As Constantin Film prepares to release an eclectic slate of high-profile films this year, including Paul W.S. Anderson’s 3D spectacle “The Three Musketeers” and Roman Polanski’s “Carnage,” it does so in a strong and dynamic market that is undergoing great change.
In an industry that is being re-shaped by digitization, the emergence of 3D, new digital distribution models as well as greater foreign competition and the ubiquity of piracy, Constantin is navigating forceful waters while keenly exploiting the advantages the new world order has to offer.
Martin Moszkowicz, Constantin’s head of film and TV who oversees both production and distribution, is embracing the challenges with gusto.
Last year, Germany’s box office slipped just 5.7% to €920.4 million ($1.3 billion) despite a 13.5% drop in admissions. Thanks to the growing power, and higher prices for 3D tickets, that considerable drop was greatly cushioned.
“The theatrical distribution business is much more robust than many have thought,” says Moszkowicz. “The ups and downs are not so much related to market developments or changes to the audience profile but product flow. Over the last five years attendance levels have been stable and the German share of those is on an upward trajectory. Sales have been solidly over ($1.28 billion) in 2009 and 2010 compared to just over $997 million in 2005.”
This year’s box office will almost certainly near $1.4 billion, he adds.
“3D is an important part of this and the positive impact on the box office is totally clear — especially when it comes to event-type movies.”
Indeed, it was a 3D pic that recently made history for Constantin. Anderson’s “Resident Evil: Afterlife” has amassed $300 million worldwide, becoming the most successful film ever for the company.
Moszkowicz is making sure Anderson stays behind the stereoscopic camera: Fresh off the “Musketeers” pic, the helmer is busy at work on the fifth “Resident Evil” installment, and then he’ll leap directly into “Pompeii,” a teen love story set against the backdrop of the Vesuvius eruption that buried the ancient Roman city. Scheduled to shoot in Europe next year, “Pompeii” is budgeted at more than $100 million, making it Constantin’s most expensive movie to date.
Both pics will be 3D, as will Reinhard Klooss’ upcoming “Tarzan,” a CGI-animated adaptation of the classic Edgar Rice Burroughs novel but set in the present day.
Also in 3D is this year’s “Vicky and the Treasure of the Gods,” a follow-up to the 2009 hit family film “Vicky the Viking.”
The market’s focus on big 3D movies has many smaller distribs in Germany worried about the fate of
independent cinema. While most major multiplex operators have digitized, many small- and medium-sized exhibs across Germany and Europe, struggling with the costs of digital conversion, warn of the growing dominance of U.S. studio distribs and the danger to film diversity.
Moszkowicz is optimistic that most exhibs here will be able to convert, and says the appetite for smaller and more adult-skewing fare remains as strong as ever.
Cinemas that cannot convert commercially need help, Moszkowicz says. “A theatrical landscape that is only a few large operators is in nobody’s interest. But also for smaller theaters in less populated areas — the need for conversion is paramount.”
Adult-targeted arthouse and independent productions, both foreign and domestic, have proved hugely successful this year, he adds.
“There is always room for a good movie, big or small, as long as there is an audience that wants to see it. The first half of this year was, in fact, dominated by smaller, more adult-skewing films such as ‘The King’s Speech,’ ‘Black Swan’ and ‘Almanya.’
“I totally disagree with the notion that big movies threaten smaller films. How should they — especially when they are targeting totally different groups of audiences?”
Indeed, the healthy size of Germany’s theatrical market continues to attract new players, and more competition for Constantin.
International companies such as Studio Canal and Wild Bunch have established footholds here in recent years, and the U.S. majors have been showing increasing interest in local productions for the German market.
The growing number of rivals poses little threat to Constantin, which boasts strong production and distribution divisions, yet the increasingly bustling market has driven up property prices.
“I have seen many arrivals and departures in Germany in production and distribution over the years. The fact is that this is a huge market that can support many players. As to the major studios, their strategy seems to me to be spotty or stop-and-go as to local-language movies. Only a very few have developed a local-language strategy that is based on the same slate-based business model that is the foundation of their worldwide success with English-language titles. But obviously there is more commotion than 10 years ago — and one of the (consequences) on German-language films is that the prices for material (book rights, screenplays) and talent have gone up due to more buyers.”
In addition to greater competition, German and European distribs are also facing multifold challenges posed by the ongoing digital conversion, from new distribution and marketing models to the ever-present dangers of piracy.
Digital distribution is still in its early stages, says Moszkowicz. “The level of sales through digital distribution is not that relevant — but I believe it will be increasing substantially over the next years. We will have to find ways to protect our existing business while welcoming new ways. From a customer perspective, it is still hard to understand that digital consumption should come at a similar price as physical consumption.”