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The Aussie Film Industry - bust or boom?
by Billy Baxter

With Fox Studios Australia officially throwing open their doors to the public in Sydney this month, the question has to be asked; is this going to turn Sydney into a Hollywood of the South, or is it all smoke and mirrors? Billy Baxter takes a look at the different sides of the local film industry and exposes both sides of the story.

Tom and Nicole are regular visitors. Most of Mission Impossible II was made here. Star Wars can call Australia home. The Matrix was shot in Sydney, which is also the chosen location for Fox's $200 million investment for a state of the art studio and entertainment facility. Plans are approved for a Viacom/Paramount studio and theme park in Melbourne. Then there's the Warner Brothers lot on the Gold Coast.

These pointers and big dollars might make the Australian film industry appear at an all time high but first impressions don't always count. There's a big distinction between local and foreign production - the Australian film industry and the film industry in Australia.

The Film Finance Corporation cites a sobering statistic that less than 10 of the last 100 films funded by it - as the federal government body responsible for funding homegrown productions - have recovered their costs.

An Australian Film Commission report* released last month examines Hollywood's dominance of international cinema and the recent poor performance of Australian films. In 1998, box office share for Australian films was down to 4 per cent in a market where 70 per cent of films released were American. A continuing increase in admissions mirrors a growth in the number of screens. Australians love the cinema, as long as it's American.

The lack of success of Australian films is a debate that consumes the local film industry. Two worlds collide on a level playing field. American studio films are made on an average budget of $US53 million, with an average domestic (US) promotional budget of $US25 million, according to the AFC report.

"They can't compete on the two aspects that underpin the major studios - budget and stars", concurs Alan Finney, managing director and vice president of Buena Vista International (Australia). Film producers in Australia work outside the accepted "formula" for box office success, established by the big studios across the Pacific.

Jonathan Shteinman, producer of the award winning Angel Baby says, "If you're spending $100 million a go on formula films then you'd probably expect to break even on more than most. But we're in a different world. We have a number of spectacular successes and a large range of less than successful films, so I just remind everyone when comparing statistics."

That different world is one that doesn't have the investors panting to get a start, bankable stars whose name alone will recoup your costs and a potential audience of 250 million warming cinema seats.

Joel Pearlman, managing director of marketing and acquisitions at Roadshow Film Distributors, recognises this. "There are a lot of things we can do better than American films and that's what we have to concentrate on. We can tell stories that relate to people's lives here because we are Australian. We can create stories that are intrinsically connected in nature to our own lives and make them interesting. We have to make people connect to those films."

The local industry is inextricably linked to global trends, worldwide issues and cycles that are not specific to the local industry or the way it works. The independent sector is currently in the doldrums due to studio backed, studio-controlled entities making films that aren't usually associated with Hollywood but yet, satisfy that niche of the market known as arthouse.

Ten to fifteen years ago companies like Miramax and New Line appeared because there was a market niche that required filling. Now Miramax is owned by Disney, October owned by Universal, Fox Searchlight a subsidiary of Fox, Sony Classics, a spin-off from Sony and Polygram, was recently bought by Universal.

"Now every studio has an independent arm", according to Andrew Mackie, director of the Sydney-based Globe Film Co. "At the specialty end of the market it means a film's theatrical life is much shorter, and the viability of a small film building its audience through word of mouth is much less. As with the mainstream major studio films, if the specialty product doesn't open strongly, it must come off to make way for other product."

To suggest that the studio-controlled entities are servicing the market to such an extent that nobody else will come up with a success is not the case. The obvious example is The Blair Witch Project, picked up by a new US company called Artisan. The film was marketed over the internet and has grossed $150 million in its domestic market. There is also the Canadian-owned distributor Lion's Gate, while yet to have a breakout success, still exists as an alternative.

On the bankable side, Australia has more directing talent than ever before. Ten years ago, there were four bankable directors: Peter Weir, Bruce Beresford, Fred Schepisi and George Miller. Now, there is a raft of directors such as Jane Campion, Baz Luhrmann, Scott Hicks, Stephan Elliot, P.J. Hogan, Jocelyn Moorhouse, Geoffrey Wright, Michael Rhymer, Alex Proyas and Gillian Armstrong who have all made films in the studio system. And there's more on the way: Gregor Jordan, Brad Hayward, Alan White, John Polson, Ana Kokkinos and Emma-Kate Croghan.

The Australian directors who have now made a film in Hollywood will start bringing home projects, as Baz Luhrmann has done, as Stephan Elliot did with Woop Woop where he bought American money to make a $10 million film, as George Miller did in making Babe 2 here. Take the example of Alex Proyas. He went overseas, made The Crow, came back here and made Dark City - Australian written, produced, directed and made in this country, backed by a studio, a $25 million film.

One factor that has certain sections of the industry up in arms is the 'Mexicans with mobiles' tag that still plagues us. Even Baz Luhrmann's currently in production Moulin Rouge, funded by Fox, is exploiting our talent by paying industry minimum rates despite being a multi-million dollar production. With local production down, cast and crew are desperate for work, and in the process are working for the kind of rates they would earn on a low budget Australian film.

But there is, in addition to the A-list directors, a growing pool of talented Australian actors making their mark abroad, who will return and star in films made in Australia's burgeoning studio facilities. It's not just Mel, Nicole and Judy Davis any more. Now there's Cate Blanchett, Geoffrey Rush, Francis O'Connor, Hugo Weaving, Russell Crowe, Guy Pearce, Toni Collette, Rachel Griffiths and Jacqueline Mackenzie, and there's a number of ascendants such as Heath Ledger and Alex Dimitriades.

Sure, few of them are not working here right now and one can understand and expect that they want to consolidate their careers and finances by notching as many big films abroad as possible. Eventually, some if not all will want to return to this country once their careers are consolidated and will agree to be in Australian films. While the short term looks grim, the medium to long term outlook is encouraging.

The new wave of Australian directors has an awareness of the necessity to produce a marketable product. Take Brad Hayward, whose $40,000 "credit card" film Occasional Coarse Language grossed just under $1 million. "There's no use making a film if no one's going to go and see it.... and that's what we did with OCL...we tried to make that film within a very modest means as marketable as we could.

"I think a mix of films is good. There was probably a time when we did make too many serious films that completely thrilled the funding bodies but no one else could give a shit about."

In financing film the Government has a particular agenda which is to enrich Australia's culture and develop the local film industry. Thus the ultimate "success" of a subsidised film is not measured solely by its box office return.

Take the example of Angel Baby. Winning seven AFI Awards it was the toast of the industry, yet it did not recover its costs. But as its producer Jonathan Shteinman points out, "a sufficient number of people within this country saw the film both on the cinema, on TV, and on video. Similarly the film travelled to festivals around the world, made a number of sales and was seen by a small section of the global market. So in terms of representing Australia's culture, it did achieve that to some degree.

"When you also take into account that it was Michael Rhymer's first film and he's now gone on to make a studio financed film in Hollywood and is looking to come back to Australia to make a larger film, the government's agenda of developing the Australian film industry has succeeded."

The tax incentives established here in the 70's still exist but in a severely reduced form. Even if you don't get funded directly by the government, investors can still claim a100 per cent tax deduction when investing in film, whether the project makes money or not. It doesn't get any sweeter. Australian films don't have to abandon their Australian element, but they do have to appeal to the sensibilities of a wider audience.

Alan Finney (Buena Vista International) says "fill the gaps; make what Hollywood isn't making, niche marketing."

Industry observers like Jonathan Shteinman argue that "one can't make genre products without stars because they make them in Hollywood bigger and better with stars. We've got to keep playing to our strengths, which are fresh, captivating, original ideas.
"It is alleged that the current system allows filmmakers to make films that supposedly aren't aimed at an audience. However, this same system produced The Piano, Muriel's Wedding, Shine, Priscilla, Strictly Ballroom and The Castle. Not withstanding the current market problems or changes, they would still succeed today."

And there are industry doubters. Frank Cox, managing director of NewVision Films, agrees but cautions "I love arthouse films, that's my background, but you cannot have a national industry just creating those types of films." ---Billy Baxter

* This article would not have been possible without the Australian Film Commission Marketing Branch's recent comprehensive report on film distribution in Australia - Distributing Australian Films (a survey of current market conditions and distributors' perception) by Mary Anne Reid, with assistance from Diana Berman and Rosemary Curtis. You can find it at
* Quotes attributed to everyone except Jonathan Shteinman and Brad Hayward were taken out of this report.

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originally posted: 11/24/99 00:00:16
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