Europe's Box Office Decline in 2005 Blamed on Poor Local Films

European box offices will be glad to see the back of 2005 as a lack of strong, locally produced films contributed to decreases in revenue across the continent's cinemas. In Germany, the decline is likely to show up as an estimated drop of 20 percent in revenue while France, Spain and Italy could end the year down more than 10 percent, according to industry estimates.

Even the arrival of Christmas blockbusters such as "King Kong" and "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe" are unlikely to arrest the slide in Europe. In fact, the perceived weak crop of Hollywood films this year has only contributed to the decline, coupled with the dearth in European successes at the box office.

"We won't see another year as bad as 2005 next year," said Frank Mackenroth, head of media and entertainment at PricewaterhouseCoopers in Hamburg in an interview with Reuters. "But in the medium term, we are set to see stagnation in Germany while we expect fairly stable growth across western Europe."

The poor performance of German films in 2005 is in direct contrast to the year before when locally produced films drove the industry to new heights, led by the sci-fi comedy "(T)Raumschiff Surprise - Periode 1" with more than 9 million viewers. It was also the year of the critically acclaimed World War II drama "The Downfall" which earned an Oscar nomination for best foreign film.

Not reaping financial rewards

Despite the critical success of German films such as "The Last Days of Sophie Scholl," which earned actress Julia Jentsch awards in Berlin and several other European film prizes, the acclaim has not been matched by euro signs in 2005. Germany's biggest domestic hit of the year to date, "The White Masai," the story of a Swiss woman living with a Kenyan Masai tribe, has so far sold only a little more than 2 million tickets.

However, December is not quite over and the German-French-British collaboration "Merry Christmas" may signal the start of a brighter 2006 for the German film industry and the box office takings.

"This just goes to show that cinema is such a cyclic business," said Thomas Negele, the chairman of the Federation of German Filmmakers, at a recent press conference. "It all depends on the material available at the time and whether the people want to see it at that moment."

James Gianopulos, the co-chairman of 20th Century Fox Filmed Entertainment, supported that view in his own statement. "When we look at the ups and downs in the marketplace, frequently they are seasonal or product-related and reflect shifts that are all manageable."

German optimism could be misplaced

The film industry in Germany is hoping that the upswing of that cycle is just around the corner. "Looking forward, we can see quite a few very hot numbers," said Johannes Klinsporn, chief executive of the German association of film distributors, in optimistic reference to the coming year and the impact of late 2005, early 2006 German releases.

In fact, the end of 2005 has brought more fans to cinemas, which could soften the blow for Germany and the rest of Europe when the final tickets are counted and be a harbinger of good things for 2006.

But Klinsporn's optimism could be misplaced, according to industry experts. German audiences are expected to spend on average a mere 0.4 percent more every year at the box office from 2005 to 2009 while most other western European consumers could spend 4.4 percent more on the cinema over the same time span.

Meanwhile, in eastern Europe and further afield, estimates see box office business booming with Russia and Poland recording a 20 percent surge in ticket sales in 2005 on the back of a widespread rollout of multiplex cinemas across the region and strong economic growth, providing consumers with more disposable income.

Homegrown British productions saving the day

One European country where the decline has been avoided is Britain. It's expecting either to break even or make a small gain at the box office, powered by a yearlong output of local films including "Closer," "Hitchhiker's Guide to the Galaxy," "Harry Potter and the Goblet of Fire," "Nanny McPhee," "Wallace & Gromit in the Curse of the Were-Rabbit" and "Pride & Prejudice."

"In the UK, we've had a fantastic flow of local material," said Mark Batey, head of the UK Film Distributors' Association trade group in an interview with Reuters. "In previous years, France and Germany have benefited from strong local films. This year they haven't, relatively speaking."