Multiplexes - a growing sector in the Baltics

RIGA - It is a plot worthy of a movie: big international companies muscle into local markets while small time operators who can't afford to compete go broke.

But for tiny Baltic movie theaters and art film distributors who face a big drop in business as giant multiplexes start to open around the region, it is also a case of life imitating art.

Billed as the fastest growing markets in the Nordic and Baltic regions, Latvia, Lithuania and Estonia are attracting the interest of international businesses with pockets deep enough to fund eight to 15 screen theaters with reclining chairs and cutting-edge film technology.

In Tallinn, where the 11-screen Coca-Cola Plaza opened in March, art film distributor Filmimax is already finding fewer places to screen its independent movies.

"This is not good for small distributors like us," said Maidis Tramberg, Filmimax's managing director. "It would be a pity not to have these small screens."

Tramberg summed up the company's attempts to screen some films at the multiplex in one word: "flop."

"'Dancer in the Dark'? It was a complete flop in Estonia. 'Way of the Samurai'? It was a complete flop too. 'Water Drops on Burning Rocks' - a flop."

Many lower-budget and alternative films lack the advertising of Hollywood blockbusters, he explained. Moviegoers visiting multiplexes are presented with so many options they end up choosing what they've read about in magazines or seen advertised on billboards, not low profile films.

With small venues often unable to compete with the offerings and amenities of well-funded multiplexes, Tramberg is worried there will be fewer and fewer places for Filmimax's movies.

While only one multiplex has opened so far - the Coca-Cola Plaza in Estonia - the Baltic Cinema company is planning a 15-screen theater in downtown Riga in collaboration with the Finnish company Finnkino and two multi-screen theaters are in the early planning stages for Vilnius.

It is fairly common for small theaters to die out as newer multiplexes - with reclining seats, surrounding sound and giant screens - move into the cinema scene, said Katharine Wright, a spokeswoman for the British-based research firm Dodona, which specializes in the film industry.

"It is like any European market," said Timo Manty, managing director of Finnkino. "If small theaters can't make it, they won't survive."

Cinema Riga, with two screens, 1,000 seats and a selection of non-Hollywood films, is hoping its loyal clientele and downtown location will save it from losing too much business to the future multiplex.

"If we keep showing good films, it doesn't matter where we play," said Velga Eklone, the theater's assistant director. "We show films no one else does. We were the only cinema in Riga to screen 'Dancer in the Dark' and it was quite popular."

But Eklone is aware even pop-star Bjork, in the role of a a poor, blind factory worker facing execution, may not stave off a drop in business from some stiff competition down the street.

She acknowledged there will probably be a sharp drop in business when the multiplex first opens as moviegoers flock to a new venue.

"But our customers will come back," she added.

Just to be sure, the company is working to upgrade its seats to more comfortable models and is considering investing in new movie technology to improve picture and sound quality.

Fading screens

The number of theaters around the Baltic states has steadily fallen since 1995, even as the number of moviegoers has been on the increase.

There were 621 screens in all three countries in 1995, a number that fell to 275 in 2000, Wright said.

While a small part of the drop could be attributed to Estonia discontinuing the practice of counting village halls which screen occasional movies, the bulk of the drop was dying theaters.

In Lithuania especially, rural theaters collapsed in droves after privatization because they could not survive without government subsidies. As a result, admission to rural theaters fell 65 percent and two-thirds of the cinemas closed.

Urban movie watching accounted for 99 percent of the Lithuanian market in 2000.

Movie giants

Finnkino - which plans to invest between $10 million and $30 million in the Baltics over the next three years - is not only funding the multiplex in Riga. It is also involved in one of the theater projects in Vilnius and its subsidiary MPDE opened the Coca-Cola Plaza theater.

The Baltic Development Group is also planning a multiplex in Vilnius.

With a declining number of screens and an increasing number of moviegoers, the Baltic states represent an opportunity for Nordic cinema companies whose growth opportunities at home are limited, Wright said.

It's a case of companies looking around their home markets and having nowhere to expand. There has not been much development in the Baltics until recently.As Finnkino's Manty points out, "The Baltics are also a stepping stone toward Russia. There is growth potential, but they are also relatively small countries."