Dendy Cinema's partner, Icon Films, supports the Independent Cinema Association's application to collectively bargain on behalf of members with studios. Credit:Lisa Wiltse However, some small cinemas are sometimes denied blockbusters, or forced to wait weeks for their turn, if they don't accept distributors prices and conditions. And even if they do secure blockbusters, owners have no idea if they are paying fair prices. Owner of Metro Cinemas in Boronia in Melbourne's east, Tom Schouten, is screening blockbusters like Spider-Man: Homecoming and Despicable Me 3 this week and has a very good relationship with big distributors. "We deal with all the studios the same way that Village and Hoyts do," he told BusinessDay. "The difference is probably that the rights that we pay may be different. We don't know what the big boys pay... but if collectively we have the ability to negotiate better deals, then obviously that is to our advantage."

Tom Schouten, owner of Metro Cinemas in Boronia says he has a good relationship with big distributors. Credit:Eddie Jim He supports the ICA's application because he has no idea if he is being ripped off. Metro's ticket prices are much lower at $12.50 for adults, and he offers seniors free tea or coffee with $8 tickets. "In the end, cinemas like mine depend on our customer service more than anything else," he said. Independent Cinemas Australia (ICA) lodged an application in June with the Australian Competition and Consumer Commission on behalf of its members for a 10-year exemption to cartel laws. Submissions are due by Friday with a decision expected in August.

We don't know what the big boys pay. Tom Schouten A spokeswoman for Motion Picture Distributors Association of Australia, which represents big Hollywood studios, said it was unable to comment. But distributor Icon Films, which is part of Dendy, said it supports the ICA's application because it will be more efficient and help the industry. "Information sharing between cinemas is not a concern to Icon as the strategy and release size will remain the purview of the distributor," chief executive Greg Hughes submitted. ICA's application argues distributors are taking bigger and bigger cuts of box office takings from exhibitors to make up for the collapse in DVD sales and disruption from streaming services.

"This has a disproportionately high negative impact on [members]... especially if the films offered are 'must have' for the commercial survival of the cinema," ICA's application states. Distributors have all the bargaining power over small cinemas and can dictate costs, release timing, number of sessions and how long the season runs. While the ICA can help with individual disputes, sharing information among members about prices and conditions might put the association at risk of legal action and investigation. "By contrast each of the [three] major exhibitors in Australia...holds sufficient individual market power to issue counter proposals and to negotiate, bargain and, if desired, reject proposals on a case by case basis." Hollywood's blockbusters cannot be replaced with other products if a cinema is denied a movie, and rights for an arthouse blockbuster is even worse for arthouse cinemas, which have less content to choose from. Chief executive Adrianne Pecotic said it wanted to share information among members, on an opt-out basis, to help "facilitate more sustainable independent cinema businesses and the availability of more diverse and affordable cinema services for the community".

It estimates the top 10 films of 2015 generated 31 per cent of all box office revenues and the three major chains took 66 per cent of last year's ticket sales with 52 per cent of the screens.