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Screen Aus reveals return on Mao’s Last Dancer and Tomorrow When the War Began

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Screen Australia has recouped less than 5 per cent of its $7.5 million production investment in the two top grossing local features of the past two years: Mao’s Last Dancer and Tomorrow, When the War Began.

The result, revealed in the Senate after a question on notice from Liberal Senator Simon Birmingham, shows the precarious nature of feature film recoupment.

The $25 million dance epic Mao’s Last Dancer grossed more than $15.4 million in 2009 and more than $US4.8 million in the US. It also topped Australian DVD sales in 2010, selling more than 100,000 copies. Screen Australia has received $352,403 back from its initial $4 million investment.

Meanwhile, the national agency has yet to receive a return on its initial $3.5 million investment in the $27 million thriller Tomorrow, When the War Began. The film grossed more than $13.4 million in Australia in 2010 and a sequel is planned for later this year.

A Screen Australia spokeswoman said the individual financing structure of each film is different, which affects returns.

Private investors typically receive returns before Screen Australia while investment returns typically take several years as a film is sold in different markets and formats. Sales agents and distributor advances are recouped before investors receive returns, as are commissions and expenses.

Nonetheless, the difficulty in delivering returns to private investors has spurred some producers to look at alternative distribution models, such as Instinct Entertainment’s David Redman.

His latest film, the animated Little Johnny The Movie, is being distributed online as well as through Greater Union cinemas during the Melbourne International Comedy Festival, ahead of a national tour.

The decision was spurred by the disappointing returns posted by comedy Charlie & Boots, which grossed almost $3.9 million and sold more than 130,000 DVDs. (Screen Australia has received no return on its $2 million investment in the $8 million film.)

The Screen Australia table does not include some recent releases, such as Samson and Delilah, and also includes some films which have not yet been released to the public, such as Swerve.

Screen Australia’s most successful recent investment was TV series Underbelly. It returned almost 90 per cent of its $2.93 million production investment.


Source: Screen Australia, Senate Estimate hearings.
 

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7 Comments

  1. That’s absolutely appalling.

    How the hell can a sequel for “Tommorrow When the War Began” be happening when they haven’t even paid back Screen Australia for their initial investment?

    Unbelievable.

    Reply

  2. the figures are misleading. Senator Birmingham should have asked what was the total amount of federal government money in these films not just the SA equity investment. Some of these titles are pre the Producer Offset so they didn’t get another 40% of their budget on top of figure mentioned, However, the majority have the Offset so you can easily double the amount the government gave them and ofcourse SA manages the offset.

    As well the list is incomplete. Where’s ‘Beautiful kate’? Statistics, what they hide is so much more interesting.

    But the general thrust is correct. Movies are not a business, so stop spending money on seminars, scriptwriting workshops and market research etc pretending it is. Every film loses money and always will. Its a cultural argument not a bottom line one.

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  3. This list of failures flies straight in the face of any commercial sense – not to mention if it was a real business the shareholders would hold the Board accountable and demand an explanation.
    I agree with Deans comments about how can a sequel be made without repaying investment – so much for corporate responsibility !!
    How do other producers expect to get funding when Screen Australia has been selecting these films which aren’t making money at box office – is there selection process that bad as they are providing film funding and looking at these ROI’s – they keep doing it over and over again without success. Isn’t the definition of insanity doing the same thing over and over again and expecting a different result ??
    One reason could be that the Australian public is not discerning as an audience, except, when it comes to paying for tickets to see “our Aussie movies and talent” yet they will flood the cinema’s to see anything that comes out of the US so I wonder if it is the casting we choose or the subject matter ???
    Having spent nearly 18 months as a writer / producer seeking funding for my animated feature I can say that through no industry assistance to date we are about to close out as our own “investors” which isn’t easy with a budget of over $30M. To be honest I feel (and have learned) that the Australian industry offers limited support or hope until you have had a big hit which is rare, and then you don’t often need support. I hope to break that losing money mentality – and to assist this having put together a great team we are ALL on the same page: great script + great talent + adequate funding AND marketing = more chance for success !!
    Why isn’t there a better way to provide assistance for the first 10% of a budget without jumping through so many hoops as at this point other investors will be more inclined to be approachable.
    As for Tim’s comment about it being a cultural argument vs a bottom line one” … it is evident that Tim is not worried about making money or is Tim not making movies ??

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  4. I’d be interested to see if Tony’s film returns it’s budget and also if the film has any value apart from trying/attempting to make money. I suppose we come from different worlds. If the bottom line, as Tony suggests, is the reason for an industry to exist, then we and most of the filmmaking world apart from Hollywood and India should close down. But some taxpayers expect value for their buck and yearn for an experience they haven’t seen, not the repeated formula/genre trash that Screen Australia is focused on. No I’m not a film maker but I pay taxes and I’m disgusted with the product that dumbs down us as country and limits opportunities for new voices. In other words have a regime that rewards and encourages quality rather than a government running a commercial studio. Government shouldn’t be in the business of business! People think its an industry, but it isn’t. Its a charity like the car industry, the local defence industry and the opera/ballet, to employ people and spread expertise, and maybe sometimes provide excellence. If you want to make money in movies go to LA, don’t expect a small country with a tiny audience base to provide the commercial promise you seem to expect from your efforts. I hope your investors understand the risk they’re up for.

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  5. wow…. this is truly disturbing…

    The best part about this is they have nothing to lose by trying something different, cause they are ALREADY losing! Time to shake things up I say! Time to be bold! Fund a slew of ultra low budget films with a focus on story, more chance to make money when you don’t spend a whole lot. Or you can spend $4 million on one film and get nothing back… I think we need to embrace a different model and stop trying to emulate the American model which exports their films to the world and has a MUCH larger audience base.

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  6. Thanks for validating most of my points Tim. I am also a taxpayer, as well as a promoter of our industry so I am pretty sure we both want the same thing so kudos to us. As to our movie achieving our budget return well what filmmaker doesn’t want that to happen, and in fact we nearly need to make double that amount to really be a success with marketing costs taken into account. So to assist us we do everything within our power to ensure that our best effort is put onto the screen and as it is such a large commitment you need to look at a global audience to get returns as there is nothing wrong with aiming for success – added this to provide you some insight into the industry Jeremy 🙂
    The business of making movies MUST be seen to enable a return on investment or else it is a charity and no one wants our industry to shrink any smaller than it is – least of all us filmmakers. Wishing everyone a happy safe Easter.

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  7. Firstly, the model is all wrong. The Germans had it right in the early part of this century when they had a state run studio under UFA. That is, the state not only handled production but also distribution. Another part of this is that when Government invests directly the Government becomes the market. It’s not intentional and noone at Screen Australia sets out to make a flop, but when the government invests directly they become what is called a “pivotal buyer” and as such they displace the real market, or become the market, unless there are built-in mechanisms to make the organisation more accountable and connected. And as a general rule, those things aren’t there. Up until recently, there has been a derth of audience data and any sort of feedback mechanism through research has been focussed purely on production, and rarely on returns or performance or product lifecycle. The money is invested and the job is done as far as government has been concerned. Atleast Screen Australia is showing an interest and a willingness to share information about what happens after a film is funded and that in itself is a good sign. A sign of a courageous organisation in many respects, willing to provide an open book, and invite honest discussion. It hasn’t happened for the past 40 years because the industry has been too frightened to look at itself hiding behind the myth that “nobody knows anything” and as such, they don’t bother to find out or ask questions. They just go on “gut” (and what do guts normally produce?). Woody Allen once said that show business was a business, if it wasn’t it would be called show show. It’s very easy to look at these figures and go what terrible results they are, but how do we know? The distribution deal, the production investment agreements, and a whole host of other deals, mean that the money goes somewhere. Someone was probably profitable. What is lacking is an understanding and a transparency of where this money goes once made. Now, if the government agency was a government corporation, say like an Australia Post, and given the capacity to not just produce but to distribute (and possibly co-distribute) then I am sure the return position would be much better. Here’s some stats… Hollywood Studios have a success rate of about 1 in 4 (various academic estimates), US production in general has a success rate of 1 in 10 (according to Vogel, Industry Economics), the forerunner to Screen Australia had a success rate of 1 in 20. Most businesses in Australia, regardless of type, have a success rate of 1 in 13. Energy is wasted saying the results are terrible. We need to put energy into finding out why? But if we keep believing that “nobody knows” then we deny ourselves the opportunity to ask. I do believe that Screen Australia is asking those questions, or atleast beginning to, but we have to remember this industry is full of people who don’t want to know the answer.

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