The Australian Visual Software Distributors Association (AVSDA) is an industry association representing distributors of pre-recorded videos. Membership includes independent Australian companies (both large and small) as well as the Australian arms of international companies which also vary in size.
AVSDA is pleased to be able to make this submission to inquiry by the Human Rights and Equal Opportunity Commission on closed captioning.
The market for pre-recorded videos is divided between the rental market and the ‘sell-through’ market (videos which you buy to take home and keep). Normally videos are released for rental some months before they are sell-through release. The rental stores pay a premium price for rental release product - about $80-100 compared to an average retail price of $24.95 for sell-through videos. Many videos are released directly to sell-through.
Until fairly recently, most captioning was done as open captions by the Australian Caption Centre with funding provided by a government grant. AVSDA members have provided videos to the Caption Centre for open captioning for many years and are actively working to increase the numbers of closed captioned titles which they release in Australia.
While the submission by Parents of Hearing Impaired Children National Network supports open captioning of videos, the distribution process becomes very cumbersome with this format as two copies of each video need to be available (a difficulty recognised by the Australian Caption Centre in its submission).
Experience is that the demand for open captioned rental titles has been insignificant. Previous efforts to open caption rental titles have resulted in distributors being left with large quantities of unsold stock. Because the cost to a rental outlet of a video is around $100 they are unwilling to purchase a second (captioned) copy which will not rent enough times to recover its cost, let alone make a profit. Many video rental stores buy only a relatively small percentage of videos released in any month and many only buy one copy of a title.
Even for sell-through videos, sales of captioned product have not been high. As pointed out in the ABC submission, less than 100 of the captioned versions of children’s videos have been sold over a 10 year period.
AVSDA members believe that closed captioning is a much more viable method of captioning. However, they are concerned at the general perception
(evidenced in many submissions to this Inquiry) that there are very few videos available which are captioned. In fact a significant proportion of new videos have Line 21 closed captioning. Most of the product being released by the major international companies now carries Line 21 captioning.
However product sourced from other than the major studios does not tend to be closed captioned and most of the smaller distribution companies in Australia deal with this type of product. It is the smaller companies which will be most adversely affected by legislation to enforce captioning.
It is of great concern to AVSDA members to note comments such as those by the National Working Party on Captioning in its submission that ‘technical and financial considerations are not particularly relevant. Companies employ such arguments to avoid their obligations’.
The assumption that all distributor companies can easily accommodate such costs is inaccurate. In fact the impact of requiring closed captioning would reduce the number of titles which would be released (and one member company has advised that it may be forced to cease operations altogether). An analysis of the financial impact on one company of requiring all videos to be captioned is provided at Appendix A.
From Appendix A it is clear that the exemption for videos which sell less than 2000 copies provided for in the Democrat’s current Bill is inadequate. The cost implications of captioning will also vary significantly depending on the price of the video - with a cost of $2340 for captioning of a 90 minute video (at the rate of ($26 per minute quoted by the Caption Centre), the impact of this cost will be significantly different for a $15 video compared to a $25 video. The average price of sell-through videos has dropped from $34.95 to $24.95 in the past four years. The capacity for companies to absorb increased fixed costs is negligible and the willingness of retailers and consumers to pay increased prices is also minimal.
Further it may be difficult to judge which title should be closed captioned using a specific unit sales level as a base (whether 2000 units or another unit base). In some cases a title may be expected top sell 2000 units or 10000 units but does not reach that level, and the opposite can also happen. This could lead to significant production difficulties.
AVSDA members do not believe that a legislative requirement to close caption videos is appropriate. There is no legislative requirement for captioning of videos in either the US or the UK.
Many of the problems experienced by hearing impaired people in accessing captioned videos are not addressed by legislative requirements for captioning.
AVSDA member companies are working to maximise the number of titles which they release with closed captions.
Conclusion
AVSDA does not support the proposal to legislate to enforce closed captioning of videos for rental, sale or other distribution.
AVSDA believes that the perception that legislation is needed to achieve more widespread closed captioning is at odds with the increased numbers of titles which are being released with closed captions and the efforts being made by Australian distributors to do so. A list of recent releases from one member company which are closed captioned is attached (Attachment C). The blunt instrument of legislation will significantly damage the good will which Australian distributors have shown in this area.
The evidence is that the demand for captioned videos is in fact very much smaller than those lobbying for captions would indicate. While demand may increase if there is greater knowledge that such a product exists, the price barrier of the equipment needed to decode closed captions remains. Legislation to mandate closed captioning is premature until this issue is addressed. A government subsidy on the decoders through a rebate or sales tax relief may be appropriate.
If legislation to enforce closed captioning is to be considered further, then the minimum run of a title should be raised to 10,000 units.