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Like Bavaria’s heraldic lions from which it takes its name, Leonine got off to a roaring start.
The would-be German mini-major, launched last year with a nine-figure war chest from its owners, New York investment firm KKR, quickly grew from cub to king of the jungle with a series of choice acquisitions, including film and TV powerhouse Tele München Group, indie film distributor Universum, Dark producer Wiedemann & Berg and local small-screen production outfit i&u TV.
At international film markets, Leonine CEO Fred Kogel, an industry veteran, became, overnight, one of Europe’s most important buyers, securing rights to top indie titles including Roland Emmerich’s sci-fi epic Moonfall and the Neill Blomkamp-Taylor Kitsch project Inferno from AGC Studios; the Samuel L Jackson-Maggie Q action thriller The Asset from Millennium Media and FilmNation’s Dog, the road comedy starring Channing Tatum, which Tatum will co-direct, and which MGM has picked up for domestic release. Leonine’s first big release under its own label, Rian Johnson’s Knives Out, earned $10.5 million at the German box office, making it the third-biggest film of 2020 and the only non-studio release in the territory’s top five.
Then came Corona.
Leonine had just brought together around 350 employees from its various divisions under one roof at a new HQ in Munich when lockdown orders forced them to send everyone home. Cinemas shut down and production stopped. The lion, it seemed, had been caged.
Well, not quite. With its massive rights library — Tele München’s catalogue alone has some 7,000 film titles — Leonine was well-positioned to take advantage of the COVID-19 spike in demand for home entertainment. “The licensing business has also been strong,” says Kogel. “Of course digital revenues are up, as they are with everyone. But even our physical home entertainment business has been stronger [since Corona].”
Leonine took the opportunity, in late April, to launch its own stand-alone streaming services, offering up its back catalog on-demand for subscribers.Titles such as Scream and Knock Knock are on Home of Horror, which went live May 1; Filmtastic, which launches July 1, will include movies like Pulp Fiction and Sin City. On Aug. 1, Leonine will launch Arthouse Cnma, with such curated films as Lars von Trier’s Melancholia and Jean-Pierre Jeunet’s Amelie.
Leonine’s television business, at least the non-fiction side, has also benefited from an increase in demand for entertainment programming that can be safely shot in a socially-distanced studio. On the corporate side, Leonine’s television business is also moving forward. On Monday, the company announced a deal to join pan-European media powerhouse Mediawan, with Mediawan taking a minority stake in the Munich-based group and Kogel taking on the position of deputy CEO of a new holding group, the Mediawan Alliance.
But Kogel is itching to jump back into the movie business. On June 25 Leonine will release the Daniel Radcliffe action comedy Guns Akimbo in Germany, following up late July with the Russell Crowe horror-thriller Unhinged. And he’s going into this year’s Virtual Cannes Market prepared to buy big. “From what we’ve seen so far, there will be no shortage of creative projects at [virtual] Cannes this year,” he says, “the film business is about mid- and longterm planning. And on that scale, things look solid.”
How have you been dealing with lockdown and the mobile office experience?
Personally my daily work routine didn’t change much. Just the location. Most of the work I do from my office desk I can do at home, I can do anywhere in the world. The same thing goes for Leonine’s employees. Our workflows were set up to be digital from the start so we didn’t really see any conflict. But personally, I found it extremely stressful to spend 10 hours a day on video conferences. I spent the first four weeks at home but then started coming back to the office, even though I was one of the only ones here.
What I missed most in this time is the personal contact to colleges. It’s incredibly difficult to discuss a script or strategy for hours on end via video. It’s about cross pollinating ideas and it just works better when everyone is sitting around the same table. And, of course, I’ve missed going to the movies!
Cinemas are starting to open up in Germany now.
Yes, step-by-step. But there are different regulations in the different states. We don’t have a single national standard. We’ll have to wait and see when cinemas will be able to open around the country. We expect that to be by late June, early July. That’s when we’re going out with our new films. Our first planned release is Guns Akimbo with Daniel Radcliffe on June 25 and then, at the end of July, Unhinged with Russell Crowe, which will be the first new release in the U.S. as well. We wanted to give a clear signal for the cinema owners and for cinema fans by showing big, new films and not just re-releases. We need films that have the potential to bring people back to the theaters.
But there’s a big risk with going first.
Of course. We expect that the maximum capacity of theaters will be around 20-40 percent. If you estimate Germany has, say, a maximum of 800,000 viewers and you are expecting 20-40 percent per cinema you can see what the size of the entire cinema market in Germany will be when things reopen. So it’s a risk. But I don’t see any alternative. And I think for specific genres, for action films like Guns Akimbo or a horror thriller like Unhinged, these are movies that target the true cinema audience, the audience that is really missing going to the movies. We also hope that there will be less competition because the big studio films won’t be back in theaters yet. That gives us a window to take advantage of to get the most out of these films.
What impact do you think the new COVID-19 regulations, including reduced theater capacity, will have on the box office and release strategies?
At the moment, its very speculative. We’re going to go full out with these two films: To do whatever we can to make them work at the box office. But we’re all looking in the crystal ball right now. We’re optimistic by nature, we wouldn’t be in this business otherwise, and we’re optimistic that film fans will want to come back to cinemas. But we’re all going to have to see what the impact of reduced capacity cinemas will be. It could change the size of our releases, how long we can keep films in theaters, many things. By fall and winter, when we are planning some of our really big German releases, including Die Schule der Magischen Tiere [based on a best-selling German children’s book series] and Der Boandlkramer und die Ewige Liebe [featuring German comedy star Bully Herbig], we should have some concrete data to work with to make estimates. Until then we’ll be closely monitoring the market.
Did you consider doing a direct-to-VOD release with any of your new titles during the shutdown?
We only did one premium video-on-demand [PVOD] release during the lockdown: With [Blake Lively actioner] The Rhythm Section. We were already so far along in our marketing that we decided to release the film directly on PVOD. But that’s not our business model. Leonine is a company of film and cinema fans. We are a vertically integrated distributor, we have physical home entertainment, we have digital distribution. We want to cover the entire distribution chain. But cinema is on top. We don’t want to miss out on those revenues and we want to help strengthen our exhibition partners, the cinema owners. We want to quickly get back in that business.
Has there been any positives to come out of this crisis for you?
Of course there have been some bright spots. We have a large and broad production business. Fiction production, film and TV, has been shut down but we’ll be restarting productions in the coming weeks and months. With non-fiction, particularly entertainment production, we’ve actually seen an increase in demand. The licensing business has also been strong. We have a big library with a lot of films and production delays and the lack of new product has meant an increased demand for library titles. And of course the digital revenues are up, as they are with everyone. But even our physical home entertainment business has been stronger.
Going into the virtual market in Cannes do you expect home entertainment and digital revenues to play a bigger role in your calculations about what films to buy?
TVOD [transactional video-on-demand] and SVOD [subscription video-on-demand] revenues have grown and will continue to grow. But I think there has been a peak in online consumption because of COVID-19 and that will flatten. I expect we’ll go back to the traditional revenue streams: Cinema, digital, home entertainment. About where they were before the crisis. I’m convinced that people are eager to go back to the cinemas. The past few years were ones of strong growth in the cinema business.
What hasn’t been good for business was having so many releases. In Germany last year we had almost 900 theatrical releases. No one wanted COVID but this crisis might act as a corrective and decrease the number of releases. I think, initially, we’re going to see it will be the major releases, the really big titles, that draw people back to the theaters. The smaller and mid-sized arthouse titles will initially have a much tougher time of it. So we might see a needed corrective in the distribution business, leading to fewer theatrical releases overall.
You’ve been one of the biggest buyers in recent markets. Given the general uncertainty in the business, will you be more cautious going into this year’s Cannes?
We are approaching the market like every market. Our goal is to do 15-20 theatrical releases a year. It will be a mix of around five in-house or co-productions and 10-15 big international acquisitions. We’re not going to change our acquisition strategy. Of course we expect we’ll have to push back some of our releases — titles that we’ve pre-bought that were scheduled to shoot this year for a 2021 release will be pushed back to 2022 — but there’s no shortage of new projects. The projects, the new scripts, that have been coming to us over the past few weeks are very good. You can see they have been in the time for development. There will be a lot of new projects in Cannes. The question with each project will be: A when can you shoot? And B: when can you deliver? But they’ll be no shortage of creative projects at the market this year.
The question is when they’ll be able to shoot.
Every producer, worldwide, can’t wait to get to start working again. Every big company, worldwide, needs these new movies. Everyone is aligned. No one wants to spend another day in their home office. Everyone will wants to get back to work as soon as possible. We think we’ll have a good theatrical slate for 2020. We might have to push a few titles back, maybe we’ll have 15 films next year and not 16-18, but that doesn’t change the overall picture. At this market we are looking for films for 2022 and 2023. If we’re lucky, they’ll be one that can be shot quickly and be ready for next year. But the film business is about mid- and longterm planning. And on that scale, our strategy is solid.
Will you miss not being on the Croisette in Cannes?
I’m a bit conflicted. On the one hand I’m really excited to see how this will work. This virtual Cannes is a test case that could have an impact on the entire industry and industry events. We have the fixed events for the big films and big buyers: Berlin, Cannes, AFM, Toronto. I could imagine going to just 2 film markets a year. Personal contact is important and festivals and markets can generate excitement and buzz but our license trading business is 12 months a year, it doesn’t stop in-between markets. The festivals are highlights but I could imagine that things are shifting and the markets are becoming less important. Or that one-two markets will get bigger and the rest will lose their importance. But that’s pure speculation. We’ll see what happens.