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The Birth of Matchbox Pictures

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The truth about making Aussie TV drama

PENNY Chapman is a co-founder of Australian production company Matchbox
Pictures. Below is a transcript of her speech yesterday morning at the Currency’s
Arts and Public Life breakfast.

November 2007. I’m drinking tea in Tony Ayres’ and Michael McMahon’s hotel room
at the Screen Producer’s Association Conference on the Gold Coast. Tony and
Michael wander back and forth neatly packing – I notice how they respect their
clothes. I’d have jammed mine in. We’re revving each other up, as we love to do,
with our exciting ideas for future projects and our old mantra, god we must find
something to do together. We’re old friends. I adore them.

But there’s something else in the room. We’ve each reached a crisis point. The
bravura is beginning to look a bit wan. We look at each other and say “Oh for God’s
sake let’s stop mucking about and do this”. “This” is a commitment we’ve danced
around but never dared make.

In 2007 Michael and Tony ran Big And Little Films out of Melbourne and I ran
Chapman Pictures out of Sydney. Variously, we’d made award winning and high
rating dramas and documentaries. Some people most likely regarded us as successful
producers. Really, despite working like maniacs, we were just staying afloat.

The previous couple of years had been pretty clarifying. The local commercial
television market only wanted reality shows. ABC’s drama slate was disgracefully
small. Ahead of us lay a splintered market of small poorly funded niche platforms.
My forays into the brave new world of online content had revealed no money in it. I’d
just sat through a presentation at the SPAA Conference on The Long Tail revenue
model that promised, for an undercapitalised indie producer like me, a lingering
demise.

A few years earlier, Michael and I had been involved in a Screen Australia venture
aimed at building better survival skills among screen producers. One of the things
this splendid program encouraged was joint enterprises or strategic alliances of
likeminded producers. We watched one take off and then collapse. I tried another
with a couple of terrific producers – a women’s erotica franchise that developed a
documentary series on the history of sex. Called 21st Century Vixen, it was enormous
fun and had good potential if you wanted to commit your life to that sort of
programming, but in truth it was always going to be something we did on the side.

Now though, the time had come to do this thing properly and doing it with Tony and
Michael made enormous sense. We believed we had the capacity to be both honest
and supportive with each other in good and bad times.

We invited producers Helen Bowden, known to Tony and Michael, and Helen
Panckhurst, with whom I’d worked, to join us. We asked Maureen Barron to
moderate an intensive day of marriage broking, so that we could all ask the
important questions – what we wanted from this and what we were prepared to
commit to in the getting it. We were clear about two things: we wanted to make
money and we wanted to make programmes we could be proud of. So we made some
undertakings to each other. We would open up our program ideas to interrogation by
the group (applying the blow torch, we called it) and we would not shirk from letting
a loved idea go if it didn’t have a strong market or add excellence to our brand.

At the end of that important day, we agreed to get engaged – to form an umbrella
entity under which each of our companies would operate. We would share operating
costs and revenues. And we would find ourselves a name. This was our first creative
test as a group – some hilarious names were offered up – Compendium,
Compendious, Motherlode, Maniac (it’s certainly how I feel, said Tony, but might be
too real) and then as we got sillier, The Whole Enchilada. Finally Sophie Miller, who
works with us, came up with the name Matchbox.

Then Screen Australia did more excellent things and invested some seed funding that
enabled us to build a bigger development slate and expand our team of writers.

I was in development with a number of programs including My Place, the
documentaries Sex an Unnatural History and Leaky Boat and with Helen Panckhurst
and Aaron Fa’aoso, a crime drama set in the Torres Strait. Michael and Tony were
completing a number of projects and Helen Bowden bowled into the office one
morning raving about a new novel called The Slap. Tony and Michael rang their
friend Christos Tsiolkas to talk about it.

Then one afternoon, on a plane from Melbourne, I ran into David Marr’s brother in
law Ken Baxter, of TFG International. Perhaps this was the corporate adviser we were looking for. Indeed he was, and his excellent associate John Balassis came on
board as our consultant. It didn’t take him long to lob the depth charge – If you don’t
properly merge you’re just fooling yourselves. We took several big breaths, struggled
our way through shareholders agreements and at the beginning of 2010, formally
merged. And John came onto our board. I am sure he considered us the biggest
bunch of corporate adolescents he’d ever come across but this was countered by the
fact we were in the amusement business.

None more amusing than a production Tony and Michael were completing in 2009 –
a comedy musical called Bogan Pride. Created by and starring Rebel Wilson, it was
really silly and very funny – about an obese girl who enters a dance competition to
raise money for her mother’s stomach stapling operation. It proved to be a very
eccentric calling card. Michael Edelstein, new Head of International Production at
NBC Univeral, was in Australia later that year, had seen Bogan Pride, thought it a
very individual and charming piece, and asked to meet Tony. Tony trotted into the
meeting armed with a bunch of fliers with our production and development slate and
at the end of the meeting Michael said, I think we want to buy you. Two nights later
we were all in a private dining room in Sydney with the NBCU team. At the end of
dinner, when the NBCU people had left, we all looked at each other and said “Shit”.
This kind of proposal we hoped might come 5 years down the track when we were
established and worth a lot more. Just when we were all getting to feel our way
forward as the Matchbox team, now we were being asked to embrace a much bigger
organisation with a quite different culture. And what did this do to our position in an
extremely nationalistic film and television industry where our Australian identity
might be called into question?

Two things were important in negotiating our way forward with NBCU. The first was
that we retain our editorial right to pick and choose our programs. The second was
that NBCU have a first and last option to internationally distribute our programming
so ensuring that we get best market price for our product.

What we have had to contend with on the governance front, with all it’s strict
compliance issues, has been well and truly outweighed by some big pluses – NBCU’s
capital investment has made a significant difference to the scale and verve in our
development slate; its people are really good eggs; the other companies owned or
part owned by NBCU, like Carnival Pictures (the makers of Downton Abbey) and
Working Title Television are simply lovely people whom we want to work with
(already one of them is in negotiations for the American remake of one of our recent
dramas); NBCU owns very strong US cable channels like SciFi and Bravo, to whom
we are already pitching ideas; our market access has opened up significantly; we
have a relationship with a distributor who wants us to succeed; our international
market intelligence has improved out of sight; and, most encouraging, NBCU is a
company which values originality and individuality.

That said, the more things change and all of that. What we soon discovered when we
set up Matchbox was that some challenges don’t alter with size.

One incentive for setting up the company was that, we all agreed, the peaks and
troughs of production, whereby a year of frantic production is followed by 18 months
of gruelling, impoverishing development, would be a thing of the past. Wrong. In 18
months over 2010-11, Matchbox put through $29m worth of production – The Slap,
The Straits, My Place, Sex An Unnatural History and Leaky Boat. Then it all stopped.
We’d all been buried in those production. We hurled ourselves frantically back into
development. Oops. Our business plan (god how I hate them) was lurching all over
the place. What happened to a beautifully orchestrated development and production
cycle?

We went in search of a Managing Director who would pull us all into line. We found
it in the splendid Chris Oliver-Taylor who was Deputy to the Director of Television at
the ABC and running business and corporate operations there. A man who looks like
he’s just left school, he is the nicest person we know and one of the brightest. He’s
the strategist we badly needed and he’s also a saint – dealing with 5 founding
directors who are hard working but each eccentric in our own way, is no mean feat.
He has reorganised us, established regular communications with our market,
expanded our factual content by employing two brilliant young women to develop in
that area and he calmly manages the day to day work with NBCU. “Beat us up” we
eagerly say like a quintet of bondage slaves.

The other challenge for us is that, in our past lives, we’ve all been mostly public
broadcaster animals. Apart from a skirmish with Network Ten called The Cooks in
2003, most of my work, and that of the other directors, has been with the ABC and
SBS – and programs like Brides of Christ, The Leaving of Liverpool and Blue Murder
were all agenda setting in their way. Kerry Packer is said to have called his
programmer the day after Brides of Christ debuted and asked “Did we pass on that
nun shit?” whereupon conversations proceeded with the production company to
whom I had sold the rights about Nine doing a follow up series on the show, a
proposition quickly torpedoed by the ABC.

We love working with the ABC and, when it has the wherewithal, SBS. No one but
SBS would have commissioned RAN: Remote Area Nurse and entertained the idea of
a crew camped out for 14 weeks on an island 800 meters wide and one and a quarter
kilometres long. A crew which had agreed to give up the grog for 14 weeks no less.
Graeme Blundell describes a film crew as something akin to a walking remand yard,
so you can imagine what an undertaking that was. No one but SBS would have
blessed our quest for a completely inexperienced islander cast. The serendipitous
outcome was the emergence of talent like Jimi Bani (recently in The Straits and
Mabo), Aaron Fa’aoso (who brought us the idea for The Straits) and Charles Passi
(recently in Mabo).

That production, by the way, was the first screen fiction set in Torres Strait islander
culture. It was an immersion for us in a fascinating world. You spend 14 weeks on a
tiny island where people live what appears to be a simple life. Helen Panckhurst, the
co-producer, and I soon learned that the life and culture there is anything but simple
– it is a very subtle, complex thing and each morning we’d wonder what one of our
crew might do today that would get us thrown off the island. A young island man
died of a heart attack, a young baby died in utero of diabetes complications. The
islanders, we knew, were beginning to think we were a contributing factor. Two of
our crew went drinking with some locals on a nearby island (it turned out most of the
crew were there – Helen and I who had assumed the position of cranky mother
superiors, frowning at any and all infractions and threatening Survivor style
evictions, were extremely relieved we didn’t know that at the time). I took a great
deal of time to work out that when our cultural liaison Rocky Gela said yes, he often
meant no. Then our island population one day went off to Thursday Island (leaving
us frantically scrambling for extras). And won the Island of Origin football cup for
the first time ever. These wonderful people considered we were a contributing factor
to this as well and we all celebrated, both abstemiously and like mad.

No one but the ABC would have commissioned a children’s series of which I am
immensely fond and proud – My Place, an adaptation of the brilliant Nadia
Wheatly/Donna Rawlin’s book about one spot in Australia seen through the eyes of
26 kids over 260 years. Written by scriptwriters the like of John Alsop, Alice
Addison, Blake Ayshford, Nick Parsons, Wayne Blair, Tony Briggs and Greg Waters,
My Place has won awards all over the world. But because it’s an anthology in which
each new episode brings a new era and new cast, broadcasters need to work hard to
find ways to build the audience addiction that comes from familiar characters on a
weekly basis. It has however, gone gangbusters among educators throughout
Australia.

And no commercial broadcaster would have picked up The Straits, our crime drama
set, yes again, in the Torres Strait and Far North Queensland, because it is
fundamentally a blackfella world and commercial Australia is yet to discover that
great territory. That said, the guys at Nine really like The Straits and the people at the
ABC observe, with some slight pangs their aging audience didn’t embrace it
enthusiastically enough, how much commercial energy it has.

The exciting development over the past decade, has of course been the rise of Pay TV
in this country and the way in which Foxtel has positioned itself in the market – a
purveyor of highly intelligent, inquisitive, smartly curated programming that aims to
set itself apart from both the public broadcast and commercial free to air networks.
We’re very fortunate to be in development with two big series for Foxtel. We’re as
excited as anything about that and determined to make them very happy with their
new partners.

We are of course, extremely pleased to be working with the commercial networks.
They have been commissioning some very good dramas and in good news, Australian
drama is once more winning big audiences. Anticipating what the commercial free to
air networks want is a subtle science. It’s one that we have learned is too easy to
oversimplify. Nine, Ten and Seven each has very particular audience demographics
but those sands shift all the time. Reading the audience is one of the dark arts. As the
competition between networks intensifies and the platforms diversify, in the world of
drama at least, stories about real events and real people is very hot at the moment.
Within that relatively limiting framework, the networks are nevertheless in search of
“ideas that pop”. Our most recent outing with Ten has been a good, vigorous workout
on the telemovie Underground – the story of Julian Assange’s teenage hacker years,
written and directed by Robert Connelly. Ten are delighted with it and we hope that
it brings them strong figures when it goes to air later this year. Similarly, we’ve been
delighted at how Nine has responded to a highly original romantic comedy idea that
we never imagined would be in their field of interest. Still, it’s a delicate dance we do
with the commercials and we retain the feeling they are cautiously working us out.
We like to hope that the “did we pass on that nun shit” might still be in play.

We do try to make our programs pathfinders – stories that will open up new ways of
seeing ourselves. I love a program with a good proposition. And regardless of who
we’re making a show for, my feeling is that we should always ask ourselves “why am I
telling this?” “What is the idea behind this that will really catch at the public’s
emotion?” My belief is that those of our programs that have worked have that good,
strong proposition at their core – Brides of Christ (the age-old question of women
and authority); The Track (an unexpectedly rollicking cultural history of Australia);
Blue Murder (the code of honour that is among thieves); The Road From Coorain
(the power of mothers in a landscape that discourages discourse); Rampant (the
bloody-minded strength that lies among misfits); Leaky Boat (our urgent need to feel
proud of this country); and The Slap (what worth our foundations when one small
act can rock them to their core?)

NBCU’s Michael Edelstein said something encouraging to us recently – what matters
is how strong and original and excellent the program idea is, not how well you’ve
second guessed your market. Great ideas will find an audience, be it public or
commercial broadcaster.

And now there are those in our company whose various peculiar passions can be
aired in other markets. Tony Ayres is also a scifi and fantasy nutcase. These days he
is busy peddling – with the help of like minded Giula Sandler and others, program
ideas to the US SciFi Channel. Sophie Miller and I have a cold war thriller idea set in
a mental institution in Kentucky. NBCU believe it has potential in the US market.

At the heart of everything Matchbox holds most dear is the writer. Writers are,

without a doubt for my part, the most important people in our industry. They create.
We realise. A good script is what will inspire and enthuse a crew and cast and is the
basis on which this expensive industry attracts its finance. It is that on which
everything else is built. We make huge demands of our writers, expecting them to
cough up extraordinary truths, stories and arcane fabrications in all kinds of
weather.

Whilst the screen production experience is a far more collaborative one – much more
a layer cake – than say the writing of a novel or a play, I really like David Malouf’s
thoughts on the works of William Shakespeare and think them relevant. In a speech
to the World Shakespeare Congress, reprinted with the title “Author, Author” in the
2006 Best Australian Essays, Malouf revisits an old question – how Will
Shakespeare, “a very common person, a son of a small-time official in a small country
town, a glovemaker and sometimes illegal speculator in wool, could acquire the
experience – of the court and its matters, the law, the life of a soldier in the field, of
foreign places – that would allow him to produce such a body of work”.

Malouf points us to Henry James whom he says knew something about writers and
the way they work. James asserted that a wrier should write out of his experience.
But what kind of experience? James tells of an English novelist, “a woman of genius”,
who had been commended for the way she understood and portrayed the life of the
French Protestant youth. Actually, James tells us, her experience of French
Protestant youth ”consisted in her having once, in Paris, as she ascended a staircase,
passed an open door where, in the household of a pastor, some of the young
protestants were seated round a finished meal. The glimpse made a picture; it lasted
only a moment but that moment was an experience…Above all, however, she had
been blessed with the faculty that (when given an inch you take) an ell (mile)…”

Malouf goes on to tell us that what really matters is that the writer “should be ‘one of
those on whom nothing is lost’; an observer, a listener, a close attendant of the
world’s smallest affairs, a scavenger, a snapper-up of otherwise unconsidered trifles;
and that everything he sees, and hears and overhears, should be laid down in his
memory, taken into the spiderweb of the consciousness and kept there to await the
moment when, transformed by imagination, it will find its use”.

Another of our essayists, Robyn Davidson, has written that it is the poets (for which I
interpret the writers) who are the ones who “lead us…back into the mystery of
things”.

One of the treasures of my work is the days spent in a writer’s brainstorm room as we
work our way towards the “bible” for a series. The bible is the introduction to the
story and characters of a drama. The brainstorm is an incredibly exhausting process.
People leave these sessions feeling wrecked even when exuberant about what they
have created. It’s a bit like coven of witches. You need to park your ego at the door and not be afraid to divulge relevant, painful life experiences. It’s a place where the
most experienced players demonstrate a brilliance for dreaming their way to a
marvellous idea while at the same time constantly reading the room – what’s being
said and what’s not being said. It’s an extraordinary journey in group psychology and
when it’s working, you feel marvellously in love with everyone in the room. It’s there
that you discover the people with the rich spiderwebs of consciousness Malouf talks
about, brimming with characters that seem fresh and true and story ideas that are
full of promise. And when someone else takes up an idea and runs with it and
everyone is galvanised, it’s like the people in that room can conquer the world.

I spent three days in a room with Tony Ayres, Blake Ayshford and Cate Shortland a
few weeks ago. And a few weeks before that, in another room with Jacquelin Perske,
Cate, Shaun Grant and Wain Fimeri. Those brainstorms were full of rigour, good will,
splendid ideas and propositions. And always people listening to each other and their
own mind and memory.

There are the times when it is extraordinarily hard. Then you have to pick your way
towards the proposition. And sometimes the mix of personalities in the room is not
right (the producer’s fault) and that can be hard. Or the brief has changed – like
when the ABC said to us after we’d delivered scripts for a 6 episode series of The
Straits, “Can you make it 10 episodes?” Sure we can I replied blithely, not properly
appreciating just how the unpicking of what we had would test all our equanimity,
our patience and our reserves. The final series, which won an Australian Writers
Guild award last week for best original mini series script, is a credit to the resilience
and talent of the writing team of Nick Parsons, Blake Ayshford, Kristine Dunphy,
Jaime Brown and Louis Nowra.

Earlier I mentioned our pledge that we would interrogate each other’s proposals and
be prepared to let go those ideas of ours that people felt would not find a strong
enough market. If there have been some pretty interesting moments along the way,
it’s been when that pledge has been tested. If we’re honest, we have had a tendency to
park ourselves on some pretty challenging propositions – a series on war crimes; an
arcane history of food; yet another drama on the outrageous way we deal with people
who come in boats. That’s when the question becomes – who’s the audience for this?
What about the bottom line? This doesn’t mean we won’t make those types of
programs. They’ll just need to be balanced by programs with a bigger reach.

Then there are the times we’ll have a furious debate about a good idea, inadequately
proposed by an inexperienced team and – it’s usually Tony – will storm off and work
up another version and return with it and it will be wonderful. For while working
with proven, talented people is what we love to do, we are always on the lookout for
the emerging people with brilliant ideas.

Truth be told, we haven’t lost our ability to be boundlessly excited by a good, original idea well put together. Even when it fails to fire on the first outing, we know it’s
worth putting carefully in the bottom drawer.

The creative tension in Matchbox is always how to balance finding as large an
audience as we can while at the same time maintaining what we call the Matchbox
brand – a striving for quality and originality. This is of course tricky. It takes both
nimbleness and fortitude. And our best attributes can also be our worst. Not giving
up on a program idea can become not being able to let go. Passion can become
bloody mindedness. Resilience can becomes blind stoicism.

And our industry is small and often not very brave and there are days when we could
cheerfully murder each other and (most days) when we appreciate the value of a
fortifying hug.

When we set up Matchbox, we also undertook to build a stratum of young people in
the company who can take over when we founding directors want to go live on the
farm, or on a boat or in a darkened room. We’re very proud of the team of smart,
talented young people who form the spine of the Matchbox development operation.
These people, mostly women as it happens, are our writers and directors and
producers of the future. For the present, they are proving to be wonderfully
proficient, smart interrogators of our work and champions of good ideas well
executed. Every success we have owes a great deal to them. They are simply
wonderful people. The trick is to find the time and the plasma – in a company now
peddling as fast as it can to feed that business plan (I told you, the bane of my life) –
to celebrate and enjoy the achievements and look out for each other when the going
is tough. For the tough days – when you feel certain everything is fallen to dust – are
shite. And the good days (like yesterday when we had a few bits of good news) –
make you dance a little jig. Because, last but by no means least, that was another
pledge we made on day one – we promised each other we’d enjoy the ride.

Europeans take small steps in VOD market

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Video on demand remains in arrested development outside the U.S., to the
frustration of many foreign distribs who are pinning their hopes on digital sales to
replace their crumbling DVD revenues.

According to Richard Broughton, head of broadband for IHS Screen Digest, the
American VOD market for feature films topped $1.8 billion in 2011, whereas Western
Europe delivered just $900 million.

The entrenched power of European exhibitors remains a big obstacle to contract the
windows and moving toward a day-and-date VOD and theatrical model. In France,
there’s even a law against it. Euro distribs are frustrated that they can’t develop their
VOD revenues to replace their disappearing DVD income.

Sales companies say they aren’t yet seeing any significant revenues from VOD from
any territory outside North America, apart from the U.K.

But the launch of the Curzon on Demand platform in the U.K., offering VOD day-
and-date with theatrical releases, is a small but significant sign that new digital
distribution models are finally starting to reach Europe, following the example set by
the likes of Magnolia and IFC in the U.S.

“It’s a paradigm shift in the business,” argues Philip Knatchbull, chief exec of Curzon
Artificial Eye, the U.K.’s leading arthouse exhibitor and distributor. “This is now
where the market opportunity lies for independent cinema.”

The rest of Europe is watching this arthouse experiment with curiosity, and a degree
of skepticism. Benelux specialty distrib Cineart is a proactive VOD player, but has
decided against launching its own platform, for now at least.

“We did the analysis to see if it makes sense,” says Cineart chairman and co-
managing director Marc Smit. “But in a territory like Benelux, it’s hard to make it
work financially. The trouble with a distributor-led platform is having enough films
on it. People want choice, and you can’t rely only on your own taste.”

The Brit VOD market is already far in advance of the rest of Europe, with fierce
competition between subscription VOD players Lovefilm and Netflix to sign up indie
distribs and major studios with lucrative output deals. Those deals, with the likes of
Studiocanal, eOne, Momentum and Lionsgate, have revolutionized the economics of
U.K. indie distribution over the past 12 months.

Meanwhile, pay TV giant BskyB is also making an aggressive move into the VOD
market with its own Internet movie service to supplement the pay-per-view outlet on
its own satellite platform.

“The U.K. is very evolved, but continental Europe not as advanced,” agrees Exclusive
chief operating officer Marc Schipper. “The main reason is that the key European
players are the broadcasters and telecom companies, and they aren’t as
entrepreneurial.”

Knatchbull is convinced there’s also room for an arthouse player with a strong brand
and a distinctive programming policy to carve out a niche among the big boys,
particularly when its virtual service is closely tied to physical cinemas.

“If you’re only on the Internet, it’s quite soulless, but what’s great about having our
physical cinemas is that you are more connected to your community.” Knatchbull is
such a believer in the importance of combining the two that he says he’s eyeing deals
to take over the running of arthouse theaters in Berlin and New York as a prelude to
international expansion of his online service.

Cineart, which releases pics such as “The Artist,” “Drive” and “Carnage” across
Benelux, prefers to stick with the traditional theatrical window, and then market its

titles on as many VOD services as possible. “But the real money comes from the
telcos and the cable operators, not the Internet-based platforms,” Smit says.

He says the VOD market is more developed in Belgium, thanks to the investment of
telco Belgacom, than in the Netherlands. Overall, Cineart’s VOD income is growing
by 50% a year, from 2%-3% of sales three years ago to 8%-10% today. Aside from the
top theatrical titles, its best performers are pics with a thriller twist, such as
“Essential Killing” or “13 Assassins,” or arty pics with a misleadingly sexy titles.

Sales agents say that VOD is becoming a more noteworthy factor in negotiations with
Euro distribs, even if the revenues are not yet significant. “We’re all paying a lot more
attention to VOD in deal terms, but it’s not coming through significantly in the
reporting yet, except in the U.K. where we’re beginning to see impact on the bottom
line from Netflix and Lovefilm,” says Focus Features Intl. prexy Alison Thompson.

VOD deals are negotiated on either a royalty or a fee basis, which varies from
territory to territory. The distributor’s share is typically lower than on DVD — maybe
40%-50%, rather than 60%-85% — because the VOD entails much lower physical
costs for the distrib. “Historically the DVD splits were terrible for producers, so this
is a chance to roll those back,” says one top sales agent.

“The U.K. is the strongest foreign market for VOD. We’re seeing some value in
Australia and other parts of the world, but nothing that’s really moving the dial,” says
Alex Walton, sales prexy at Exclusive Media Group.

Broughton suggests the slow development of VOD in Europe may have more to do
with the relatively primitive infrastucture of cable and telco systems. Once they are
upgraded, the potential for VOD will increase significantly.

Many distribs are waiting to see if the likes of Netflix, Amazon (which owns the
U.K.’s Lovefilm), Google and Apple (via iTunes) will emerge as significant innovators
to challenge those traditional local players.

In the meantime, VOD remains stubbornly underdeveloped.

“Outside the U.K., it’s difficult to see where the value is in the VOD market,” says
Andrew Orr of Independent Film Sales. Sales agents who have experimented with
offering unsold or library titles directly to pan-European Web-based platforms such
as Mubi say that the returns so far have been negligible. “For social reasons,
European audiences are just not as advanced as Americans in terms of looking at
films on the Internet,” says Bankside’s Stephen Kelliher.

“VOD is still in its infancy in Scandinavia,” says Jim Frazee, acquisitions topper at
Scandinavian distrib Scanbox. “It’s doing business, but not growing as rapidly as we
hoped, and not nearly enough to compensate for DVD which is declining far more
rapidly than we feared. VOD needs to be 10 times larger than it is to make up for
DVD.”

Robert Beaumont of L.A.-based Lightning Entertainment sees a role for U.S. sales
agents and distributors in helping to develop the foreign VOD market by exporting
their domestic expertise.

“We’re a technical aggregator for cable systems in the U.S., and we have so much
experience about best practice, that we are contemplating offering this service in
Europe, to act as a go-between between distributors and VOD platforms,” he says.
“We would continue to sell rights as a sales agent, but because the VOD market in
Europe is immature, we could also service the ambitions of our European buyers by
providing technical support, not just for our content but for other sales companies as
well.”

By ADAM DAWTREY Mon., May. 7, 2012. Cannes Preview 2012

As DVD pie crumbles, is VOD sweet?

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The gulf between the evolution of video on demand in the U.S. and the rest of the
world is posing both an opportunity and a challenge for producers and sales agents of
indie films.

VOD is a growing component of domestic distribution deals but unlike boffo box
office figures, such success adds no value for the international market.

Indeed, releasing a film day-and-date on VOD and theatrical in the U.S. may
diminish its appeal to foreign distributors, who still regard that as a sign of inferior
quality. Plus, the secrecy surrounding VOD revenues undermines any positive
reports regarding any business a film has done.

“There’s definitely a lack of sophistication in the way that foreign markets view
what’s going on in the American VOD business,” says Alex Walton, president of
international sales and distribution at Exclusive Media Group. “But at the same time
it’s understandable when there’s no significant VOD market in their own territory,
and there’s no U.S. box office chart for the top VOD releases.”

This despite the U.S. model of launching pics on VOD alongside or even a couple of
weeks before the theatrical release, as pioneered by the likes of Magnolia and IFC, is
reaping healthy dividends for some specialized films.

“If you have a film that’s going to VOD in the U.S., it’s a negative signal for a
distributor who’s trying to book exhibition in France or Italy, because those
multiplex chains are driven by the domestic box office figures,” Walton says.

But the boom in domestic VOD is great news for companies selling films into the U.S.
market, where a much wider range of titles is being picked up than ever before.

“We’ve sold everything on our slate to the U.S. — some for traditional theatrical
releases, some for day-and-date with VOD — and the fact we haven’t got any films left
for the U.S. shows how interesting that market has become,” says Stephen Kelliher of
London-based sales outfit Bankside.

But conversely, the secrecy around VOD figures in the U.S. is significantly hampering
the international sales effort.

A year ago, producer Ted Hope complained to Variety that the robust VOD
performance of his film “Super” was irrelevant to potential foreign buyers, who could
only see its relatively paltry theatrical gross. “Theatrical box office clearly sends a
message loud and quickly to international buyers that yes, there is an audience for
this film — what’s different about the VOD market is that it’s hidden,” Hope
lamented.

Kelliher agrees. “Even if a film has supposedly done well on VOD, it doesn’t matter,
because verifying the figure is impossible.”

Mirjam Wertheim of Orange Entertainment, a veteran L.A.-based rep for multiple
foreign buyers, echoes that frustration. “If they would release the numbers, my
buyers would care.”

But Martin Moszkowicz of Germany’s Constantin makes the point that it’s not about
how many people see a film in theaters, it’s about the publicity that a U.S. theatrical
release generates.

“A film with a big theatrical P&A spend has repercussions around the globe, but I’m
not sure if that works if you go straight to VOD. Of course, the fact you don’t have to
spend so much on P&A is why VOD makes sense economically for producers, but it
doesn’t help to create the global branding.”

Stefano Massenzi of Italian distrib Lucky Red echoes the foreign bias: “A VOD
release in the U.S. is like straight to video, it’s a different kind of product from a
theatrical film.”

What aggravates foreign buyers most is when a movie they already bought for
theatrical release ends up going the day-and-date VOD route in the U.S.

That’s what happened to Neil Jordan’s “Ondine.” “It was frustrating for people who
have pre-bought it as a theatrical release, and didn’t get the U.S. platform they
needed to sell it to their exhibitors,” says Walton, who handled the title when he
worked at HanWay.

It’s not just the multiplex chains in some key territories that make their booking
according to the American theatrical box office. As Robert Enmark of Scandinavia’s
Svensk Filmindustri says, the domestic release pattern can also directly affect the
value of foreign TV rights.

“With some of our TV deals, the price of our free or pay TV rights follows the U.S. box
office,” he says. “The problem with U.S. VOD releases is that there’s no reliable
statistics on the transactions. If something has done well on VOD, it’s good to hear
about that, but it doesn’t make a difference to us. We have ‘Margin Call’ in
Scandinavia, but its U.S. VOD success won’t translate for our audience in any way.
It’s invisible, the press doesn’t write about it, so it doesn’t create any publicity.”

VARIETY’S CANNES PREVIEW 2012

By ADAM DAWTREY Mon., May. 7, 2012

Nott wins the ACS Award of the night

Film, Latest News, Television, , ,

Ben Nott was crowned Australian cinematographer of the year for his work on
director Stuart Beattie’s local hit Tomorrow When The War Began at the annual
national awards of the Australian Cinematographers Society (ACS).

Among the 15 other cinematographers also presented with Golden Tripods at the
presentation at Sydney’s Manly Pacific Hotel were Mark Wareham for Cloudstreet in
the television drama section, Nick Matthews for The Palace in the section for
fictional drama shorts and Brad Dillon for episode 13 of the dramatized documentary
series Fatal Attractions.

The other winners were Iain Mackenzie and Aron Leong (commercials), Mark
Lamble (wildlife/nature), Campbell Munro (non-fiction television), Peter Barta,
Daniel Soekov and Tarryn Southcombe (news and current affairs), Callan Green
(music clips), Andrew Deubel (promos), Daniel Graetz (experimental) and Boris
Vymenets (student).

Television personality Ray Martin was master of ceremonies at the awards, held at
Sydney’s Manly Pacific Hotel, and actor Rebecca Gibney was a special guest.

One Golden Tripod is given out in each category and all these winners were then
considered for the Milli Award, the honour this year granted to Nott, who did not
attend. The only way to be considered for an ACS national award is to first win gold
at a state or territory level; Nott won in Queensland.

Several ACS members were inducted into the ACS hall of fame being David Eggby,
David Muir and Barry Woodhouse.

As already announced, Emmanuel Lubezki won the international award for his
efforts on Terrence Malick’s The Tree of Life and Jimmy Ennett was selected as the
emerging cinematographer deserving of an award – he will now do an internship on
the set of The Railway Man. Heidi Tobin, Craig Pickersgill, Martha Ansara and
David Lewis were all acknowledged with awards for special contribution to the
society.

More Here:

Home

Sandy George – INSIDEFILM – Mon 07/05/2012

Homeland in the UK

Latest News, Television, ,

Gripping and daring, Homeland raised questions British TV
needs to answer

As with Victorian novels, much of its power comes from the space available for
narrative development, writes Mark Lawson.

Damian Lewis in Homeland, ‘notable for an ambiguity of attitude far outside the us-
and-them divisions of most political thrillers’.

The highest levels of televisual tension have generally rested, in recent years, on
which of two aspiring performers would be allowed to record an album for Simon
Cowell. But – for upwards of 2.5 million viewers of Channel 4 on Sunday night –
genuine pulse-thumping, sweaty expectation attended not the result of a public
phone-vote but that oldest of dilemmas: the outcome of a story.

Twelve weeks after he returned to America a hero from eight years as a hostage in
Iraq, would Damian Lewis’s Private Brody finally prove the view of CIA handler
Carrie Mathison (Claire Danes) that he was an al-Qaida sleeper set on devastating
the American government?

Following three months of unnerving reverses, in this adaptation by the American
cable network Showtime of the Israeli prisoner of war dramaHatufim, the answers
were typically twisted and ambivalent. While intermittently implausible (requiring,
for example, the secret service to be oddly cavalier about sniper lines of sight), the
plot intelligently combined concepts – rendition, redaction – introduced to the
language by recent occupants of the White House. It was also notable for an
ambiguity of attitude far outside the us-and-them divisions of most political thrillers.
The quality of writing and acting made Brody sometimes warm and supportable to
the extent that the viewer is tempted into the mental treachery of wanting his anti-
democratic massacre to succeed.

But the most daring aspect of the drama was to create two central characters who
could never necessarily be trusted in anything they said or did: Brody because he was
suffering from post-traumatic stress disorder but also a suspected terrorist and
Carrie due to a bipolar condition for which she received electroconvulsive therapy in
Sunday night’s finale, conveniently wiping from her mind some of the details of
season one.

And, if Homeland had a serious weakness, it was the nagging need to keep a second
series possible. At times, there was an unwanted additional tension, now common in
TV drama, between the narrative logic whipping the story to its natural conclusion –
would Brody get away with it, whatever “it” is? – and the commercial imperative for a
successful show to continue for as many series as possible.

So, while Brody did seem by 10.45pm to be an American Taliban who flunked his
mission to kill the vice- president, enough doubt has been left about who exactly is
running whom to make viewers eager for the sequel, in which Carrie will again seek
to convince America that it is him rather than her who has the unreliable mind.

For British television, the brief relief at not being found wanting in comparison with
Scandinavian shows (The Killing, Borgen, The Bridge) will be tempered by another
round of cringing contrasts with America. And, while the alleged inferiority of British
TV drama can be exaggerated – shows such as Sherlock, Life on Mars and Downton
Abbey are envied in the US – the viewer and reviewer reception of Homeland here
does raise issues that commissioners in this country need to consider.

David Harewood, who plays double-dealing CIA chief David Estes, has, in a number
of interviews, echoed the complaints of other black British actors that our networks’
preference for period dramas and classic adaptations reduces the availability of
strong non-white roles. Harewood has suggested that he would not be offered in
Britain a role as pivotal and complicated as Estes and that even the acclaim for
Homeland has not yet improved the flow of offers.

Our homeland drama departments should urgently examine such complaints and
perhaps also reflect on the greater risk-taking of overseas fiction. The 12 episodes of
Homeland’s opening season are a standard span in the US, whereas six parts is
exceptional for a UK start-up and two or three more usual.

This caution comes from a tradition of public funding, state regulation and rapid
newspaper fury over “flops”. But, in common with the vast Victorian novels with
which the form of British TV drama shares so much, much of the pulling power of
Homeland comes from the space available for narrative and character development.

Tension now shifts to the arrival of this autumn’s second season. Surely, though, two
runs must be the limit. The experience of series such as Lost makes us fear the
revelation, in the schedules of about 2017, that the previous six seasons were Brody’s
nightmare in his Iraqi rat-hole on the eve of release from imprisonment.

Mark Lawson guardian.co.uk, Sunday 6 May 2012

New shows for Nine and Ten – husbands clean up

Latest News, Television,

The Nine and Ten networks announce House Husbands and Mr and Mrs Murder for
next year. Talkin’ ‘Bout Your Generation host Shaun Micallef is set to show off his
acting chops in a new murder mystery series for Network Ten. Co-produced with
FremantleMedia Australia (FMA), Mr and Mrs Murder will also star Offspring’s Kat
Stewart.

“I’ve enjoyed working with Ten on Talkin’ ‘Bout Your Generation over the last four
years and am looking forward to continuing our relationship with Mr and Mrs
Murder,” Micallef said in a statement. The show features a husband and wife team of
industrial cleaners who will solve a crime each week, in a series that is promised to be
packed with guest stars.

“This is an exciting new chapter in murder mystery drama, which brings together an
acclaimed production and storytelling team, and two of our most respected actors, a
winning combination,” Ian Hogg of FMA said.

The series will be filmed in Melbourne from September and will screen on Ten in
2013.

Husbands who clean will be also the focus of a new Nine Network show. Pondering
the question of what stay-at-home dads actually get up to when the wife’s at work,
Nine is promising to lift the lid in a new Australian comedy/drama that tackles the
issue of changing gender roles.

Filming of House Husbands, from production house Playmaker, will begin at the end
of this month, Nine announced on Sunday. The 10-part series is about four modern
families with one thing in common: the men are in charge of raising the kids.

“House Husbands is a fresh and dynamic look at Australian family life, with a very
modern twist,” Michael Healy, Nine’s Director of Television, said. “Audiences will fall
in love with our characters as they deal with the challenges of raising families in
today’s hectic world,” he said.

The series was created by Ellie Beaumont and Drew Proffitt. It will be directed by
Geoff Bennett (The Great Mint Swindle) and Shirley Barrett (Wild Boys, Offspring)
with Nine’s Jo Rooney and Andy Ryan plus Playmaker media’s David Maher and
David Taylor named as executive producers. “The timing feels right for a funny and
honest Aussie drama … We are thrilled to be producing this series for Nine, Maher
said. Cast announcements will be made in the coming weeks.

AAP May 7, 2012

In Search of Apps for Television

Latest News, Online Media, Television,

The technology industry is working on viewing options that could include apps, a
move that has the potential to transform cable television’s interface and business
model.

The same consumers who delight in navigating the iPad still click frustratingly
through cable channels to find a basketball game. Their complaint: Why can’t
television be more like a tablet?

The technology industry is trying to address that question for the millions of
customers ready to embrace the next generation of viewing options. In the process it

could transform the clunky cable interface, with its thousands of channels and a
bricklike remote control, into a series of apps that pop up on the television screen.

While still in its early stages, the idea has taken off among tech-loving consumers,
and companies are trying to satisfy them. Already, apps for Hulu Plus, Netflix and
Wal-Mart’s Vudu streaming service, among others, are built into Internet-enabled
televisions. Devices like Microsoft’s Xbox 360 and the streaming video player Roku
let viewers watch apps that mimic channels. New sets by Samsung and others come
with built-in apps loaded with television shows, movies and sports.

Apple has a video player called Apple TV with apps to Netflix, Major League Baseball
and other content. Many media executives predict Apple will ultimately enter the
television market in a more aggressive way, with either a new set-top box or an
Apple-made TV set. Both would rely on apps scattered across the screen as they are
on the iPad. Apple declined to comment.

“I’ve told my bosses, ‘This is beachfront real estate. Buy in now,’ ” Lisa Hsia,
executive vice president of digital media at NBCUniversal’s Bravo channel, said of
developing TV apps.

A model built around TV apps, however, could let viewers use favorite apps on the
screen on an á la carte basis, thus bypassing cable subscriptions and all the
extraneous channels they don’t watch. And therein lies the tension that has the
television industry delicately assessing how to balance the current system with an
Internet-based future that some feel is inevitable.

“The question that hasn’t yet been answered is whether television viewing will consist
of a single app that mimics the pay TV bundle or a series of different apps that
together form a content experience,” said Jon Miller, the chief digital officer at News
Corporation, which owns Fox Broadcasting and cable channels like Fox News and
FX.

À la carte apps would upend the entrenched and lucrative economics of television,
which have long relied on a system in which cable customers pay for channels even if
they don’t watch them.

The so-called bundle setup helps little-watched channels bring in revenue from
monthly cable fees and allows the most popular channels to get high fees from every
subscriber, even the ones who don’t watch them.

The idea of undermining this model is so sensitive that media executives who think
that apps are the future of television would not discuss the subject publicly, for fear
of disturbing their cable and satellite partners.

But many analysts caution against predicting the near-term demise of cable and
satellite delivery, pointing out that the spending and viewing habits of consumers are
also firmly entrenched.

“The model we have is the model we have, and while it’s tempting to imagine an app
for TNT and an app for ESPN, that’s not the likely outcome,” said Craig Moffett, an
analyst at Sanford C. Bernstein & Company. À la carte apps might seem like a bright
idea, Mr. Moffett said, but it is unlikely consumers would pay $20 a month for
individual channels when the traditional cable bundle provides a bargain price.

Currently, most TV apps created by networks work on an authentication model that
requires cable subscribers to log in before gaining access to a channel’s app. The
handful of apps already available on television screens also largely require a cable
subscription.

For the most part, the apps being offered today are intended as complements to
traditional TV viewing and are available only on tablets and mobile devices. For
instance, NBC Sports will soon introduce its NBC Olympics Live Extra app, which
will allow subscribers to stream every Olympic event from London this summer. It is
available only on iPads, tablets and other mobile devices, not on TV screens through
Xbox or Roku.

“No one on the digital side wants to take away audience from the TV,” said Rick
Cordella, vice president and general manager for NBC Sports Digital.

Time Warner’s HBO still relies heavily on the cable bundle because it does not have
the customer service or sales force of a company like Comcast or Time Warner Cable.
But HBO Go does allow subscribers to have access to the pay channel’s library of
almost every series, movie, documentary and heavyweight fight directly on the TV
screen, via the Xbox.

“The HBO Go app is seen as a doorway into the entire world of HBO programming,”
said Eric Kessler, co-president at HBO. “That adds tremendous value to the
subscription.”

As such, HBO Go could help the channel lay the groundwork to eventually break out
on its own on an à la carte basis, even if that might not happen soon, said James
McQuivey, an analyst at Forrester Research. “HBO has the largest subscriber base of
any video service in the world, but they know none of their customers by name,” Mr.
McQuivey, said. “That will be a huge liability in the future. HBO knows that; that’s
why they need a direct relationship.”

The ability of any channel to strike out on its own, even strong ones like HBO or the
Walt Disney Company’s ESPN, remains problematic. ESPN makes about $5 a month
from each of the country’s more than 100 million cable subscribers. If ESPN ever
sold its live sports and talk shows directly to the consumer, it would need to charge
several times that rate. “We have no plans to bisect our partnerships with
distributors,” said Sean Bratches, the ESPN executive vice president for sales and
marketing.

But just as with previous transformations in television, the economics will have to
catch up as technology evolves, said Jeremy Allaire, chief executive of Brightcove, a
technology firm based in Boston that builds apps for media companies.

By 2014, an estimated 89.5 million people in the United States will use tablet
computers, up from 54.8 million users in 2012, according to the research firm
eMarketer. “You have to achieve scale before the economics will work,” Mr. Allaire
said. “But at some point, we think direct-to-consumer will be very important.”

That model may prove attractive to smaller cable channels, many of whom dislike
how they are buried within the traditional electronic guides that viewers use to
navigate their cable boxes.

Bigger cable channels may find it appealing as well. The head of digital strategy at
one major channel said he was excited about the idea of having an app that sat on the
home screen of a television. It would provide a “safer passage” to eventually sell the
channel directly to customers, rather than through a cable package, said the
executive, who declined to be identified to avoid upsetting the company’s cable
partners.

Cable and satellite companies have sped up the development of their own TV apps in
the hope that they will eventually mimic the set-top box. In an ideal cable industry
model, customers will have one or two apps that offer hundreds of channels rather
than dozens of apps for individual networks. “You download all these apps, and then
you get app fatigue,” said Matt Strauss, Comcast Cable’s senior vice president for
digital and emerging platforms.

“Apps create amazing experiences,” Mr. Strauss said. “But I believe most customers
and households are still looking for an aggregated experience that’s intuitive and
personalized.”

By AMY CHOZICK and NICK WINGFIELD – NYTimes – April 27, 2012

Who Says Piracy Costs the U.S. $58 Billion a Year?

Latest News, Online Media, Television

The closer one looks, the more dubious the figures seem.

Speaking at November 2011’s American Film Market, the White House’s intellectual
property czar, Victoria Espinel — officially the U.S. Intellectual Property Enforcement
coordinator for the Office of Management and Budget — repeated the oft-cited
statistic that intellectual property theft costs the U.S. about $58 billion per year.
Given the scale of the problem, one might expect the movie business to have rock-
solid numbers on what piracy costs them. But the closer one looks, the more dubious
the figures seem.

“Obviously, the movie industry’s number is going to be somewhat suspect,”
says David Abrams, a fellow with the Berkman Center for Internet and Society at
Harvard University. “Even if a person downloaded a movie, it’s very hard to translate
that into, ‘And they would have paid $10.50 to see it.’ ”

It turns out that Espinel’s $58 billion figure covers IP theft as a whole — a far cry
from just film and television. It also comes from a source that would astonish
Hollywood liberals.

The figure originated in a 2007 report, “The True Cost of Copyright Industry Piracy
to the U.S. Economy,” written by economist Stephen Siwek for the Institute for Policy
Innovation. Just what is the Institute for Policy Innovation? Answer: A right-wing
think tank founded by Dick Armey, the former Republican congressman and nemesis
of liberals.

The MPAA’s credibility on piracy costs was hurt by a separate 2007 report it
commissioned that later proved riddled with holes. Among other things, it blamed
U.S. college students for 44 percent of the studios’ losses due to piracy. Shortly
thereafter, the organization that represents the major studios was forced to
acknowledge “human error” in its accounting, admitting students were responsible
for only 15 percent of domestic losses.

Despite errors like these, the report (prepared by international consulting firm LEK),
derived from statistics obtained in 2005, still is cited by the MPAA when it claims the
studios lose $6.1 billion or more annually to worldwide piracy. There has been no
new report.

As to when one will be conducted, Chris Dodd, the former U.S. Senator named chair-
man and CEO of the MPAA in March 2011, told THR last year: “We are planning that
report; it’s internal at this juncture. It shouldn’t be too long.”

An MPAA spokesperson said April 28 that no release date has been scheduled.

5/2/2012 by Stephen Galloway – The Hollywood Reporter

‘King’s Speech’ Oscar Winners Hire BBC High-Flier To Ramp Up TV Ambitions

Film, Latest News, Television,

Emile Sherman and Iain Canning’s See-Saw Films bring in ex-BBC Films and BBC4
commissioning editor Jamie Laurenson to build small screen output.

LONDON – Oscar winning producers Australian Emile Sherman and Englishman
Iain Canning’s production banner See-Saw Films is boosting its television ambitions
with the duo bringing in former BBC high-flier Jamie Laurenson to spearhead the
push. The British banner, which produced The King’s Speech, earning Canning and
Sherman best picture plaudits along with Gareth Unwin, has appointed Laurenson as
the company’s head of television.

Laurenson joins from the pubcaster where he was exec producer for BBC Films and
commissioning editor for drama for BBC 4 for four years. In his newly-created role
Laurenson will be tasked with running development and overseeing See-Saw Films’
television productions.

See-Saw is currently in production on Jane Campion’s Top of the Lake, a six-part
series for BBC 2, UKTV Australia & New Zealand and the Sundance Channel, to be
sold by BBC Worldwide. It is the company’s first foray into television production
having also produced, aside from The King’s Speech, the Michael Fassbender-
starrer Shame.

Canning and Sherman described Laurenson in a joint statement as a “perfect fit” for
their company. “As an incredibly experienced film and television executive we are
excited by his decision to focus solely on developing and growing our TV business.
Increasingly there appears to be no distinction between film and television talent and
hiring Jamie puts us in the best position to take advantage of that,” the duo said.

Laurenson said he had been “very lucky to work with a host of immensely talented
people whilst at BBC Films.” He added: “I’m really looking forward to the new
challenge and to continuing a strong relationship with the BBC.”

Laurenson’s resume boasts development work for An Education, starring Carey
Mulligan, James Marsh’s Project Nim, the Michelle Williams’ starrer My Week With
Marilyn, Salmon Fishing In The Yemen with turns from Ewan McGregor and Emily
Blunt and TV projects including Toast and Holy Flying Circus.

5/2/2012 by Stuart Kemp – THR

The future is now for television viewing over the internet

Latest News, Online Media, Television, , ,
Illustration: Eric Lobbecke

Illustration: Eric Lobbecke Source: The Australian

THE powerful television executive looked rather sheepish over lunch. The topic at issue was nothing less than the future of TV, and he had a tale to tell about his teenage daughter and the impact of the phenomenon known as IPTV.

Dad, keen to point his daughter to some worthwhile TV, had suggested Downton Abbey, Julian Fellowes’ grand servants and masters Edwardian drama that Seven screened last year to much acclaim and even higher ratings. The forthcoming season two, due on Seven soon, is eagerly anticipated. But when the executive followed up with his daughter, she was unexpectedly enthusiastic: “Dad, season one was great but season two is even better!”

That she was able to watch the program at all, before it hit Australian screens, was due to IPTV. It stands for internet protocol television, and means watching TV over the internet. Some say it is about to change everything. Certainly, there’s a bewildering array of brands to choose from, including Apple TV, FetchTV, Foxtel, GoogleTV, Quickflicks and ABC iView.

Then there is which method to chose to watch: via digital TV sets that come with IPTV built in, or by a separate set-top box or even via a website.

The problem is, these services are not really on people’s radars.

“It is very early in the take-up curve. I don’t think most people know what it means,” says Duane Varan, director of Audience Research Labs at Murdoch University. When most think about online TV, they think of “a three-minute clip of someone who puts a pie in someone’s face”, he says.

“I don’t think most people think it is the legal form of the programs you enjoy on TV, now available over the internet.”

But for young people, IPTV is not over the horizon, it is here. “They are doing it already and doing it in droves,” says David Castran, chief executive of research analyst Audience Development Australia. “The research indicates that for people 25 to 54 in Sydney and Melbourne, 30 per cent of their TV viewing is that, but it is DIY: do it yourself.”

And DIY, for the most part, still means illegally. While legal IPTV is a nascent industry, illegal piracy has taken off. And what they want, by and large, is US drama.

“Everyone I know has copies of Revenge. They have downloaded them from the internet via BitTorrent,” Castran says. The US melodrama, starring Madeleine Stowe as tragic social powerbroker Victoria Grayson, is an updated Count of Monte Cristo set in the glossy Hamptons.

Australian viewers love it, with its debut topping two million viewers in February. But recently, after a break over Easter, ratings had slipped to 1.22 million. Seven reacted after Anzac Day by doubling episode broadcasts to twice a week to catch up to the US.

“It realised the program is being pirated,” Castran says. For Castran, the advantages of IPTV are numerous. You can watch television quickly, ad free and as many episodes as you like.

IPTV will change what we watch. Partly in reaction to this, Australian networks this year will emphasise local content that can’t be downloaded beforehand, such as Nine’s super-talent quest, The Voice. It is bringing in more than 2.3 million viewers each night, the biggest hit in years. But to be part of the conversation about the show in cafes, parties and the office kitchenette, you have to have watched the latest instalment. The program is IPTV proof. “Strong Australian content is a lot safer from pirating,” Castran says.

It is astonishing to think that when masterful English playwright Dennis Potter (The Singing Detective) referred to television as the “palace of varieties in the corner of the room”, it was restricted to a few dozen linear channels that dictated what we watched, when we watched, rather then the endless online smorgasbord of today.

IPTV will change what it is to watch TV. In fact, it already has. At a recent industry conference, Microsoft executive David McLean outlined how viewers would be able to start watching a drama such as medieval sword and sex fantasy Game of Thrones at home via a device such as Microsoft’s XBox, before hopping on to a bus to work and continuing to watch the same episode via a mobile phone or tablet.

Certainly, our TV landscape has changed beyond recognition since the 1970s. Media executive Nick Leeder remembers those days well. He recalled recently: “As I was growing up in Newcastle in the 1970s, my access to information and entertainment was limited to a handful of media outlets – two television channels, one newspaper and a handful of radio stations. Given that airtime and column inches were scarce and expensive resources, it’s not surprising that I had so few choices.”

Leeder is now the managing director of Google Australia and New Zealand. It owns YouTube, which in terms of the number of hours Australians devote to it is a significant TV channel in its own right. Globally, four billion videos are viewed every day and 60 hours of video are uploaded every minute.

“My family has endless choices of what to watch, listen to, play and read,” Leeder says. He is fond of pointing out that Australia has a trade surplus in online video. More people overseas watch more hours of Australian-made video than Australians watch of overseas-made video.

“International online users consume eight times more Australian video content than Australians themselves, with the US being our biggest audience,” says Leeder, who himself is indicative of how the medium has changed.

Google is said to make more money than our big three TV networks combined, but the contrast of low-profile Leeder with a traditional media mogul such as Kerry Packer couldn’t be more marked.

The online medium has thrown up new stars, such as sassy online blogger Natalie Tran. The Sydneysider gained a massive following with her humorous take on life, so much so that when suicide prevention program R U OK? hired her and Hollywood star Hugh Jackman to film online endorsements, at one point just 50,000 people had watched Jackman, while Tran had attracted 1.4 million hits. Mainstream TV is ignoring her, but companies such as Lonely Planet have hired her to be a brand ambassador.

IPTV will change the way companies advertise. David McGrath, the ebullient salesman behind the development of a product called Viewer Interactive Application Program (VIAP) reveals how his technology allows consumers to shop while they watch.

On his laptop, McGrath screens a clip from Sex and the City. Miranda and Carrie stroll through a park while discussing their therapy. Suddenly they freeze and, as a cursor flits over their clothes, up pops a product description of each item. Want Miranda’s Minnetonka calf high moccasin boots? Simply click on them and for $225 VIAP will buy them, bag them and send them to you.

But will the potential of IPTV become a permanent revolution, or will it go the way of the video disc, Betamax video, CB radio and the First Republic? Just because the technology exists, that doesn’t mean fickle consumers will adopt it. While we love new technology, and have the highest penetration of smartphones in the world (50 per cent of the market has one), we haven’t fallen in love with pay-TV in quite the same way as other countries. Pay-TV penetration here is stuck at about 30 per cent, below levels in the US and Britain, due in part to the anti-siphoning rules that restrict the amount of live sport pay-TV can show.

At the Audience Research Labs at Murdoch University, Varan and his team undertake research that goes worldwide, issuing findings on everything from limited interruption addressable TV advertising to profiling the ad avoider. Varan thinks an IPTV future is inevitable but not a fait accompli, citing obstacles present here that are absent overseas.

First, most broadband internet in Australia is offered under a metered model and you need a lot of bandwidth to watch TV.

“That’s hindering the growth of that sector,” Varan says, because it means that IPTV is not a simple proposition. However, if iiNet is your broadband provider, you don’t pay extra to watch its IPTV service FetchTV. Same with Telstra’s T-Box and Foxtel’s IPTV service.

The second barrier is about access. “Is your show available and by whom?” Varan asks. Not all services can provide the same shows. It is different in the US with aggregators such as Hulu and Netflix, “a one-stop shop for a good portion of your content”. Those brands are not available here.

Third, do you connect via a smart TV that encloses the IPTV technology, or purchase a set-top box (Xbox or T-box), or rig up a computer media centre or something else altogether? Fourth, which of the myriad providers to choose?

And, finally, there is what happens when you power up and connect.

“The majority of the interfaces, particularly if you are trying to navigate through a TV, are absolutely god-awful,” says Varan. “The industry is at its nascent stage and it hasn’t developed its conventions. There are a lot of barriers.”

So, the forecast is that Australia will lag behind the rest of the world in IPTV. “It’s not one of the sectors where we will be bold pioneers,” Varan says.

Then there is the looming National Broadband Network, inexorably being rolled out amid political controversy. It will pipe superfast broadband into all homes for a price but, he warns: “It could be a non-event. You radically improve capacity but you could still have a metered model and all the same problems we have today.

“The real power of the IPTV universe is the on-demand characteristic,” he says.

“Conventional TV is like responsible drinking; you have to pace yourself. If you really like something in the IPTV universe you can binge.”

Thus Foxtel, which has an expensive subscription model threatened by cheaper and targeted IPTV, says it has a range of IPTV offerings on its own service but also as part of Telstra’s T-box and Microsoft’s XBox. The pay-TV company offers subscribers a Mad Men special: viewers can download 10 crucial episodes of the critically adored but low-rating US drama (Foxtel prefer to call it “niche”) to complement the current run of season five on Movie Extra.

What is striking about IPTV is its non-essential nature. It is not a must-buy. Certainly, IPTV is years off attaining the level of consumer consciousness where people are aware of it, people are talking about it and people are using it.

Castran warns the impact on TV could be total, and recalls an industry conference several years ago where a speaker warned television was about to go the way of Encyclopedia Britannica — destined for an online-only future.

But Varan is measured. “What is most amazing about the US story is that conventional TV viewing has gone up,” he says. Everyone feared it would cannibalise but, once again, TV has triumphed.

“Before, even if you liked a show, you were lucky to see all episodes a season. But if you miss an episode, you can now catch up,” he says. Viewers who come late to a show can use IPTV to buy all the episodes and watch at their leisure.

“The big companies are still benefiting. It’s a remarkable development.”

Stephen Brook is media editor of The Australian.