News / The Network Imprimer
The Network - 28/09/2015
Interview with Christian Bräuer, President of AG-Kino Gilde, and General Secretary of Europa Cinemas
The Leipzig art house film festival (Filmkunstmesse), held between September 14 and 18, is an unmissable event for stakeholders in the German cinema industry. For the occasion, trade magazine Filmecho published an interview with Christian Bräuer who is President of the German cinema association Kino Gilde, Vice President of the CICAE and General Secretary of Europa Cinemas (of which he is also an exhibitor-member). Here, we have reproduced the part of the interview on Europe in which Christian Bräuer discusses the issues of video on demand and simultaneous release as well as the European Commission's policy on subsidies.
Is it advantageous for cinemas to offer video on demand films themselves?
This model exists in Great Britain where it has been heavily subsidised. In Germany as well, some cinemas are trialling it at the moment. Of course, films need to take advantage of an online success. The question is, does this give cinemas a chance to boost their profiles and generate additional income? Lots of cinemas sell DVDs already.
However, we are seeing a major problem in combining video on demand with release windows and simultaneous release. The main issue hampering VOD is not the window, as video has functioned successfully for years and is still functioning. The problem is piracy. As long as films are already available on video for free, it is impossible to set reasonable prices. Amazon, iTunes and Netflix would all ask for more if they did not have to contend with piracy.
We really do not understand how simultaneous release strategies can hope to help smaller films. It would put the cinemas that show these films at risk. On the Internet, mainstream films always dominate while the proportion of European films is even smaller than it is in cinemas. In theory of course, anything is possible on the Internet, and there is an audience involved in this, but only those films that are successful in the cinema also experience success online. No user is going to keep looking until the seventh page, whether on Google or Amazon. People choose whatever is suggested at the beginning - and that's blockbusters. Smaller films simply do not feature. There are benefits for major platforms but an intermediate economic model cannot capitalise on this.
So as a consequence, does this mean VOD for cinemas is not a lucrative business model?
It cannot provide a secondary source of income but could be an additional extra, much like selling popcorn. We are still a long way from this however. Profit margins for cinemas are relatively modest. The Internet also raises the question of content and whether distributors can supply all the films the public wants to see at a given moment, as they do not always have the required licenses. What's more, with video on demand come technical challenges and safety requirements, and there are costs involved in these. In fact, this raises the question of access control technology for screening and storing films. The majority of VOD platforms do not make money themselves, it would be hard for a cinema to offer VOD profitably.
In the same way, DVD sales in cinemas do not generate noticeable income; this is more about brand image. VOD could appeal to cinemas but up to this point, all the models have run into difficulties in practice.
So, VOD is not an alternative?
To promote smaller films, you need cinemas to screen them. This remains the solution as this is how films gain an audience. However, lots of films are second-rate and flop both in the cinema and online. In 2014, our members screened 5000 films. This would not have been possible before digital technology. I hope that Europe is getting ready to abandon the combination of simultaneous release and video on demand. What Europe needs is cinemas that want to show European films and that have large screens to launch them on. In its report on cinema in the digital era, the European Union says that the situation regarding subsidies is critical, so it should look at how it goes about granting subsidies. Of course we need VOD, but we must support cinemas showing non-national European films with their programming and marketing. Their work is quite an achievement as they have more films to promote each year.
What are your requirements with regard to the European Union's policy?
The current network of European cinemas serves the interests of European films and European filmmakers and this should be consolidated. To maintain Europe's strength - its cultural diversity - it is also important to respect linguistic and cultural territories. Each film is perceived differently in each country. In one country it can reflect the reality of the spectators' lives while in another one it offers a window into another culture. Such awareness applies to all political areas. Therefore, preserving distinct territories is extremely important for the film industry. Given the fragmented structure of the filmmaking economy, geo-blocking and release windows remain indispensable for exhibiting a film successfully. Transatlantic agreements acknowledge that a film cannot be treated in the same way as other cultural products and that Europe is not a homogenous cultural area. Culture requires specific rules, protection and support to prosper. The European Union should make sure this is respected and focus on subsidising heavily so that films achieve a good level of visibility through effective circulation.
Interview by Birgit Heidsiek, published in Filmecho n°37/ 11 September 2015, Excerpts