An initiative of the EU MEDIA Programme with the support of the Italian Government
Since 1992 MEDIA Salles has been promoting the European cinema and its circulation at theatrical level




Elisabetta Brunella
Secretary General of MEDIA Salles
Cinema Expo Amsterdam: June 28, 2005

After completing her education in the humanities in Italy and post-graduate studies in the United States, Elisabetta worked as a freelance journalist and in the field of communications and marketing.
Since 1991 she has been Secretary General of MEDIA Salles, the project supported by the European Union's MEDIA Programme and the Italian Government, addressing cinema exhibition and providing services in the areas of information, training and the promotion of European cinema.

Subjects discussed: European Admissions, Market Shares, Domestic Cinema, ‘La Vita è Bella’, Linguistics in Cinema, Cultural Links, Formula and Unique Content, European Digital Cinema Distribution, Marketing and Exhibition, Cinema as Entertainment and Culture, Digital Cinema and its Possible Impacts on Exhibition.

What is the state of European cinema exhibition today?
In the last 10 years, in the 15 countries that formed the European Union up to 2004, there has been an overall increase in admissions. In all, admissions have increased by about 50% for these countries, rising from around 600 million to 900 million. If you want more detailed information and more detailed percentages, you can have a look at the “European Cinema Yearbook” .
This increase does not regard all countries to the same extent. There are varying levels of growth. There is also a difference in the number of tickets sold per capita. There are countries like Ireland, France or Spain, that are above the European average per capita frequency, which is around two and a half tickets per year. There are then the countries that are below the European average, for example, Germany, Italy and the Netherlands. It should also be remembered that the number of tickets sold, and consequently the per capita frequency, may vary greatly from year to year. The penetration impact of domestic films is also affected by great variations.
There are countries in Europe where the market share of domestic movies is quite substantial. This is the case mainly of France and also of Italy and Denmark to a certain extent. There are countries like Germany where the market share of domestic product can change substantially according to the year. In the case of countries with weak domestic production, the market share of domestic movies is usually quite low.
owever, it can be noticed almost everywhere that the presence of domestic films with wide appeal has a highly positive influence on the overall trends in cinema-going. In fact you can have a better year when there is a very successful domestic movie. Just one movie can make the difference. This also happens in the case of non-domestic European films.
There are certain years when two or three big pan-European successes can make the difference almost everywhere. This was the case of the 1997 film, ‘La Vita è Bella’, (Life Is Beautiful), which was circulated internationally in 1998.
There are times when two or three of those very important movies can influence the market share in several countries. There are also countries that have higher percentages of non-domestic European movies due to their specific linguistic situation. Statistics in Belgium show that they continuously have a high market share of non-domestic European cinema. As in part of Belgium they speak French, French movies are considered foreign movies in terms of statistics but play the role of domestic movies there. Outside of the European Union, in Switzerland, there is a similar situation. In fact, French films are perceived as domestic movies for the French-speaking population; similarly, Italian films in the Italian-speaking part of the country, and German movies in the German-speaking one.

Do you consider that language and cultural identity have an importance in cinema?
As we have just seen, language is very important to convey a sense of familiarity or, instead, of foreignness. The cultural or historical link within a specific country can play a very impor¬tant role for the success of a film on any type of market, as proven by the cases of ‘Names in Marble’ and ‘The Downfall’. The former was very successful in Estonia, the latter in Germany; but the German film succeeded in becoming a true international success.
In Norway in 2001, there was a movie ‘Cool and Crazy’ that didn't travel much abroad but was able to draw even the older generations into Norwegian cinemas. This was because this film was saying something about the life of Norwegian people in a very convincing way. It was a tremendous success. This shows that movies that speak the same language as the people and touch something that is part of their culture are very successful, even if they are not broader European successes.

What are the market shares for films in Europe?
On average, the market share of U.S. movies in Western Europe is about 70-78%. This number can vary quite a lot, according to the country, the year, and especially in relation to the success of domestic and European movies. Sometimes a small number of well known European or domestic hits (or even just one) can change the situation.
Unfortunately, irregularity in product flow is one of the main problems concerning European films. In fact, it's not possible to count on a regular flow of European movies which have a certain success or reach more than just one market. In a particular year several European movies may be successful internationally, whilst the following year it may prove impossible to repeat this situation.

Does this situation come from the concept that, in general, European films are not ‘formula’ driven for European countries?
We could say that each European film is unique, so it is more difficult to build on the success of a particular movie. Nobody can be 100 percent certain of the success of a movie. If there were a long term strategy that took into consideration the different needs and expectations of the public, this could be of use. Every year the U.S. studios offer comedies, thrillers, something for families and children; they tend to offer a range of products that are attractive to different types of audiences. Unfortunately, this is not the case in the European cinema industry.
The challenge is to offer a regular flow of products catering to different needs and expectations. In my opinion, it is incorrect to say that Europeans don't want to see European films. This is not true. Europeans are definitely ready to see movies like ‘La Vita è Bella’. The problem is that there should be an equivalent to it every year.

But does not another piece of this puzzle have to do with European cinema marketing, distribution and exhibition?
European distribution and marketing are also two areas where more development is needed. If you look at the number of prints of European and domestic films, you realize that they only cover certain cinemas. Thus, they cannot actually achieve broad distribution. Another challenge has to do with marketing budgets. Although it's very difficult to get precise information about marketing budgets, if you look at the figures of the average marketing costs of Hollywood new feature films (source MPAA: 34-35 million dollars in 2004), you see immediately that the difference between those and European budgets is enormous. Additionally, the Hollywood majors count on a well-articulated network of distribution, whilst European cinema does not. This makes it very, very difficult to compete.

Could the potential rollout of digital cinema change this picture?
Technology by itself doesn't change these factors. It can offer a chance, but this alone cannot be considered the solution. With digital cinema, the distributor will be able to cut distribution costs and the benefit of these reductions could go in different directions. One direction could be to allow films that already have a lot of prints circulating through traditional distribution to be distributed even more aggressively and at a lower cost. This would clearly move in the opposite direction to a variety of range in programming.
The other hypothesis is that digital technology may allow films that would only come out with a few analogical prints to reach many more screens. For example, the Danish film ‘Italian for Beginners’ was distributed in Germany on 19 screens in 2002. The average per screen was about 10 thousand admissions, which is quite high. But probably a distribution with a higher number of prints could have boosted total admissions even higher. In cases like this, digital technology would make it possible to respond more quickly and with lower costs to the increase in demand by audiences. In fact ‘Italian for Beginners’ had greater success than was forecasted by the distributor. It would have been possible in a case like this to increase the number of releases after seeing that the movie was better received than expected.
In my opinion, digital distribution and exhibition is a real possibility for varying the offer to the public, but this is not something automatic. There must be a strategy behind this, a transition enabling this. Otherwise, I'm afraid that the new technology could benefit those who already control the market. Digital cinema should result in better film distribution and not in the limitation of the types of content that make it to the screens.
Faced with the prospect of digital distribution, exhibitors raise some key questions. If the distributors are going to save a lot of money, why should the exhibitors cover the cost of much more expensive equipment? Another area that is also important to address is that of quality. Can exhibitors engage in a transition if they’re not sure that the quality offered to their patrons will be better than the quality they offer now? Is digital projection making piracy easier or more difficult?
Another area to question would be that of market access. Is this technology going to help exhibitors in becoming less dependent on traditional distribution? In my opinion, this question is crucial for European cinema if it is to benefit from this new technology. I believe that it would be much more beneficial to cinema-going in general if there were more competition and choice among products as well as among the product suppliers.
In a market where there is a limited number of players in the field of distribution, even though the practice of block booking is not allowed, it may prove difficult in practical terms for an exhibitor to refuse to program a film that is not particularly promising if this is part of the offer from a distributor who also offers titles with wide appeal. In other words, in a market where there are many cinemas and not so many distributors, it is clear that an exhibitor who has to deal with five or six distributors cannot “quarrel” too much with them.
In the cinema market, which is very much dependent on product and where there is a small number of suppliers, the negotiating power of exhibitors is sometimes quite limited. That’s why some exhibitors are exploring the possibilities of adding alternative content to movies. This could be a way both of offering more variety of choice to spectators and of gaining more bargaining power with distributors.
This is a little far away, but, for example, there are those who can imagine a situation where the exhibitor would be able to tell the distributors that he may decide to present some programs of soccer championships instead of showing a bad movie or something else. This is just an example to show that exhibitors are thinking about the new technology and future distribution possibilities.
Another crucial issue for the development of digital screening regards standards and equipment specifications, security and other issues, such as high image quality. These areas are sensitive in the exhibition sector. On the one hand, it is evident that high levels of quality and security are essential for making certain that digital screening represents an improvement on analogical screening. On the other hand, it is feared that these standards may be instrumental to retaining control of screen access by the present market leaders. It is also very risky to approve of European cinema being delivered at lower quality than Hollywood movies.
The above issues are open questions. In my opinion technology alone doesn't solve problems that are not only of a technical nature. The participation of the many different parties involved will be very important in coming years.
It is also important for the European Community to reflect on what cinema means to society. Does it bring citizens freedom of information and access to various sources and ways of expression? Is cinema simply entertainment, or is it also a part of culture? Is profit the only criteria to adopt in the cinema industry? And when we talk about market, are we sure that in a situation where a limited number of competitors have gained a much stronger position than others, there is room for real variety of offer? Clearly, questions of cultural and social relevance also come into play.

Could digital cinema technologies change the way cinemas - large and small - are used?
Theoretically, yes. With digital technology, any cinema could potentially show many different types of content. A theatre could, for instance, feature music events and educational programs. If a cinema has a wider variety of material, this could possibly allow for longer working hours. The role of the cinema in smaller communities, too, could become different. People might go to the cinema more in the morning – for example, for educational initiatives such as distance learning on university courses – and, if the cinema thus extended its opening hours, they could then drop in to buy a sandwich. If there were other content available that is not the standard one and a half hours in length, but for example 40 minutes, this could be combined with a quick lunch.
The goal of MEDIA Salles is to help inform exhibitors and train them for the new technologies, their potential and relevant issues. One of these ideas is to explore how digital technology can enrich a cinema’s programming. This can have a social significance as well as a commercial one for cinema owners. If there could be ways of keeping cinemas open longer, expanding programming and content models, this would be very interesting.

Could this mean a kind of regeneration for cinemas?
Yes, it could contribute to regeneration, especially for dealing with a scenario where the individual consumption of songs and images is constantly on the increase. But it is just as clear that people will always be willing to share experiences with other people. Therefore, the new technologies must also place themselves at the service of those who prefer going to an actual physical place, because it will give them the possibility of sharing their feelings and emotions with other people. Nothing can replace the communal experience of cinema-going.