‘The Hobbit: The Desolation of Smaug’ is among the films that over-performed in Oz.
Australian moviegoers are far less receptive to Hollywood action/adventure movies than US audiences and in relative terms comedies, documentaries, dramas and music/event films tend to perform better in Australian cinemas than in the US.
Typically there is a 38-day interval between US and Australian release dates, and while the gap is much shorter for action/adventures, comedies and animation it is much longer for independent titles, including documentaries.
The cinema industry’s long accepted 10 per cent rule, meaning the average ratio of the Australian dollar earnings for US movies to their US box office revenues, is no longer true, with wide variations for the vast majority of films.
These are among the findings of a research paper entitled ‘Understanding the dynamics between the United States and Australian film markets: testing the ‘10% rule.’’
Academics Vejune Zemaityte, Deb Verhoeven and Bronwyn Coate studied 231 films that were released in both countries in 2013. They concluded: “None of the four market measures typical to our data are equal to the 10 per cent rule proposed by the industry, although some come close to this benchmark.
“Our data suggest that American films typically earn more than expected, around 11 per cent, while screening considerably less, around 6 per cent, in Australia when compared to the States. In addition, American movies typically live here around half the time they stay on screens in the US and usually arrive in Australia with around a 38 day delay.”
However, that gap has closed considerably in the past few years, at least for Hollywood releases. Research by the Motion Picture Distributors Association of Australia (MPDAA) showed 51 of the top-grossing films in 2016 were released here before the US.
The window for M and MA15+ releases was three days after the US and overall average was just seven days later, according to the MPDAA.
The Australian study found that 68 independent features typically reached Australia in 65 days, which was probably due to distributors waiting for gaps in the schedule outside the periods when Hollywood tentpoles were dominating screens.
Of the 231 films sampled, only 16 titles registered a ratio of between 9.5 per cent and 10.5 per cent, including Despicable Me 2, Iron Man 3 and The Hunger Games: Catching Fire.
The other 215 features deviated from the rule, including Insidious: Chapter 2 at 1.88 per cent, Lone Survivor at 3.2 per cent and two 2012 releases, Hitchcock at 69.71 per cent and Life of Pi at 25.62 per cent.
The ratio for action/adventure films was 9.4 per cent, the second lowest of all genres, with horror movies at 6.71% per cent.
However as Wallis Cinemas consultant Bob Parr points out, horror movies are back in vogue, led by last year’s break-out It.
Some action/adventure films did perform much better, including The Hobbit: An Unexpected Journey with 16 per cent and The Hobbit: The Desolation of Smaug with 16.97 per cent.
But the majority of films in that genre earned less than 10 per cent, such as Man of Steel, Gravity, Star Trek into Darkness and Oz the Great and Powerful.
Unsurprisingly, the researchers found Australia cinemas gave longer runs to movies distributed by majors compared to independently distributed films.
Studiocanal’s Greg Denning says: “I’d be careful about making any sweeping generalisations without looking at the comparative release plans and P&As behind the films, as well as any cultural significances that may have played a part with the films that are skewing the data. Also, the competitive landscape can make a huge difference too.”
As an example, Studiocanal bought John Wick Chapter 2 after the US release and by the time it opened in Oz several male-skewed action/sci -fi films were in the market. That factor compounded by piracy meant the film fell short of the 10 per cent conversion rate, but the distributor was pleased with the result.
Denning adds: “A number of the discrepancies could be explained by certain films having significantly stronger cultural significance to the US including US-centric stories like Lone Survivor that tap into the US support of their armed forces/heroism. Australian audiences can be put off by more overt US flag-waving films. US sports-centric films too and faith based films nearly always underperform.
“Conversely I think Australia most often over-performs vs the US on more upscale films such as Jackie, Hitchcock, Three Billboards Outside Ebbing, Missouri and Brooklyn, and UK films.
The 10 per cent rule is still regarded as a reliable indicator by sections of the screen industry. Village Cinemas chief operating officer Gino Munari tells IF: “There will always be nuances with certain films given genre preferences, delayed releases, holiday fluctuations etc, but from a holistic level, this ratio is still intact.”
20th Century Fox international president Andrew Cripps still relies on the 10 per cent rule to determine if a film is over or under-performing. “I think to use a 9.5 -10.5 per cent range is very restrictive. If you look at total market gross it is approximately 10 per cent in Australian dollars of the US dollar box office,” he says.
“The time lag does not surprise me greatly as the holiday schedule is so different in Australia and films are frequently held for the holidays.”
Still, for those who think of Australia culturally as the US’s 51st state, the researchers conclude, “The belief that Australia is a proportional, perfectly formed microcosm of American cultural preferences is shown in our analysis to be largely unsubstantiated.”