Video on Demand

Germany's Answer to Netflix

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The battle stage is set.
  • Why it matters

    Why it matters

    The web-based service could put a new spin on the international distribution of films, and be a boon to filmmakers.

  • Facts

    Facts

    • Pantaleon Entertainment has invested €3 million in its Pantaflix video-on-demand platform, which is set to launch in February.
    • Customers will pay for each film individually, and the price will be determined by the film’s producer.
    • German actor Matthias Schweighöfer has a 30-percent stake in Pantaleon.
  • Audio

    Audio

  • Pdf

Berlin’s beloved Berlinale film festival may feel the pinch of start-up disruption this coming February, with the planned release of web-based film distribution platform Pantaflix. The Berlin-based video-on-demand service provider aims to fashion a new playground for the distribution of international films.

Pantaflix’s operator is the publicly listed entertainment company Pantaleon Entertainment. Its principal investors are filmmaker Dan Maag, who is also the company’s chief executive, entrepreneur Marco Beckmann and German actor Matthias Schweighöfer.

The similarity of Pantaflix’s name with U.S.-based Internet media streaming and DVD-by-mail service Netflix isn’t likely to be mere chance. Yet the Pantaflix platform is something different. It starts with exclusively offering films that were produced for the cinema. And Pantaflix isn’t a subscription service. Customers will pay for each film individually. The price will be determined by the film’s producer. Pantaleon’s Mr. Maag estimates that, on average, films on the German-language version of the platform will cost €3.99 ($4.26) each.

Its internationality is the core of the business idea of the partners in Pantaleon. They want to remedy the situation where 90 percent of the films produced worldwide are not distributed globally.

The web portal will be offered worldwide. Its internationality is the core of the business idea of the partners in Pantaleon. They want to remedy the situation where 90 percent of the films produced worldwide are not distributed globally. “That’s 6,000 plus productions yearly,” Mr. Maag said. He wants to offer them worldwide via Pantaflix on all devices, from TVs to smartphones.

The deal is supposed to be more lucrative for filmmakers. According to Mr. Maag, filmmakers now get now only 10 percent of the international proceeds and the rest goes to film distributors, theater operators or other platforms. With Pantaflix, filmmakers will receive 75 percent and the portal will get a commission of 25 percent, he said.

Pantaleon Entertainment AG has invested €3 million in the platform, and investors appear to believe in Pantaflix’s potential. Following the announcement of the plans, the company’s stocks shot up. On Tuesday, they reached a record high of €54.33. Mr. Maag expects his new portal to be in the black after two years.

“In principle, Pantaflix is a good idea,” said Munich-based film producer Uli Aselmann. “But we can’t yet make an assessment of the market development.”

One problem is that German film production companies primarily earn their money from television films and not so much from theatrical releases. According to a study by the German industry association Produzentenallianz, €1.81 billion was earned from TV productions and only €610 million from theatrical releases in 2011 (the most current figures available). As a rule, TV broadcasters own the international rights to commissioned TV productions, not the producers.

Mr. Maag, Mr. Beckmann and Mr. Schweighöfer each own 30 percent of the shares of Pantaleon Entertainment. The remaining 10 percent are being traded on the stock exchange.

In order to attract investors to Pantaleon, private banking institution Hauck Aufhäuser held an event in Frankfurt, Germany’s banking and financial center, on Monday evening. The evening’s star was Mr. Schweighöfer.

When the actor appeared, the guests from the financial sector grabbed for their smartphones for photo ops. Mr. Schweighöfer obligingly permitted a selfie or two.

People who invested in the company earlier did alright for themselves. Since November 10, the price of the stock has risen from €39 to about €54. The recent rise is almost entirely attributable to the November 18 announcement by Pantaleon that it was launching Pantaflix in February, to coincide with Germany’s largest film festival, which takes place in the capital.

It isn’t unusual for successful actors to put money into their own production companies. Til Schweiger, who became world famous for his appearance in Quentin Tarantino‘s 2009 film, ‘Inglourious Basterds,’ owns Barefoot Films. Mr. Schweighöfer has also invested in the fashion brand German Garment, and the 34-year-old said he can imagine founding a music label too.

 

 

Kai-Hinrich Renner is an editor for Handelsblatt. To reach him: renner2@handelsblatt.com.

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