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TWST: Can we start with a brief historical sketch and introduction to IM Internationalmedia AG (DE:548880), bringing us up to date with how the company is positioned today?

Mr. Konle: IM Internationalmedia AG is active in the development, production, financing and the worldwide distribution of feature films. In our view, we are the only significant German company in this particular industry. We had the IPO in May 2000 and since then a lot of things happened. We bought Initial Entertainment Group, which is now a 100 percent subsidiary, and we have secured some other relationships such as, most recently, the Summit Distribution joint venture. So the company itself has really developed according to how we wanted to see it develop. On the other hand, however, the markets really became a bit difficult, especially the international distribution market, which is now the biggest challenge we are facing.

TWST: Can you elaborate on what you are experiencing on the distribution side?

Mr. Konle: First, we are definitely affected by the drop in the world economy, perhaps in two ways. First of all, there is a need for distraction for the people, which is one major reason why, for example, box office results are going up. On the other hand, there is the weakness of many companies which results in lower advertising revenues for the TV stations, which in turn means they have less money to buy our product . So that’s kind of a compensating effect which doesn’t make it very easy at the moment. Most of the times the TV ads and the TV revenues overcompensate the positive box office development, but at the moment the TV revenues are fairly disappointing. There is the evolution of DVD, which is very promising, but unfortunately it is overshadowed by this TV problem at the moment for the local distributors.

TWST: What are you seeing in your other business areas? Are the development and financing components in line with where you’d hope to be at this stage?

Mr. Konle: Yes, the development is fairly stable. We have a very strong development slate, which is highly regarded in the industry, especially by the studios. That is a key reason in fact why we have such a good relationship with the studios. Financing is a little bit more difficult because, as I said, the international markets are kind of difficult at the moment and as a result getting these minimum guarantee (pre-sales) contracts which are bankable is not that easy at the moment. Also what we would call “soft money” is not as easy to get as in former times. Developments in the German market, such as the legislations changes, are not easy to handle at the moment on the financing side.

TWST: What’s the range of budgets you typically get involved with?

Mr. Konle: There is a wide range of budgets involved, but the company has decided to concentrate in the future on either lower budget films, which means up to a budget of $30 million, or higher budget films with a costs of $70 million plus. The reason for that is, first of all you get very good scripts for these lower budget films which can be made with a limited amount of money and therefore should have high profitability. On the other hand, the industry is looking for these big event films which are also highly profitable and are launched with a huge marketing campaign. That’s the reason we will try to concentrate on these two segments in the future.