One week into the Olympics and most Australian cinemas are reporting revenues down by 25-50%, with games venue Sydney being the worst affected. Unseasonably fine spring weather is further exaggerating the fall in business, particularly as it's helping to draw non-sport lovers out of doors.

Although the Olympic site is 14 kilometres west of Sydney at Homebush, a lot of outdoor entertainment is focused on the Sydney's central business district - a pivotal cinema market within Australia. "We are hoping people will tire of watching sport 24 hours a day. Hopefully the half-price tickets will lure them into cinemas. We've all got our fingers crossed for rain," said Nicki Martin, communications manager at major exhibitor Greater Union.

Michael Eldred, programming executive at arthouse exhibitor Dendy Cinemas, reports that business is down by a similar amount, vindicating the decision not to discount tickets. All the majors have dropped admissions from the top price of $7.5m to $4.7m (A$13.50 to A$8.50) throughout September, but only some arthouse players have followed their lead.

The distributors have chosen to release teen films - Scary Movie and Big Momma's House, and those with a strong female skew such as Up At The Villa and Where The Heart Is rather than big blockbuster product. Given the once-in-a-lifetime conditions, it is not easy to judge the effectiveness of this strategy.

Helped by very strong reviews, Eldred reports Dendy has done very strong business on One Day In September, the British documentary about the dramatic hostage situation at the 1972 Olympic Games in Munich. He also notes that confectionary sales are up considerably because of passing trade at their flagship Dendy Opera Quays site, which is in the same tourist precinct at the Sydney Opera House and the Sydney Harbour Bridge.