The Transformation of the Hungarian Cinema Market

It’s fall, yet cinemas, especially multiplex theaters are far from being full. Cinemagoing is on the decline  - not only in Hungary, but in Europe and America as well.

Károly Kozma spent years working in cinema and film distribution, although lately he works for the National Cultural Fund, which ensures the financing of film events and he is actively involved in enforcing the Film Law and in the activities of the Film Industry Round Table.  We spoke with him about the state of the local film distribution and cinema market, the ongoing and expected transformation, the technological developments of the future. Obviously, we also mentioned the attendance numbers of Hungarian films.

Károly Kozma

filmhu: A slight decrease in cinema attendance figures is apparent all over the world. Numbers show that the summer of 2005 was the worst for American cinema distributors since 1997. Compared to the same period of the previous year, viewer numbers declined by 12%. It seems that people still go to see the blockbusters, but B-movies have become less attractive.  According to statistics, 75% of the surveyed viewers say that they will rather watch the films on DVD. What is the situation like in Hungary, are there any specific circumstances that alter the picture here?

Károly Kozma: The magic era of significant cinema development – multiplexes built on top of each other – is over. I think that in Hungary they spent enormous amounts on over-developing this industry, and now there’s a surplus cinema capacity that cannot be put into use. In Miskolc, for example, there are to rival multiplex cinemas next to each other, and often, there are no viewers in either of them.

filmhu: It was obvious already years ago that this existing western tendency will arrive here, too. Developers must have been aware of the tendency, too – why did they invest into these cinemas?

K. K.: These are investment issues. In Hungary, the development process that took 15-20 years in the world took place within 6-8 years here. The market was liberated, an enormous number of shopping centers were built. At the same time, they left out a step, which was a novelty in Europe 20 years ago: the construction of independent multiplex cinemas. The only such institution in Hungary is the Corvin cinema.

On the other hand, the majority of shopping centers were built close to city centers, for example in Debrecen, Miskolc and Szolnok, and that’s the case even in Budapest. The investments related to cinemas require lots of money, yet much less than in case of the construction of an independent cinema. In theory, these units can be turned into shoe stores anytime, since their layout is not very different from the rest of the shopping facilities. So in case of a business failure, the complex is able to divest its cinema function.

An additional factor is the increasingly cheaper and wider selection of DVDs, as well as a series of technological innovations, which have become widespread in „home cinemas”. Bigscreen television sets are ridiculously cheap. It was a Hungarian characteristic of the early 90s that viewers wanted to own the films, individual collections materialized. That is increasingly true in case of DVDs - just as the creation of a library is a requisite of an intellectual existence.

But the most significant problem is the astonishing number of films (of acceptable quality) appearing on the black market. Thanks to download programs, this has become as widespread as in case of music CDs.  DVD duplication has become an industry, products are available at acceptable prices and with Hungarian subtitles.

And finally – although the Hungarian television palette and programming structure deserves criticism – viewers have a choice of 10-15 feature films each evening.  These are all screened in Hungarian. These are not new films, but most of them haven’t been shown in Hungarian cinemas, so they can be considered novelties. That constitutes another market, which is related to the lifestyle change that has taken place here, too. 

filmhu: Multiplex attendance numbers are on the decline, but the attendance numbers of Hungarian art cinemas are more or less stagnating.

It can be used as a shoe store, too The 10-screen multiplex cinema of Győr Plaza under construction with a 9.30-meter-high wall

K. K.: The reason for that is fairly simple. Since the Film Law entered into force, the distribution of Hungarian and art films is backed by a sizable normative state support, and as a result, the interest of distributors has increased substantially. Even though in limited copies, but they do release the films. For example, Best Hollywood or SPI, which have entered the Hungarian movie market from the world of commercial film, are now important players on the art scene, where Budapest Film used to have no rivals. The competition is now for making it to the list of the Ranking Committee to obtain the support. Of course, it’s also useful if audiences respond positively to the film, the screening of which also receives state support.

The reform of the system of financing allowed the National Cultural Fund and the Hungarian Motion Picture Public Foundation to coordinate certain activities. For example, years ago NKA provided a significant amount of selective film distribution support, which is no longer necessary, due to the increase in normative support. These days it rather helps the organization of film events, which can only be kept alive this way. These include creative sessions, festivals, film days and the occasional screening of Hungarian films in the countryside or abroad. Experimental festivals like Mediawave, Titanic, or the European Film Week, which present films from outside the structure, are gaining increasing importance.  Such is the launching International Science Film Week, which will be held in Budapest due to the reconstruction of the cinema in Szolnok.

filmhu: Many hope that digital cinema will solve most of the difficulties.

K. K.: Digital cinema can be interpreted in several ways. We already have it in one of the rooms of the multiplex in MOM Park. It has many advantages, but a technological investment of this type costs a lot, so it is not likely to become widespread. The other idea is to screen films from DVD, which provides increasingly better image, it is a perrfect solution for smaller rooms. But the copy protection mechanism of DVD is still fragile, even though there’s talk about new, more secure codes. The third option is the secure satellite technology, but its introduction depends on the approach of the large multinational distrubutors.

Technological development is much faster than we have ever imagined. We have to prepare to be able to react to changes rapidly.  That requires investment and concept, long-term ideas about the role motion picture will play in people’s lives, and the channels and media through which it will be consumed. If someone has the answers for these questions, it won’t be that difficult to move in the direction of the topical technological developments.