Australian television has always considered children a special audience and the effects of television on children have been widely studied. However less is known about the production circumstances of Australian children’s television and the creative, economic and technological factors that influence the programs that are made. This research provides a systematic analysis of one area of Australian children’s television, namely live action drama, from 2006 to 2011. It identifies key trends in children’s drama production including a reduction in the quality standards of the C drama classification, the importance of the Australian Children’s Television Foundation as a quality control mechanism and distributor, and the increased presence of transnational super-indies in the spaces of local expression. The research uses interviews with production personnel, economic and industrial analysis and textual analysis of children’s programming and policy documents to support its findings.The 1979 introduction of the Children’s Television Standards and the content quotas that accompanied them was the single most important factor in the establishment and long term viability of an Australian children’s drama production industry. However the advent of digital transmission, pay-TV and the internet fragmented the child audience across several platforms, transforming its media consumption habits and challenging traditional television business models and children’s content quotas. At the same time vertically integrated US conglomerates like Disney which control content and carriage distributed their programming across multiple platforms on a global scale. Between 2006 and 2011 a significant proportion of small independent Australian production companies were bought out by US and European transnational companies which could then access Australian funding subsidies. The resources and distribution networks these companies provided in turn supported Australian producers in international markets. As Australian regulatory regimes became increasingly focused on encouraging international investment and structural connections, national cultural expression ceased to be coterminous with the goals of cultural nationalism. There was also some decline in the quality of certain types of Australian children’s drama. Nonetheless the access to resources and global distribution networks, and the stimulus to local production that this new wave of international investment provided, led to the emergence of new and sustainable models for the production of Australian children’s drama. The new models of production raise significant issues however for a policy settlement predicated upon the notion of the child audience as a special audience for whom high quality, identifiably Australian drama ought to be provided.