German Films Get Serious

Statistically, the film board counts openings resulting from both new construction and reopenings after upgrade and remodel. Nevertheless, only 108 new screens were added from January to June (236 in 2000, 448 for the full year). In the old Bundeslander of the West, a mere 68 opened (188 in 2000), while the Eastern federal states counted 40 over 48 screens. Of the 4,738 screens, 3,813 are located in old states and 925 in the Neue Bundeslander of the East. Closings remained stable at 153, with a slight shift from West (133 vs. 135 in 2000) to East (20 vs. 18). Broken down by size, only five new multiplexes opened with 44 screens and 10,735 seats as opposed to 13 that started popping corn by June of last year. After the UCI Kinowelt in Chemnitz (October 2000), the second purpose-built multiplex closed its 1,620 seats and seven screens in Freiburg (Ufa Palast). The market share of all remaining 132 multiplexes attracted 34.3 million, or 42.7 percent of all moviegoers (2 000: 29.2 million) with only 25.1 percent of the screen count. At 45.9 percent, revenues were also on the rise, despite a 0.8 percent lower average admission price.

At the same time, home-video businesses took in DM 421 million (plus 31.6%), which translated to DM 955.9 mil. on retail level for both rental and sales activity. As everywhere else in the world, the DVD share rose a staggering 176 percent in comparison to the first six months of 2000.

Among those closings were the Broadway and Odeon art houses in Cologne, both part of the Kinopolis Management GmbH that operates theatres for the Kinowelt Group. Once a darling of the Frankfurt Neuer Market stock exchange, Kinowelt Medien AG, like many of its colleagues, has been forced to institute several changes in its portfolio. On the distribution side, its branded labels for specialized (Arthaus) and repertory programs (Jugendfilm) will no longer have a separate team, but will be marketed through the same system as first-run and commercial product. At the same time, it was announced that the number of releases would be trimmed to about 35 annually, down from 60 last year.

Less than a week later, the next bomb hit the Munich-based company, at a time when warnings went out to staff that paychecks will be late and shares hit a new market low. In 2002, most likely starting with Rush Hour 2, U.s. corporate ties will rake hold and films produced by New Line Cinema will be handled through Warner Bros. At press time, only negotiations were confirmed, but it sure looks like Kinowelt will lose its biggest and best single supplier.

Sadly, New Line and Kinowelt is not the only break-up that we have to klatsch about. Two giant marriages in the exhibition sector have called it quits as well–one deliberately, the other by way of financial collapse. In 1998, Ufa Theater AG and Rehs Filmtheaterbetriebe founded N.e.U.e. Theaterverwaltungs GmbH to jointly manage and operate the IMAX theatres in Bochum, Frankfurt and Dusseldorf. With attendance figures hovering under 100,000 in Dusseldorf and below 300,000 in the other two cities, the three separate ownership structures filed for bankruptcy. (Insolvenzverfahren is the German term for very un-Chapter 11-type proceedings.) Volker Riech of Ufa is setting up a potential successor company, should the appointed bankruptcy administrator decide in favor of the assets.

Based in Dusseldorf, Volker Riech’s Ufa Theater AG once was the strongest force in Germany. In the other royal wedding gone sour, his cinema-operating unit, Ufa Theater GmbH, had merged with Hans-Joachim Flebbe’s CinemaxX AG to jointly explore a shrinking cinema market. Despite the hoped-for savings and awaited synergies, the operating agreement was cancelled at the beginning of August. In April 2000, CinemaxX had purchased ten percent of the Ufa Theater GmbH and took over the day-to-day business, with a full-fledged merger anticipated by 2005. Now Ufa GmbH’s majority partners–investment firm Apax Partners and U.S. insurance company Pricoa Capital–claim that the results were below expectations and decided to build on their own management team instead. Headed by managing director Stephan Lehmann and Andreas Vogel, an Ufa project manager in Berlin, offices have since been relocated from the CinemaxX headquarters to the Alstercity in Hamburg. To complicate matters further, Ufa Theater GmbH’s operations divisio n is located in Dusseldorf, home of corporate parent Ufa Theater AG. In addition, CinemaxX will retain its share in the Ufa GmbH.

Sounds like just the usual family business.

Leave a Reply

Your email address will not be published. Required fields are marked *