloggers’ receive financial benefits from their content, even though their material may not initially be produced on a commercial basis. Such content will often have millions of views worldwide, more than the highest rating programs on commercial free-to-air television, or even the population of Australia.
6.60 In the ALRC’s view, it is important to narrow the scope of the content that must be classified to content made and distributed on a commercial basis. This may be difficult to define, but again, the volume of media content that is now available dictates that only certain content can reasonably be expected to be classified. Without such a limitation, the obligation would apply too broadly.
6.61 Also, crucially, content is being provided by individuals and small enterprises who may often be unable to pay for their content to be classified by the Board or an authorised industry classifier. The ALRC agrees that classification information is a useful service, but it is also a costly service, and not all content providers should be expected to provide it.
6.62 There also appears to be a greater community expectation for classification information for commercial content. A 2011 report from the Australian Communications and Media Authority states that participants considered that, ideally, ‘professionally produced content available online should provide guidance about what that content contains’.
Participants believed the classification and ratings information that applied to broadcast television should also apply to on-demand television. They also considered that classification and ratings should apply to movies and games available online, given that all professionally produced mass-consumed content should be subject to community standards. Furthermore, as parents were less likely to have a comparative reference for movies and games than for television shows, it was felt to be almost more important that classification and ratings apply to these products.
6.63 A large amount of content is user-generated and not made on a commercial basis, but is distributed on a platform that operates on a commercial basis—for example, a television station or a video-sharing website with advertisements. The ALRC recommends that only media content that is both made and distributed on a commercial basis should be required to be classified. This is the content for which Australians appear to expect classification information, and it is also the content provided by persons most likely to be able to provide the classification information.
6.64 Whether content is made and distributed on a commercial basis may be drafted with reference to whether the content is made and distributed by persons ‘carrying on a business’, an idea reflected in some Australian statutes. The concept of ‘carrying on a business’ under the Income Tax Assessment Act 1997 (Cth) allows the Australian Tax Office (ATO) to distinguish between ‘hopeful amateurs’ and commercial operations, and is relevant to assessable income, entitlement to an Australian Business Number, and GST registration.
Significant Australian audience
6.65 The ALRC recommends that only certain content likely to have a significant Australian audience should be required to be classified—that is, an Australian audience of a significant size.
6.66 Without such a limitation, the classification obligation will apply to too much content. A platform-neutral rule that requires television programs to be classified, for example, would mean that the thousands of television shows now broadcast internationally, but perhaps available to be watched in Australia on the internet, would have to be classified. Again, the volume of media content that is now available, combined with the impracticality of having it all classified, suggests that only some content should be required to be classified. It appears appropriate to require the most popular content to be classified—that is, content that has or is likely to have a significant Australian audience.
6.67 A similar intention may be found in the AVMS Directive, which states:
For the purposes of this Directive, the definition of an audiovisual media service should cover only audiovisual media services, whether television broadcasting or on-demand, which are mass media, that is, which are intended for reception by, and which could have a clear impact on, a significant proportion of the general public.
6.68 Some submissions said that audiences seeking out more ‘niche’ media content also need classification information. Free TV said thatviewers ‘have a right to expect the same acceptable community standards with respect to any material they access’.
6.69 It is also difficult, some submissions noted, to predict the size and composition of an audience—especially for online content. Telstra commented that:
Recent experience shows that the size and audience composition of differing types of content has changed dramatically in relatively short periods of time … This rapid pace of change creates the risk that classification distinctions based on the potential size and composition of audience could quickly become outdated leading to inconsistencies and perverse outcomes.
6.70 Another submission stated that internet content can ‘become popular or fade in popularity within days, depending on which channels it is promoted in’.
6.71 However, many submissions noted that classification of content creates an economic burden on smaller producers. Some said that content produced by small producers, or for a niche audience, should therefore be exempted from any requirement to be classified, and independent and niche developers should not be caught up in red tape. The Australian Independent Record Labels Association argued that music for ‘a small audience should not be subject to costly or resource dependent classification systems’.
6.72 The ALRC maintains that a platform-neutral rule defining what content must be classified should be limited to content with a significant Australian audience, otherwise it will catch the many millions of films, games and programs now available on the internet that may be watched by only a small proportion of the Australian population—if by any Australians at all.
6.73 The legislation should define more precisely what will amount to a significant Australian audience. Determining audience size will sometimes be difficult. The popularity of some platforms may indicate whether content will have a significant audience; films broadcast on Australian television and shown in Australian cinemas, for example, will for some years no doubt continue to reach a significant Australian audience.
6.74 Some content providers may not know whether their content is likely to have a significant Australian audience, and may even be surprised if their content ‘goes viral’. Such content providers may choose to classify the content anyway, or monitor the popularity of the content, or await a ‘classify notice’ from the Regulator. The ALRC appreciates that laws should ideally be certain in their application, but some reference to the likely size of the Australian audience may be the only reasonable way to create a platform-neutral law that will apply to relevant content on the internet, without imposing a costly classification obligation on persons, including international content providers, who do not intend to deliver content to a significant Australian audience.
6.75 In enforcing this classification obligation, the Regulator should not be required to prove that a particular piece of content had, or was likely to have, a significant Australian audience. Rather, the Regulator should be able to issue classify notices, discussed later in this chapter, in respect of content with a significant Australian audience. If a content provider then argues that their content does not have a significant Australian audience, and the Regulator changes its view, the Regulator might withdraw its classify notice. However, if the notice stands, and is not complied with, then in enforcing the obligation, that notice should be taken to be conclusive proof that the content has a significant Australian audience.
6.76 Limiting the content that must be classified to content that is likely to have a significant Australian audience may mean that some content that would currently be classified before being broadcast or sold on DVD, for example, may no longer need to be classified, because the Australian audience is likely to be very small. However, if a commercial television program is expected to be watched by a large number of Australians on the internet, and another obscure commercial television program is expected to be watched by only a few Australians when broadcast, then in the ALRC’s view, it is more important for the first program to be classified than the second.
Sold, screened, provided online, or otherwise distributed
6.77 Existing laws generally provide that certain content must be classified before it is sold, hired, distributed, publicly exhibited or broadcast—rather than merely possessed or lent to friends and family. In New South Wales, for example, it is not an offence to possess an unclassified film, or to give a copy of an unclassified film to a friend, but it is an offence to ‘sell or publicly exhibit’ an unclassified film. Publicly exhibit means exhibit ‘in a public place’ or ‘so that it can be seen from a public place’. ‘Sell’ is defined to mean:
sell or exchange or let on hire, and includes offer or display for sale or exchange or hire, agree to sell, exchange or hire and cause or permit to be sold or exchanged or hired, whether by retail or wholesale.
6.78 The ALRC does not favour any extension of the obligation to classify content to persons who merely possess content or who lend or show content to family and friends. The ALRC recommends that the new Act provide that only content that is sold, screened (including broadcast), provided online (and through peer-to-peer networks), or otherwise distributed will be required to be classified.
Recommendation 6–1 The Classification of Media Content Act should provide that feature films and television programs that are:
(a) likely to have a significant Australian audience, and
(b) made and distributed on a commercial basis,
should be classified before content providers sell, screen, provide online, or otherwise distribute them to the Australian public. The Act should provide for platform-neutral definitions of ‘feature film’ and ‘television program’ and illustrative examples. Examples of television programs may include situation comedies, documentaries, children’s programs, drama and factual content.
Recommendation 6–2 The Classification of Media Content Act should provide that computer games that are:
(a) likely to be classified MA 15+ or higher; and
(b) likely to have a significant Australian audience; and
(c) made and distributed on a commercial basis,
should be classified before content providers sell, screen, provide online, or otherwise distribute them to the Australian public.
The Act should provide for platform-neutral definitions of ‘computer game’ and illustrative examples.
 Exemptions are discussed later in this chapter.
Classification (Publications, Films and Computer Games) Act 1995 (Cth) s 5.
 Though again, only if they are made and distributed on a commercial basis and likely to have a significant Australian audience.
 Free TV Australia, Submission CI 2519.
 Ibid. Free TV draws a distinction between providing content through linear, ‘push’ technology (traditional broadcast television), and providing content on platforms from which users deliberately choose to download the content—‘pull’.
Classification (Publications, Films and Computer Games) Act 1995 (Cth) s 5A(1).
 Apps and other computer programs that are not ‘played’ or ‘interactive games’ would presumably not meet this definition of computer game.
Classification (Publications, Films and Computer Games) Act 1995 (Cth) s 5.
 Ibid s 5B(2).
 In the Issues Paper, the ALRC asked whether the potential impact of content should affect whether it should be classified: Australian Law Reform Commission, National Classification Scheme Review, ALRC Issues Paper 40 (2011), Question 5.
 For example, Classification (Publications, Films and Computer Games) Enforcement Act 1995 (NSW) s 19.
 J Dickie, Submission CI 582.
 Interactive Games and Entertainment Association, Submission CI 1101.
 Australian Law Reform Commission, National Classification Scheme Review, ALRC Discussion Paper 77 (2011), Proposal 6–2. A game ‘likely to be MA 15+ or higher’ is an unclassified game that, if it were to be classified, would be likely to be classified MA 15+ or higher.
 Arts Law Centre of Australia, Submission CI 2490.
 Telstra, Submission CI 2469.
 Civil Liberties Australia, Submission CI 2466.
FamilyVoice Australia, Submission CI 2509.
 Classification Board, Submission CI 2485.
 Australian Children’s Commissioners and Guardians, Submission CI 2499.
 Of the computer games classified by the Classification Board between July 2005 and June 2010, only 8% were classified MA 15+ or RC. See annual reports of the Board for this period. This statistic does not account for the many online games not submitted to the Board for classification.
 See Ch 4, Principles 3 and 4.
 Interactive Games and Entertainment Association, Submission CI 2470.
 In the Discussion Paper, the ALRC proposed that certain content should only be required to be classified if it is produced on a commercial basis: Australian Law Reform Commission, National Classification Scheme Review, ALRC Discussion Paper 77 (2011), Proposals 6–1 and 6–2.
 In Ch 7 the ALRC recommends the introduction of authorised industry classifiers.
 Civil Liberties Australia, Submission CI 1143.
 Interactive Games and Entertainment Association, Submission CI 1101.
FamilyVoice Australia, Submission CI 2509; See also J Trevaskis.
 Classification Board, Submission CI 2485.
 Free TV Australia, Submission CI 2519. See also A Hightower, Submission CI 2511.
 Australian Communications and Media Authority, Digital Australians—Expectations About Media Content in a Converging Media Environment: Qualitative and Quantitative Research Report (2011), 54.
 This limitation is not applied to the recommendations in Ch 10 concerning content that should be restricted to adults. Reasonable steps should be taken to restrict access to adult content, whether or not the content is commercial content.
 See Australian Taxation Office, Am I in Business? <www.ato.gov.au/content/66884.htm> at 23 January 2012.
AVMS Directive, recital 21.
 Free TV Australia, Submission CI 1214.
 See, eg, Telstra, Submission CI 1184; Australian Council on Children and the Media, Submission CI 1236.
 Telstra, Submission CI 1184.
 Endless Technology Pty Ltd, Submission CI 1786.
 Australian Independent Record Labels Association, Submission CI 2058.
 In practice, many films with smaller audiences, such as many non-English films sold on DVD in speciality retail outlets, are not classified now anyway, even though the law provides that they should be. Whether such ‘niche’ non-English language films should be classified under the ALRC’s model may depend largely on the likely size of their Australian audience.
Classification (Publications, Films and Computer Games) Enforcement Act 1995 (NSW) s 6.
 Ibid s 4.
 Ibid s 4.