The partner of German movie theater circuit Cinemaxx filed a lawsuit last summer to block a rival from building an eight-screen theater just three blocks from its 10-screen complex in Berlin.
The suit is one example of how the international multiplex theater market, until recently under-screened, is for the first time getting crowded in some parts of the world.
Large-scale building of multiplexes--a theater with six or more screens--is in the middle of what analysts say is a 20-year drive to blanket the globe with modern theaters. Multiplexes are common in the United States, where the concept became widespread in the 1970s.
Now they are rapidly taking hold in the international market, which covers everything outside North America. The biggest beneficiary of the multiplex building boom will be Hollywood, whose films routinely corral more than half--and sometimes much more--of the box office in lucrative Western European markets.
"Multiplexes are working everywhere that they are being built," said Jack Valenti, president of the Motion Picture Assn. of America, who credits increased screen capacity overseas for Hollywood's booming foreign sales.
In the 1980s, one-third of Hollywood studios' box-office income came from the international market, according to United International Pictures, the London-based theatrical joint venture of Paramount, Universal and MGM.
In 1998, the major studios took in 55% of their global total from the international market, or more than $6 billion in gross box-office earnings, based on preliminary estimates.
If all cinema-building goes forward as planned, some 20,000 multiplex screens would be built worldwide in the next five to seven years at a cost of $10 billion to $15 billion, according to Peter Ivany, chief executive of Australian multinational exhibitor Hoyts Corp., which has 1,500 screens in seven countries.
"This is the time where you make your position for the long term," Ivany said. "The opportunity to enter will eventually close, and this is already happening in the U.S., Australia, the United Kingdom and parts of Latin America."
The multiplex revolution is led by a dozen large multinational exhibitors, mostly based in the U.S. and Australia, which typically form partnerships with local companies.
Burbank-based Warner Bros. International Theatres, a unit of the movie studio, operates theaters with 669 screens in seven countries. It is in a broad partnership with Australia-based Village Roadshow that encompasses five countries. Warner has two or three partners in each of its seven territories.
Local partners in such joint ventures typically provide capital, work with local government officials in getting building approvals and provide expertise in choosing sites.
Leading U.S.-based multiplex builders are AMC Entertainment, Cinemark, Sumner Redstone's National Amusements, the Paramount-Universal joint venture United Cinemas International and Warner Bros. International Theatres.
Leading Australia-based players are Hoyts, Greater Union and Village Roadshow. Other multinational multiplex leaders are Belgium-based Kinepolis, which pioneered the mega-plex (20 or more screens) and steep stadium-style seating; Hong Kong-based Golden Harvest, hard-pressed by the Asian economic downturn; and South Africa-based Ster Kinekor.
"This wave of construction taking place in Europe, in South America, in Asia and soon all over the world is creating a vibrant studio business where it never existed and compensating, to a significant degree, for the difficulties in Hollywood" stemming from spiraling costs, said Viacom Chairman Redstone at a London meeting of investment analysts last year.
The multinationals generally construct new-from-the-ground-up multiplexes, typically on the edge of cities where land costs are lower than in the inner city and where real estate zoning regulations allow big new buildings. Their objective is to replicate their U.S. and British success.
Multiplex building is responsible for ratcheting up British ticket sales--which had bottomed out at 54 million in 1984--to 135 million in 1998, according to analysts.
"When you look at the infrastructure in place today in most of the world and you compare it to the most developed territory that is the United States, the ceiling is not yet in sight," said Jim Gianopulos, president of Twentieth Century Fox International.
Multinationals have been particularly adept at developing high-profit food-and-beverage sales that, while long a fixture in the economics of North America cinemas, had been little exploited by old-line circuits internationally.
While indicators are bullish, there are risks in the international market, particularly as costs for land, construction and operations typically are higher than in the U.S. Many countries have special taxes on movie tickets, especially to raise funds to subsidize unprofitable local movie production.