How the multiplex changed film distribution and film viewing in the Czech Republic
Less than seven years ago film distribution and screening in the Czech Republic was an entirely different ballgame providing only options for dealing with single-screen theatres capable of playing one film at a time. Much has changed since then,of course, thanks to the arrival of the multiplex, which had a fundamental impact on how films are now marketed, distributed, and screened here. This week I met with Jan Bradac, the head of major film distributor Falcon films and head of Cinestar - which operates three multiplexes throughout the country - to ask about the impact, including how Falcon had anticipated closer co-operation with, for example, Cinestar, to remain a strong player among some tough competition indeed.
Mr Bradac, by all accounts this has been a phenomenal year so far for film distributors and theatre operators in the Czech Republic; according to the numbers it's the first time that revenues (the first half of 2004) have exceeded one billion crowns (roughly 33.3 million euros)...
"That's right. The main reason for all of that is that the market dynamically and aggressively increased its revenues through the change in the market itself, because the entrance of new operators - new multiplex operators since 1999 - drastically changed the structure of the market, and drastically changed the sources from which all distributors are obtaining revenues over the last five, six years. In the perspective of 2004 the trend should continue in a similar way, although I don't think the increase in the business will be as significant as, say five years ago. With regards to 2004 the trend should continue along similar lines, even though I don't think that the increase of business would be as significant between 2003 and 2004 and five years ago.
If we look at the history it is interesting to compare some of the numbers: the last time the total Czech theatrical market exceeded 12 million admissions per year was in 1995. It took nine years to get back to the same level. The interesting thing about those numbers is that in 1995 box office revenues were 25 percent of the revenues of 2004 when we hit 12 million admissions again.
So, it's pretty nice to see what happened to the ticket price, it's obvious what happened to the market. Up to now there are four key multiplex operators: there is Cinema City, which is the Israeli company called I.T. theatres, there is Village Cinemas which is the Australian-based and Australian capital foreign investor for the operator of multiplexes, there is Palace Cinemas, which has an American investor behind the label, and there is Cinestar, which is the Czech-German joint-venture company, which is the youngest company, having entered the market in 2001."
You are in the interesting position of heading two companies: on the one hand a distributor, which is Falcon, on the other, a theatre operator, which is Cinestar. What kind of position does that put you in when films that you distribute in Falcon play in theatres run by Cinestar?
"To be really exact it's necessary to take one step back in history also, because Falcon was established in 1994. In 1997, 1998, there was a clear sign and very clear information that new operators of multiplexes would enter the market. Knowing this, we and our shareholders and investor and we as the management, discussed inside the company what we were going to do. We realised that if the market was going to become saturated and we could lose out, sitting only on "one leg of the chair", so we thought about the possibility of building up another "leg" on which we were sitting! We were trying to access a new venture with a foreign operator of multiplexes, to attract him to come to the Czech Republic to invest money and especially pass on "know-how" on how to build-up and operate a multiplex.
It took a long time, I have to admit, and during that time other operators began entering the market. At this stage we were kind of late. After seeing what was happening in Prague, seeing how many cinemas were being planned for Brno, today two, which I think is fully sufficient for that city, seeing how these multiplex operators - in Prague especially - were starting to cannibalise each other, we knew that any chance for further expansion needed to be done through regions outside the major cities. That's why that happened. We opened in east Bohemia's Hradec Kralove, the north Moravian city Ostrava, and in south Bohemia in Ceske Budejovice. We are convinced that we did the right thing."
One of the things that I wanted to ask about was the manner in which multiplexes changed Czech film-going habits...
"Well, people started to come more frequently to the cinema, and they began to buy popcorn and cola going to the screen! But basically tastes haven't changed - what people really want to see in the cinema - haven't changed since before the existence of multiplexes. The favoured genre is comedy, they love action films... but if you looked at the scale of top ten movies in 1995 and 2004, they would be very, very similar.
What could be called a change in the numbers is the "attractiveness" of Czech films for Czech audiences. You look at the top tens for the last years going back: almost every two years there were Czech films that broke one million admissions. Not many foreign films could boast the same - blockbusters like The Lord of the Rings or Harry Potter were unable to reach the same level. Maybe the first Lord of the Rings but that was it; all of the others never hit that point. Multiplexes are able to keep Czech films longer on the market, than former single screens. Czech films have definitely benefited from the situation happening right now in the Czech Republic."