BERLIN — Rainer Koelmel, chairman of German entertainment group Kinowelt Medien, announced Thursday that the company is looking at plans to start its own TV broadcaster.
Speaking to financial analysts at a company conference, finance chief Eduard Unzeitig said the goal is a realistic one in view of Kinowelt’s vast film library.
Shareholders reacted quickly to the news: Kinowelt stock dropped 23.5% to 50.50 euros ($51.76). Analysts predict a Kinowelt web would incur losses in its first couple of years due to high marketing and operation costs.
Kinowelt officials say the move is a logical next step for the media group and see their plans as a long-term strategy for the company. With its own outlet, Kinowelt would sell fewer films to other broadcasters and distributors and could instead utilize the pics for its own channel. The company would thus give up short-term revenue in exchange for greater long-term profit growth, the execs explained.