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New rules get Down Under distribs’ skin

Oz commish's new regs upset distribs

SYDNEY — The Australian arms of U.S. majors are angry over a gov-ernment agency’s attempt to regulate the terms they negotiate with exhibitors.

The distribs were stunned Tuesday when consumer watchdog the Australian Competition and Consumer Commission released its review of the 3-year-old voluntary code of conduct of film exhibition and distribution, which provides a framework for fair trading and settling disputes.

The ACCC’s report recommends 35 changes to the code, including several that are far more extensive than most tradesters had anticipated.

The most contentious is that film hire rates for all cinemas should be based on the number of weeks after national release. That would end the practice of charging theaters in rural areas first-week terms (usually 55% of the gross) for films that often are not available until weeks after pics debut in cities.

“If we can’t set terms, including asking for minimum sessions and seasons, how can we control our business?” asked one distrib. “The ACCC does not take into account how the industry works. Some of the things they want are absolutely crazy.”

Ross Jones, the commissioner who spearheaded the review, rejects that criticism, telling Daily Variety he believes it’s “outrageous” to force rural cinemas to pay first-week terms when they have to wait four weeks or longer for prints. “This has hurt country cinemas. I don’t think it’s unreasonable to say people should pay like terms for a like service,” he said.

Cap flap

Among other proposals that are riling distribs, the agency calls for a four-week cap on minimum runs at cinemas with fewer than four screens and stipulates that any party that fails to abide by the code conciliator’s findings should cease to be a signatory to the code.

That would exclude 20th Century Fox, which ignored the conciliator’s recommendation that it supply prints to Reading Cinemas’ Market City theater in downtown Sydney. Such an exclu-sion would prohibit 20th from taking any grievances to the code’s conciliator.

The changes advocated by the ACCC will be considered by the code administration committee, which reps exhibs and distribs when it meets later this month.

Jones said he expects a response from the committee by the end of this month. While he said the ACCC will listen to distribs’ views, Jones warned that if the proposed changes “do not address industry concerns,” the agency already has recommended that the government consider making the code mandatory.

That prospect would alarm distribs and many exhibs who want the code to remain voluntary.

By insisting on a speedy outcome, the ACCC is trying to get the code committee to take action before the federal election, expected to be held in November.

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