Market Insight

Norwegian cinema shake-up as Nordisk Film buys Oslo Kino

April 10, 2013

David Hancock David Hancock Director – Research and Analysis, Cinema & Home Entertainment
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Danish film major Nordisk Film, part of the Egmont Group, has acquired full control of Norwegian cinema circuit Oslo Kino for NOK630m ($108.2m) from the local municipality. Nordisk already co-owns a Norwegian cinema, Drammens KinoCity, but the addition of Norway's largest circuit (7 sites and 28 screens in and around Oslo) will take its market share in the country's exhibition sector to 28 per cent. Oslo Kino sells approximately 3m tickets a year and has annual revenues of NOK285 ($48.9m), employing 350 people. The net revenue to Oslo municipality will be NOK600m ($103m). Included in the transaction are subsidiaries Norsk Kinodrift (which runs cinemas in Asker, Askim, Halden, Horten, Honefoss, Kilden, Kristiansund and Verdal), Oslo Kinodrift, Media Direct Norge and Norsk Filmdistribusjon.

The municipality say that the proceeds will go towards developing other cultural projects, such as museums. On the Nordisk side, the Drammen site is a joint venture with the Drammen local municipality (Nordisk owns 66.7 per cent), with annual admissions of 350,000 a year, and a good trial run for Nordisk's latest move. Nordisk expects to take full control in Q2 2013. Nordisk is already a major player in Norway's television (sole owner of TV2) and publishing sectors. Nordisk owner Egmont owns and operates 17 cinemas in Denmark.

This move could signal the beginning of the end for Norway's now unique way of providing cinema to its population. The vast majority of Norway's cinemas are owned by local municipalities, and are therefore in public hands, but the sale of the largest exhibitor in Norway to a private company may put pressure on other municipalities to follow suit. Other Scandinavian countries also had a similar system of public ownership, which remains to this day but in much smaller numbers as their markets moved to majority private ownership during the 1990s.

The strength of this public sector system was seen in Norway's pioneering single market approach to digitisation, making it the first country to be fully digitised following a collaborative process between all concerned parties. The film agency, Film&Kino, could essentially take control of the process and become co-ordinator and part-funder in a way that is more difficult with a group of private companies. This collaborative approach has continued, as Norwegian digital services group Unique Digital is developing an electronic distribution system (called MovieTransit) to move content around to cinemas, to which nearly all the country's cinemas are connected. However, now that this conversion process has all but finished, the municipality feels that a private company is best suited to take the business forward and take advantage of the flexibility that this new technology provides.

This is the second piece of Scandinavian cross-border cinema consolidation in the past two weeks, with SF Bio and Finnkino effectively merging under the single ownership of Ratos.  

Organization
Nordisk Film Oslo Kino
Research by Market
Media & Advertising
Category
Cinema
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