It’s So Pathetic You Want To Cry
Pleiades gave me the heads up on the Hansard transcript on the Senate Estimates Committee asking questions to ScrOz CEO Dr. Ruth Harley.
There is also a David Tiley article about this on ScreenHub which is worth a read if you’re a member. If you are not, you won’t be able to read it so I thought I would share this pertinent little section:
Senator Birmingham, a Liberal, came onto the canvas for round one. “I understand you are conducting an enquiry into the movie, Two Fists, One Heart? Is that correct?” He was corrected on that supposition with a quick tap on the sternum. “We have had an internal review of it”, said Harley. “I would not describe it as an inquiry”.
Instead, it was “an occasion where one board member at a board meeting said, ‘Are there any learnings we can take from this?’ It was a relatively low-level inquiry.”
Ross Matthews, Head of Production Investment, was quickly dragged into the fray, to establish that the budget was around $8m, that the agency put in $4m, it was one of the last 10ba projects, and Disney was the distributor. Neither Matthews nor Harley could remember the exact gross – perhaps they have repressed it – but Fiona Cameron, the Executive Director, Strategy and Operations, extracted the figure of $295,000 from her notes.
From an industry point of view, this situation is important because the audience response was heartbreaking for all concerned, but also because it was backed by Disney, who provided much more clout than the average independent distributor.
I wanted to know why Senator Birmingham was inspired to ask the question. Being an opposition Senator, he answered the telephone.
“I’d heard a few murmurings around the place about Screen Australia’s reaction to the investment in that movie, and I thought it was worthwhile to explore and see if it stood out as a particular concern for the agency.”
“Obviously it was a concern for at least one member of the Board, and certainly it was a disappointment for them, though no-one thought it was an extraordinary disappointment, if we can put it in those terms.”
“One wonders whether having a distribution deal provides maybe a little too much comfort at the outset. And obviously it has shown that in and of themselves, they don’t generate great results.”
With Senator Birmingham excited about his role as industry analyst, the committee spent several questions working out when the picture was released. It obviously didn’t stick in anyone’s mind as a result of the vast advertising blitz, because there wasn’t one.
Eventually, Birmingham got to the point. “What were the learnings of that investment?” he asked, using her own language to dance in under her guard.
Harley chose a veritable flurry of blocking words in reply. “It was one of those things where everything went almost right, but ‘almost right’ in the film business is not quite right enough. It is very unforgiving and very competitive. In the end everybody concluded that the film was good, but good is not quite enough to be competitive in this market. The release strategy was good, but good is not quite enough to be competitive in this market. Everybody was very disappointed.”
Fists up, wary, Birmingham wove past the usual confusion between cinema gross and return on investment, to establish that actual returns would not pay for a boxer’s shoelaces. Harley agreed to provide several years of data on the relationship between the agency investment and the ultimate loss for a range of projects.
He wanted to know if there are changes as a result of these “learnings”. Yes, said Harley, “There have been changes instigated. I would not specifically say they were as a result of that particular incident, but there is a general trend of change. The general trend of change is to be more demanding of scripts before they go into production and to be more collegial with the distributors, to partner with them in a more detailed sense. You will appreciate that Disney does regard itself as very competent indeed in the business.”
And there is the rub of the matter. Disney does know how to promote a film, it was made as a commercial venture, and it was a genre piece with a clear audience.
The committee went on to discuss Mao’s Last Dancer, made for $28.5m, with $4m from Screen Australia, and estimated to finally return $12-14m in the Australian market. So far, it has no overseas release, and some territories remain unsold.
In amongst the relieving flurry of mutual congratulations about Samson & Delilah, Harley described $1m in ticket sales as “a good figure for an art house film—for a specialist film.”
Ross Matthews stepped onto the canvas to deal with a statistical question about investments. Senator Birmingham obviously knows about industry disquiet about investment levels, but allowed himself to be brought undone. He asked how many projects Screen Australia has committed to in the last twelve months, and Matthews took him up directly.
“Mr Matthews—I have the figures for 2008-09 and I have the figures for 2009 to present, but I have not got the split.
Senator BIRMINGHAM—That would be fine.
Mr Matthews—Do you want a total across all the genres?
Senator BIRMINGHAM—Yes. Just a headline total would be fine.”He had missed the point. The issue is the collapse in feature investments – what Matthews has called “a genre”. Matthews didn’t deceive him, but he did seem to misunderstand.
“Mr Matthews—For 2008-09 Screen Australia committed $64.1 million to 89 new film and television projects, including docs, with a total production value of more than $212 million. That was for 2008-09. So far this financial year we have committed to 29 projects, for a total production value of $138 million.
Senator BIRMINGHAM—With a Screen Australia investment of?
Mr Matthews—It is $29 million, generating $138 million worth of production.
Senator BIRMINGHAM—There is $29 million investment in how many projects?
Mr Matthews—In how many projects? Twenty projects.
Senator BIRMINGHAM—Twenty.
Mr Matthews—Yes. Twenty projects across the genres.”The committee went on to ascertain the staggering fact that the rising dollar has indeed put the kibosh on Australia’s ability to attract footloose productions.
Senator Ludlum is a Greens representative from Western Australia. After the committee heard a weary but rosy picture of the transition, he ascertained from Dr Harley that combined staff totals were 190, the number is down to 144, with approximately 41 voluntary redundancies, and one involuntary redundancy, for a saving of $6m. The rest went as a result of “atttrition”, a term which referred to resignation and not startling outbursts of violence.
Senator Ludlum then wanted a breakdown of senior salaries before and after the merger. Given that internal and external experts – including ours – have been unable to determine the true loss in documentary production over the last two years, we suspect this is rather more onerous a request than the chirpy Ludlum thinks. We can guess that he doesn’t care.
I asked Senator Ludlum why he was taking such an interest in these matters. He said, “We have pretty broad consultation in the sector in the leadup to the Estimates. I let folk know that the door is open for questions that they might want to raise.”
“We will normally get thirty or forty tips across the portfolios I cover (eight altogether).”
There you have it.
Evidently Ross Matthews had a rough day at the office – screw him, it couldn’t have happened to a more deserving … – but beside that salient point, I note that both Dr. Harley and Ross Matthews are cornered in an uncomfortable position in trying to explain away the apparent failures of our so-called film industry.
I could say a lot about all this but astute readers would note I’ve already said everything that I can about why Screen Australia and its ventures are headed for failure; and that failure equates to a gross churning of budget money that is going to return $290,000 on $4million investments of government money. I guess the short answer is that the global outlook on film markets and productions have changed grossly since the early 1990s when the Australian Film Industry was last competitive, and that Screen Australia itself is proceeding as if the GFC hasn’t happened. That’s two adjustments they haven’t made, and as far as we can tell, they’re still making the kinds of mistakes that led to the demise of the FFC organ.
The rest of David Tiley’s article goes into an account of how ScrOz went with PCs ins spite of 2 separate reports that recommended macs over PCs. It’s entirely laughable if that too weren’t so tragic:
Scott Ludlum then moved on to ask about the decision to replace the Macintosh computers in Screen Australia with PCs – an issue which has annoyed a number of staff who are proficient on Macs, and its software.
He is sensitised to the issue because he has a previous history as a web designer. You can guess the platform. “That caught my eye”, he explained, “because I am a bit of a tech geek myself, and partly because there did seem to be a bit more to it.”
There was indeed, as he soon discovered, and the exchange is worth quoting at length. [PwC in this exchange refers to Price Waterhouse Coopers, a consultancy company].
“Dr Harley—One thing I can tell you, Senator, is there are a lot fewer managers.
Senator LUDLAM—There are a lot fewer managers? Okay. I guess those numbers will come out in the wash. Can we go to software costs? I gather there are a couple of different platforms and that would be one of the more difficult things to coordinate between the three organisations as you merged them. You commissioned a number of reports that recommended adopting a Mac platform over a PC. Is that the case?
Dr Harley—I asked my staff to form a view, and their view was Mac. I was concerned that that was not a very close look at the issues. We then commissioned PWC to do a second report. They also recommended Mac. I also took the view that they had not looked at the issues as thoroughly as I would like and I took my own view that we would move to PC.
Senator LUDLAM—Was the first review, the staff review, just anecdotes and talking to people at the coffee machine, or did you commission a study?
Dr Harley—No.
Senator LUDLAM—Sorry, I am not trying to be—
Dr Harley—The IT team wrote a report.
Senator LUDLAM—Are you able to table those two reports—the staff one and the PwC one—for the committee?
Dr Harley—I am sure I am. I cannot see why not.
Senator LUDLAM—You can check that if you need to. Having asked your IT experts within the organisation and an external consultant, on what basis did you form the view that both of those reports should
be set aside?
Dr Harley—The staff report was done in a very short time frame, and when I read it I did not think it canvassed the issues fully. It will probably interest you to know that the head of IT has subsequently changed his mind and thinks that the PC platform is the right answer. When I read the PwC report—and a number of us read it—I thought that, although they had identified the issues, they had not weighted them correctly. One of the things they had put in there as if it were equal to everything else was the fact that three of our current staff
are particularly adept at Mac and so we did not have an installed PC talent base, if you like. Of course, that is not a very difficult thing to change. I do not rate that as a very significant problem to overcome.
Senator LUDLAM—Did you undertake any sort of formal cost-benefit analysis or anything to sit next to these figures?
Dr Harley—Yes.
Senator LUDLAM—Would you be able to table that as well please?
Dr Harley—It is in the document.
Senator LUDLAM—Which document?
Dr Harley—The PwC document.
Senator LUDLAM—You said PwC came to the view that the Mac platform was most appropriate.
Dr Harley—They did.
Senator LUDLAM—You then came to a different view. Is there anything that would substantiate that for us?
Dr Harley—Yes, I can write something to substantiate that view.
Senator LUDLAM—But there is not something written at the moment? Otherwise it makes it sound like it was just a view that was formed out of thin air.
Dr Harley—It was not a view formed out of thin air. I spent some months thinking about it. As you rightly observed, it is one of the more difficult issues. In fact, neither study made clear to me until later in the piece that there never was a Mac or PC option; there was a PC option or a mixed Mac-PC option. It was some time before I identified that there never was a pure Mac option, because our finance, HR and record-keeping systems are all PC based. That is one of the difficulties we have because the PC-Mac interface is not smooth.
Senator LUDLAM—Was the chair, Glen Boreham, involved or a party to that decision making?
Dr Harley—No, he was not, but I did ring him and ask if I could use one of his senior staff to help me think through the issues.
Senator LUDLAM—You would be aware obviously that he was the Managing Director of IBM.
Dr Harley—He is still the Managing Director of IBM. Yes, I am aware of that.
Senator LUDLAM—His views directly or indirectly were not important in forming that third opinion?
Dr Harley—That is correct.”
I should say here that Dr Glen Boreham is Managing Director of IBM BM Australia and New Zealand. His company is no longer involved in the manufacture of personal computers, or software for them.
By then, the committee had been meeting for more than twelve hours, and Dr Harley had been subjected to a long run of questions of detail, much of which came from a superficial understanding of the sector.
The question of Mac v PC was taken up by Ross Pearson, the Chief Financial Officer of Screen Australia, who was “actually leading the project.”
Again, the whole exchange is illuminating.
“Mr Pearson- …. There were three basic considerations that particularly moved our decision. One was a strategic aspect. We had our main corporate applications all running on PC servers and to then run a Mac desktop you would have to have translation software, which is slow, inefficient and costly.
Secondly, we did try to identify other corporate Mac-using organisations but were not able to identify any.
Certainly, our main stakeholders such as DEWHA and the Department of Finance all work on a PC basis and we have difficulty at times communicating and file-swapping with them because of the difference in platforms. The other issue is one of risk. We formed the view that we were inevitably heading into a smaller resource base, because Macs are extremely useful for image and data manipulation but not for corporate applications. So the talent pool on which we could call for support would be smaller and smaller, as opposed to having a much wider pool for PC applications.”
Senator Ludlum told me that “The sense that I got was that a genuine attempt to do some due diligence on the platforms that would work best was done, and for some reasons that was set aside. And I don’t believe that any counter-factual document was produced. The decisions seemed to arise as a result of a thought process that contradicted the due diligence attempts. And that was odd.”
“I look forward to reading the material that we requested to be put on notice.”
UPDATE: Now when I posted this article earlier this evening I didn’t go into the Mac versus PC thing because what Dr. Harley was saying seemed to be just about what I would expect Dr. Harley to say in front of a Senate Committee to justify a bad call – and let’s not make any bones about it. If you’re in the creative industry, a Mac is de rigeur even if the accounting department is running entirely on PCs. Dr, Harley is being more than disingenuous when she says there was only a Mac-PC hybrid option or a full PC option. You go with Macs as much as you can afford.
Even PWC (a big accounting firm) told her to go with Macs. To have so willfully picked PCs is exactly the kind of bad call, bad judgment, bad decision-making procedure and process that characterises the Australian Film bureaucracy culture. So I shrugged it off. I mean, what does it look like, but a case of ‘goes to character’.
Pleiades then pointed out to me the extreme lack of probity in the process whereby having had 2 reports recommending the Macs from both within and without the organisation, Dr. Harley ignored them was noteworthy. Dr. Harley went and talked to somebody at IBM to get some additional input and came to her conclusion that all-PCs would be the way to go. That’s really weird. Why would you go talk to the head of IBM if but to prepare an alibi of doing one’s own research in order to justify the conclusion you want to justify. At least, that one ‘goes to motive’.
She has no documentation of the process. So it’s a little like she hid the weapon. But here we are thinking, “what the hell was she thinking?” Fortunately she can offer to write it down for us, she told the Senate Committee. Oh really now, Dr. Harley? You don’t say!
*Ugh*
I don’t know how to explain it but I just don’t expect better judgment and actions from these people, whereas more objective people such as Pleiades and others see this as an obvious problem in how Screen Australia functions – and I have to agree with them. This is plain lousy; but if you’re me writing this blog that is partially about the Australian Film Industry by dint of me being *in* it then I have to confess my expectations are so low that probity just doesn’t enter into my view of these people. I fully expect them to make crappy decisions. I base my low expectation on their past performance, and this is just like one of those crappy decisions they’ve made just like a million before this decision.
That the Senate is only finding out now, just how crappy the people they’ve got running ScrOz is a bit sad. Had previous governments – both Labor and Coalition – bothered to think through the massive problems facing the Australian Film Industry more properly, there is no way they would have come up with Screen Australia as it is currently mal-functioning, as their panacea.
Lynden Barber’s Perspective
Dennis out there sent this heads up. We just want to draw your attention to this article here.
Overall Australian produced feature films earned $35.5 million or only 3.8 per cent of the total domestic box office in 2008, a fall from 4 per cent the previous year and below the 10-year average of 4.4 per cent. And most of that sum was taken up by earnings of a single film: Baz Luhrmann’s Australia, a US$130 million production bankrolled by Hollywood studio 20th Century Fox and the Australian tax payer, and hyped to be better than the Second Coming.
Since then things have improved — they could hardly have got worse without a total collapse. The global financial crash has seen increased cinema audiences worldwide and a more diverse slate of local films has seen a number hailed as box office successes. These include the Paul Hogan and Shane “Kenny” Jacobson comedy Charlie and Boots ($3.6 million and still going) and to everyone’s surprise, Warwick Thornton’s small-scale aboriginal drama Samson & Delilah, which earned nearly $3.17 despite taking an unflinching view of the aimless life of a petrol sniffer on the run from the law.
Last week Mao’s Last Dancer, based on the bestselling biography of Chinese expatriate ballet dancer Li Cunxin, brought the strongest news yet for the beleaguered local film industry. It had earned $3.32 million by the end of its opening weekend (once preview screenings were added). As its distributor was quick to point out, the film could also boast the fifth highest ever opening-day earnings for an Australian film — and even though that figure isn’t inflation-adjusted, it’s still an impressive result. Made for $25 million, the film needs to keep going strongly and do well in overseas markets to have a chance of earning back its production cost, but the result so far augurs well.
Now here’s the rub: Mao’s Last Dancer is no masterpiece. Though hardly a bad film by any measure, the film has struck several commentators — myself included — as somewhat lackadaisically directed by the veteran Bruce Beresford (who has delivered far stronger work in the past including Breaker Morant). For the first half the film plods on dutifully through Li Cunxin’s early life story and arrival in the US, only gaining serious traction as a drama around the mid-way point, when Li decides to defect.
The dance sequences are also curious: Chi Cao, who plays the adult Li, is a superb professional dancer who also acts perfectly adequately. Yet to compare the dance sequences — where a static camera is placed in the audience — with the elaborately photographed choreography of Michael Powell and Emeric Pressburger’s classic 1948 ballet film, The Red Shoes, is to get a sense of how great these sequences might have been.
Look at Luhrmann’s Australia and the automatic equation of strong box office with quality looks even more suspect. The problem with most Australian discussions of box office is that they’ve been focussed on how to make “better films”, usually by spending more money on script development.
Time to own up: some of the best films don’t get the sizeable audiences they deserve (last year’s The Black Balloon among them), and many of those that do are mediocre or worse. Due to the policy of “front-end loading” (ie get the audience in quick), major US movies are heavily marketed to the point where they can set turnstiles spinning on opening weekend before the bad word of mouth sets in. The production of rubbish and mediocrity is no impediment to success.
We’re quick to recognise Hollywood hits don’t always equate to strong filmmaking — so why not with Australian films? Baz’s recent camp adventure may have been an artistic failure but it entertained many ordinary Australians. Why? I’d suggest any big budgeter that wallows in Australiana seems to hit an automatic chord. Look at The Man From Snowy River (critics sniffed, the public flocked). Or Crocodile Dundee I and II — the first had charm, the second was lame but that didn’t stop it earning a motzah.
Even Strictly Ballroom, which many seem to now accept as a cinematic masterpiece, is not that good a film, I’d argue — energetic and sparkly, sure, but also corny, predictable and let down by a male lead with the acting weight of a sequined cummerbund.
Hit films are not just a luxury but a necessity for any local film industry to prosper – the veteran producer Anthony Buckley likes to say that there’s nothing wrong with the local film industry that a hit film couldn’t solve. An industry that depends on public funding needs to demonstrate to the politicians and especially the taxpayers that their endeavours are appreciated by the ordinary Joe and Josephine.
This is not just a pragmatic need but I’d suggest a moral duty. No middle class art film lover — and the writer includes himself — should feel complacent about his or her passion for fine local films being kept alive by the drip-feed of tax dollars.
Yes. Screw the funding models and the agencies and the guidelines that produce an endless stream of films your average Australian punter reacts to as if it were radioactive. Seriously, stop giving these film bureaucrats money for their mortgages. I mean, it’s show biz, not show art. When are we going to be allowed to get on with the biz part?
