Understanding the dynamics between the United States and Australian film markets: testing the ‘10% rule’

ABSTRACT

Australia has historically been an important market for American media exports. As far as film trade relations between the two countries go, there is an anecdotal perception that distributors follow a ‘10% rule’ to predict the popularity of Hollywood titles in Australia, expecting American films to earn around one-tenth of their domestic box office receipts when screened downunder. Nonetheless, as prevalent as this ‘rule’ has been in the industry, it has not been seriously tested. This article addresses the gap in both scholarship and business practices and uses the ‘10% rule’ as a starting point to discuss various facets of the relationship between the two markets. We measure the popularity of American films among Australian audiences as well as contrast the differences that emerge in terms of distribution and exhibition in these markets. The article compares box office revenues, screening counts, life length in theatres and release delay in both markets. In addition, we examine how Australian exhibitors and audiences differ from the US in terms of preference towards genre, distribution company and production origin. The discussion is informed by a large dataset of global film screenings from the Kinomatics Project in conjunction with box office data compiled by Rentrak. We find no support for the ‘10% rule’ but strong evidence that audience tastes as well as distribution and exhibition practices differ across regions.

KEYWORDS:

• 10% rule
• film market
• Hollywood
• Australia
• Kinomatics
• cultural tastes
• box office
• screenings
• film life
• release delay

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Vejune Zemaityte is a PhD Candidate at the School of Communication and Creative Arts at Deakin University in Melbourne, Australia. Her research explores spatial and temporal dimensions of international film distribution using a ‘big data’ collection of movie showtime information. Vejune's research interests include Digital Humanities, New Cinema History and Cultural Economics.

Deb Verhoeven is Associate Dean of Engagement and Innovation at the University of Technology Sydney (UTS). She is Director of the Kinomatics Project, a big cultural data research group.

Bronwyn Coate is a Lecturer in economics at the School of Economics, Finance and Marketing at RMIT University. Bronwyn's research has involved the application of quantitate modelling techniques to various aspects associated with the arts and creative industries. Recently Bronwyn's research has focused on the economics of film and media.

ORCID

Vejune Zemaityte http://orcid.org/0000-0001-9714-7903

Deb Verhoeven http://orcid.org/0000-0003-3680-3561

Bronwyn Coate http://orcid.org/0000-0002-9148-3751

Notes

1. For further information on the Kinomatics Global Showtime Dataset see: http://kinomatics.com/about/data-and-technology/

2. The exchange rate between Australia and the US has fallen by 27 cents throughout the period from 1 $A = 1.04 $US in December, 2012 to 1 $A = 0.77 $US in May, 2015 (Reserve Bank of Australia 2016).

3. We cross-checked the values of all extreme outliers with other sources such as Box Office Mojo and The Numbers (http://www.the-numbers.com/) and concluded that our information was correct. As they were not measurement errors, we could not justify excluding the outliers from the data. In addition, the removal would have greatly reduced the sample size.

4. A less conventional genre category ‘music/event’ was established for live concerts, performances and operas. The Metropolitan Opera performances that make up 69% of this category belong to a slightly different event cinema market with singular live HD transmissions at a certain time and higher priced admission.

5. No sample films were distributed by STXfilms or A24.