Australians paying twice to watch Bluey on smart TVs

Australians are paying more to watch their favourite cartoon cattle dog, as tech giants nudge fans toward paid streaming services over free alternatives.

Bluey has taken the world by storm, ranking amongst the most streamed programs in the United States and beating TV staples such as Gilmore Girls and Seinfeld.

As a children's show developed in Queensland and commissioned by the ABC and BBC, it is funded by Australian taxpayers.

But these same benefactors are being double-charged for the show because of smart TVs.

Speaking at a parliamentary inquiry on laws relating to free-to-air TV, ABC managing director David Anderson said search functions on smart TVs were prompting Australians to pay for streaming subscriptions when they wanted to watch Bluey.

"On some TVs, searching for Bluey won't take you to ABC iView, where Australian families can enjoy it for free," he said on Friday.

"Instead, it will take you to a paid service.

"If we want Australians to be able to find Australian content, including local news and children's programs, ensuring search recommendations ... is vital."

Stephen Clear, a technical expert at Free TV Australia, says the issue could come down to each streaming network's willingness to share its catalogues to a TV's search engine.

Broadcasters have blamed it on TV manufacturers doing deals with tech giants like YouTube or Netflix.

SBS managing director James Taylor said the manufacturer of the "best-selling connected TV" in Australia threatened to remove the broadcaster's app from the TV home page unless it agreed to a 15 per cent revenue share and placement fee.

"When SBS refused to pay the manufacturer carried through on their threat, making it much harder for audiences to find the SBS on Demand app," he said.

"It's frankly scandalous that these massive global tech firms can unilaterally insert themselves as gatekeepers between Australians and their free Australian content - trusted news and information services that have been intentionally developed and underpinned by decades of public policy."

Laws discussed at the inquiry would require free TV channels to be given prominence on smart TVs, meaning catch-up services would be prioritised in search functions.

Patrick Delany, boss of pay TV service Foxtel, warned the changes would lead to a "dangerous outcome going forward".

"I just want to get to the content that I love or that I want to search for," he said.

"When you start legislating to put certain apps ahead on queue or search results, you're not going to get that - you're going to get a distorted outcome."

Netflix policy advisor Carolyn Hough agreed, adding it was "quite unfair" to creators involved in making Australian movies with the streamer, if search results only showed content from on free-to-air TV.

"We really need to make sure that we're preserving that flexibility," she said.

The proposed legislation would also guarantee first rights to major sporting events to be offered to free-to-air broadcasters before they go behind a paywall.

The parliamentary committee also heard from Seven, Ten and Nine bosses, and Free TV Australia executives including Gregory Hywood, who argued paid services posed an "existential" issue for Australian culture.

As advertisement spend is funnelled into online services such as Google and social media, free-to-air TV's share of revenue has diminished.

"This is about news, sport - all the things that make Australia, Australia," he said.

"There is really only one solution to this issue which is government legislation because there has been a market failure."

Free-to-air networks have called for the timeline for prominence laws to take effect to be reduced from 18 months to six months.