Expectations are high for the Australia and New Zealand box office this year - and not just because of the number of high-profile studio sequels scheduled to open over the summer months.
Admissions have been rising steadily in recent years - from 76 million in 1997 to 83.6 million in 2006 - and with an encouraging spike in older cinema-goers, a strong pipeline of product and the ongoing refurbishment of cinemas, distributors are confident the upward trajectory will continue.
As a result, the Australian and New Zealand distribution markets are becoming more competitive. More films are being released, and an increase in distributors means it can be more challenging to secure release dates and keep non-performers on screens.
The markets are dominated by studio distribution (see left) with Fox, BVI and Sony all having Australian and New Zealand offices. The UIP split sees the creation of standalone Universal and Paramount operations for Australia and New Zealand and takes full effect from July 1. Roadshow handles Warner Bros films in Australia and New Zealand.
Nevertheless, players in the independent sector still see plenty of growth potential: earlier this year Lionsgate Australia announced its plans to launch an Australia and New Zealand distribution operation based in Sydney. Although Lionsgate's exact plans are not yet clear, it intends to release about 25 titles per year.
With another company hunting for titles, the market can only get more competitive. "There's no doubt prices are on the rise," says one distributor.
Walking the line
Smaller distributors are already feeling the pressure as the line blurs between mainstream and sophisticated arthouse films. Specialist buyers such as Dendy, Palace and Hopscotch increasingly favour films with crossover potential (see profiles) as audiences shun the smaller, darker and more difficult films.
For example, despite critical acclaim, films such as Hard Candy and The Road To Guantanamo grossed less than $331,000 (a$400,000) and Oscar-winner Tsotsi crept to $496,000 (a$600,000) in 2006. As Palace Films executive director Benjamin Zeccola puts it: "The business is more fickle now. When you get on to the right film, it is a little bit easier to cross over. But when they don't work, they can fail spectacularly."
As one distributor says, it is no longer possible to "get away" with middle-of-the-road titles. Films have to be distinctive and buyers are getting more particular about what they pick up.
In the independent sector, horror films are doing fairly well but perhaps not at the same level as the UK and US. Films for older audiences - such as Mrs Henderson Presents and The World's Fastest Indian - have also performed well in Australia and New Zealand, and recent pick-ups hoping to secure a similar demographic include Hopscotch's Closing The Ring by Richard Attenborough.
UK films continue to sell well, with recent buys including Shane Meadows' This Is England (Madman), but Asian films remain difficult. Madman released Korean hit The Host in March but it failed to ignite much interest. A foreign-language title has to be exceptional to have any impact: this year one such film has been Pan's Labyrinth, which has grossed $1.8m (a$2.2m) to date.
All the distributors mouth their support for Australian films but acknowledge it is hard work to create buzz from scratch (Dendy and Palace handle the most local titles). It does not help that most local films fit in the arthouse rather than the mainstream environment. The big exception is Baz Luhrmann's sweeping romance Australia, which is now in production and will be distributed by Twentieth Century Fox.
Sydney-based Omnilab, which has plenty of cashflow from its core post-production businesses, has also signalled it is entering the field - it has taken a share of international and local sales rights on a couple of Australian films this year.
Each of the major independents, including specialists Dendy and Palace, handle 10-15 titles theatrically every year. Madman takes on slightly more as it is prepared to take a risk on very small titles.
Australian rights to films can go for anything from $4,100-$99,000 (a$5,000-a$1.2m). Prices paid are rising for the big players though. Wild Bunch, Dreamachine, Fortissimo, Summit and Pathe regularly sell to Australian distributors, as do Arclight, Lakeshore, Kathy Morgan, The Works, Capitol, Focus and Beta.
Cannes is the favourite market for key Australian distributors and they also frequent Berlin and Toronto, or have a representative there, and show up at Sundance, Venice and the American Film Market (AFM). The exception is Hoyts, which principally depends on the AFM due to its focus on mainstream titles.
Simon Franks, head of Lionsgate Australia, says that although Australian audiences support a diverse range of cinema, the fact exhibitors take a big slice of the box office, among other factors, holds back many independent distributors. "It is hard being an independent in any territory, and if you do not have the resources of an international structure you are at a disadvantage. This applies even more if your territory is a small territory."
PROFILES: INDEPENDENT DISTRIBUTORS
Joint general managers: Richard Payten, Andrew Mackie.
Dendy is one of Australia's longest-running quality film distributors and was taken over by the Becker group five years ago. Becker already had a distribution business - formerly REP - and channels any mainstream titles out under the Becker name. "We are including mainstream cinemas in our release patterns more than we ever used to," says Mackie. "We want crossover potential but not genre pictures. It's no longer only about digging out cutting-edge cinema and directors."
Dendy fights to make films such as Inland Empire and Into Great Silence pay their way (Becker handled the local hit film The World's Fastest Indian). Questions surround the future ownership of the group - there is talk about Richard Becker regaining control - which includes a 30-screen arthouse circuit. Australian films are playing an increasingly important role.
Biggest hits (since the Becker takeover in 2002): The Motorcycle Diaries ($2.9m), The World's Fastest Indian (2006, $5.5m).
Upcoming: Untitled Morgan Spurlock film, Brideshead Revisited, Death Defying Acts (all undated).
Managing director: Troy Lum.
Hopscotch is five years old and is principally owned by former Dendy head Troy Lum and Frank Cox, who previously operated under the NewVision banner. The company is becoming more content-driven, with less of a pure theatrical focus. It is executive-producing features, for example, and producing straight-to-DVD material.
Lum says this makes the company a better distributor as it can think laterally and exploits all avenues. Films have to be distinctive. "Sophistication has always been our mantra and we don't do lightbrow - that is, teen or horror," says Lum.
Biggest hits: Fahrenheit 911 (2004, $7m), Mrs Henderson Presents (2006, $4.9m).
Upcoming: Evening (undated), Mongol - Part One (October 25), The Fox And The Child (2008).
Managing director: Robert Slaviero.
Hoyts Distribution is the little sister to Hoyts Cinemas, one of the biggest exhibitors in Australia and New Zealand. It is driven by securing audiences with mainstream product. "We're looking for commercial multiplex titles with a good DVD life," says Slaviero.
Both companies are part of PBL, which also includes a significant consumer magazine group. Slaviero says being part of such a group equates to getting good playdates, longer play times and cross-media promotional opportunities. Hoyts has been handling Lionsgate films but Slaviero is cagey about whether the two companies will continue to work together.
Hits (since its 2001 re-establishment): Saw 3 (2006, $5.6m).
Upcoming: Georgia Rule (May 10), Bratz The Movie (September 20).
General manager: Greg Denning.
With only a couple of films per year flowing from the parent company, Icon's slate is principally made up of independent films chosen by chief executive Mark Gooder (who recently relocated from Sydney to Los Angeles) in consultation with his Australian colleagues. "We have consistently proven we can release all kinds of films from studio-sized to very small films," says Denning. "The question is always, 'Who will see it and is the audience worth the price''" He says the company prides itself on thinking laterally about marketing.
Biggest hits: The Passion Of The Christ (2004, $12.5m), Match Point (2006, $3.4m).
Upcoming: La Vie En Rose (July 12), 30 Days Of Night (October 25), Dan In Real Life (2008).
Theatrical distribution manager: Anna McLeish.
Madman was known as a fast-moving and innovative home entertainment distributor before getting into the theatrical business three years ago. It appears to be less risk-averse than some of its competitors. The slate includes small films - Rampage and Zidane: A 21st Century Portrait, for example - and many are not released traditionally, instead going out via a cinematheque or grouped into festivals. "We want films that are unique, bold, provoke discussion and excite us as fans of film," says McLeish. Madman had the biggest local hit of last year in comedy Kenny.
Biggest hit: Kenny (2006, $6.4m).
Upcoming: This Is England (August 16), In The Shadow Of The Moon (undated), The Counterfeiters (2008).
Executive director: Benjamin Zeccola.
Veteran distributor Anthony Zeccola is in the process of passing control of one of the oldest specialist distributors in Australia to his children. "We're looking for high-calibre accomplished films and they can come from all over the world," says son Benjamin.
That said, the family company has a natural affinity with Europe because of its Italian ancestry and has embraced Australian films. It is now looking for a better balance between international and local films because of the extra effort required for the latter. "We have established relationships and networks stretching back 35 years and always pay our bills," says Benjamin. Palace is supported by a 77-screen arthouse circuit.
Biggest hits: Lantana (2001, $10.1m), Ten Canoes (2006, $2.7m).
Upcoming: Clubland (June 28).
All the distributors operating out of Australia buy films for both Australia and New Zealand. Hoyts handles Icon films in New Zealand.
The rule of thumb is that the New Zealand gross is equivalent to 10%-15% of what is taken in Australia. Tastes vary between the two countries: the Kiwis have a bigger appetite for UK films and those that will appeal to the Maori population, Apocalypto being one such example.
New Zealand-based Rialto, which is now part-owned by Australia's Reading Cinema chain, has been distributing in Australia for some years, and another Kiwi company, Arkles, also sends the odd title Australia's way.
The New Zealand market has nearly 400 screens, and saw more than 15 million admissions in 2006.
|TOP 15 AUSTRALIAN DISTRIBUTORS|
|2006 gross||2005 gross|
|3 SONY PICTURES INT'L||$105m||$65.3m|
|4 BUENA VISTA INT'L||$98m||$88.7m|
|6 WARNER BROS||$45m||$ 65m|
|7 HOYTS DISTRIBUTION||$12.8m||$16.1m|
|8 ICON DISTRIBUTION||$10.8m||$9m|
|10 MADMAN CINEMA||$7.5m||$1m|
|13 BECKER ENTERTAINMENT||$4.3m||$0.1m|
|14 MG DISTRIBUTION||$1.9m||$1.3m|
|Note: Warner Bros films are released by Roadshow in Aus/NZ|
|Source: Nielsen EDI|