By James Manning

The company claims it has secured a team behind movies returning profits of 220% to 439%, and are ready to capitalise on Hollywood’s apparent content supply shortage, driven by the multi-billion dollar demands of streaming giants like Netflix, Disney and Apple.

“Reel House Productions will lead a new golden age in Australian cinema,” said Jay Grant, partner at Reel House Productions. In a pitch to investors, Grant said: “Technology is causing major disruption to the $68bn film and television business and our unique business model is set to capitalise on this trend, unlike any Australian production company has ever done before. The financial weight in the film industry has now shifted from cinema and broadcast television to online streaming.”

Jay Grant

Grant told Mediaweek his background is venture capital and the wealth management industry. “I got into the film industry by accident through a business connection with Costas Mandylor in Los Angeles. During a dinner we became intrigued with how the movie business works three and a half years ago.

“In that time we have done due diligence and met up with South Road Pictures in Dallas. We have been working on a model with them around how can a privately funded group have success in the industry. We have finally revealed our business model and are now taking it to market.”

The Reel House model looks good on paper, but is yet to be tested in Australia. Grant said the model they resemble most is low-budget horror film and TV specialist Blumhouse Productions. “We are talking about genre horror films with budgets capped at $3m. They have been extremely successful and that was a model we did a deep dive on.”

With regard to anyone operating in a similar fashion in Australia, Grant mentioned Eureka Productions. “They have a slate of television projects they are selling to multiple broadcasters.”

Reel House is not putting its hand out for grants. “We are testing the proposition that you don’t need to go to the Australian government to get seed money for productions, you can [instead] go to the Australian public. We want to test that there is a market there of people who will invest in getting a production company up and running if they feel it is a viable model with a pathway to profit.”

Grant noted that in the past film investment had been linked to tax write offs were people lose money to save on tax.

The market for the sale of the Reel House projects are the streaming platforms. “The streaming market is growing rapidly and it has already outgrown the box office worldwide and it will keep on growing.

“It amazes us that with Australia’s talent pool and reputation globally we don’t have an industry providing content to this hungry platform.

“If we can show there is a way to do this using private capital, we are hoping there will be others in the industry who follow in behind us.”

Talent associated with Reel House that has a track record include writer, producer, director King Hollis and Will Kaufman who made Jarhead 3, Daylight’s End, Sinners and Saints. “Will made Sinners and Saints about 10 years ago and stars Johnny Strong. He made it for $2m, and it looks like it grossed about $5m. However Will walked away from that film with about $60,000 in director’s fees.”

Grant said Kaufman and his colleagues have a list of about 10 similar movies made for $2m or less grossing similar amounts in the action, horror and thriller genres. Instead of giving these films over to the traditional theatrical distribution model, they will now go direct to streaming platforms.

The crowdfunding Reel House is after will be for share in the company, not individual projects.

We asked Grant about Reel House projections for an initial investment of $10,000. “In year two the investment should be worth around $13,000. We are telling people to stay with us for at least five years because in that time we will build a vault of content that we own which will give us balance sheet power.”

He stressed that none of the returns are guaranteed, there is risk and he urges buyer beware.

“If we hit our numbers though, we expect a tripling of value in the company over the first five years.”

Grant noted this is not unlike the original film studios did back in the early days of cinema. “Everything old is new again. It’s not a new model.”

Reel House will later consider episodic TV. “They can be a lot of time and effort with a lot if time in development. It is not part of our core business at this stage.”

Although the business model is not reliant on it, Grant said any regulation change about local content on streaming services wouldn’t be a bad thing for the business. “What would also help us would be a change to the regional incentives and the breaks that are given to productions in Australia.” He said it would be fairer if the tax offset was also available for non-cinematic release projects.

The Reel House investor pitch continued:

“We will fund, produce and distribute our own movies, cutting out the middle man, which saves vast sums of money. Reel House Productions will produce a slate of low budget, high quality movies using economies of scale during film production – i.e. sharing film sets, production equipment and crews; with only the actors needing to be swapped out. We will produce and sell a slate of six to eight movies on a rolling 12-month cycle using this business model, all based on genres proven to give high rates of return.

“Reel House Productions business model will share many similarities to horror genre specialists, Blumhouse Productions, which has achieved super-sized returns on very low budget films such as Paranormal Activity and Insidious. Blumhouse is famous for developing high quality films for 70-80% less than typical Hollywood studios with identical project parameters. Its breakout hit Paranormal Activity was made on a budget of $15,000 and grossed $194 million. While hits like this don’t happen every day, Reel House Productions’ team already has an enviable track record of making low budget, highly profitable movies.

Reel House Productions will host its equity crowdfunding raise through Birchal.com with investors able to own part of the company for as little as $200 and up to $10,000 for retail investors. Investors will receive ordinary shares in the company and also money can’t buy experiences such as exclusive film merchandise and memorabilia, extra roles, and VIP invitations to premieres, set visits, wrap parties and special cast and crew screenings.

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Top Photo: Reel House partners: Company director Geoff Moore, actor Tony Nikolakopoulos and venture capitalist and wealth manager Jay Grant

The eighth edition of Deloitte’s annual Media Consumer Survey continues an examination of how Australians are consuming different media and entertainment.

Here some edited highlights:

Streaming platforms and content choice exploding

The proliferation of content across over-the-top (OTT) services has continued over the past year. At the time of writing, there are more than 12 TV and movie services, as well as eight music streaming services, available in Australia.

Gamers have a choice of more than 12 platforms and subscription services across computer, console, and mobile devices. With further launches in Australia confirmed for the coming year, this number will continue to rise, leading to more distributed content if rights remain exclusive, or less unique content libraries if rights are shared across multiple services.

Half (50%) of subscription-video-on-demand (SVOD) subscribers say they now need more than one streaming service to access video content they are looking for – on average subscribing to one and a half paid video streaming services. As the number of available OTT content services grows, consumers will be forced to make hard choices across their preferred content providers, potentially leading to frustration as ‘choice’ transitions into ‘trade-off’.

Our quest for simplicity has set the scene for a potential new digital entertainment battleground – aggregation. We’re feeling the strain of the complex content environment, where 46% find it hard to know what content is on what service, and 75% want to be able to search for all content in one place.

Pay TV providers, telcos, and digital giants such as Amazon and Apple are perfectly positioned to evolve their existing value propositions and capitalise on the opportunity. Sixty-seven percent of respondents with a pay TV subscription also hold a subscription to a video streaming service and 23% of all respondents bundle OTT media devices such as Fetch and Telstra TV with their broadband services.

As the content landscape grows more complex, two divergent groups of consumers will likely emerge. Those with narrow consumption needs who will entrench relationships with their preferred provider, and those with distributed consumption needs who will see value in the role of an aggregator.

Audiences continue to grow more discerning in how their data is used. The push for greater transparency and increased data privacy raises the question of just how much information we are willing to exchange for a personalised experience and what role advertising can play in the content environment. There’s work to do in building consumer comfort levels with data sharing; 78% of respondents believe companies are not taking adequate steps to protect their personal data. The use of data for targeted advertising plays into this concern, although respondents had more general reservations about the presence of advertising in their video subscriptions.

Watching content ad-free is the most commonly valued attribute of SVOD, with 89% of respondents agreeing.

Podcasting and consumer listening habits

Podcasts have steadily grown in popularity and this year we explore media consumer listening habits for the first time.

Forty-four percent of all respondents identified themselves as podcast listeners, with Trailing and Leading Millennials the highest users (59% and 57% respectively). Alongside popularity in younger consumers, 67% of high income earners listen to podcasts. Those who engage tend to do so actively, where 47% of podcast listeners consume at least one episode each week, with 20% listening to three or more podcasts each week. It’s a format that relies heavily on word of mouth for discovery, with over half of listeners identifying friends and family, and social media in their top three ways to find new podcasts.

When it comes to genres, 36% of podcasters listen to news and current affair podcasts, making it the most popular, followed by comedy (28%). A quarter of listeners are tuning in to true crime – a genre synonymous with podcasting thanks to the success of podcasts such as Serial and The Teacher’s Pet. Across all age groups the strongest driver for listening to a particular podcast is to learn something new (39% of all listeners), particularly among Trailing Millennials (44%) and Xers (43%).

Spotlight on… news and magazines

This year sees a drop in the number of respondents owning newspaper and magazine subscriptions, now at 15% and 8% respectively compared to 17% and 11% last year. This appears to be driven by a continued reduction in Millennial readership from last year for both Trailing Millennials (7% this year down from 13%) and Leading Millennials (6% this year down from 18%).

Hard copies of both news and magazines remain resilient among subscribing readers – those willing to pay for a newspaper subscription still prefer the physical print version (59%) over the digital version (24%). This varies across age groups with Millennials open to both online and print (37% and 41% respectively) and Boomers preferring hard copy over digital (68% and 19% respectively).

Our reluctance to pay for news has stayed in line with last year’s data, with 64% of respondents again stating nothing would entice them to pay for news. This sentiment has held steady or increased slightly across most age groups. However, Trailing Millennials are more willing to pay for news than they were last year when 60% claimed nothing would entice them, compared to 47% this year.

In depth news analysis, brand trust, and unique content that can’t be accessed for free are the main drivers for willingness to pay.

Most subscribers have held their subscription for more than three years – 57% for newspaper and 55% for magazines. This has been consistent since 2015 (59% and 54% respectively) indicating publishers continue to rely on a consistently loyal base of subscribers.

This year, the proportion of respondents using social media as their primary news source has dropped to 15% from last year’s 17%. However, Leading Millennials are increasingly turning to social media for their news – 27% this year, up from 22% last year and 18% in 2017.

When over-the-top becomes OTT

Australians are spoiled for choice when it comes to OTT digital media and entertainment. Consumers can create their own tailored entertainment ecosystem through a collection of free-to-air catch-up TV, streaming video and music services, OTT set-top-boxes, and a number of new platforms integrating this complex assembly of subscriptions.

At the time of writing, there are more than 12 TV and movie and eight music streaming services available in Australia. There are also several new service launches in Australia announced for the upcoming year. This will continue to increase, leading to more distributed content if rights remain exclusive, or less unique content libraries if rights are shared across multiple providers. Sports content has always been distributed across different free-to-air and pay TV channels in Australia, and now we have the addition of OTT apps such as AFL Live and NRL Live Pass, as well as dedicated sports streaming apps such as Kayo. Gamers have the choice of more than 12 platforms and subscriptions services across console, computer, and mobile devices.

With this proliferation, consumers are enjoying a golden age of content availability. But are we approaching a tipping point? Will the vast choice become too much, and the ability to consolidate, streamline, and converge content become the new digital entertainment battleground?

All in one place to all over the place

For consumers, the landscape is fragmented, with content spread across an expanding variety of services. Households increasingly hold multiple subscriptions to access the content they want.

Half (50%) of SVOD subscriber respondents say they need more than one streaming service to access the video content they’re looking for, and on average they now subscribe to one and a half SVOD services. The original appeal of services such as Netflix or Spotify was boundless choice, all in one place. But the number of services has steadily increased, and as rights shift and new services launch, content is becoming even more dispersed.

This creates challenges for consumers in both experience and expense. Consumers are regularly moving between services, sometimes as holders of multiple subscriptions and sometimes as they switch one for another. For respondents who have cancelled or switched streaming services in the past, 19% have done so due to wanting content from another service. Multiple subscriptions means multiple apps, multiple devices, multiple bills. And the expense for consumers is mounting. For a household wanting Disney content for the kids, the latest seasons of Game of Thrones and Stranger Things, English Premier League soccer matches, and access to ad-free music and podcasts, this could mean paying upwards of $70 a month across multiple services. It’s a price tag not far from the pay TV prices of simpler days, where consumers could pay one provider to access packages of entertainment content. It’s also a model that could well see a resurgence as consumers once again seek convenience in both experience and pricing.

Download Deloitte’s Media Consumer Survey 2019 here.

The event will shine a light on the critical role of commercial free-to-air television news in the Australian community.

Free TV CEO Bridget Fair said: “Free TV broadcasters deliver over 25,000 hours of news and current affairs programming to Australian audiences every year. That is not something that is going to be replicated on multinational digital platforms. Now more than ever, trusted Australian news is essential to our community and our democracy and Free TV has a key role to play here.”

The event will include a panel discussion moderated by Seven Network’s Melissa Doyle.

The panel will include some of the leading news and current affairs TV executives in Australia:

Ross Dagan, Network Director of News Content, Network 10
Stella Lauri, Network News Director, WIN Television
Craig McPherson, Director of News and Public Affairs, Seven Network
Paul Patrick, Director of News and Current Affairs, PRIME 7
Darren Wick, National Director of News and Current Affairs, Nine Entertainment

The event will be co-hosted by Fair and the co-chairs of the Parliamentary Friends of Free TV Group, Senator Andrew Bragg and Susan Templeman MP.

Fair added: “Millions of people turn to commercial television news and current affairs each and every day.

“Each night, Free TV broadcasters deliver 66 live and local news broadcasts into 40 local markets around Australia. And every week, we produce and broadcast more than 486 hours of news and current affairs programming.

“Thirteen million Australians engage with commercial television news and current affairs programming every week. That’s over 6.5 million people every day,” she said.

“And that is just on linear TV services. Free TV members have also made significant investments in new ways to reach audiences online. In addition to reaching millions of people through their own news websites, the pages of Seven, Nine and 10 news have a combined total of more than four million Facebook followers.

“The investment we make every day of the year in content – and our focus on giving people live and local news when they need it – has given commercial TV news and current affairs a special and important role in our society,” Fair said.

“In regional areas, our members’ news and current affairs content has a special connection with their local communities, keeping them connected, up-to-date and informed.”

Media markets have been weak across the first quarter. SCA’s revenues were 8.5% adverse to the prior year in the quarter ended 30 September 2019, with declines in both audio and television segments. SCA believes that it has consolidated advertising share gains achieved in the prior corresponding period and is currently trading in line with media markets.

First quarter operating costs were $1m below the prior comparable period. This includes one-off restructuring costs of $1.5m related to the outsourcing of transmission services.

EBITDA for the first half is expected to be in the range of $60m to $68m, before adjustments for AASB16 (Leases).

As foreshadowed in SCA’s FY2019 results announcement, this range includes the above one-off restructuring costs of $1.5m and, compared to the prior comparable period, approximately $2m in incremental operating costs associated with outsourcing transmission and television playout services.

Depreciation for the first half is expected to be about $4m lower compared to the prior comparable period, and full year capex will be $5m to $7m lower than in FY19. These reductions are a direct result of the decisions to outsource transmission and television playout services.

Cost discipline remains a core focus, and a series of actions have been taken to mitigate full year costs in response to adverse market conditions. The majority of these savings will be realised in the second half.

Advertising markets remain short and volatile and SCA will continue to focus on maximising its market share while maintaining strict cost control across all divisions.

Ad revenue fell in all capital cities YOY:
Melbourne down 8.68% to $59.371 million
Sydney down 11.44% to $55.043 million
Brisbane down 6.70% lower at $28.938 million
Perth down 15.87% to $22.247 million
Adelaide down 9.39% to $15.832 million

CRA chief executive officer Joan Warner said: “The results were not unexpected given the challenging overarching economic influences and broader market conditions.

“In response to this challenging environment the industry pro-actively launched a marketing initiative in August, alongside major radio advertisers including ALDI, Qantas and Coles Liquor to remind businesses of the effectiveness of advertising and the benefits of maintaining investment in marketing to grow brand awareness and revenues.

“The December quarter leading into Christmas is usually the busiest, and we hope to see the market stabilise before returning to growth.”

The Deloitte figures report actual revenue received by metropolitan commercial radio stations and include all agency and direct revenue.

Paul Ridley, SEVP of sales & distribution, Australia, New Zealand and Japan, International, Fremantle, said: “Our incredible range of shows come from some of the best creative minds in the business. The quality of our content and the standard of our talent both in-front and behind the camera is very impressive, resulting in compelling stories from around the world that we’re confident SBS’ audiences will love.”

Peter Andrews, SBS head of network programming, said: “SBS is thrilled to bring this exceptional suite of programs to our platforms. These series represent a diverse mix of programming, and we look forward to sharing this content with Australian audiences.”

Dublin Murders

SBS will pick up a collection of new primetime dramas from Fremantle’s MIPCOM slate, including the psychological thriller, Dublin Murders (8 x 60’). Adapted from Tana French’s first two novels in the Dublin Murder Squad crime series, the show is from Fremantle’s Euston Films and is written and created by Sarah Phelps (And Then There Were None, The Casual Vacancy). The series recently launched on the BBC in the UK, with The Telegraph calling it “an addictive delight”. The channel will also launch Euston Films’ original new crime series, Baghdad Central (6 x 60’), written and created by the BAFTA-winning writer Stephen Butchard and based on the novel by Elliott Colla.

Additionally, the deal includes the new crime dramas, Face to Face (8 x 30’), directed by award-winning director Christoffer Boe, and Seizure (8 x 60’) which follows the story of two troubled detectives who become entangled in the biggest and most inexplicable case of their lives. Both series are produced by Fremantle’s Scandi drama creators, Miso Film.

Audiences will also get to see the supernatural series, The Last Wave (6 x 60’) produced by Fremantle’s acclaimed scripted producers Kwai; and the drama The Attaché (5 x 60’) from Fremantle’s Israeli production arm Abot Hameiri. This is the first international deal for the series which tells the story of Avshalom, an Israeli Jew of Moroccan descent whose life is thrown into turmoil when his wife’s gets the job opportunity of a lifetime as an attaché to the Israeli embassy in Paris.

Finally, SBS have also acquired a selection of Fremantle’s critically acclaimed titles such as, American Gods (S1: 8 x 60’), the mythological series adapted from Neil Gaiman’s bestselling and award-winning novel; Exit (6 x 60’) the contemporary Norwegian drama inspired by the true story of four highly successful, real-life investors in Oslo; Darkness: Those Who Kill (8 x 60’), Miso Film’s tense psychological thriller and the epic documentary series Expedition with Steve Backshall (10 x 60’), from Wendy Darke’s natural history production company True to Nature, which follows adventurist Steve Backshall as he attempts to complete a series of world firsts.

By Trent Thomas

While no film has gotten close to the $7.43m posted by Joker, there are two new films that have managed to break into the top five in their first week in theatres in Hustlers and Gemini Man. 

The two films to drop out of the top five this week was The Angry Birds Movie 2 (five weeks, $9.27m), and Dora and The Lost City of Gold (four weeks, $6.04m) which both slip down as the holiday period comes to an end.

Despite Joker’s continued success and two new releases making waves the total box office in Australia this past weekend declined 13% after making $18.55m.

#1 Joker $7.43m

Only dropping 24% from its opening weekend the first stand-alone Joker film made an average of $13,751 on 541 screens which were both the highest totals from the weekend as it grossed more than double any other film.

#2 Hustlers $2.81m

The crime drama written and directed by Lorene Scafaria, based on a New York magazine’s 2015 article stars Constance Wu, Jennifer Lopez, Julia Stiles, Keke Palmer, Lili Reinhart, Lizzo, and Cardi B and follows a crew of strippers in New York City who begin to steal money by drugging stock traders and CEOs who visit their club, then running up their credit cards. In its first week of release, the film made an average of $7,662 on 368 screens.

#3 Gemini Man $1.51m

The Sci-Fi flick starring Will Smith and.. Will Smith, debuts in third spot and delivered the lowest average among films in the box office top five making $4,091 on 370 screens.

#4 Ride Like a Girl $1.30m

The Australian made film has now made it three weeks in a row in the top five as it brings its overall total to $7.56m, after making an average of $4,521 on 289 screens.

#5 Abominable $1.14m

The latest film by Dreamworks Animations has stayed in the top five after four weeks totaling $8.29m. The film declined 21% from the previous weekend which is the smallest decline from any film in the top 20 this week, averaging $4,183 on 274 screens.

Monday Week 42 2019

By James Manning

• Seven News 1,009,000/976,000
• Nine News 812,000/884,000
• A Current Affair 801,000
• ABC News 674,000
• 7.30 609,000
• The Project 288,000/525,000
• 10 News First 335,000
• The Drum 151,000

SBS World News 141,000

Breakfast TV

• Sunrise 269,000
• Today 187,000

Seven

Home and Away averaged 614,000 and 607,000 over the past two weeks and then started week 42 on 627,000.

Couples talking about their sex lives at a dinner party sounds reminiscent of Married at First Sight. However Bride and Prejudice isn’t attracting too many of that show’s audience with 434,000 last night after 430,000 was the best of three episodes screened last week.

The Rookie was then on 299,000 followed by S.W.A.T. on 212,000.

Nine

A Current Affair has averaged 706,000 and 664,000 over the past two weeks. It’s new week started on 801,000. Last night’s episode covered a lot of ground from another Tziporah Malkah transformation to the loss of a carers benefit and then teeth straightening kits.

The Block is into veranda week, but first last night the Blockheads reviewed each other’s studios and Mitch and Mark weren’t impressed by the winners’ work. The Monday episode did 970,000 after 978,000 last week.

Love Island Australia then did 342,000 after the launch on Monday last week had 456,000 watching.

10

The channel had a big night and is enjoying a big Q4. 10 was narrowly behind Nine in primary share last night. It beat Seven again in primary share and only trailed by 0.2 of a point in combined channel share. Remember 10 has three channels to Seven’s five.

10 recorded its biggest Monday network and primary share since January 2018.

The Project featured Charles Firth from The Chaser and James Schloeffel from The Shovel and their plan to bid for Sky News. The 7pm half hour was back over half a million with 525,000.

The Masked Singer started Finals Week, not to be confused with an actual Final, with Kate Ceberano revealed as The Lion. The episode reveal was on 1.155m with 905,000 watching the episode prior to that. Tonight on the show there will be a double unmasking.

Mick, Celia and Urzila joined Ed and Sam on Have You Been Paying Attention? and the audience responded big time with 946,000 tuning in, the biggest crowd ever watching the hit format. The national audience was an even more impressive 1.280m.

ABC

Former Media Watch host and QC Stuart Littlemore introduced Australian Story. The episode was about the ongoing mystery surrounding an unidentified body found on an Adelaide beach and how DNA testing might uncover the truth. The episode did 662,000 after 558,000 a week ago.

Reporter Sean Rubinsztein-Dunlop then presented a Four Corners-Background Briefing investigation that uncovered extensive collaborations between Australian universities and Chinese entities involved in Beijing’s increasingly global surveillance apparatus. The audience was 494,000 after 542,000 a week ago.

Media Watch featured Alan Jones and Kerri-Anne Kennerley and then rounded up the media who failed to correctly predict the new MasterChef judges. The episode did 429,000.

Hamish Macdonald then managed to find time to host an episode of Q&A with 306,000 watching.

SBS

The third episode of How the Victorians Built Britain did 219,000 at 7.30pm.

24 Hours in Emergency then did 196,000 followed by 24 Hours in Police Custody on 124,000.