Australian production spending fell 18 per cent in Q1 2026 and the floor is still not visible

Total Australian production activity in Q1 2026 was $310 million, down from $378 million in the same quarter of 2025. That is an 18 per cent decline, and it follows a Q4 2025 that was already flat. The trajectory is not ambiguous. The industry is contracting, and the contraction is accelerating.

The breakdown by sector tells you where the damage is concentrated.

Independent features took the largest hit

Independent feature film production fell to $48 million in Q1 2026, down from $79 million in Q1 2025. That is a 39 per cent drop, and it is the steepest quarterly decline the sector has recorded since Screen Australia began publishing consolidated production data in 2007. The number of features in production fell from 22 to 14. Average budgets held relatively steady, which means the decline is about volume, not scale. Fewer films are being made. The films that are being made are not being made cheaply.

The causes are layered. Private equity investment in Australian features has contracted for six consecutive quarters. Pre-sales to international distributors, which historically underwrote 20 to 30 per cent of independent feature budgets, have become harder to close as international buyers reduce their acquisition slates. The gap financing market, never robust in Australia, has tightened further.

International co-productions held steady

International co-productions and foreign productions filming in Australia totalled $142 million in Q1 2026, roughly flat against the $148 million recorded in Q1 2025. The Location Offset and the PDV Offset continue to attract production from studios that need the rebate to close their budgets. Two large-scale productions in Queensland and one in New South Wales accounted for most of this figure.

This is the segment of the industry that the federal government’s incentive structure is designed to support, and by that measure, the incentives are working. Foreign productions bring crew employment, facility revenue, and ancillary spending. They do not, as a rule, tell Australian stories or develop Australian intellectual property, and the tension between the economic argument for the offsets and the cultural argument for domestic production is now twenty years old and no closer to resolution.

Television commissions were flat

Domestic television production was $94 million in Q1 2026, compared to $98 million in Q1 2025. The decline is modest in percentage terms but masks a shift in composition. Free-to-air commissions fell, continuing a trend that has been consistent since 2019. Subscription television commissions (Foxtel and its streaming platform Binge) were stable. SVOD commissions from international platforms were down slightly, reflecting a broader global pullback in original content spending by Netflix, Amazon, and Disney+.

The SVOD content quota, introduced in July 2024, requires streaming platforms operating in Australia to invest a percentage of their local revenue in Australian content. The quota was designed to create a floor for domestic television production. In practice, the floor is lower than the industry hoped. The platforms are meeting their obligations, but they are meeting them with minimum-viable investments: cheaper formats, shorter series, and acquisitions of existing content rather than commissions of new work. The quota guarantees spending. It does not guarantee ambition.

What the numbers mean for crew

The production spending figures are an abstraction until you translate them into employment. Screen Australia’s workforce data, published annually, lags the quarterly production figures by roughly nine months. But the direction is clear. An 18 per cent decline in total production activity means fewer shooting days, fewer crew calls, and longer gaps between jobs. The departments most affected are construction, art department, and below-the-line technical roles that depend on continuous production volume.

Anecdotally, crew rates have not fallen. The MEAA’s negotiated minimums hold, and experienced crew in high-demand departments (camera, sound, post-production) are still working. But the total hours of employment are down, and the pipeline of upcoming productions visible to crew agents and line producers is thinner than it was at this point in 2025 or 2024.

The floor question

The industry has been looking for a floor since mid-2023, when the post-pandemic production surge ended and spending began to normalise. The normalisation turned out to be a contraction, and the contraction has not stabilised. Q1 2026 is worse than Q4 2025, which was worse than Q3 2025. Each quarter produces a new set of numbers and a new round of speculation about when the decline will stop.

The honest answer is that nobody knows. The variables that drive Australian production spending are mostly external: global streamer budgets, international co-production appetite, exchange rate movements, and federal government policy settings that are reviewed on political rather than industry timelines. The domestic variables that the industry can influence directly, such as development slate quality and financing creativity, operate on longer cycles than quarterly reporting can capture.

Three hundred and ten million dollars in a quarter is not a crisis. It is below trend, and the trend is downward, and the factors that would reverse the trend are not currently in motion. The industry is not collapsing. It is contracting, steadily, and the floor is still not visible.