Oz players feeling flush thanks to DVD lift and lower U.S. dollar

SYDNEY — Until a couple of months ago, execs at Icon Film Distribution were repeating the mantra “buy less, buy smarter.”

2003 STATS
Top film: “Finding Nemo” (BVI; $27.8 million)
Top indie: “The Lord of the Rings: The Two Towers” (Roadshow; $21 million)
Total B.O.: $649 million
Indie B.O.: $169 million
Total releases: 268
Indie releases: 131
“Around the World in 80 Days” (Roadshow)
“Fahrenheit 911” (Hopscotch)
“Heart of Summer” (Hoyts)
“The Life and Death of Peter Sellers”
“Super Size Me” (Dendy)

That’s still their policy, but the mood at Icon is a lot more buoyant thanks to lucrative returns from “The Passion of the Christ” and handy B.O. from “Monster” and “The Butterfly Effect.”

“We still have to buy carefully, but you don’t need to buy much if you buy the right ones,” says Icon’s chief exec Mark Gooder.

The indie psyche is a fragile thing, no more so than this year as the Oz exhib market matures. Execs foresee little organic growth, and there’s no let up in the volume of product.

Last year, indie distribs clocked combined grosses of $A226 million ($169 million), repping a market share of around 27%. But Roadshow, New Line’s Oz distrib, which released 36 titles in 2003, commanded nearly 20%, leaving more than a dozen companies to fight for the remaining 7%.

Indies say most films lose money theatrically — but all the serious flops end up in the black thanks to the booming DVD market and steady coin from pay-TV sales.

“It’s more usual to lose money than to make money theatrically,” says Hoyts Distribution’s Robert Slaviero. “But if you’re careful with your P&A and the advances you pay, you can make money on every release.”

Slaviero describes the DVD market as “sensational,” buoyed by a doubling of DVD player penetration to 51% last year. Hoyts has a first-look arrangement with feevee Showtime, and an output deal with sister company the Nine Network.

Roadshow Films’ m.d. Joel Pearlman expects to see a slowdown in release skeds soon, because he figures fewer English-lingo indie films are being made due to the ongoing consolidation in that business.

And he believes the growing trend to global day-and-date releases could result in more opportunities for indie distribs as tentpoles are crowded into ever-narrower periods.

Despite a slew of Hollywood films that under-performed Down Under this year, Slaviero does not see that creating more room for indie films in Oz, noting there’s no shortage of product from other majors as well as indies competing for playdates, with more than five titles being released on average every week.

The rising Oz dollar, which is worth around 30% more vs. the greenback than 12 months ago, makes acquisitions more affordable for the Aussies. The nationwide B.O. grew by 5% through the end of March.