After five years away from the industry George Mihaly, the former Hungarian partner of Andy Vajna, is back on the film scene with a new DVD venture called Ariel International.

Mihaly who built the Budapest-based InterCom into Hungary's leading distribution and exhibition outfit during the early nineties was ousted by Vajna in a boardroom shakeup in 1997. Mihaly was managing director and co-owner of InterCom while Hollywood mogul Vajna had helped to fund the company's startup.

Speaking about his new venture at the annual DISCOP Program Showcase film market and conference in Budapest last week, Mihaly revealed that as part of his exit package from InterCom he signed a five-year non-competition agreement. When, at the beginning of this year, the exclusion period expired, he immediately launched the DVD production and distribution venture, Ariel International.

After just six months in operation Ariel is already the leading independent DVD distributor in Hungary and this year will release up to 80 titles.

"The DVD market is quite centralised and Pan-European disks tend to dominate," said Mihaly, "our company's main strength is that we are developing and supervising the whole mastering process and creating a fully Hungarian DVD."

Ariel already has distribution deals with Summit and other major studios. In the autumn it will release the first DVD of a Hungarian film, Robert Koltai's Mayday Mayhem.

DVD still faces stiff competition from video in Hungary where an official video cassette sells at between $8-$10, while a DVD costs $22-$30. But Mihaly believes it is the way forward for the Hungarian film industry.