Warwick Thornton.

Screen Australia CEO Graeme Mason has two blunt messages for feature film producers. One is: Recognise that most independent films, Australian and international, now are earning roughly half as much at Australian cinemas as they did only a few years ago.

The other: Keep up-to-date with the rapidly shifting dynamics in the global theatrical market or get left behind.

“I bash my head against the wall with the lack of attention many people are paying to the changes in the sector,” he tells IF. “It is wilful to not look at it.

“Filmmakers have to keep cognisant with what is happening in the sector. It is their responsibility to be thinking about how the world they work in has changed, both as business people and as people who are trying to make things for an audience.

“At a certain point this conversation will become real to many of them as their models collapse.”

Illustrating the shrinking market for indie releases of all stripes, Mason says many titles which which typically used to gross $3 million can now expect to make $1.5 million.

“That is the new normal,” he says. “If you are making at art house film and think you will make $5 million, how many films do $5 million anymore? Films are either doing $10 million or $20 million or they are doing $1 million or $1.5 million.

Mason contends the contraction of the art house market has virtually halved the potential grosses of films such as the best picture Oscar winner The Shape of Water (which has made $4 million), the 2017 winner Moonlight ($2.5 million) and nominees Manchester by the Sea ($3.1 million) and Fences ($1.2 million).

“If those hugely-talked about films are doing half, why for one second would Australian filmmakers think their films are different?” he asks.

In that context, he rates Sweet Country’s gross of $1.76 million after its seventh weekend as an excellent result for director Warwick Thornton, producers David Jowsey and Greer Simpkin and Transmission Films.

“That is a massive success,” he contends. “It isn’t that Australian films are under-performing. They are performing exactly in line with how all films of that type are performing.”

Films that play on fewer than 200 screens now compete for a share of around 14 per cent of the BO, down from 33 per cent 10 years ago.

Last year only six local films grossed more $1 million and five surpassed $2 million. So far this year Stephan Elliott’s Swinging Safari has made $1.59 million, the Spierig brothers’ supernatural thriller Winchester has collected $828,000 and Stephen Amis’ comedy The BBQ has cooked up $602,000 .

The implications surely are worrying for those who finance, produce and distribute Australian films. If little or no money flows back to the producer from theatrical and the back-end has shrivelled with the decline of the DVD business, isn’t the entire model broken? That’s compounded by the fact that Foxtel is paying licence fees of $100,000- $150,000 or more with escalators tied to BO results, while the free-to-air networks are seldom buying Aussie movies. Typically producers split the ancillary revenues 50/50 with distributors.

Mason responds by reminding filmmakers they need to answer some fundamental questions: Who do you think will see your film and why? And should it be for the cinema?

I would add: Surely it’s incumbent on all producers to clearly state in their business plans the target audience and how to attract that audience?

Apparently not, as Mason observes that too often the pitch documents which go to Screen Australia claim that films are aimed at all audiences.

“We will happily still help people make films for cultural and creative reasons but they have to know why they are making it. Just for them, or because they want to, is not the right answer,” he says.

“If you think your film will make $4 million to $8 million at the box office and with the knock-on ancillaries, it is almost impossible for that to happen because that model doesn’t stick anymore.

“You can knock it out of the park, as we saw with Lion, Last Cab to Darwin and Paper Planes, but it’s rarer. The audience for cinema has changed fundamentally.

“We need to be working with the sector to very clearly help them identify where they and their projects sit. Maybe sometimes we can be too polite. We don’t necessarily tell people the honest, brutal truth enough.

“There is a massive problem that people are almost deliberately not looking or keeping themselves informed. Now in any other business you would be out of business.”

“This is now more than ever a global industry. One of the things we’re talking to SPA about is how can we help them work towards their same goals of exporting in terms of revenues and eyeballs the best we can. And from that how can we encourage greater investment outside of government and traditional sources into projects.”

 

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11 Comments

  1. A filmmaker should really just be concerned with making a good film. The marketing and distribution as well as how much it makes is actually not in their control. This is an inherently uncertain business, always has been and second guessing everything in an attempt to please everybody is never going to work.

    In the case of Sweet Country, it is a strong and important Australian film. Period. Whether it makes a million or four million is not the point of it. The conversation should be about the quality of the work and what it’s saying as a film, rather than how much money it has made or not.

    And if it is about how much it has made, why don’t we start holding distributors more accountable for their strategy and implementation of Australian film releases? It’s easy to blame producers and filmmakers, but they’re not the ones putting the thing out there.

    It’s also worth noting that there are many projects with wholly commercial intentions that bomb all the time. This being the case, surely we should at least finance and support projects with a bit more integrity to them, like Sweet Country.

    We may not have films that make a zillion dollars, but at least they’ll be good ones.

    1. To believe that a filmmaker should just be concerned with making a good film ignores the reality of the audience without whom there is no film. To believe that the taxpayer should subsidise (indeed fully fund) the personal passion projects of individuals is unreasonable. Andy, if you don’t care about your audience, that is fine, but don’t ask other people to pay for you. Screen Australia is already too focussed on festival films and projects that make no money. Why should investors ever get involved if they know they will lose their money. Art is important. But without returns there can be no industry.

      1. Couldn’t agree more. Also the dichotomous thinking – art vs commerce is also dangerous thinking as if a single project can not harbour both. Thinking about your audience also celebrates one important principle – good showmanship!

    2. That’s right about Sweet Country. It will have a long and broad life (e.g. it opens in Poland on 1 July). But that is a lot to ask from investors.

      Screen Australia had an intention some years back in “audience development” but what did they actually do? The structures in Australian film are amateurish in competition with organised foreigners.

    3. Every business is ‘uncertain’ in this time of digital disruption- no one is safe. But to excuse filmmakers on that basis is simply not good enough. If filmmakers are making a film with taxpayer dollars they are obligated to ensure audience ROI just like any other business. I agree with the sentiment of this article and opinion of Mason that there’s not enough done to hold industry stakeholders accountable for spend if they’re using or requesting taxpayer dollars to make their films. Why should filmmakers be exempt- no other industry can consistently acquire government funds that prove no proportionate benefit back to the economy. ABC is constantly vulnerable to harsh critique and interrogation about the spend by both the government and audience (the investors) so why shouldn’t filmmakers be held accountable if they’re also acquiring government funding to create and share stories?

      Sure, some films, such as the critically important ‘Sweet Country’ serve an important cultural and soft diplomacy purpose regardless of the net profit they do or don’t make, but on the whole most don’t make profit and they don’t make any significant social, cultural or political impact to the audience. You only need to jump onto the Screen Australia website to familiarise with the data in reports which show tax payer dollars have been spent on films that have made slim to none ROI and no substantiated audience impact for many years now, save one or two that make a dent every blue moon…the dismal downward trend may be why Mason is so aggrieved…

      Frankly, I’m alarmed we’re only having this conversation now- to turn our back on the changing state of play across the board is just plain ignorant. It’s not a blame game, it’s about everyone paying attention and becoming more pro-active and supporting more genuine innovation in this space. This call to action is not limited to producers but also to distributors and all stake holders- there are new strategies that need to be considered and explored to revive the industry. No one wants quality and important Australian films to die but if the model can’t be revived the finance can’t be qualified and then the govt screen agencies will be held accountable by the audiences (if tax payer funded) which will further reduce available funding and perpetuate the problem…I know many taxpayers who would (on the spot) offer a range of better options for the spend of their ‘hard earned tax dollars’ than continuously bombing films that do little more than stroke egos, provide festival and award ceremony folly and stoke the bank accounts of Australian filmmakers….

      Clearly the traditional model is not working… but I believe this article suggests we consider other alternatives before it’s too late for the benefit, not the detriment, of filmmakers. Mason encourages people to explore how this might be done and admonishes the inclination many have to project a story on an audience, rather than asking an audience what they want. It’s interesting that so many industry players will defend the current state but the audience, the group the stories are actually meant for, have had enough…. they’re not exactly breaking down cinema doors to back the films the industry makes for them. Given the severe lack of cognitive diversity represented in Australian films across the board the idea should be to invite more people (filmmakers, investors, distribution channels, strategic thinkers) into the very restrictive industry to expand the spectrum of ideas that can be represented to audiences and then hopefully speak to a wider audience and re-engage. If we keep excusing the status quo and exclusivity in this space we close our eyes to the stories of the future and the audiences that haven’t yet been accessed through very different means.

    4. I agree Andy – Sweet Country is an important piece – As a film maker I believe when scripts resonates with me I will make the film to share my love for that script. Not how much can I make?! Sorry but that just me.. And how I share my craft.

  2. Really good article and one that equally applies to us here in the UK as well as Australia. ‘Who do you think will see your film and why? And should it be for the cinema?’ – are fundamental questions all producers need to ask themselves wherever they are based. The distribution ground has shifted and while it’s certainly a challenging environment, it can also represent a real opportunity to think and deliver more creatively.

  3. Yep, the financing, producing and distribution model is breaking, if not broken already. You know what else is broken? That Screen Australia only offers the 40% Producer’s Offset to films if they get a distributor to commit to a cinema release BEFORE the film made. If most Aussie films cannot even get a cinema release, let alone secure a distributor because the market is so tough, then how can producers leverage the Offset?!? That Offset requirement needs to be amended.

  4. If Screen Australia wants producers to be realistic about whether their project is appropriate for cinemas or not, they should remove the cinema release requirement from the Producer’s Offset.

  5. The presence of so many willing to blame a gov funding body for whats obviously to do with what content is funded is the all the evidence you need to know that nothing is going to change. Perverse subsidies will continue…….. zzzzzzz

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