The ACCC has authorised Independent Cinemas Australia (ICA), and its current and future independent cinema members, to share information and collectively bargain with film distributors on the terms and conditions of film licensing agreements.
“Authorisation is likely to benefit the public as it should reduce negotiation costs for independent cinemas and distributors who participate,” ACCC Commissioner Roger Featherston commented “Any cost reductions and improved terms from collective bargaining may help the viability of small cinemas, and allow them to reinvest into their cinemas, creating a better experience for cinema-goers.”
Mr. Featherston explained that collective bargaining will also assist smaller cinemas in negotiating film season length and session times that are more appropriate for local demand. This may result in a greater variety of films being shown, providing greater film diversity and choice for local consumers. Featherstone added that the ACCC took submissions from a wide range of cinemas, film distributors and other interested parties, conducting two rounds of consultation, publishing a draft determination, and holding a pre-decision conference. While there were a number of submissions in support, film distributors raised concerns about cinemas sharing information and the possibility that they would insist on the same outcome for all cinemas.
“The information sharing component is not likely to harm competition. Independent cinemas face competition from large chains, and this authorisation will not override any confidentiality arrangements protecting distributors’ commercially sensitive information,” Mr. Featherston commented “With the film industry subject to changing technology and consumer preferences, there is some uncertainty about the impact of authorisation on the industry. If ICA seek reauthorisation in 2023, the ACCC will test the evidence and assess whether the expected benefits outweigh any detriments,”
Featherston pointed out that authorisation is granted for five years, rather than the 10-year period sought.