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.