Distributor rides rough Russian seas

Berlin's A Company labors on in wake of crisis

BERLIN — As head of a Berlin-based distribution company focusing on Eastern Europe, Alexander van Duelmen finds himself weathering a perfect storm fueled by the current financial crisis and deteriorating political relations between Russia and the West.

Van Duelmen’s A Company and its wholly owned subsidiary Eastern European Acquisition Pool (EEAP) are major distributors of films and TV series to Eastern European markets.

Russia, its largest market, has been hit particularly hard by the plummeting price of oil and gas, which has led to a loss of sponsors and lower acquisition budgets for TV broadcasters. In addition, increasingly chilly relations between Russia and the West following the country’s recent conflict with neighboring Georgia have made already shellshocked banks even more jittery, making it that much more difficult to secure the occasional credit line.

Gala Media & Film Intl., wholly owned by A Company, handles distribution in Russia and the Commonwealth of Independent States, something that became increasingly difficult following the Russian-Georgian conflict, when telecommunication and bank transactions were cut off between the countries.

Yet van Duelmen is optimistic about getting through the current tempest.

In its five years of existence, A Company has carefully built up a network of reliable theatrical and television partners throughout Eastern Europe and in recent years amassed a large number of films, some two dozen still in the pipeline.

“We’ve built up a good cushion,” van Duelmen says.

The group holds rights to more than 250 films, including upcoming titles such as “Zack and Miri Make a Porno,” “The Reader,” “Daybreakers,” “Igor,” “Saw V,” “100 Feet,” Brazilian hit “Elite Squad” and TV series like Turner Network Television’s heist skein “Leverage.”

EEAP’s distribution partners include Lionsgate, the Weinstein Co., Lakeshore, Summit, Icon, Capitol, Odyssey and Voltage.

A Company and its subsidiaries have so far enjoyed a strong year, making more than $12 million in TV sales in Russia and some $6 million in Poland.

“We have the advantage of having a very diverse portfolio,” van Duelmen says. “We can mix a Martin Scorsese film with a high-quality TV movie. Channels find that more exciting than, say, a package of horror films.”

In September, EEAP extended its distribution agreement with pay TV group Canal Plus in Poland for an additional three years, solidifying its position as one of the leading independent distribs there. It also extended a similar agreement with Hungary’s TV2. Earlier this summer, A Company expanded into video-on-demand by acquiring a 25% stake in Hungarian VOD platform Filmklik.hu and partnering on joint ventures in Germany and throughout Europe.

“I don’t believe the effects of the current crisis will be as dramatic as some people say,” van Duelmen says. “In Russia, broadcasters will be buying fewer films, but that was already the case before the crisis hit as channels are looking to produce more inhouse programming, and some channels may even use the situation to postpone payment on some acquisitions.”

As a further sign of health in the Eastern European market, van Duelmen points to recent purchases by major players in Bulgaria, the poorest country in the European Union but one seen as having plenty of potential.

Swedish media powerhouse Modern Times Group agreed over the summer to pay some $800 million for Bulgarian broadcaster Nova Televizia. The deal follows the $172 million acquisition by Ronald Lauder’s Central European Media Enterprises of an 80% stake in two Bulgarian channels owned by Bulgaria’s Top Tone Media Holdings.

The challenges facing the media industry will be front and center at the upcoming European TV Dialogue conference in Berlin, a confab van Duelmen initiated in 2004.

This year’s Dialogue, which takes place Nov. 20, will explore growing opportunities in Eastern Europe but also examine pressing issues such as the recent conflict between Russia and Georgia and its impact on the media industry in the region. Other topics include the state of commercial and public television in Poland and the Czech Republic and the increasingly symbiotic relationship between music and TV.

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