All the key Oz buyers will be at Cannes but they’re telling much the same story suppliers have been hearing for some time: Get real or go elsewhere.
Aussie buyers are buying less for less. The now well-chronicled near collapse of the Aussie commercial tv industry means ever greater pressure on theatrical release to recoup advances and p&a expenses rather than the traditional hefty tv sale.
With tv prices capped at around $A200,000 for a major film, theatrical prices for Oz have had to change accordingly, in some cases by as much as 50% and more. Exacerbating that, Oz nets until recently were buying almost zilch indie product. “Recent movements in tv sales have only fixed our view that our new pricing is very realistic,” says John Rochester, chief exec of Hoyts Entertainment.
Top prices Aussies will pay for a pic is now $300,000-$400,000. Anything over that would have to be extremely hot to cover costs, sources say.
But Hoyts – burdened by hefty debt and working under long-term financing arrangements with its banks – is buying much less and has renegotiated terms with some of its suppliers. “Quality not quantity” is now the company’s credo at the markets, says Rochester. At Cannes, Hoyts Distribution g.m. Hugh McGowan is repping, assisted by L.A. rep Doree Glaser.
Other major buyer is Village Roadshow, which sees Cannes as a vital meet and greeter for its many suppliers. And although national marketing and distribution manager Alan Finney, assisted by L.A. rep Kathy Kass, will be on the lookout for indie pickups, the company has more than enough top product coming its way via output deals. Both Finney and Rochester report increasing awareness of the realities facing Aussie buyers.
Indies, however, report that at AFM prices were still being asked that don’t add up (for example: $250,000 reportedly for the new Kurosawa film, or $350,000 for Ian Pringle’s “Isabelle Eberhadt,” an Oz film).
“Prices at AFM were unbelievable,” notes Frank Cox of New Vision Films. “I found they were so high that what we liked we couldn’t pay for.” Cox, like others, wonders if new arrangements could come into play incorporating lesser advance minimum guarantees but higher averages.
But there was willingness to haggle. “Prices were much the same but the U.S. suppliers were willing to come to some arrangements,” notes Lyn McCarthy of Dendy Films, who said there was a “whole bunch” of films on offer at AFM that were around a year ago but had seen their deals fall through. Adds Tony Zeccola, m.d. at Palace Entertainment Corp: “There are still some crazy prices; others are now more realistic and have come down but often it’s not enough.”
But Oz indies didn’t find AFM fruitful; some didn’t buy anything. But all are upbeat about new offerings due at Cannes. “We think it’ll be a good Cannes; we’ll be in a keen buying mode to pick up our summer releases,” notes McCarthy.
Inflated cowboy legacy
But don’t expect a bidding war between them. Oz indies have settled down to a tight bunch of operators who know each other well, and in some cases have joint interests. They’ve seen the legacy of inflated prices caused by some cowboys during the ’80s. Likewise major players such as New Vision, Premium, Dendy and Palace all have substantial amounts of unreleased product so they’ll be cherry picking only.
But all the major indies also need to feed associated exhibition interests which can be brought into play when talking prices. “We can guarantee the film will get out, which can carry a lot more weight than the dollars we can pay,” says Graeme Tubbenhauer, co-principal at Dendy, whose Sydney site celebrates its 10th anni this month. Adds John Cerrone, g.m. at Premium Films, which is aligned to eight screens, “It gives you a bottom line to work off.”
A new Oz buyer at Cannes will be Terence McMahon, former head of Greater Union Film Distributors. His company Broadstone, previously involved in tv and video, has just completed its first theatrical release with Nancy Savoca’s “True Love.” Not there will be Capricorn Pictures, which launched this time last year. Topper Tony Malone says he can do the same amount of work on the phone and follow up with a post-Cannes trip to suppliers.