A Champion for Swedish Cinemas: UNIC to Honor Exhibitors’ Association Chair Peter Fornstam

Peter Fornstam is a leading force in Swedish theatrical exhibition, as founder and managing director of the country’s second-largest circuit, Svenska Bio, and chairman of the Swedish Exhibitors’ Association. But he’s disarmingly humble about being honored with the 2019 UNIC Achievement Award, given by the International Union of Cinemas in recognition of outstanding dedication and service to the European cinema industry.

“You always feel: What did they give it to me for?” Fornstam says. “But I feel honored. I’m sure that my grandfather and my father are smiling from somewhere way up.”

Fornstam represents the third generation of a venerable exhibition family. His grandfather Karl entered the business in 1914. “I heard that he traveled around with a projector, and from that he built up a chain of movie theaters. My father joined him in the late ‘40s, and later they had a small distribution company. And I came to work with them in the mid-’70s.”

He notes, “My grandpa had the pleasure of being part of an industry when the growth there was pre-television. My father took over the business when television hit big, and I took over when home entertainment hit the industry.”

Fornstam’s father, Gosta, “was very good at programming theaters,” he recalls. “And I learned from him to be hands-on, to be involved with details.”

Fornstam founded the current incarnation of the family business, Svenska Bio, together with the Bonnier Group (now Filmstaden) in 1987. The circuit today operates 200 screens in Sweden and Finland, plus screens in Denmark under the Biografkompaniet banner.

The idea behind the founding of Svenska Bio, Fornstam says, “was to be a mom-and-pop operation, closer to the action rather than this big multiplex. We dealt with small and midsize markets where we felt that a more close-to-the-market approach would be good business, and we were right. There were a lot of opportunities with smaller markets that didn’t perform, which we could buy cheaply because they were underperforming. We could fix them and change them and build them up. We started in five markets with 10 single screens. Now we’re operating in 47 markets with 200 screens. I guess we were right on that hunch.”

Fornstam is upbeat about the state of exhibition in Scandinavia. “I think we’re pretty healthy. The difference with smaller territories is that we’re dependent very much on the studios being stable, but also having local production on a good level. In smaller territories, we are much more dependent on local production. If local production is combined with studio stability and good output, then we have a great year. The ups and downs mirror the U.S., but we can balance that with good local productions. Finland, for example, has had a couple of very good years, because they had studio movies combined with good, strong local films. But Sweden has been lagging behind for a couple of years on local productions, and we see the effects of that.”

Fornstam reports that last year in Finland, 25 percent of box office went to local productions, while in Sweden the local production share was only 17 percent. “We should be somewhere between 20 and 30,” he opines. “In Finland the year before last, it was 31 percent.”

He explains the discrepancy: “In smaller territories, local productions are very dependent on subsidies from the local film institutes. Depending on their approach to the films they subsidize, I think that is reflected in the box office. In Finland, for example, they really want to make sure that the film has a wide appeal. In Sweden, they have a different approach, and that hurts the box office. Sweden has no tax rebates. Finland has tax rebates. All those things are very important for the health of the industry. I heard an expression when I was in Las Vegas [for CinemaCon] that the health of the exhibition business is determined by the health of the local productions. I agree with that.”

Fornstam notes that “we are very spread out in Sweden. We have two very good art houses in Stockholm, while our Empire theater in Copenhagen has a somewhat broader audience. But in the rest of the theaters where we operate, if you have a local hit that works, normally that’s where the audience is. The key cities are normally 80 percent of the total market, but when you come to the local films, those numbers change. The audience for local films is much bigger around the country than in key cities. If you really want to help the industry and help the smaller markets, make good local movies.”

The Svenska Bio chair calls his relationships with the American studios “excellent. We just had a managers meeting. Every year we bring the managers together and have a two-day program. And this year, Disney’s MD flew down and did a presentation. The chemistry with the MDs varies, but overall we have a very good relationship.”

One notable recent American success in Sweden was A Star Is Born. “It did 750,000 admissions—that’s a big number.” He has very high hopes for the next Star Wars chapter (“Sweden has always been a big Star Wars territory”) and the upcoming James Bond movie.

As chair of the Swedish Exhibitors’ Association, Fornstam says his greatest current challenge is a recent change in the VAT policy affecting cinema tickets. He explains the history: “For 53 years, we had a deal where when you went to the movies, 10 percent of the movie ticket went to the Swedish Film Institute. That money was then recycled back into film production. Six percent was paid as a culture tax, like a VAT, treating the movie theater as if you went to the opera or another cultural activity. Now, only 10 million people live in Sweden and we have about 800 screens in total, so the screen average per citizen is pretty high, much higher than the rest of Europe. That means we have many small screens that show movies just a couple of days a week. I’m not talking about my circuit; I’m talking as an industry. The deal done in 1963 was if you showed movies fewer than five times a week, you didn’t have to pay 10 percent to the Swedish Film Institute, you only had to pay the 6 percent culture tax.”

Then, he recounts, “the minister of culture eight months into office cancelled this deal. The way this was calculated, the margin of change for the bigger circuits, although the money was big, was 3 or 4 percent. My circuit or Filmstaden, the biggest circuit, could deal with those issues by cutting costs. We could handle that change. But the smallest movie houses, they went from 6 percent to 25 percent. Those are theaters where the margins are tiny to start with—historically, those theaters was created before television came into the market. They were hanging on, they were already having problems surviving. When this happened, that became a big problem for them. We are the only territory in all of Europe where we have a different tax on moviegoing. Wherever you look in Europe, taxing a movie ticket is the same as all other culture institutions.”

Fornstam notes, “All of those theaters that got hurt the worst, I don’t have any of them. So when I went out to plead their case, nobody could say that I spoke for my own circuit. My credibility was never an issue. It was a shock to the industry and it’s been painful. The call I had before yours was with the Swedish Film Institute. They are now going to hire a person whose job it is to try to understand the financial consequences for those theaters. I have small members who are struggling, and one of my worries is that these second-generation exhibitors who have an emotional [connection to their theaters], when they give up, nobody’s going to replace them. The big cities are always going to be fine. But once [these smaller theaters] go out of business, they’ll stay out of business. There’s been a lot of damage done, and I don’t think the minister of culture, who’s no longer the minister, understood the consequences of what she did.

“I will never give up this fight,” Fornstam declares, “because it’s a bad decision. The consequences of this decision are that smaller theaters have a hard time surviving and the Swedish Film Institute has less money at its disposal than before they made this change. So there are no winners, there are only losers. If we get the right government that understands this, then we have a shot for change. Especially since we’re living in a world where everyone says: ‘Why should the bigger cities just get bigger? Is there anything that we can do to reverse that?’ I think having a movie theater is a good way of staying where you are. It’s a typical political issue where the politicians think: I’m going to do something nobody has dared to do. Well, maybe there was a reason.”

Meanwhile, Svenska Bio continues to grow. Fornstam expects to open between five and 10 new screens in Sweden this year and about the same number next year in both Sweden and Finland. Like so many of today’s exhibitors, he’s installing VIP recliner seats with double armrests and extra legroom in select screens, and adding laser projectors in some theaters.

In a few weeks, Svenska Bio will be opening its first in-cinema dining theater in the city of Nyköping. “In the lobby area, we have a restaurant already established called Pinchos. It’s an app restaurant. You choose your table with the app, you order your food with the app and go to pick up your food and drinks, and you pay with the app. We now have our first luxury theater with recliners only, where you can eat during the movie and order with an app.”

Fornstam will receive his UNIC award at CineEurope in Barcelona, Spain, on June 20. As Phil Clapp, president of UNIC, stated, “We are delighted to recognize Peter’s extraordinary career in European exhibition, as well as his key role in making Svenska Bio a pioneer in enhancing the cinemagoing experience. This award recognizes in particular Peter’s considerable contribution to developing both the Swedish and wider European cinema sectors through his work as chairman of the Swedish Exhibitors’ Association. On behalf of the entire UNIC board, I thank him for his tremendous support as UNIC has evolved in recent years.”

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