A new cinema operator in the Czech Republic
Author: Ing. Juraj Misun, PhD.
Maybe if the Israeli company Cinema City International would know what happens when it closes the oldest multiplex theater in Prague, it would never had so decided.
On 31st March 2012 the oldest multiplex theater in Prague closed its doors. During its existence it was operated under three different brands. For the first two years as Ster Century Cinemas, then from 2002 to 2011 it was named Palace Cinemas and last year has had the name Cinema City. Its last owner, however, decided to conclude the site.
He did not realize, however, that he could anger the owner of the Park Hostivar shopping center, where the theater was located. The Austrian investor company Immofinanz was well aware that the existence of the multiplex has a positive impact on overall traffic of the shopping center. The center has a large grocery store, but it lacks prominent fashion tenants.
Already in April, therefore, on the website of the center was reported that the multiplex is in a total renovation and will open soon under a new operator. Later, the name of the operator was communicated – Premiere Cinemas. The official owner is the former CEO of Palace Cinemas Czech Republic David Horacek, but according to information of the Czech daily E15, the Immofinanz Group invested 1.5 million Euros into Horacek’s company Central European Cinemas.
Up to this point, it would seem that Cinema City International hasn’t done anything wrong, but the bad news continued. In addition to the official opening of Premiere Cinemas Hostivar Park (24th June 2012), it was reported that Premiere Cinemas will operate another 8-screen multiplex in the new project in the city of Olomouc. Horacek also said that Premiere Cinemas has already tipped 25 small towns where the company could build miniplexes of the brand.
Miniplexes in small Czech towns could reduce the demand for cinema tickets in major cities, where viewers have to travel now. And right there are theaters of Cinema City International. Another big risk is if Horacek will try to bring back the flair of Palace Cinemas, which was very popular among Czech moviegoers. Only one theater with this flair might attract many visitors from other multiplexes in Prague, where the cost-oriented Cinema City is absolutely dominant. Sony 4K digital projectors and the Dolby 7.1 surround system are also a competitive advantage of Premiere Cinemas. Unofficial sources say that the biggest auditorium could be equipped with Dolby’s latest audio system ATMOS this autumn to meet the premiere of Peter Jackson’s Hobbit.
While at the end of June the company Central European Cinemas wanted to wait some years to expand, only few weeks later a developer announced Premiere Cinemas will have another theater, in the town of Teplice. The miniplex should have four screens and be opened in the first quarter of 2014.
Other plans can be found at Central European Cinemas website. The company wants to concentrate on other countries of Central and Eastern Europe, precisely on markets dominated by Cinema City International. The business model of Premiere Cinemas should also differ from other operators in better programming of the respectively theaters.
The investment of Immofinanz Group into its own cinema operator is a win-win situation. In nearly all of its shopping centers a multi-screen theater is placed. If any operator would request a discount at extension of his lease, Immofinanz would be able to replace him with its own cinema brand very quickly.
This could be a case of the Polus City Center Theater in the capital city of the Slovak Republic Bratislava, another property of the Immofinanz Group. It is the at least profitable of the three multiplexes in Bratislava and belongs to the Cinema City chain. However, now Cinema City International will think twice if it wants to risk the loosing of its monopole position in the most lucrative market in Slovakia.
According to the Czech Union of Film Distributors there are currently 27 multi-screen cinemas with 214 screens and 39,567 seats in the country. The market is controlled by two large networks – CineStar with eleven and Cinema City International with thirteen operations. In the last year the total ticket sales of Czech multiplex cinemas amount of one billion Czech Crowns.