U.S. Exhibs Eye Germany, U.K.

Installing multiplex theaters in Western Europe – especially Germany and Great Britain – will be the primary focus of international exhibition expansion this year, say top officials at Paramount and Warner Bros.

Expansion development by Yank companies in Southeast Asia, particularly Japan, appears to be in the preliminary stages, while plans to open hardtops in Eastern Europe and the USSR are on hold.

‘The place to be’

For now, Western Europe is “absolutely the place to be,” says Laurance Gleason, the Los Angeles-based senior vice president for Paramount’s overseas exhibition arm, United Cinemas Intl., a 50-50 joint venture with MCA. UCI plans to open 81 new screens on eight sites in Europe in 1991.

UCI’s chief American rival for the lucrative European market, Warner Bros. Intl. Theaters, plans to add 51 screens on six multiplex sites this year, says David Bent, the company’s New York-based v.p.

To date, UCI has 262 screens in Europe on 47 sites. Warners has 56 screens on seven sites. Warners is also involved in a three-way joint venture in Australia with Village Roadshow and Greater Union Organization that currently operates over 90 screens on 10 multiplex sites, with an additional nine-screen opening scheduled for Brisbane this year. UCI does not operate theaters Down Under.

The newly united Germany and a Britain that is rapidly being re-screened are attracting the most attention from the two exhib giants. Both companies plan to open three multiplexes apiece in the U.K. in the next 12 months.

In Germany, UCI is readying an 18-screen plex in Bochum for a March debut, a 10-plex in Kiel for December and a 12-plex in Bremen for early next year.

Warners, meanwhile, recently entered into a joint venture with Neue Constantin Film, a major German producer and distributor, to build up to 15 multiplex theaters across Germany in the next several years. The venture will go under the name Constantin-Warner Kino.

The venture’s first showcase comes in late March, when a nine-screen cinema with more than 2,700 seats is scheduled to open near Dusseldorf. In addition, Constantin-Warner just broke ground on a 13-screen site in Cologne, slated to debut by Christmas.

According to Bent, Warners’ overall strategy centers around building multiplexes to “reverse audience deterioration in established markets.”

Although admissions are declining in Europe as a whole, Bent claims new multiplexes are showing attendance increases of 50% in Britain and Germany. “The main thing,” Bent says, “is to be able to keep attracting people to go out to the cinema. The theaters have to be perceived as a place of entertainment, which is why we’re making them as enticing as possible, installing top-quality systems and lots of neon and brass.”

Yet, Bent adds, Warners wants to be careful not to “overdevelop” multiplexes in large markets. What was formerly West Berlin, for example, has close to 100 cinemas, and is not being targeted for short-term expansion by either Warners or UCI.

Moscow, on the other hand, is a different story. In 1989, Warners announced plans to open the first Western multiplex in the city. The company, however, found itself a victim of the political and economic turmoil that has plagued the Soviet Union over the last several years.

WB’s Moscow dig now set for ’92

Warners initially signed a lease with the central government, according to Bent, but was later forced to renegotiate a new lease with the Moscow city council. As a result, he says, construction on the two-story, 12-screen site won’t begin until 1992.

Construction is also scheduled to start the same year on an eight-acre, nine-screen multiplex in Leningrad, Bent says.

Countries that were formerly behind the Iron Curtain such as Hungary, Poland and Czechoslovakia are being approached by exhibitors with great caution. “The area offers tremendous possibilities,” says UCFs Gleason, “but right now things are still unsettled.”

The only former Eastern Bloc region that is attracting immediate investment dollars is what used to be East Germany, especially East Berlin. Gleason says UCI has “a great desire to move forward quickly” in the area and wants to concentrate on putting up multiplexes in new shopping centers, which, he says, would be “easier than taking over the existing buildings, which had been run by the government.”

In all of Germany, Gleason says, UCI plans to have a total of 10 to 12 new sites by 1993. In Spain, UCI entered into a joint venture with Cinesa, a local exhibition chain, in December 1990 and took a 50% interest in 38 screens. By 1992, according to Gleason, UCI and Cinesa will jointly construct six new multiplexes in Spain.

UCI is also looking closely at sites in Italy and France, Gleason says, and hopes to add to existing multiplexes in Ireland. About 60% of UCI’s cinemas are leased, Gleason says; 40% are owned outright.

Today’s Western Europe, Gleason believes, “mirrors the U.S. in the late 1960s and early ’70s. Existing theaters are rundown, suburbs are expanding, and the public is responding to the multiplexes that are opening.”

Knowing the local market, Gleason says, is critical to success. Zoning requirements in crowded Western Europe tend to be exacting, he notes, and local experts are essential for cutting red tape. And, he says, responsive local management is crucial to “understanding local needs.”

While Gleason and Bent are bullish on the Euro exhib market, they disagree on whether a staple of income for exhibitors – lavish commercials shown in the theater before the movie starts – will survive the ’90s.

Gleason thinks on-screen ads will be short-lived. As European audiences become increasingly accustomed to ads on television as commercial stations proliferate, he reasons, they will become less tolerant of ads at theaters.

But Bent believes exhibitors can count on the cash for years to come. “The quality of those ads is very high, and people are quite used to seeing them,” he says.

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