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TWST: Can we start with an introduction to Constantin Film (DE:580080) including a brief historical sketch?

Dr. Wiest: Constantin Film was founded in 1977 as a cinema distributor and started producing and co-producing films in the early 1980s. This not only included German productions but also international movies such as “The Never Ending Story”, “The Name of the Rose”, “The House of the Spirits” and recently “Resident Evil”. We now have a proven track record in producing some of the most successful German films as well as big budget international box office hits. But our involvement is not limited to feature films; we have also successfully expanded into the television production business. Constantin is Germany’s leading independent film distributor, a position we have held for several years. We have maintained a steady share of the German distribution market ranging from eight to fourteen percent over the last three years. We are thereby outperforming all the other independent film distributors and matching the achievements of the major United States studios.

TWST: What would you outline as some of your key advantages that enable you to compare favorable with the major studios? What do you see as Constantin’s fundamental strengths?

Dr. Wiest: One of the real differences is that we produce a third of the overall product in-house. This gives us a leading position here with the German-speaking product. Most of the time we have also been fortunate in picking our third party product over the last few years.

TWST: Can you paint a quick picture of the competitive landscape?

Dr. Wiest: I think the big competitors are the distribution outlets of the US major studios and it is hard to compete with them because they definitely have a different product line. However, in 2002 Constantin Film achieved more admissions than the five independent distributors together. We had 12.7 million admissions whereas the other independents together did not achieve this figure.

TWST: What is the ideal scenario now in terms of how you would like to see the company move forward?

Dr. Wiest: The ideal scenario would be that we could produce twenty movies ourselves, and, out of these, the maximum possible would be international product. Therefore, increasing international production is our main goal. At the moment, speaking about 2003, we are looking at two to three international products or movies, which we want to produce per year. Our growth path is based on how quickly we can increase this number.

TWST: What do you see as the major issues facing the company in the near term?

Dr. Wiest: I think the major issue for all the media companies at the moment is keeping the financial strength and focusing on cash flow and the cash position, which is after all the bottom line. This admittedly is not particularly sexy and has nothing to do with the product, but at the moment in a shaky market that is the only way for a mid-sized company such as us to maintain our position. So, we won’t really be looking for big growth paths because nowadays that’s not the central issue any more; I think that the driving force of the stock market to support a fast growth path no longer exists. We came out of 2002 with a very strong net cash position. If we deduct all our bank liabilities from our cash position, the net position is well above EUR 20 million. Besides that, on the product side, we will work hard to maintain our position with the German-speaking product. We distributed seven of the top ten feature films last year. Internationally, if we can repeat the success of “Resident Evil,” which grossed more than 100 million worldwide, then I think we will be well on track.