Australia exhibition

Aussie theatre owners are hitting pay dirt by marketing 'small' movies to an increasingly sophisticated audience.

SIDNEY --If Australia's AUS$900 million ($690 million) exhibition and distribution sector is a little more upbeat these days, don't be so quick to give all the credit to Hollywood's annual slate of summer blockbusters. According to the Motion Picture Distributors Association of Australia, local boxoffice figures are up 15% compared to this time last year, and that doesn't even factor in the heroics of a certain caped superhero, swashbuckling pirates or anthropomorphic cars.

With the local boxoffice taking in AUS$36 million ($28 million) more than last year, the industry is buzzing about the possible end-of-summer results since the numbers were tabulated prior to the Aussie release of three of the summer's biggest tentpole hits: "Pirates of the Caribbean: Dead Man's Chest" and "Cars," both from Buena Vista, and Warner Bros. Pictures' "Superman Returns."

A number of factors are driving the recent boom, including a more diverse slate of releases, theater upgrades and ramped-up efforts to market the moviegoing experience to fickle consumers.

But the most surprising factor driving Australia's robust summer is the rising popularity of decidedly nontentpole releases.

Alan Finney, managing director of Buena Vista International, Australia and New Zealand, who also is chairman of the MPDAA, points to strong boxoffice from "smaller" films such as the 2005 U.S. releases "Walk the Line," "Brokeback Mountain" and "The World's Fastest Indian," which have all performed surprisingly well at the local boxoffice.

"There's an increasing maturity of audiences and the type of films they want to go to," Finney says. "The diverse nature of these releases means they are delivering more complex, satisfying and interesting titles to the broadest possible audience."

Increasingly, many executives say, intimate adult-oriented films are blurring the line between the art house and the multiplex down under, and the success of smaller films could influence release patterns in the future.

In recent months, for example, indie distributor Hopscotch Films has achieved healthy boxoffice with titles like Richard E. Grant's family drama "Wah-Wah" (a Roadside Attractions/Samuel Goldwyn Films 2006 U.S. release), which has grossed AUS$1.5 million ($1.1 million) in limited release, more than in all other territories combined, as well as the quirky British comedy "Mrs. Henderson Presents" (a 2005 U.S. release), which has grossed AUS$4.5 million ($3.4 million).

"There's an audience that wants films with more substance," says Peter Cody, general manager, film, at local theater chain Greater Union. "As an exhibitor, what's great is to be able to play films like 'Wah-Wah' and 'Mrs. Henderson Presents' to an audience where there's as strong a demand in multiplexes."

Cody adds that the success of these films is no coincidence and stresses that Australian distributors are becoming particularly skilled at marketing smaller films to wider audiences.

"Australian-audience trends are going against a lot of markets," he says. "Distributors are successful in getting smaller films to a broader audience. They can do exceptionally well if you market them (properly)."

Finney concurs, adding that much of the credit for the diversity of films on offer this summer should go to a growing independent distribution sector, which has become increasingly competitive of late with the arrival of newcomers such as Aztec International Entertainment, Madman Cinema and Rialto Entertainment, which join established outfits such as Dendy Films, Hopscotch, Icon and Palace Films.

"How good they are and the choices they make about the films they release are what will ensure their success," Finney says. "A more diverse range is a positive thing. There are films screening now that are very popular that I wouldn't have acquired."

Adds Hopscotch Films CEO Troy Lum, "The scope of what's being acquired is broadening, and there's a growing appetite for the more discerning moviegoer being serviced by the independents."

But Australian audiences aren't just becoming more discriminating about the types of films they want to see. They're also becoming selective about the environments in which they see them, increasingly flocking to upmarket cinemas and multiplexes with luxury lounges.

Since the number of screens in Australia plateaued at 1,943 after a boom that saw a doubling of screens between 1993 and 2003, exhibitors are investing in a number of initiatives to enhance the cinema experience, with multiplexes following the quality initiatives led by art house theaters.

These include luxury amenities, larger screens and better quality sound, as well as new technology like 3-D cinemas. In the next six to 12 months, exhibitors also plan to rollout mobile and digital ticketing, including print-at-home ticketing via the Internet.

"With the right product and the right environment, which means good quality cinemas and a really big screen experience, you can get people back to the cinemas," Cody says.

While Australia has the highest penetration of giant screens in the world, according to Village Cinemas CEO Kirk Senior, it's the high-end cinema concept that has drawn an "astounding" reaction from a moviegoing public that is happy to pay double the standard ticket price for luxury seating and upscale food and beverage offerings, including waiter service for a maximum of 40 people in a separate area of the main cinema.

"We have to be fresh and fashionable and appeal to changing consumer habits," Senior says.

Both Greater Union and Village have dubbed their luxury cinemas Gold Class and have put a total of 17 luxury viewing areas into a variety of multiplexes in each major market on their circuits, while Hoyts has so far built six La Premiere sites.

Hoyts also has begun testing a unique approach to the youth market at one of its Melbourne cinemas, replacing the seats of one theater with 42 beanbag chairs. The tactic has proved so popular that the chain is looking to implement it at other multiplex sites, while Hoyts head of marketing Anthony Thiessen reports that he's been fielding inquiries from overseas operators keen to know more about the concept.

The irony that the industry is aiming to differentiate the cinemagoing experience from watching a DVD at home while simultaneously installing beanbag chairs in theaters is not lost on Finney.

"The industry needed to find a way to re-enthuse people about going to the movies," he says. "When the industry spends over AUS$200 million ($153 million) a year promoting its products and venues, we want part of that spending to celebrate the moviegoing experience, not the home experience."