The producers of $3 million horror film Needle will manage their own theatrical release after selling the Australian and New Zealand DVD and cable rights to Sony Pictures Home Entertainment.

The decision to self-distribute follows the end of the film's original distribution deal with Richard Sheffield's Polyphony Entertainment. Sheffield joined All Interactive Distribution's new distribution arm, Pinnacle Films, in August last year, bringing all of of Polyphony's theatrical deals to the new company.

"When all their theatrical deals were transferred to Pinnacle Films our contracts had to be renegotiated," Needle writer-director John V. Soto said. "Ultimately our focus is achieving the best deal for our investors and as we could not reach a satisfactory agreement we decided not to go with them."

Needle producer Deidre Kitcher said the targeted theatrical release would begin on six screens in Perth on July 28 before moving to other States.

“From experience, we know that a wide theatrical release of an Aussie horror film is unlikely to be successful, so we have decided to manage a targeted campaign focused on limited screens instead,” she said in a statement.

The producers of Needle released their last film, the supernatural thriller Crush, in one Perth cinema in 2009. However, the film sold well on DVD and to international territories.

The announcement comes as a number of Australian films have posted disappointing returns in cinemas this year.

While the James Cameron-backed cave thriller Sanctum posted a reasonable $3.8 million across 252 screens in February, the four local films released since then have posted mediocre returns at best.

The Paramount-distributed Wasted on the Young posted a disappointing $52,907 across 54 screens on its opening weekend while the Hoyts-distributed A Heartbeat Away grossed just $44,204 across 77 screens in its opening weekend this month.

Sony’s most recent Australian cinema release was last year’s Red Hill, which was shown across 60 screens but, despite a strong promotional campaign, it did not succeed in theatres, grossing just $364,590.

At least two major upcoming local films scheduled for release in April have now had their release dates pushed forward – Oranges and Sunshine will be released on June 9 and Red Dog will be released on August 11.

Needle is a supernatural murder-mystery about a killer who uses an 18th century machine with supernatural powers to terrorize students at a local college. It stars Jessica Marais (Packed to the Rafters) and Michael Dorman (Daybreakers, Triangle).

The Perth-based production company behind Needle, Filmscope Entertainment, also announced that it had sold all rights to Needle for France to major European distributor, SND Films. SOYUZ Films have also acquired the rights to CIS (Commonwealth of Independent States – the former Soviet Union) which encompasses 11 countries.

“In the tough economic climate of the post-GFC world, for any Australian film to get sales overseas is quite an achievement. The fact that Needle has now been sold in 60 countries worldwide including the key territories USA, UK, Germany, France and Japan speaks volumes about our company’s overall strategy,” Kitcher said.

Needle recently won a “Golden Skull” award at Screamfest, Los Angeles and awards at the British Horror Film Festival for Best Cinematography, Best Special Effects and Best Supporting Actress.

Check out the Needle trailer here.

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