"Breaking up monopolies is cheaper than buying up companies"
Gérard Unger, President of Mediavision, on the gradual conquest of new markets
Gérard Unger, President of Mediavision, on the gradual conquest of new markets "Breaking up monopolies is cheaper than buying up companies".
Two years ago, the French cinema marketing company Mediavision expanded into the western Swiss market, breaking Cinecom's monopoly. Mediavision now has 44 cinemas under contract in western Switzerland, giving it a market share of 37 percent (see page 23). The move into the rest of Switzerland is prepared.
In 1999, Mediavision entered the Swiss market by marketing cinema advertising for the Balexert multiplex in Geneva, breaking Cinecom's monopoly. What do you gain from the Swiss market?
Gérard Unger: We are on an international expansion course. In doing so, we are following our most important business partners, i.e. those cinema groups that also operate outside France. For Switzerland, this is the Village Road Show (VRS), which operates the Balexert Geneva multiplex cinema. So our strategy is not just to mark presence, which usually involves losses. Besides, it is always easier to gain a foothold in a country without much competition. It is also no coincidence that duopolies or oligopolies exist in most countries. A monopoly is always very fragile.
Have you been able to break up any other monopolies with your expansion strategy?
Unger: Yes, in Holland.
Does Mediavision itself have a monopoly in a country?
Unger: No, but in France we control two-thirds of the market, in the Netherlands 50, in Poland 55, and in Spain are
it is around 30 percent. In French-speaking Switzerland, the figure is 37 percent for the time being. As I said, a monopoly is very fragile, which is why we are not aiming for that.
Which are the three most important cinema groups in Europe for Mediavision?
Unger: In France, this is Gaumont Pathé, which now operates under Europalace. In second place comes UCI, which is mainly active in Spain, Portugal, Italy and outside Europe in Brazil. In third place is VRS. Kinepolis is an important partner for us only in France.
Last year, Mediavision achieved 3 percent of cinema advertising sales in Switzerland - even though gross sales in this industry fell by 7.9 percent in 2000. How were you able to achieve such a result?
Unger: Balexert was the first large multiplex in Switzerland and is also located in such an important city as Geneva. That attracts a lot of people. That's why the result was surprisingly good.
Since the beginning of this year, Mediavision has contracted 31 more movie theaters. And next year, at least 13 more are to be added. What special offers do you have for cinema operators?
Unger: By breaking up the Cinecom monopoly, we have brought life to the Swiss market. Customers also feel like comparing. In addition, Mediavision was already known in French-speaking Switzerland. We enjoy a very good reputation here. We also bring over 70 years of experience to the table.
Generally speaking: What distinguishes your offering from that of the competition, i.e. Cinecom?
Unger: In addition to the rate structures, which hardly differ from the competition, and the advertising potential, service and advice certainly also play a major role. We also attach great importance to the chemistry between the partners. We can offer customized solutions, from which our Swiss customers will soon benefit.
But the Swiss market is comparatively very small. What are the special features of this market for Mediavision?
Unger: The size of the market is actually not that important for us. Much more decisive is the question of what and how much can be extracted from a market. The Swiss advertising market is highly developed. In terms of viewers, the potential is far from exhausted.
Last fall, RMB took over Cinecom. Wouldn't that also have been a way for Mediavision to penetrate the Swiss market more easily?
Unger: No, that's not our philosophy. Following a customer, that is, a cinema operator into a country to break up a monopoly, is much more effective and far cheaper.
Up to now, Mediavision has only been active in the cinema advertising market in French-speaking Switzerland. What's preventing you from moving into the German-speaking market or into Ticino?
Unger: It's more a cultural problem, and we don't speak the same language. But I can assure you that we have already taken steps and corresponding contacts exist. We are very interested in this part of Switzerland.
Have you contacted owners of small and medium-sized cinemas, or are you not interested in this clientele?
Unger: Oh yes, we do. If we dominate two-thirds of the market in France, it is also because we are interested in small and medium-sized operations. Here in French-speaking Switzerland, we have signed quite a number of contracts with small and medium-sized movie theaters.
At the time, Mediavision relied on VRS, which owns Balexert in Geneva, to become active in the Swiss market. VRS will sell Balexert and withdraw from Switzerland, if not leave Europe altogether. What are Mediavision's prospects now?
Unger: If this had happened six months ago, it would certainly have caused us headaches, because at that time we only served this one cinema center in western Switzerland. In the meantime, we have signed contracts with numerous other cinemas and have thus been able to gain a definitive foothold. Of course, we also hope to be able to work with the future owner of Balexert - whoever that may be.
The Swiss tobacco industry is thinking aloud about giving up cinema advertising for its products. That would mean a big loss for you. What long-term development do you see for the Swiss market?
Unger: It would only be a temporary loss. After all, we have experienced this in France. There, not only was advertising for tobacco products banned in cinemas in 1991, but also for alcohol. By 1993/94, we had overcome the crisis. We simply looked for other advertising partners who were geared to a young, culturally interested audience and who could offer products such as cell phones, jeans and perfumes.
Who were your most important advertising customers in 2000? And which customers have you already signed up for this year?
Unger: British American Tobacco BAT, Coop, Swisscom. New additions this year are Nike, Henniez, Nivea, Nestlé, Fiat, Amag and SSR-Reisen.
What possibilities does Mediavision use to control the broadcast of its advertising films?
Unger: On the one hand, we have inspectors who visit the cinemas anonymously on a random basis. On the other hand, the cinema operator has to fill out a form about the films that are shown.
Cinecom has just opened an office in French-speaking Switzerland. Does that bother you?
Unger: Mediavision and RMB are the biggest competitors in all countries. One time it's us who mark a success, the other time it's the competition.
You name it, Cinecom has just renewed contracts with Metrociné, or newly Europlex, the second largest cinema chain in Switzerland, for a longer period with 29 cinemas. Your offer apparently didn't stand a chance. Why?
Unger: We were probably too expensive. But we believe that a good service has its price. So if we want to provide our services correctly, we cannot engage in price dumping.
Interview: Anita Vaucher
Two years ago, the French cinema marketing company Mediavision expanded into the western Swiss market, breaking Cinecom's monopoly. Mediavision now has 44 cinemas under contract in western Switzerland, giving it a market share of 37 percent (see page 23). The move into the rest of Switzerland is prepared.
In 1999, Mediavision entered the Swiss market by marketing cinema advertising for the Balexert multiplex in Geneva, breaking Cinecom's monopoly. What do you gain from the Swiss market?
Gérard Unger: We are on an international expansion course. In doing so, we are following our most important business partners, i.e. those cinema groups that also operate outside France. For Switzerland, this is the Village Road Show (VRS), which operates the Balexert Geneva multiplex cinema. So our strategy is not just to mark presence, which usually involves losses. Besides, it is always easier to gain a foothold in a country without much competition. It is also no coincidence that duopolies or oligopolies exist in most countries. A monopoly is always very fragile.
Have you been able to break up any other monopolies with your expansion strategy?
Unger: Yes, in Holland.
Does Mediavision itself have a monopoly in a country?
Unger: No, but in France we control two-thirds of the market, in the Netherlands 50, in Poland 55, and in Spain are
it is around 30 percent. In French-speaking Switzerland, the figure is 37 percent for the time being. As I said, a monopoly is very fragile, which is why we are not aiming for that.
Which are the three most important cinema groups in Europe for Mediavision?
Unger: In France, this is Gaumont Pathé, which now operates under Europalace. In second place comes UCI, which is mainly active in Spain, Portugal, Italy and outside Europe in Brazil. In third place is VRS. Kinepolis is an important partner for us only in France.
Last year, Mediavision achieved 3 percent of cinema advertising sales in Switzerland - even though gross sales in this industry fell by 7.9 percent in 2000. How were you able to achieve such a result?
Unger: Balexert was the first large multiplex in Switzerland and is also located in such an important city as Geneva. That attracts a lot of people. That's why the result was surprisingly good.
Since the beginning of this year, Mediavision has contracted 31 more movie theaters. And next year, at least 13 more are to be added. What special offers do you have for cinema operators?
Unger: By breaking up the Cinecom monopoly, we have brought life to the Swiss market. Customers also feel like comparing. In addition, Mediavision was already known in French-speaking Switzerland. We enjoy a very good reputation here. We also bring over 70 years of experience to the table.
Generally speaking: What distinguishes your offering from that of the competition, i.e. Cinecom?
Unger: In addition to the rate structures, which hardly differ from the competition, and the advertising potential, service and advice certainly also play a major role. We also attach great importance to the chemistry between the partners. We can offer customized solutions, from which our Swiss customers will soon benefit.
But the Swiss market is comparatively very small. What are the special features of this market for Mediavision?
Unger: The size of the market is actually not that important for us. Much more decisive is the question of what and how much can be extracted from a market. The Swiss advertising market is highly developed. In terms of viewers, the potential is far from exhausted.
Last fall, RMB took over Cinecom. Wouldn't that also have been a way for Mediavision to penetrate the Swiss market more easily?
Unger: No, that's not our philosophy. Following a customer, that is, a cinema operator into a country to break up a monopoly, is much more effective and far cheaper.
Up to now, Mediavision has only been active in the cinema advertising market in French-speaking Switzerland. What's preventing you from moving into the German-speaking market or into Ticino?
Unger: It's more a cultural problem, and we don't speak the same language. But I can assure you that we have already taken steps and corresponding contacts exist. We are very interested in this part of Switzerland.
Have you contacted owners of small and medium-sized cinemas, or are you not interested in this clientele?
Unger: Oh yes, we do. If we dominate two-thirds of the market in France, it is also because we are interested in small and medium-sized operations. Here in French-speaking Switzerland, we have signed quite a number of contracts with small and medium-sized movie theaters.
At the time, Mediavision relied on VRS, which owns Balexert in Geneva, to become active in the Swiss market. VRS will sell Balexert and withdraw from Switzerland, if not leave Europe altogether. What are Mediavision's prospects now?
Unger: If this had happened six months ago, it would certainly have caused us headaches, because at that time we only served this one cinema center in western Switzerland. In the meantime, we have signed contracts with numerous other cinemas and have thus been able to gain a definitive foothold. Of course, we also hope to be able to work with the future owner of Balexert - whoever that may be.
The Swiss tobacco industry is thinking aloud about giving up cinema advertising for its products. That would mean a big loss for you. What long-term development do you see for the Swiss market?
Unger: It would only be a temporary loss. After all, we have experienced this in France. There, not only was advertising for tobacco products banned in cinemas in 1991, but also for alcohol. By 1993/94, we had overcome the crisis. We simply looked for other advertising partners who were geared to a young, culturally interested audience and who could offer products such as cell phones, jeans and perfumes.
Who were your most important advertising customers in 2000? And which customers have you already signed up for this year?
Unger: British American Tobacco BAT, Coop, Swisscom. New additions this year are Nike, Henniez, Nivea, Nestlé, Fiat, Amag and SSR-Reisen.
What possibilities does Mediavision use to control the broadcast of its advertising films?
Unger: On the one hand, we have inspectors who visit the cinemas anonymously on a random basis. On the other hand, the cinema operator has to fill out a form about the films that are shown.
Cinecom has just opened an office in French-speaking Switzerland. Does that bother you?
Unger: Mediavision and RMB are the biggest competitors in all countries. One time it's us who mark a success, the other time it's the competition.
You name it, Cinecom has just renewed contracts with Metrociné, or newly Europlex, the second largest cinema chain in Switzerland, for a longer period with 29 cinemas. Your offer apparently didn't stand a chance. Why?
Unger: We were probably too expensive. But we believe that a good service has its price. So if we want to provide our services correctly, we cannot engage in price dumping.
Interview: Anita Vaucher
