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AN APPRAISAL of the FINANCING of the MODERN AUSTRALIAN FEATURE Fil.1-1 INDUSTRY, the ROLE of the AUSTRALIAN Fil.1-1 COMMISSION A

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AN APPRAISAL of the FINANCING of the MODERN AUSTRALIAN FEATURE Fil.1-1 INDUSTRY, the ROLE of the AUSTRALIAN Fil.1-1 COMMISSION A AN APPRAISAL OF THE FINANCING OF THE MODERN AUSTRALIAN FEATURE Fil.1-1 INDUSTRY, THE ROLE OF THE AUSTRALIAN Fil.1-1 COMMISSION AND THE DEVELOPMENT OF PRIVATE ENTERPRISE. briann kearney M.Gen.Stud. - 9100 Supe~visor : Dr. Peter Gerdes AN APPRAISAL OF THE FINANCING OF THE MODERN AUSTRALIAN FEATURE FILM INDUSTRY, THE ROLE OF THE AUSTRALIAN FILM COMMISSION AND THE DEVELOPMENT OF PRIVATE ENTERPRISE. briann kearney Master of General Studies ... 1985 G) briann December, 1984 Brief : This paper covers the rise of the modern Australian feature film industry from that beginning in the late 1960's and the relationship of the Australian Film Commission to this rennaissance. It touches briefly on the period prior to 1969 as it relates to the ownership structure of the traditional media owners with a comparison of the foreign owned film industry. In turn this brings the former, i.e. the modern Australian Film industry and the Australian Film Commission, plus the latter, the traditional media owners and the foreign film distribution/exhibition domination, together in the 1980's development of private enterprise in the Australian film industry of today. This is to certify that this paper has not been submitted to any other institution or university for consideration by them in either a diploma or degree course. I hereby declare that this paper is my own work and that, to the best of my knowledge and belief, it contains no material previously published or written by another person nor material which to a substantial extent has been accepted for the award of any other degree of diploma of a university or other institute of higher learning, except where due acknowledgement is made in the text of the paper. briann kearney M.Gen. Stud. - 9100 AN APPRAISAL OF THE FINANCING OF THE MODERN AUSTRALIAN FEATURE FII.11 INDUSTRY, THE ROLE OF THE AUSTRALIAN FII.11 COMMISSION AND THE DEVELOPMENT OF PRIVATE ENTERPRISE. In appraising the feature film industry it should be briefly established that a feature film is defined as a one off production shot on 35 mm film which is approximately 90 minutes in duration and is intended primarily for cinema exhibition. There are, of course, exceptions and a feature film can be shot on 16 mm or 70 mm (or Super 16 for that matter) and it can be either shorter or longer than 90 minutes. International standards define a feature film as 60 minutes or longer but there appears to be no universal agreement on the issue. However, a completed film does comprise of two distinct properties a) A visible master - negative and release print of the film and b) The invisible property rights vested in the producer by the Copyright legislation in Australia and by the 1. International Copyright conventions. Even in 1984 the Australian feature film industry still constitutes the smallest and, perhaps, the least stable sector of our country's industries. One of the reasons for the instability of the film industry is the difficulty experienced in predicting the revenue earning performance of a film at the production planning stage and this sets up one of the major sources of uncertainty in the commitment of investment funds. More especially because the 1. Kirsten Schou,The Structure and Operation of the Film Industry in Australia .. A Resources/Research and Survey Unit Publication, April, 1982, p.7 Page 2. commercial value of a feature film, in contrast to most other products, is not determined by the physical dimensions of a tangible property but by the revenue earning potential attributable to its intangible qualities, it is extremely difficult to predict at such an early stage the commercial performance of any film. Only about one in seven Australian feature films recoups its production costs. However, the modern Australian film industry is still young and fragmented and even in the eighties the Australian Film Commission (known as the AFC or the Film Commission) points out that our film industry is, indeed, a fragile industry. There is little developed infrastructure and, therefore, no natural continuity. o f pro d uction.. 2 · Without careful nurturing by the AFC and without the support of current tax concessions to private enterprise there is little doubt that it would not, could not, survive. Historically, Australia has been credited with making possibly the world's first feature movie, THE TRUE STORY OF THE KELLY GANG (1906), with a running time of more than one hour. Yet there has never been an industry here to equal that in Britain or Europe, and certainly none to come anywhere the scale of the Hollywood film industry. Of course, there have been highlights over the decades with films such as Raymond Longford's THE SENTIMENTAL BLOKE (1919), Ken Hall's ON OUR SELECTION (1932) and Charles Chauvel's 40,000 HORSEMEN (1941), all films made under 2. 1982 Australian Film Commission Annual Report, p.vii Page 3. the growing foreign control of the Australian film industry through an oligarchical distribution/exhibition system - a situation which, to a large extent, still exists in 1984. It was this dual control of cinema distribution and exhibition that stiffled the indigenous feature film industry from the early twenties until the seventies, and, surprisingly enough, still has the power to stiffle that same industry today. The film industry in Australia is highly concentrated and to a large extent vertically integrated with the major Australian chains as well as with major international film corporations. Even though the distribution and exhibition sectors in the film industry in Australia have become more competitive and less restrictive over the last decade, in terms of economic models of market structure the distribution/exhibition sector presents a case of oligolopoly, a situation certainly not allowed in, for example, the United States since the Paramount Decree in 1952. All film industries throughout the world operate on three levels 1. Production 2. Distribution 3. Exhibition Production consists of a producer making a product, i.e. finding a script and investors, organising filming, pre-production, production, and post-production work and then finding a distributor for his Page 4. product. Distribution is the stage where an agent, the Distributor, on behalf of the Producer, disposes of the final product to as many outlets as he can find. Exhibition is the outlet where the product is shown to as many· viewers as possible. Until the early 1920's Australia had a film industry that incorporated all three aspects of filmmaking to the benefit of the Australian producer. However, competition from overseas productions began to become very apparent by 1920 and overseas producers had agreements or links with local distributors. The 1928 Royal Commission into the Motion Picture Industry agreed in its findings that most of the distributors in Australia were connected with American producers, yet it it was suggested by the Government of the time that the reason why Australian films were not enjoying the same popularity and financial return as their American counterparts was because of their lack of appeal to Australians, and their lack of 'professionalism•. 3 • There was no mention of the fact that Distributors, who filled the central role in the industry, were linked with overseas Producers and that they obtained the product from these Producers and then hired it to Exhibitors with whom they were also linked through financial agreements. Yet, if a distributor is linked with a producer he is far more likely to push the product of that producer with whom he is financially tied than he is to spend money buying 3. J. Tulloch, Australian Cinema - Industry Narrative and Meaning, George Allen & Unwin, Aust., 1982, pp.111-112 Page 5. and promoting the product of someone to whom he has no obligation of any kind. Therefore, from the 1920's until the late 1970's, three overseas owned film production combines controlled almost the entire Australian distribution/exhibition scene thus assuring their own products of both distribution and exhibition throughout Australia to the almost total exclusion of Australian feature film. The three companies who won and held this position for so long were 1. The Rank organisation 2. Twentieth Century Fox 3. Warner Bros. Up until the beginning of the eighties the ownership link-up between producer/distributor/exhibitor appeared in the following way : PRODUCER DISTRIBUTOR EXHIBITOR RANK GUO Distributors CIC .. GREATER UNION 20TH CENTURY FOX Fox Distributors .. HOYTS WARNER BROS. Village International Village Distributors .. VILLAGE UNITED ARTISTS United Artists .. HOYTS By 1981 after changes within the structure of the producer/ distributor/exhibitor establishment, the situation was as follows : (See over) Page 6. PRODUCER DISTRIBUTOR EXHIBITOR RANK · THORN-EMI WALT DISNEY GUO Distributors .. GREATER UNION 20TH CENTURY FOX Fox-Columbia Distributors •. HOYTS WARNER BROS. Roadshow Distributors ~. VILLAGE PARAMOUNT UNIVERSAL MGM CIC •. GREATER UNION AVCO-EMBASSY Hoyts Distributors .. HOYTS The 1984 ownership links of the five major domestic distributors of Australian produced feature films are - GUO DISTRIBUTORS Fully owned by GU Organisation FOX-COLUMBIA Wholly owned by 20th Century Fox Film Corp. ROADSHOW 1/3 owned by Village 1/3 owned by GUO The remainder held by various shareholders CIC Wholly owned by Paramount and Universal Pictures. and the ownership links of the three major domestic exhibitors of Australian produced feature films are - GREATER UNION 50% owned by Rank 50% Amalgamated Holdings HOYTS For a number of years Hoyts was owned by 20th Century Fox but subsequently it was bought from them by Aetna Insurance Group which in turn sold it in June, 1982 4. to the Lieberman farmily of Melbourne. VILLAGE 1/3 owned by GUO 1/2 owned by Positive Investments The remainder held by Australian shareholders 4. Malcolm Wilson, U.S.
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