SYDNEY — The exhibition industry is battening down the hatches as tepid profits have forced Village Cinemas to halve its number of international territories. In remaining regions, the company plans to trim operating costs and increase ticket-sale initiatives.
Meanwhile, Oz’s smaller exhibs have turned up the volume of their ongoing demands for equitable treatment from distributors, who they claim are focused on the industry’s heavy-hitters — Hoyts, Village and their affils.
But Village’s Graham Burke has come out fighting. He attributes the international B.O. slump to the U.S. studios producing a raft of “very nationalistic and narrow” product rejected by international auds.
Burke predicts an exhibition upswing fueled by what he describes as pics with a more international appeal like “Harry Potter,” “The Mummy Returns,” “A.I.” and “Tomb Raider.”
Village Cinemas’ A$11.8 million ($6 million) six-month loss was exacerbated in Oz by the Sydney Olympics and the introduction of a 10% sales tax in July.
The division’s slump contrasted with the group’s 4% pre-tax net profit of $26.8 million for July-December.
Roadshow Prods., bound to a 40-picture deal with Warners until 2005, returned profits of $10.2 million.
Burke welcomes competition from smaller exhibs, led by U.S.-owned Reading Cinemas, whose CEO, Neil Pentecost, has been appointed prexy of the Cinema Owners Assn.
Enthuses Burke, “If (they) become more aggressive, it increases the size of the pie overall.”
But Reading and the smaller cinema operators have ongoing complaints about what they see as market share abuse by Hoyts and Village, which together control the lion’s size of the nation’s exhib biz.
Despite a recent unsuccessful complaint to the consumer and competition watchdog, Pentecost has vowed to fight for a re-examination of the conduct rules governing exhibitors and distributors. Reading and other smaller exhibs accuse Hoyts and Village of throwing their weight around to obtain terms favorable to them.Since Reading announced its intention to become a significant Oz exhibitor, it has endured protracted battles with the established players over developing sites.After announcing its intention to “take on” the big two in December 1996, the company has opened only 11 sites with 81 screens.