A flurry of US deals for Australian films is good news for the industry but few producers are getting rich as a result.
15 Oct 2012 - 11:18 AM  UPDATED 5 Nov 2012 - 4:33 PM

US distributors bought three Australian features, Not Suitable for Children, Crawlspace and documentary Storm Surfers in deals trumpeted last week. That means at least 40 Oz films and docos have been sold to the US since January 2010.

While it's heartening to see so many local films of various genres find homes in the world's biggest film market, the reality is most of those deals are with small distributors, resulting in exposure on DVD and on Video-On-Demand (VOD) platforms but limited cinema release.

Dealmakers say Australian films typically fetch an advance of $US50,000-$US75,000 from a US sale, with revenues split between the producer and distributor after the latter has recouped the minimum guarantee and prints and advertising costs. If there's spirited competition among buyers, an upfront fee of $100,000 is gettable.

In a multi-million dollar deal, the Weinstein Co. snapped up multi-territory rights including the US to The Sapphires just before the Cannes Film Festival, but deals of that magnitude are rare. While it may be tempting to believe this high-profile acquisition and The Sapphires' sterling Australian B.O. results might herald a renewed interest in the US in Australian cinema, it's unlikely to alter the pragmatic decision-making of US buyers.

“When a distributor buys a film he doesn't care where it comes from,” says Richard Guardian, a Los Angeles-based sales veteran who's been involved with Australian films since he worked as marketing manager for Hoyts in the 1980s.

“He doesn't care whether it's French or Australian. He looks at a movie and figures out if there is a market for it, how to reach that market and how to generate the most net [return],” says Guardian, who has a consultancy with Lightning Entertainment and has represented a slew of local films, mostly genre titles, including The Reef, Road Train, The 25th Reich, You and Your Stupid Mate and Wrath.

Screen Australia head of marketing Kathleen Drumm describes the volume of deals with US distributors as a “steady flow,” observing that “our films continue to find interest in this territory”.

Wolf Creek director/producer Greg McLean, who's an executive producer on Crawlspace (pictured), says, “There are so many new avenues for producers now with VOD/DVD/iTunes and a host of new opportunities to match with distributors looking for a wide variety of content.”

Marion Pilowsky, an Australian-based filmmaker and former head of international production at Myriad Pictures, has negotiated numerous US deals. She tells SBS Film, “My sense is that there is renewed competition because of new platforms, players and delivery systems that reach a large, fragmented but willing consumer. Festivals which have started distribution outfits such as Tribeca Releasing are perfect examples of new homes for independent films. All these new players need content. Competition has forced new ways of thinking, investors and distributors have to stay agile in order to stay in the game at a sustainable level.

“We're talking about a new wave of indie distributors being able to reach up to 40 million VOD homes through their networks and significant affiliated platforms such as national hotel chains and airlines. This really has been a game changer during the last five years.”

Formerly based in London, Pilowsky produced the comedy My Last Five Girlfriends (acquired by Tribeca Releasing in 2010), Sleuth starring Michael Caine and Jude Law, and Being Julia starring Annette Bening.

In last week's deals, Gary Hamilton's Arclight Films placed rom-com Not Suitable for Children with Well Go USA while XYZ Films sold Justin Dix's thriller Crawlspace to IFC Midnight and Storm Surfers to IXLrator Media.

Michael Wrenn's Greenlight will release Crawlspace, the saga of a squad of elite soldiers who are attacked during a mission at the US military base Pine Gap, in Australia later this year. McLean says, “We have limited theatrical releases in the US, UK and Australia and a few other major territories whose release plans are currently being locked in. The team's very happy with the reception so far and how it's unfolding for what's really an indie production with 'big' production values.”

After attending a screening of his film last week at the Sitges Fantasy Festival in Spain, Dix headed to Los Angeles to discuss two projects he's written, Declassified and Riding Hood. “Scripts are coming my way, but nothing has really struck a chord with me yet,” he tells SBS Film. ”I have four feature scripts finished, both big budget tentpoles, high concept, branded and franchisable kind of stuff, and low budget in the same vein as Crawlspace, claustrophobic, military, spooky.”

Among other Oz films that have secured US deals this year are Lore (Music Box), Drift (Wrekin Hill), Deception (Sony Pictures Worldwide Acquisitions), Red Dog (ARC Entertainment), Wish You Were Here (Entertainment One), Bait (Anchor Bay Films) and The Wedding Party (MouseTrap Films).

Most Aussie films are released on fewer than 50 screens in the US. Sleeping Beauty premiered at just four cinemas via IFC Films, released simultaneously on VOD and DVD. The Hunter went out on 17 via Magnolia while Animal Kingdom (Sony Pictures Classics) played on 61. The broadest release for an indie Aussie title in recent years was the Spierig brothers' Daybreakers, which rolled out on 2,500 screens.

Guardian and Pilowsky are excited about the potential for Australian films to tap into a relatively new release window in the US known as Ultra-VOD, whereby theatrical films premiere exclusively on VOD platforms and 30 days later are released in a limited number of cinemas, usually a minimum of six screens, and on DVD.

That platform was “created to give theatrical films of better quality and that are more marketable a chance to stand out rather than getting lost among the many titles that are available on VOD,” says Guardian. He quotes one US film that has two very recognisable actors but is “rather flawed,” which Lightning Entertainment sold to an Ultra-VOD service for an advance of $600,000.

That's the kind of deal most Aussie producers would kill for.