German Theaters Threaten to Extend Disney Boycott

Cinemas across the country, representing nearly 200 screens, refused to show 'The Avengers: Age of Ultron,' protesting rental fee hikes by Disney.

Small theater owners across Germany are threatening to extend their boycott of Disney films if the U.S. studio doesn't claw back plans to increase film rental fees.

This past weekend, cinemas in 193 towns across the country joined the Disney boycott, refusing to screen Disney blockbuster The Avengers: Age of Ultron. If Disney doesn't meet their demands, the theater owners say, they will extend the ban to all of the studio's titles, with 3D animated feature Tinkerbell: Legend of the Neverbeast, set to hit theaters here April 30, next on the list.

It is hard to qualify the financial impact of the boycott. While the cinemas involved in the Disney ban represent a total of 686 screens, not all were planning to book The Avengers. The best estimates put the number of screens lost as a result of the ban at less than 200. Cinemas from small towns, representing 187 screens across Germany, all of which promoted The Avengers: Age of Ultron in the run-up to last weekend, took part in the boycott.

As it happened, The Avengers: Age of Ultron opened on more than 840 screens in its first weekend in Germany, grossing $9.35 million (€8.6 million). It was the best-ever start for a Marvel title in the territory. Elsewhere, the film has set opening weekend records, including in the U.K. and Hong Kong.

Back in 2012, Disney bowed the first Avengers film on 660 screens in Germany, grossing €6.3 million. There were 708,000 admissions for Age of Ultron, compared to 560,000 for the first Avengers, which went on to gross more than $30 million here.

To compare, earlier this month Fast & Furious 7 opened on 642 screens in Germany. Fifty Shades of Grey bowed on 739. The Hobbit: The Battle of the Five Armies, had last year's widest opening in Germany, starting on 930 screens across the country.

The number of admissions per screen for The Avengers: Age of Ultron were 1,500 for the past weekend, extremely high for a wide-release title.

German cinema-owners are up in arms over a rate hike under which Disney has increased the rental fee for its films — the proportion of ticket sales the studio collects — from 47.7 percent to 53 percent. The increase brings Disney's fees for smaller theaters in line with the rent paid by bigger chains in Germany's main urban centers. Because Disney — like other studio distributors — concentrates its advertising push in big cities, cinemas in smaller towns say they don't benefit from a film's marketing push and have to spend more, proportionally, to compensate. Thus, lower rental fees for smaller theaters are standard practice in the market here.

“We told Disney we were prepared to go as high as 50 percent but that's the limit,” Karl-Heinz Meier, a spokesman for IG Nord, which represents cinema owners in Northern Germany, told THR. “We said for a 50 percent rate, we'd screen every Disney film.”

Meier said Disney announced its rate hike just 12 days before the start of Avengers, giving cinemas little time to adapt to the new system. If Disney won't compromise on its rental terms, said Meier, participating theaters will continue to boycott their films, including such upcoming blockbusters as Pixar's Inside Out and Star Wars: The Force Awakens. Meier said Disney send a letter to the boycotting cinemas on Monday, April 27, saying there would be no change in rental policy and that the new rate of 53 percent would stay in place. Disney has repeatedly declined to comment on the issue, citing the confidential nature of negotiations with its exhibition partners.

AG Kino, a group that represents the interests of cinema owners across Germany, said rental fees should sink across the board, given that exhibitors have had to invest heavily in new digital projection technology, an investment that largely benefits studio distributors, who no longer have to pay as much the delivery of physical film rolls.

“Digitization has resulted in major savings for distributors, (savings) that have not yet been passed on to their partners, the cinemas,” AG Kino wrote in a statement. “We are convinced film rental costs have to come down.” The group has proposed a new rental standard of 39 percent.

While Meier and other independent cinema owners hope to reach a deal with Disney, they are worried the studio's rate hike could soon be copied by other Hollywood majors. If so, he says, Germany's small town cinemas will continue to fight: “We are businessmen, we just want to run our business. But these conditions make it impossible.”

The Avengers: Age of Ultron hits U.S. theaters on May. 1

Twitter: @scottroxborough