FNE Visegrad 2021-2022: Czech Distributors Keen to Maximise Revenue in Market Shifting to SVOD

    Caught in the Net by Vít Klusák and Barbora Chalupová Caught in the Net by Vít Klusák and Barbora Chalupová

    PRAGUE: Digital Video-On-Demand (VOD) revenues are expected to keep increasing in the Czech Republic, according to some film distributors in the country, even as the COVID-19 pandemic wanes across Europe and the continent continues to recover from the coronavirus crisis

    “Physical distribution of the BR/DVD carriers continues to sink steadily due to the fact that DVD shops are closing down and supermarkets limit or cancel such sales. In contrast, we expect digital VOD distribution to increase revenue by approximately 40%,” asserted Jan Rubeš, Chief Executive Officer of AQS/Magic Box, one of the Czech Republic’s foremost independent distributors, specialising in the distribution of foreign and domestic film and television titles via Blu-ray/DVD, and digital VOD. Magic Box has recently been responsible for the non-theatrical release of titles such as Parallel Mothers by Pedro Almodóvar, The Eternals by Chloé Zhao, and the Czech romantic comedy Love on the Peaks / Láska na spickách directed by Petr Zahrádka.

    The market changes experienced as a result of COVID-19 may persist at least in the medium-term, experts also say. Aleš Danielis, Programme Director at Cinemart, one of the Czech Republic’s largest film distributors, says that, while during COVID-19 distribution companies were forced to “dramatically limit our business activities and be very flexible” in order to get through the crisis, the recovery period has not been characterised by stability. “With all our colleagues, we succeeded in surviving without negatively impacting our team. Expectations were that 2022 would see an improvement [in the situation]. However, we do not think that the difficult period is over. Apart from the still-present COVID-19, the Ukrainian war is making citizens nervous, and this might prevent them from being open to entertainment,” he said.

    Cinemart represents two of Hollywood’s most powerful and profitable studios - Universal and Paramount Pictures. In 2020, they released two of the titles in the Czech top 10: Paramount’s Sonic the Hedgehog, directed by Jeff Fowler, with admissions reaching 205,845, earning a gross box office figure of 30 385 348.80 CZK / ~ 1 227 000 EUR; as well as Universal’s Doolittle, directed by Stephen Gaghan, which racked up admissions of 156,143, earning 23 929 581.68 CZK / ~ 967 000 EUR at the box office.

    These numbers reflect the pandemic restrictions imposed on theatres over the course of the year, with Czech theatres forced to close for 223 days – from 13 March to 10 May 2020 and later, from 12 October to 23 May 2021. As a result of the crisis, the film distribution market saw a shift from one based predominantly on international titles, to a distribution sector prioritising Czech titles.

    Indeed, in 2019, out of the ten top titles in the charts eight were US productions - Avengers: Endgame; Bohemian Rhapsody; Frozen II; How to Train Your Dragon: The Hidden World; Joker; Once Upon a Time in Hollywood; The Lion King, and Spider-Man: Far From Home – while only two were domestic titles: Women on the Run / Ženy v běhu directed by Martin Horský, and Poslední aristokratka by Jiří Vejdělek. In contrast, in 2020 six on the top ten were Czech productions – Caught in the Net / V síti, a documentary about online predators, directed by Vít Klusák and Barbora Chalupová; the Czech romantic-comedy, A Too Personal Acquaintance / Příliš osobní známost by Marta Ferencová; 3Bobule, a comedy set in a vineyard, directed by Martin Kopp; Charlatan / Šarlatán, a biopic of Czech healer Jan Mikolasek, directed by famous Polish auteur Agnieszka Holland; and another romantic comedy Chlap na střídačku, helmed by Petr Zahrádka; as well as The New Year´s Kiss / Šťastný nový rok directed by Jakub Kroner. In the meantime, only four were international titles: Sonic the Hedgehog; Jumanji: The Next Level; Frozen II; and Dolittle. This may indicate that Czech film distributors were keen to monetise as quickly as possible their investment in the films they had purchased, in contrast to US companies, who decided to wait until the crisis was over.

    Fortunately, admissions were high in the case of the extremely popular documentary Caught in the Net / V síti, whose extraordinary performance – with 413,250 admissions and a gross domestic box office of 61 068 068.73 CZK / ~2 468 000 EUR – was only clipped when COVID-19 started to make a resurgence, although many later opted to watch this film online via VOD.

    “The COVID-19 period brought enormous restrictions resulting in a dramatic loss of spectators,” Cinemart’s Aleš Danielis continues. “Cinemas were closed totally, and then opened with strong restrictions. The authorities and the media strengthened the message that people should isolate and avoid meeting each other. All this resulted in a dramatic loss of admissions. [The popularity of] VOD was expected under such circumstances, but it had really started before COVID,” he explained.

    Indeed, VOD saw an upswing in engagement, as both traditional VOD operators – such as Aerovod, Dafilms, Bontonfilm, Cinemart, Magic Box – as well as new VOD operators – such as theatres, including the National Theatre, who were pushed to stream their performances and shows – made the best of the situation, and shifted further resources and programming online, as film distributors replaced their film premieres (particularly art house) with VOD outings. Some new players also entered the market, such as Film/Theatre Naživo = Live, which streamed theatre performances in filmic form.

    Moreover, as has also been seen in other countries, linear broadast TV and IPTV saw audiences return. According to official statistics, the average consumption of television during the COVID-19 lockdown was 4 hours 11 minutes a day, which meant 50 minutes more than in the previous year. Younger audiences also turned to television, with 15-24 year olds making up 47% of audiences and 4-14 year olds making up 37%. Audiences tuned in to watch the news, children’s programmes, films, long-form series and documentaries, with films and TV series seeing their audience numbers increase by 93%, while the viewer numbers for specialised docs soared by 316%.

    Describing those times, Magic Box’s Jan Rubeš attests that “there were no new films to be premiered in the cinemas (since, anyway, most were closed) and on BR/DVD”. Magic Box “survived just thanks to the sale of catalogue titles for TVOD sales were sinking without any substitution. On the other hand, sales on SVOD platforms were steadily increasing,” he confirmed.

    Mr Danielis from Cinemart echoes these experiences, stating that VOD development had already commenced prior to the coronavirus crisis, but that, as expected, it increased when the pandemic shuttered businesses.

    Looking ahead, however, Mr Danielis is hopeful that audiences will return to cinemas, and that theatrical releases will remain a strong segment for distribution companies. “Should people be able to return to the cinemas, they will do it, as [it is a] common experience and social contact should remain important. I do hope so, at any rate. Thus, we have to believe that 2023 might be the year which takes us back to pre-COVID levels,” he says.