ACCC authorises ICA to collectively bargain

16 March, 2018 by Jackie Keast

The ACCC has officially authorised Independent Cinemas Australia (ICA) and its members to collectively bargain with distributors on licensing agreements.

As per the ACCC’s draft determination in September last year, the authorisation has been granted for five years. ICA, which represents about 30 per cent of exhibitors, had asked for a 10 year exemption.

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ACCC commissioner Roger Featherson said the authorisation would likely benefit the public as it would reduce negotiation costs.

“Any cost reductions and improved terms from collective bargaining may help the viability of small cinemas, and allow them to reinvest into their cinemas, creating a better experience for cinema-goers,” he said.

“Collective bargaining will also assist smaller cinemas in negotiating film season length and session times that are more appropriate for local demand. This may result in a greater variety of films being shown, providing greater film diversity and choice for local consumers.”

Participation in the collective bargaining is voluntary, and the exception to the cartel law does not allow cinemas to engage in any collective boycott of films supplied by distributors.

In their submissions, distributors raised concerns about cinemas sharing information and the possibility that they would insist on the same outcome for all cinemas.

In its submission Universal Pictures International Australia said: “Collective bargaining typically results in all participants receiving the same outcomes – however, with such diversity in exhibitors (as well as distributors), the services delivered by distributors vary greatly.  A ‘one size fits all’ outcome is not appropriate.”

The Australian Independent Distributors Association (AIDA) – which represents Becker Film Group, eOne, Umbrella, Studiocanal and Madman, among others – sought unsuccessfully to be exempted.

ICA President Scott Seddon told IF: “I have always seen the process as one which will allow exhibition and distribution to work together to achieve mutually beneficial outcomes, which in turn will result in an improved choice in the quality and variety of movie titles available to patrons of independent cinemas, be they in our major cities or in Australia’s regional areas.”

Featherson said with the film industry subject to changing technology and consumer preferences, there is some uncertainty about the impact of authorisation on the industry.

“If ICA seek reauthorisation in 2023, the ACCC will test the evidence and assess whether the expected benefits outweigh any detriments.”

 

 

 

 

 

 

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