The collapse of Yugoslavia shattered the structure of the previous film distribution network. Aleš Pavlin analyses how the new industry has taken shape in Slovenia.

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At the end of the 1980s, cinema attendance in Yugoslavia and profits from film screenings underwent a surprising drop. Political changes in Yugoslavia and the subsequent formation of independent states led to further changes in the field of film distribution.

Slovenia officially announced its independence on 25 June 1991. Insofar as can be expressed in absolute numbers, the space of the Slovene economy is a small one. In 1997, the population numbered under two million, GNP was of around USD 18.2 billion and per capita income was USD 9,161. (Dosje, 1999, p 10)

After 1990, the process of transition to a market economy led to major structural changes, the most significant of which were:

• a transition from state to private ownership;
• a transition from an industry- to a service-based economy;
• a transition from large to small companies; and
• a reorientation away from the market of the former Yugoslavia and towards the more developed European market.

These changes also influenced the import and distribution of films in Slovenia.

Companies that had previously imported films for the Yugoslav market either collapsed or transformed themselves after 1991. Within Slovenia, new film distributors appeared in the form of private firms that struck agreements with leading American film companies, or rather with their representatives for the non-American market, which are mostly based in London. Some of these new distributors have obtained representation rights for Slovenia only, though some gained contracts for both Croatia and Slovenia.

This new manner of exploitating films produced by American companies created two parallel systems in the Yugoslav market:

• the exploitation of films on behalf of foreign partners for a predetermined proportional commission; and
• the direct exploitation of films purchased for a fixed amount

The exploitation of films for a predetermined proportional commission on behalf of foreign partners implies: a division of the profits (which in this arrangement amounts to 40 percent of the cost of cinema admission); the flooding of the cinema network with a large number of copies; and a strong and organized advertising campaign. This system of film exploitation makes use of arrangements with leading film companies and a number of strong independent ones.

Such arrangements have "legalized" the domination of American films in the largest Slovene cinemas. As a result, at least as far cinema repertoires are concerned, we have begun to come closer to the developed world. Meanwhile, the large offering of American films has brought considerable homogenization and monotony to cinema repertoires, along with the existence of obvious differences between the American and Slovene public which give priority to different genres or combinations of genres.

Another major problem is the disharmony between peak movie-going periods for the American and Slovene public, since, unlike its Slovene counterpart, cinema attendance in the United States peaks in the summer, when much of the young public gravitates towards film halls. As a result, cinemas adapt the character of the films they promote at various times of the year.

This system carries little risk for distributors, but at the same time considerably limits the possibility of higher profits; the Slovene distributors which use this system will henceforth be referred to in this paper as "major distributors."

The exploitation of films purchased for a fixed amount involves purchasing the rights for cinema distribution and screenings by paying fixed sums in a foreign currency (mostly US dollars), and it is used in arrangements with smaller independent American and European film companies. In this system, there is no prescribed ceiling on the fee for licensing the films, since it does not require a middleman. The purchasing of rights for the exploitation of foreign films in cinemas is developing in an atmosphere of stiff competition among Slovene distributors, which battle for their bare existence by buying those films whose distribution has not been restricted by arrangements between the leading American companies and powerful local distributors.

This system entails more risk for distributors, but increases the possibility of successfully exploiting films; the Slovene distributors which use this system will henceforth be referred to in this paper as "independent distributors."

From 1991 to the present day, all forces have been harnessed to seek an arrangement for importing foreign (primarily American) films; this process is not yet complete, but the results of most arrangements with foreign companies unambiguously point to the following future scenario: as a consequence of over-saturation, it is clear that only the strongest distributors will survive, while the rest will be relegated to struggling for existence or will, perhaps, completely disappear since in Slovenia—where there are still not enough cinemas—it is very difficult to find a space to show films in during the peak season.

Distribution companies

At the end of 2000, the following distributors were active on the Slovene market:

• Cenex: distributes Buena Vista films to cinemas, but not independently, rather as a sub-distributor of Kinematografi Zagreb, which has an agreement with Buena Vista for the territory of Croatia and Slovenia;
• Continental Film: distributes Columbia and Fox films;since early 2001, it also distributes MGM/UA films, which were hitherto distributed under the aegis of UIP;
• Karantanija Filmdistributes films by United International Pictures (UIP), which brings together the exports of Paramount, Universal and DreamWorks SKG, as well as films by smaller, independent production houses;
• Ljubljanski Kinematografi: the country's largest film presenter (its cinemas account for more than 45 percent of the total cinema attendance in Slovenia), it distributes films by Warner Bros; it is also an independent distributor for the majority of domestic films, of independent films which it purchases, as well as of independent films from several other distributors with which it cooperates;
• AG Market: distributes films by independent companies to cinemas only; lately, it started distributing domestic films as well;
• Fivia: distributes films by independent companies, among which the largest is by all means Miramax, to cinemas only;
• Fun: distributes certain domestic films and films by independent companies, the largest of which used to be PolyGram; that arrangement is no longer in place, however, and so the fate of this company is uncertain;
• Studio S: distributes films by independent companies; until recently, two of the biggest names in their portfolio had been New Line Cinema and Miramax.In the course of 2000, however, they lost the distribution rights for films by these two companies.

There are two other distributors, Slovenska Kinoteka and Cankarjev Dom, but they cannot be included in the above group. Although they buy the rights to distribute individual European and, of late, more and more films from other countries for the Slovene market, they differ from classic distributors in many ways: they do not belong to the private sector and cannot act commercially or only for profit-making motives. They also own cinemas and they primarily distribute works for which they have bought the rights; the opportunity to see these films, however, is rarely extended to the film-going public outside of Ljubljana.

Cankarjev Dom, with its international festival, the Ljubljana International Film Festival (LIFF), which has been going on for more than a decade, offers a voluminous program of quality original works every year in November.

Table 1 shows that, in 1998 and 1999, the major film distributors cornered more than two-thirds of the Slovene film market; in 1998, in fact, their share even surpassed 90 percent.

Table 1: Market share of distributors in Slovenia in the period 1998-1999.

Distributor	1999.		1998.
	Viewers	%	Viewers	%
Karantanija film	430,673	23.1	400,951	15.9
Continental film	330,726	17.7	985,386	39.1
Cenex	274,822	14.7	360,719	14.3
LK-Warner Bros	267,694	14.3	561,655	22.3
LK-independents	219,838	11.8	-	0.0
Studio S	110,262	5.9	-	0.0
Fun	107,921	5.8	145,848	5.8
Fivia	76,517	4.1	42,188	1.7
AG Market	43,288	2.3	24,741	1.0
Slovenska kinoteka	4,240	0.2	-	0.0

Source: Fivia, Annual report on theatre attendance for 1999, 2000, p 5.

The almost complete market domination by major distributors in 1998 was due to the unforgettable commercial success of the film Titanic, which was seen by more than 400,000 people and which became the most-watched film of all time in Slovenia. Therefore, in order to reach more realistic conclusions, further analysis of the situation in 1999 is imperative.

Showing films in Slovenia after 1991

The transition to a market economy also introduced great structural changes in the field of theatre film screenings. After 1990, individual firms that had previously shown films on the Slovene market within Yugoslavia were transformed into private companies; this was, for example, the case of Ljubljanski Kinematografi, Kinematografi Maribor, Celjski Kinematografi, etc.. While the majority of them struggled on, some soon entered a decline.

We can divide the film screening companies in Slovenia into three groups:

• companies that screen films as their primary activity;
• cultural centers which combine various activities and offer access to libraries, concerts, theatre performances, etc in addition to film screenings;
• club halls belonging to cultural and educational organizations that promote various activities, with film screenings being one of them.

The average cost of a ticket (expressed since 1992 in Slovene tolars) has constantly risen and a large variation in ticket prices exists among various theatres; they range from SIT 550 to SIT 900, the cost of a premier screening in the best Ljubljana theatre. At the beginning of 2001, the price of movie tickets fluctuated between the equivalent of USD 2.50 and 3.50. The split between distributor and exhibitor was set at 40 to 60 percent of the ticket price, respectively.

In 1999, 76 legal entities screened films in Slovenia. (The total number of cinemas in the country is actually higher, but several have not been trading for years). Table 2 shows that, in the nine largest cities in the country, total attendance fell by more than 84 percent in 1999. Cinemas in Ljubljana accounted for almost half of the total attendance; if we include cities where films premier on the same day as in Ljubljana (ie Maribor, Kranj, Celje and, sometimes, Novo Mesto), this segment represents more than three quarters of the total cinema attendance in Slovenia.

Table 2: Attendance at Slovene cinemas in 1999

City Viewers % Ljubljana 874,149 47.0 Maribor 183,704 9.9 Kranj 150,515 8.1 Celje 143,863 7.7 Novo Mesto 49,381 2.7 Velenje 44,269 2.4 Koper 37,537 2.0 Nova Gorica 33,160 1.8 Portorož 30,983 1.7 Brežice 19,823 1.1 Škofja Loka 17,463 0.9 Radovljica 15,588 0.8

City Viewers % Ptuj 15,455 0.8 Murska Sobota 14,794 0.8 Trbovlje 14,549 0.8 Slovenj Gradec 13,961 0.8 Zagorje 12,866 0.7 Ajdovščina 12,840 0.7 Črnomelj 11,950 0.6 Slovenske Konjice 11,716 0.6 Remaining cinemas 150,053 8.1

Source: Fivia, Annual report on theatre attendance for 1999, 2000, pp 11-12.

Table 3 shows that cinema attendance in Slovenia fell constantly between 1988 and 1992. In 1993 it began to grow slowly, reaching its highest level of the decade in 1995. Nevertheless, 1995 sales figures are approximately 45 percent lower than the figures for 1988, which amounts to over 2.4 million tickets less. After 1995, attendance at cinemas fell once again.

Table 3: Attendance at Slovene and Ljubljana cinemas in the period 1988-1998

Year	Slovenia	Ljubljana	% Ljubljana
1988	5,473,000	1,521,063	27.79
1989	3,789,000	1,169,645	30.87
1990	2,846,000	1,086,868	38.19
1991	1,792,000	907,779	50.66
1992	1,588,000	833,267	52.47
1993	2,343,000	1,110,345	47.39
1994	2,700,000	1,276,534	47.28
1995	3,000,000	1,365,214	45.51
1996	2,662,004	1,213,992	45.60
1997	2,560,347	1,189,952	46.48
1998	2,521,488	1,170,241	46.41

Source: Fivia, Annual report on theatre attendance for 1999, 2000, p 1

An even more illustrative situation is shown in table 4, which shows that cinema attendance in all Slovene cities in 1999 was far below the average for the 1992-1999 period. The data in table 4 also suggests that the seven largest exhibitors generated more than three quarters of the total cinema attendance figures for Slovenia in that period.

Table 4: Average annual attendance at cinemas in Slovenia in the period 1992-1999

City	Viewers	%
Ljubljana	1,129,127	47.00
Maribor	230,031	9.41
Kranj	197,521	8.18
Celje	164,808	6.70
Koper	61,839	2.96
Novo Mesto	64,857	2.76
Nova Gorica	41,461	1.75
Other cinemas	517,023	21.24

Source: Fivia, Annual report on theatre attendance for 1999, 2000, p 3

The average cinema hall in Slovenia has about 300 seats. There are eight individual halls in the theatres of the four largest exhibition venues, but these theatres are on the whole technically backward, with out-dated projectors and poor audio equipment, old and uncomfortable seats and no air conditioning.

Although cinema attendance in Slovenia has shown a slight increase of late, with 2,246,505 viewers in 2000, it remains below the average for the period between 1992 and 1999.The number of legal entities engaged in screening films fell further in the year 2000, and the problem of viewer concentration around the largest venues became more pressing, as graph 1 demonstrates.

Graph 1: Cinema attendance in Slovenia in 2000 according to town

Graph 2 shows that cinema attendance in Slovenia suffered a drop after 1995, and this contributes to the claims that the situation can only be corrected through additional investment in equipment and the modernisation of cinema halls, and most importantly by building a multiplex.

Graph 2: Cinema attendance in Slovenia in the period 1989-1999.

Source: Fivia, Annual report on theatre attendance for 1999, 2000, p 1

Graph 3 shows that Slovene cinemas continue to be very poorly attended in the summer months; the reason for this must be sought in the viewing habits of the audience, but also in the poor state of cinema halls.

Graph 3: Cinema attendance by month in Slovenia in 1999

Source: Fivia, Annual report on theatre attendance for 1999, 2000, p 15

I would argue that multiplexes must be introduced in order to revive the fortunes of Slovene cinema. A first step has been taken by Ljubljanski Kinematografi, the biggest cinema exhibitor in Slovenia, which opened Slovenia's first 12-screen multiplex at the end of May 2001.

Multiplexes hold much economic promise, as their public tends to be homogenous and, on average, younger than the usual movie-goer. This younger audience tends to arrive by car, usually visit the fast-food restaurant at the multiplex before screenings, and mostly wants to be entertained by undemanding films. There is, therefore, a ready-made public for the so-called "multiplex film," which is a film targeted at young people and meant to be screened in an entertainment complex with multiple film halls.

But the ever-increasing dominance of American films, along with all of its logical consequences for domestic film production, means that it would also be necessary to carefully construct a chain of arthouse cinemas that would make it possible to show quality European productions and place a particular emphasis on the support and development of Slovene cinematography.

Aleš Pavlin

Translated by Brian J Požun