What the end of the VPF means for Australian Content and Exhibitors

What the end of the VPF means for Australian Content and Exhibitors

Update on Australian Content for Australian Communities

This new initiative has gained some attention:

  1. comments of support from Screen Australia.
  2. International media coverage from the top industry must read Celluloid Junkie. Recommended read as it has an interesting external perspective.
  3. Media Coverage from website and FilmInk

On the back of this initiative, Deluxe has contacted me to indicate that digital delivery of feature DCPs from the top five studios is close to going live.

These are important developments and should encourage smaller cinemas to start investigating infrastructure upgrades to leverage these new digital delivery offerings.

The VPF is ending. How does this effect our industry?

Theatrical distribution is on the precipice of a pivot in the way the industry runs.  In this newsletter, I give you a quick overview of the circumstances around this pivot and how content distribution and cinema exhibition is likely to change.

The VPF is ending by end Mach 2020

The VPF started a long time ago and some readers may not know what it is.  The VPF is/was a subsidy from the major studios to help with the transition from celluloid film to digital projection.  This subsidy was in the form of a payment from the distributor to the exhibitor when the exhibitor takes a film. This payment was required from all distributors who wished to show their film on a VPF screen.  This subsidy, in effect, created a barrier for smaller films as to do any form of wide release (to a large number of cinemas) would require a large up front investment by the distributor.

Before the VPF

I was very much involved with the explosion in local content before the VPF.  My brother Martin and I were the developers of eCinema solutions back in the pre-VPF era.  We sold many into Australia (especially to show “Kenny”), but mostly into the US, where Emerging Pictures used our technology, and into India, where Prasad also utilised our products for secure playback and distribution.  I was very proud of being able to sell Australian innovation and technology into the US and Indian markets. It is through my experiences during these times eCinema playback and distribution that I strongly believe we will once again have a local content resurgence.

Before the VPF was introduced there was an explosion of local content and smaller distributors in the industry as eCinema technologies allowed a zero-cost distribution to the exhibition industry.  This was the golden days of “Kenny” and many other local films that gained strong growth in cinema due to the lifting of this high cost of Film Prints. ($2K-$3K per print)

Once the VPF came into effect, the industry was once again under the strain of a large upfront cost reducing the ability for smaller films to capture the imagination of the public.

The VPF subsidy is only months from ending in the independant market and already over for major exhibitors.  When the VPF is completely over, it is expected, based on pre-VPF models with eCinema technologies, that an increase in the number of Australian films reaching local screens will occur.  This is especially relevant as Deluxe moves to digital delivery and the Australian Content for Australian Communities Initiative also evolves the industry into an era were getting your Feature Film to an exhibitor is as easy as downloading a file via web browser.

Sweden a window to our future

The end of the VPF is an important development and all small cinema owners and film distributors should be aware of it, as it will bring opportunities to our industry.  I have mentioned Sweden a number of times and how the conditions there are so much better than Australia. It must be noted that Sweden finished its VPF a few years ago and has already progressed into the changes that I expect in Australia.

As always, if you have any questions regarding this topic or advice on how to take advantage of the evolution of the australian cinema industry, please contact me, I am happy to discuss them with you.

James Gardiner
Founder, Small Cinema Owners Association
mob: 0412997011

Published: 2019-09-17
jamieg administrator

James is the Founder of Small Cinema Owners Association. He is also known for his YouTube channel CineTechGeek, has been involved with ISDCF and the formation of the digital cinema technologies, is a member of SMPTE. For a job he runs three small regional cinemas in Australia.