BUDAPEST — Hungary’s status as an emerging TV market is battering its video industry, and distributors of U.S. cassettes are the hardest hit.
In the wake of the launch of three commercial TV stations last fall, Hungary’s video distribution/rental industry is rapidly shrinking.
“According to experts, there is a 60% drop in the video (distribution) market,” Gabor Karpati, international trade director for the Budapest-based distributor Flamex, said. “Only hit titles are good sellers. B-movies and cheap action movies are not selling well because you can see these types of films on TV.”
The dramatic drop in video rentals is in fact, per most accounts, the result of the dramatic growth in the TV broadcaster sector over the past seven months.
“It’s not a big surprise that a new TV station will affect the video industry,” Peter Balint, managing director of Budapest-based distributor UIP Dunafilm, added. “The thing that is unique to Hungary, that has not happened anywhere else, is that two terrestrial networks started at the same time. They are competing with each other and they are buying the best programming packages.”
Last October, western Euro giants SBS and CLT-Ufa won tenders to launch the TV2 and RTL Klub networks, respectively, over Hungary’s national terrestrial TV system.
Shortly after, U.S. media investment company Central European Media Enterprises (CME) bought controlling interest in the TV3 cable network, and announced plans to turn this regional channel into a national network.
During this competitive start-up period all the networks are filling their slates with hot U.S.-produced movies.
“All the networks are highlighting movies,” Cecilia Hazai, co-owner of the distribution company Twin Media, said. “Ratings show that films are very powerful in Hungarian programming.”
Flamex’s video distribution arm, Flamex InterStar, says it is now releasing four video titles a month where prior to the launch of the three new Hungarian networks it released as many as 10 titles monthly.
All is not lost. Balint predicts that the rental industry will pick up again sometime this summer after the three networks have aired the hottest blockbusters in their arsenal. “In another six months (the networks) will show all of their A titles,” he said, “and won’t have any (blockbusters) available to air. Then everything will return to normal,” he said hopefully.