Just four years ago it would have been absolutely unimaginable but the first day of the Cinema Owners Association of Australia's (COAA) annual conference closed in Sydney yesterday with something resembling a love-in between independent exhibitors and the major distributors.

The final session had been reserved to discuss progress on revising the cinema industry Code Of Conduct. The code caused enormous friction and antagonism when introduced in 1998, after a damning review of the industry by the Australian Competition and Consumer Commission (ACCC).

The 100 delegates yesterday heard that more flexibility in terms had been written into the new code, which is a few weeks away from completion. The code's original author, ACCC Commissioner Ross Jones, said no code would ever solve all the industry's problems. The most sensitive issues continued to be excessive hire terms for films not released day and date, inappropriate minimum season and no-share periods for country cinemas, and exhibitors not being notified of terms until, or in some cases after, the film has been released.

But the number of complaints are falling and there were only two against distributors in the past six months, compared to 10 in the previous half year. Early intervention procedures adopted six months ago also mean many matters are not going into formal dispute resolution mode, thus avoiding expense and delays.

UIP managing director Mike Selwyn said country cinemas, which are the majority of COAA members, now contribute a bigger percentage of box office revenue than they did before the code was introduced.

One by one distributors, regulators and exhibitors took the microphone and said the code had bought remarkable improvement to the relationship between exhibitors and distributors, and to the business as a whole.