Germany's Kinowelt is set to offload one element of its rapidly-expanding empire - specialist distributor Arsenal Filmverleih - which is expected to seek an independent existence.
The company, which handles modern arthouse staples such as The War Zone, Flores Del Otro Mundo, La Balia and Ghengis Blues, became part of the Kinowelt stable of distributors two years ago when it was refinanced.
Kinowelt wholly owns Arsenal's catalogue, but only partially owns the distribution arm, run by Stefan Paul. Arsenal recently partnered with Senator-Zentral for distribution of Tsatsiki And The Policeman. Paul told Screen International: "this could be the way things go."
Kinowelt co-chief Rainer Koelmel confirmed that he is unlikely to prevent Arsenal from leaving the group, but said that contractual terms have yet to be discussed.
Paul said that he intends to seek new alliances in production, TV and with private investors. "We also need to expand our horizons beyond the German market, to gather up as many rights as possible and sell licences in other German-language markets," Paul said.
Like other small distributors Arsenal is finding the mounting cost of marketing is hurting. "Our films do not fit the multiplex mould," said Paul. "But at the same time we need to sell our niche films in the same way as you would sell a commercial movie."
*Kinowelt has extended its relationship with Beacon Communications and acquired The Spy Game, which starts shooting in August with Robert Redford and Brad Pitt.