Cinema exhibition and distribution in Australia:
Structure and key players

Analysis by Sandy George

Exhibitors and distributors work together to sell us the experience of going to the movies. Exhibitors are those companies or individuals who own or manage the cinemas; distributors supply the films to the cinemas and are the main marketing force behind individual pictures.

Who’s who in exhibition

Four brands dominate exhibition in Australia, with more than 20 cinemas and over 200 screens each:

• Birch Carroll & Coyle (BCC)
• Greater Union (GU)
• Hoyts
• Village.

As of the end of 2007, they accounted for 52 per cent of the 1,941 screens in Australia, and 68 per cent of the 335,280 seats in the 201 multiplexes (i.e. cinema complexes with four or more screens).

The fifth largest brand is Reading, which has built or acquired 136 screens since emerging on the scene in 2000. Reading is a subsidiary of the US exhibitor of the same name while the other four brands are Australian.

Amalgamated Holdings Ltd (AHL) owns Queensland-based BCC as well as the GU brand, which is predominantly found in New South Wales, while Village is part of the entertainment conglomerate Village Roadshow. Pacific Equity Partners purchased Hoyts in 2007 from Publishing and Broadcasting Ltd and West Australian Newspapers Holdings.

However, the name above the entrance does not necessarily reveal ownership, and there is significant co-operation as well as competition between the big exhibitors. This is most clearly demonstrated by the 38 multiplexes, comprising 433 screens, that are jointly owned by AHL and Village Roadshow. Some of these multiplexes are operated by Village and carry that name, and the remainder are badged and run by either BCC or GU. Hoyts and GU have also combined forces in some city cinemas.

Australia also has two significant arthouse brands: Palace Cinemas and Dendy Cinemas. Palace is the most widespread with 63 screens. It was founded and is still owned by Melbourne’s Zeccola family. Dendy Cinemas changed hands in 2007, when its parent company, Becker Group, was taken over by Prime Media Group, a regional broadcaster. Prime kept Becker’s television assets but sold the cinema circuit in early 2008 to Icon Film Distribution, part of the international Icon Group.

Who’s who in distribution

Most of the highest-grossing films shown in mainstream cinemas are made by US studios and distributed in Australia by one of their five foreign-owned affiliates:

• Sony Pictures Releasing
• 20th Century Fox Film Distributors
• Walt Disney Studios Motion Pictures, Australia (formerly Buena Vista International)
• Paramount Pictures Australia
• Universal Pictures International.

Until December 2006, Paramount and Universal Pictures had been part of United International Pictures.

These five distributors make up the Motion Picture Distributors Association of Australia, along with Warner Bros Entertainment Australia.

Warner Bros’ films – many of them produced under a joint venture with Village Roadshow Ltd – have long been distributed in Australia by Roadshow Films, which also distributes for New Line (which was folded into Warner Bros in early 2008).

Roadshow is the only Australian-owned distributor to work at the scale of the US studio distributors and, like them, has at least one film each year among the top 20 box office hits. It had the highest market share in 2007 – equating to 24 per cent of the gross annual box office (9 per cent of this was for Warner Bros titles) – with the company handling more than twice the number of films released by any of its competitors.

The films handled by these large distributors are either made by US studios or their subsidiaries or flow from relationships the studios have with particular companies or producers. Paramount, for example, distributes films from Paramount and its specialty film division Paramount Vantage as well as DreamWorks, DreamWorks Animation, MTV and Nickelodeon. A film might also be acquired on a one-off basis.

There are many Australian-owned distributors in addition to Roadshow, including mid-size players such as Hopscotch Films and the exhibitor-affiliated Hoyts Distribution, Palace Films and Dendy Films. There are also a few smaller companies that specialise in documentaries, handle films from one particular country, or only become active when their affiliated production house completes a film.

Unlike the foreign-owned distributors and Roadshow, none of these companies are guaranteed a constant flow of films. Instead, they generally sign for individual films via sales agents, often while overseas at film festivals. They might buy a film once it is completed or on the basis of the script or the filmmaker’s reputation. Most acquire arthouse rather than populist films, although the hope is that a title will break out and find a broad audience.

Australian companies handle the majority of Australian films, with Palace handling the most titles and Roadshow the largest proportion by revenue.

Marketing and release

Increasingly, to fit in with international marketing campaigns and to guard against piracy, high-profile films are launched simultaneously throughout the world, although busy holiday periods such as Christmas are still preferred for the release of blockbuster titles.

All distributors make judgements about how popular their films could be, in order to decide how much money to risk on marketing. The resources available to market US blockbusters are significant when compared to other films. Whereas $10,000 might be spent on a film released on just a few screens nationwide, the biggest blockbuster of the year may have a $3 million budget for advertising and publicity, plus the cost of prints, and be seen on hundreds of screens.

Typically, distributors charge cinemas a shifting percentage of ticket sale revenues. It might be 60 per cent of takings in week one, when a film is expected to draw the biggest crowds, but only 25 per cent six weeks later. Exhibitors may be required to show a film a minimum number of times each day for a certain period. Generally, the more sought-after the film, the more bargaining power the distributor has.