Netflix and other streaming services could for the first time be forced to make Australian programs, with a government inquiry hearing that local quotas for subscription video on demand services are under active consideration.

Representatives from the federal Department of Communications appearing before the inquiry into the sustainability of the film and television industry on Friday were asked if they had done any research into "what a responsible quota" on online content might look like.

"It's a very timely question," responded Carolyn Patteson, content head at the department. "We recognise that the system we currently have in place is probably not contemporary for our environment, and what we're really starting to grapple with is the online space."

While conceding that the department was "not well advanced on thinking how you might apply quotas" to the online space, Ms Patteson added that work had begun on the issue. The department was expected to make its recommendations by the end of the year.