Welcome to a new year. Like the start of any year, it's a good time to look back at how our industry fared this past year. In this newsletter we will look at the 2019 Australian Film Scorecard. Thanks to if.com.au for kicking off the topic with this post: https://www.if.com.au/australian-films-2019-bo-scorecard/
In a future post I plan to dissect the Australian Screen statistics, looking at the narrative of "Boom or Bust" for Australian theatrical exhibition. Is the industry doing well, with every bigger box office, or is it heading into the abyss with slowly reducing attendance?
A lacklustre year
Don Groves's sentiment in his if.com.au article for last year is negative. As a small cinema owner I can relate, however, let's take a different approach. Let us focus on the top 10 movies listed below. The full table can be downloaded here.
| TITLE | CSHIP | GENRE | DISTRIBUTOR | BO IN 2019 |
| RIDE LIKE A GIRL | PG | DRAMA | TRANSMISSION | 11,577,871 |
| TOP END WEDDING | M | COMEDY | UNIVERSAL | 5,255,934 |
| STORM BOY | PG | DRAMA | SONY PICTURES | 4,984,445 |
| PALM BEACH | M | COMEDY | UNIVERSAL | 4,492,490 |
| HOTEL MUMBAI | MA15+ | CRIME | ICON | 3,295,499 |
| DANGER CLOSE: THE BATTLE OF LONG TAN | MA15+ | ACTION | TRANSMISSION | 2,968,941 |
| 2040 | G | DOCO | MADMAN | 1,517,899 |
| MYSTIFY MICHAEL HUTCHENCE | MA15+ | DOCO | MADMAN | 1,149,194 |
| THE AUSTRALIAN DREAM | MA15+ | DOCO | MADMAN | 1,143,980 |
I operate three small cinema locations, and I was only allowed to play two out of these top 10 Australian films. For one of those two films, I was only given permission to play it at a single location. The one film I did play at all locations was specifically because I knew the director and worked on the film.
I would have been happy to play most if not all of these films, if I had been granted access to the films on a commercial basis. In many cases I was simply refused access. Going by the SCO-Data-mining website at https://data.smallcinemaowners.com.au/dashboard/cinemas, many other smaller cinema locations were also treated this way.
The data shows that many small cinemas seem to be unable to gain access to Australian films. Given that all these films are substantially subsidised by the Australian Government and by extension the Australian people, it is unfortunate that many Australians, particularly those living in regional areas with access to only one small cinema, are then unable to enjoy these films on the big screen.
The result of this industry behaviour is that Australian Films do not reach their potential. The producer and investors have a higher risk and lower yield (make less money). In general, the Australian film industry is considered unhealthy, with a lot of traction towards direct to streaming. This may be perceived as being a better, less risky path for distributors as this systemic poor behaviour does not appear as apparent.
Is this unavoidable?
The Paramount Decree, a document formulated in the U.S. in 1948, was created to ensure smaller cinemas and by extension consumers, had fair and convenient access to films in cinemas. In Australia, a similar investigation by the ACCC in 1998 resulted in the Code Of Conduct. Following this, the formation of the Australian Consumer Law guidelines that encapsulates much of what is contained in the Code of conduct into law.
Having well defined regulations is one thing, but for them to work, enforcement is necessary. Unfortunately enforcement is non-existent. Those asked to explain this behaviour make it clear that from their perspective, this is the more profitable path for them. One possible explanation for this behaviour is the alleged practices of a well known industry term called "Clearances", or in other words secret exclusivity arrangements, in place. It makes no sense to refuse a cinema that wants to take a film, unless giving that film to the cinema will result in penalties in other areas.
Due to this behaviour, smaller cinemas are collateral damage and by extension, so are Australian Films and film culture.
Is this simply how the industry works and is generally accepted by the industry?
In general I think this is the case, however, with the changing media landscape putting pressure on the culture of Australian film, should we sit on our hands?
Content Choke
Another example of pressure on Australian content is the following testimony by Marc Wooldridge, ex MD of Fox. While on the stand in court he described what Policy is used for.. Court recording of this short description can be found here.
Policy is the contractual acceptance to play a film a specific number of times per day over a specific period of time. To access some "must have" films, Marc suggests policy requirements are put in place to choke out smaller films.
Policy was initially created to ensure a cinema taking a PHYSICAL film print, costing a considerable amount, would put enough effort behind a film as to ensure it makes back its costs. However, this testimony shows how the use of policy has changed. Now, although digital files replace physical film prints, policy requirements are still in place.
As Marc has testified, one of the specific reasons for policy is now to choke indie content off screen. Australian Content ends up losing out in this scenario.
In addition to this, Policy is also commonly used to ensure smaller cinemas are restricted access to films on day of release. For example, certain distributors ask locations of one screen to play a film 3 times per day for the first 2 weeks. Assuming an average of 5 screenings per day per screen, under this policy, 3/5 of a single-screen location's session time is now devoted to a single film. It is uncommercial to accept such conditions. This leads to no variety of content and overscreening of a film for the limited population of a single-screen location. The data.smallcinemaowners.com.au website also shows single screen locations typically never show more then 2 sessions per day on opening week. The use of a Black-list/White-list is allegedly in place that determines whether or not a particular location is allowed access to a film on a commercial basis.
The heart of Australian Cinema Culture?
Here at SCO we consider smaller independent cinemas to be the heart and soul of Australian film. Unlike the largest chains that are corporate machines, smaller independent cinemas are operated by people who love cinema. These people will often go out of their way to promote and bring the life-changing insights and experiences of cinema, particularly local content, to the community.
Running a small cinema is hard work. You don't typically do it because its profitable, but because it fulfills a passion.
To nurture the culture of cinema in Australia is to nurture the independent cinema and by extension, Australian films.
What can we as an industry do?
With the negative sentiment over Australian Film and in some ways, theatrical exhibition (see future newsletter in which I plan to cover the flat to downward trend in attendance levels), I believe that transparency and the willingness to adopt new practices can improve the viability of Australian Exhibition and by extension, Australian Film. Dwelling on the past and systemic failings of our industry is not helpful. Identifying them, acceptance and moving forward to a better future should be our focus.
As cinema owners, we do our best to bring curated content that our specific locations would prefer. We will of course bring Australian films to our locations when possible. The best option we have to improve this situation is to be more aware of Australian Films. Typically, based on the code of conduct, distributors are supposed to make all cinemas aware of a film release date. This is typically not done and smaller cinemas are left out. The use of the SCO Booking tools, made available to small cinemas in December 2019, can be very helpful here in spotting these films well in advance so as negotiations can be finalised for the date of release. If the distributor still refuses to offer the film on a commercial basis, I recommend you inform them of this fact, then contact the producer voicing your frustration.. then move on.
As film producers, there is a LOT that can be done. This newsletter has been subscribed to by many producers. Understanding how to best reach consumers via the exhibitors is to better understand exhibitors. This was especially made clear to me in a recent conversation with producer Clayton Jacobson when discussing the success of his 2006 film "Kenny". As a producer, I recommend you have more involvement with exhibitors and ensure all cinemas, including small regional ones, have date of release access to your film. Producers may also insist that the distributor contacts all cinemas big and small (contact list available from SCO on request). I also recommend policy requirements are abandoned. If a cinema wants the film, just give it to them. The minimum guarantee covers the costs. I recommend that as the producer, you stipulate contractual conditions, as above, to ensure this occurs with your chosen distributor.
Small Cinema Owners focus
SCO has a number of initiatives in play. As identified by the discussion above, SCO is doing its part to try and move the industry forward to a more sustainable and vibrant industry in the coming era of streaming. There is no question that the lack of attendance growth is largely a result of the disruption to our industry by the convenience of streaming, and we have not even hit peak streaming yet. With the major studios all bringing streaming services to market in the coming years, we can expect some leakage of profitable content directly to streaming. Disney, for example, has a number of Star Wars and Marvel content, once expected for theatrical release, now going directly to streaming.
Due to these headwinds, we need to allow our industry to evolve and become more efficient. This brings us back to the SCO initiatives to help start this process.
These initiatives would include the following:
- The Australian Content For Australian Communities Initiative, moving the industry forward to a more cost effective distribution platform.
- Transition the industry to digital film delivery and significant cost savings.
- Streamline distribution as to allow more of the distribution cost to go towards promotion/advertising.
- Support small cinema owners to make other transitions such as the move from paper to digital posters.
Wishing you all the best with your cinema.
James Gardiner
Founder, Small Cinema Owners Association
james.gardiner@smallcinemaowners.com.au
mob: 0412997011
