As private distributors proliferate across Eastern Europe, a once highly regulated region has become significantly more competitive and lucrative for U.S. films. But don’t expect East European distribs who are converging on the Cannes market to be in an expansive mood.

For one thing, most have alliances based on percentage deals with the U.S. majors, which means their larders are fairly well stocked.

For another, it’s no secret that the economies in the former Eastern Bloc are struggling to make up for years of neglect and lost opportunity. Cinema attendances are declining and many theaters sorely need refurbishing. Video piracy is still endemic.

B.o. down in Hungary

And moviegoers, by now accustomed to a steady diet of new American blockbusters, are becoming as blase and selective as those in the West.

In Hungary, demand for horror and action fare has tapered as audiences have developed a voracious appetite for comedies, especially the slapstick variety, according to Istvan Gardos, co-m.d. of distrib Intercom.

A co-venture between CaroIco, Mafilm and Hungarofilm, Intercom is the clear leader among the 20 or so distribs that sprouted since state-owned Mokep lost its monopoly in 1989.

“There is a good supply of U.S. hits which can be seen in Hungary within a short time” of their Stateside release, said Gardos.

Last year Intercom, which handles Warner Bros., Disney, Columbia and Tri-Star product, released 30 titles which garnered 500 million forints (about $6.8 million at last month’s rate), one third of the industry’s total revenues.

But ticket sales nosedived by nearly 22% to 35.7 million, an inevitable consequence of the shuttering of many dilapidated cinemas. This January and February, admissions were off 40% on the same period last year.

“The basic problem is the falling standard of living,” said Jozsef Gombar, general manager of state-run Mokep. He cited research published last March indicating 50% of families prefer to watch tv than spend money on cultural events such as the cinema.

“The existing structure of exhibition in Hungary has not kept pace with reforms in other fields and is not advantageous for quality films,” noted Istvan Varadi, g.m. of Hungarofilm which created a distrib unit last year.

“I am afraid distributors cannot do much more to increase (business) with the lack of convenient cinemas,” said Gabrielle Jancso, m.d. of Danube Film, a partnership of United Intl. Pictures and Budapest Film.

Top title last year was Intercom’s “Look Who’s Talking Too” which grossed nearly $900,000. The sequel preemed in March and drew 600,000 patrons in the first four weeks.

Another U.S-Magyar co-venture, Saturnus Film, debuted mid-1990 with 14 titles. So far this year the company has released nine.

Danube has scored this year with “Kindergarten Cop” (350,000 admissions in the first month), “Bird On A Wire,” “The Godfather Part III” and “Teenage Mutant Ninja Turtles.” But Jancso said that of the 1990 crop, “Born On The Fourth Of July” and “The Hunt For Red October” were disappointing.

Mokep released 106 titles including 34 U.S. films, last year. “The supply of films in Hungary has drastically tightened,” said Gombar. “Now we have to chase profits, and everyone is scrambling to cash in on U.S. films.”

In Czechoslovakia, the distrib business is in a state of flux. Pending the introduction of a long-awaited film law, United Intl. Pictures and Warner Bros. are withholding product.

Lucernafilm, the former Czech distrib agency, has signed a deal with 20th Century Fox, and will unleash “Aliens” in June, followed by “Predator,” “Die Hard” and “Star Wars.”

Interama, a new co-venture between N.Y.-based IFEX Intl. and the Slovak Distribution Co., has an agreement with Columbia Tri-Star, via which “Flatliners” will bow nationally May 23, and “The Freshman” in June.

Having snared Czech rights to “Dances With Wolves,” Interama plans a gala preem in Prague June 5, with key cities opening the next day and national release in September.

Both companies are sending reps to Cannes seeking commercially appealing films such as comedies, sci-fi, horror and packages for homevid.

Czech distribs say price levels for American pictures have not changed much from the monopolistic days, ranging from $5,000 for a “Stranger Than Paradise” to $50,000 for a “Rain Man.” Difference, of course, is that flat prices have given way to minimum guarantees and percentage deals.

Current flat prices for indie product varies from $12,000 to $25,000, depending on budget and perceived appeal. Those amounts cannot be forced up because of the 30% drop in attendance in the past year, distribs argue.

Czech Filmexport, which formerly had sole responsibility of importing foreign films, is disbanding its import department and concentrating on exports.

The Bonton company, which caused a furor last year when it pre-empted film law and “illegally” produced a picture adapted from the popular novel “The Tank Battalion,” is preparing to distribute it later this month. Bonton is opting to bypass Lucernafilm in favor of the services of regional film offices.

With more than 2,000 cinemas, Czechoslovakia is potentially a very strong market. But until rampant video piracy is curbed that potential is a long way from being fully realized.

In Poland, many of the 900 cinemas are in poor condition, and vid piracy is rife. The video market is profitable and growing: There are 8,000 registered video rental outlets, and an estimated 2 million VCRs.

Since the abolition of the state monopoly on film distribution and production, private companies have formed co-ventures with the majors. ITI pacted with Warner Bros., Eurocom joined forces with UIP and Syrena Distribution linked up with Columbia Tri-Star.

Guaranteed such supply lines, it’s unlikely those operators will embark on buying sprees in Cannes. But one new outfit, Opal, is hungry, and has set an ambitious goal of importing 24 films annually from the U.S. and Europe.

Yank product dominates the Polish market, accounting for an estimated 85% of the b.o. Among the recent clicks have been “Indiana Jones & The Last Crusade,” “The Hunt For Red October,” “Batman,” “Pretty Woman” “Dick Tracy” and “Casualties Of War.” For U.S. films, distribs pay in the range of $12,000 to $25,000.

A new form of rights licensing is emerging in Poland: films and other product for cable tv. Over the past year cable penetration has rapidly expanded via small neighborhood networks from almost nothing to as many as 80,000 homes.

– Csaba Osgyani in Budapest and Krzysztof Toeplitz in Warsaw with Don Groves in London contributed to this report.

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