Australian cinema in crisis

21 October, 2014 by Don Groves

Australian cinema is facing a crisis because the distribution model for most Oz films is no longer viable, according to Troy Lum.

The EntertainmentOne Australia MD is calling for a summit where funding agencies, producers, distributors and exhibitors can address the vexing issues of release windows, how films are financed and how best to reach audiences across the spectrum.


“We are at a crisis point in our industry; we have to change the model,” Lum told IF. His comments followed the launch of Julius Avery’s Son of a Gun, which took $65,000 in its first four days on 53 screens, released by eOne.

“We are absolutely devastated by the result,” said Lum. “I'm gutted for the filmmakers who worked really hard and made a really fine film.

“We worked very hard on the release with a big marketing campaign and a publicity tour. We booked it into a mixture of art houses and multiplexes and gave it a lot of support.”

In an informal IF poll, some industry figures questioned the amount spent on P&A and a few said they didn’t even know the crime thriller starring Ewan McGregor and Brenton Thwaites had been released.

Lum rebuts that criticism, stating the distributor spent more than $300,000 on P&A, which takes its total investment in the film, including the minimum guarantee, to more than $700,000.

The crux of the problem, in his view, is that to reach a broad audience for any film, Australian or international, a distributor must spend a minimum of $1.5 million on P&A. That kind of investment would be fiscally irresponsible for any film which ends up earning less than $3 million, he said.

“We want to back Australian films and new filmmakers but in the last two or three years it’s become really difficult. We are losing money hand-over-fist on Son of a Gun.”

In an ideal world he’d have liked to launched Avery’s thriller in the same number of cinemas, followed within weeks by home entertainment, so the marketing spend is amortised across all windows.

That’s not feasible while the 120-day holdback between theatrical and VoD/DVD remains standard practice in the industry.

“As an industry we need to come together to talk about windowing, how films are financed and the Australian brand,” he said.

Universal Pictures International  MD Mike Baard concurs with Lum, telling IF, "The middle ground is gone and a new model has to come in to effect. Troy's numbers are correct."

EOne is trialling the US model of direct-to-digital with the November 21 launch of Tony Mahony and Angus Sampson’s dark comedy The Mule for purchase online, preceded by a week of event screenings attended by Sampson and Hugo Weaving. The titte will be released on DVD and Blu-ray and online rental from December 3.

Josh Lawson’s The Little Death was released by eOne, grossing a disappointing $254,000. Lum shares producer Jamie Hilton’s belief that the sex comedy’s B.O. prospects were virtually killed by adverse reviews in mainstream media.

Given the daunting challenges facing mid-range titles, most of the films on eOne’s slate now are wide releases.

As an example of US films that are no longer viable theatrically, the distributor sent Escape Plan, the action/thriller starring Sylvester Stallone and Arnold Schwarzenegger, direct to home entertainment after it grossed just $US25 million in the US.

Lum reckons that had the film gone out in cinemas here and raked in $2.5 million B.O., backed with $1.5 million in P&A, he’d have lost $700,000.

On Monday Son of a Gun producer Timothy White told IF that he and Avery set out to make a broadly-appealing film skewing to young males but the advertising spend wasn’t enough to connect with that audience.

At least one exhibitor agrees. Wallis Cinemas’ Bob Parr said, “I loved the film and as an exhibitor wanted to support it. I trailered it where possible but to no avail.”

Parr sees gaps in the markets which create opportunities Aussie producers, observing, “The Yanks continue to make boys movies. The Australian industry has to try to fill genres that are missing. The upcoming line-up is excellent but where are the rom-coms and films for the 50-plus audience? Few and far between.”