Globalised production and niche markets make more flexibility essential.

RECENTLY a small St Kilda video store, Out Video, drew the attention of the federal Attorney-General's Department for selling and renting imported titles that have not been classified in Australia. Bureaucrats may be doing their job, but by acting against a small niche video shop, they have inadvertently exposed critical flaws in our film classification laws.

Out Video markets films primarily directed at the gay and lesbian community. Many are produced overseas and never achieve general or selected release in Australia. And because of the prohibitively high cost of classification, they never get classified.

The A-G's Department contacted Out Video because they were selling and renting out titles not given the all-clear by the Office of Film and Literature Classification (OFLC). As a result, Out Video says nearly half their stock will have to be shelved permanently.

This highlights two major flaws in Australia's classification regime:

1. The regime has not adapted to a marketplace that allows media to be accessed through more than just domestic broadcasters and distributors. Consumers demand access to an increasingly wide selection of entertainment from overseas, and they can get it through the internet.

2. Our classification laws are not designed to accommodate small markets. Instead, the classification processes are optimised for large, general-release films. The system simply doesn't lend itself to small-run films, and the law unfairly harms businesses trying to service niche markets.

The targeting of Out Video by the A-G's Department should give it and the OFLC impetus to review the classification laws. With a vibrant and diverse international entertainment sector, these laws should not blanket-ban content. Such a policy makes a mockery of the liberal legal principle that all things should be legal unless there is a reason to make them illegal.

Many of the films these niche providers import have already been classified in the UK, US and Canada. So one possible solution is to recognise comparable classifications from other media-exporting countries.
But a preferable outcome would be the elimination of mandatory classification. If consumers demanded classification to guide their decisions, then distributors would have a commercial incentive to seek it.
Furthermore, classification need not be the preserve of government. Many private classification regimes exist to rate films on special criteria (the Christian community, for example, has pioneered many alternative rating systems). Under such a regime, films that failed to obtain any form of classification would be burdened with the trepidation of some consumers to buy or rent the product.

The removal from sale or rent of Out Video's titles will do nothing to reduce their availability. All the "offending" titles are available from online stores outside the country. Australians can order them online and watch them at home, avoiding the scrutiny of the censors.

Furthermore, internet-aided piracy is now extremely common. By denying consumers legal access to small-run films, mandatory classification provides additional incentives for consumers to download illegal copies.
The sale of unclassified material is hardly uncommon. If government bureaucrats want to clamp down on unclassified videos, they should take a walk down Victoria Street or Sydney Road. Both are hives of foreign-language video stores that stock unclassified foreign-language films. In all likelihood the Government wouldn't dare act in these cases: the electoral backlash would be considerable.

It is unlikely that homophobia played a part in the Government's decision to enforce the law: it acted because it received a complaint. But if homophobia was the cause of that complaint, it would merely demonstrate how the classification laws can be manipulated.

Current film classification laws undermine access to films for different sections of the community. And businesses that are trying to meet a diverse market demand for unique niche content should not be punished for doing so.

Tim Wilson and Chris Berg are research fellows at the Institute of Public Affairs.