Distribs seeing red over code review

Motion Picture Distributors Assn. of Australia react to report

SYDNEY — A showdown is looming between Australian distributors and government watchdog the Australian Competition and Consumer Commission over the ACCC’s attempt to regulate film rental rates.

Distribs reacted angrily after the Oct. 2 release of the government agency’s review of the 3-year-old voluntary code of conduct for film exhibition and distribution, which provides a framework for fair trading and settling disputes.

The ACCC report recommends 35 changes to the code, mostly aimed at appeasing regional exhibs who have long griped about the B.O. share and minimum-length runs demanded by distribs.

In an Oct. 5 statement, the Motion Picture Distributors Assn. of Australia expressed “surprise and disappointment” and complained that few of its detailed responses were included in the ACCC’s report.

Several distribs tell Variety they won’t accept the ACCC proposal to set terms for all cinemas based on the number of weeks after a pic’s Oz release. That would end the practice of charging provincial theaters first-week rates (usually 55% of the gross) for films that often are not made available until weeks after pics debut in the bigger cities.

One distrib says that would force him to stop supplying prints to low-grossing cinemas, asserting, “The losers would be the independent cinemas whom the ACCC is supposed to be fighting for.”

The other key sticking point for distribs is the ACCC’s proposed four-week cap on minimum runs at cinemas with fewer than four screens. One exec complains the rule makes no allowance for arthouse films or other platformed titles.

Ross Jones, the commissioner who spearheaded the review, tells Variety the ACCC is willing to listen to the industry’s views, but he believes it’s “outrageous” to force rural exhibs to pay first-week terms when they have to wait four weeks or longer for prints. “This has hurt country cinemas. It’s something that distributors could have fixed without causing much damage to their bottom lines,” Jones says.

The agency also advocates cutting off any party that fails to abide by the code. That would mean 20th Century Fox — which ignored the Code of Conduct conciliator’s recommendation to supply prints to Reading Cinemas’ Market City theater in downtown Sydney — could not refer any grievances with exhibs to the conciliator.

“I can see some people withdrawing from the code,” says one exec. “How could the code function if people are not members of it?”

Jones warns that if the proposed changes “do not address industry concerns,” the agency already has recommended the government consider making the code mandatory. That prospect does not appear to faze one distrib, who ponders, “How would we be any worse off?”

Unanimity unlikely

The ACCC’s recommendations will be considered by the code administration committee (repping major and indie distribs and exhibs), which is due to meet later this month. Any decisions to amend the code must be unanimously agreed upon by the committee — a remote prospect, judging by the mood gauged by Variety.

By insisting on a speedy outcome, the ACCC clearly is trying to spur the code committee to take action before the federal election, expected to be held as early as Nov. 10.

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