There are signs that South East Europe is in rude health as local talent gears up for the 18th Sarajevo Film Festival (July 6-14) and the tenth edition of its important CineLink co-production market.

‘The market in South Eastern Europe is maturing. Consequently, there is more competition for arthouse films’

Jovan Marjanovic, Sarajevo Film Festival

A development and financing platform, CineLink has seen an impressive 60% of its projects realised as films, a figure that reflects the rising number of both co-productions and productions as a whole from the region. There has been steady growth between 2009 and 2011: films co-produced by at least one of the countries represented at the South East European Pavilion in Cannes, which includes territories of the former Yugoslavia, plus Cyprus and Bulgaria, have increased from 24 to 33. The number of films co-produced by the wider region - with Austria, Hungary, Greece and Turkey leading the way - went from 19 in 2009 to 23 in 2011.

But while production is growing, the distribution and exhibition sector still has to catch up. Serbia, Bosnia and Herzegovina, Montenegro and Macedonia, for instance, are underscreened - though the construction of new multiplexes should help.

“The market in South Eastern Europe is maturing. Consequently, there is more competition for arthouse films across the region,” says Jovan Marjanovic, head of industry at the Sarajevo Film Festival. “Those who manage to get out there need to put up a strong fight for attention, and the Sarajevo Film Festival is their launch platform. This is where they get both press and trades coverage, find international sales agents, as well as sell to local distributors.”

Here, Screen analyses the latest trends from the key territories.

BOSNIA AND HERZEGOVINA

Aida Begic’s Children Of Sarajevo, co-produced with Germany, France and Turkey, recently won a special distinction from the Un Certain Regard jury in Cannes. The country made four feature films (national productions or majority co-productions) in 2010 but none in 2011.

Seriously underscreened, Bosnia saw the arrival of four new digital screens in 2011 but still has a total of just 40 screens for a population of 4.6 million. A five-screen cinema opened in the city of Mostar, but multiplexes have yet to make their presence felt in the territory.

Lacking a strong local film such as Danis Tanovic’s Cirkus Columbia in 2010, and with piracy still rampant, admissions tumbled from 720,000 in 2010 to 490,000 in 2011. But local box-office highlights included Montevideo: Taste Of A Dream (28,088 admissions) and The Parade (23,300).

In a bid to prevent piracy, director Pjer Zalica and production company Refresh decided to sell DVDs of documentary Orchestra, about a cult Sarajevo band, for $3 a copy the day after its premiere at the Sarajevo Film Festival.

SERBIA AND MONTENEGRO

In 2011, Serbia produced, along with Croatia, Slovenia, Macedonia and Montenegro, the first true regional blockbuster, The Parade, directed by Srdjan Dragojevic. Drawing 338,057 admissions in Serbia and Montenegro (a total of 561,658 in all of former Yugoslavia), the comedy went on to win three prizes at the 2012 Berlinale.

Local hit Montevideo: Taste Of A Dream sold more than 470,000 tickets, and these two releases are largely responsible for the 27% rise in total admissions in 2011.

Prospects continue to look bright this year, even before the summer blockbusters, with more than 760,000 admissions in the first quarter including 211,000 from local success story Professor Vujic’s Hat. Serbia’s biggest festival success, Maja Milos’ Clip, had a lacklustre performance at the box office.

‘Serbia is currently the most progressive territory in Europe in terms of exhibition development’

Igor Stankovic, MegaCom Film

Multiplexes are finally taking root in Serbia and Montenegro. In 2011 and 2012, the three largest cities after Belgrade - Novi Sad, Nis and Kragujevac, with a combined population of more than 700,000 - saw theatres with a total of 16 screens, after five years without a cinema. New multiplexes are expected to open in Subotica by 2013 and in Belgrade by 2014.

“Serbia is currently the most progressive territory in Europe [in exhibition development],” says Igor Stankovic, CEO of distribution and exhibition company MegaCom Film which brought the Austrian chain Cineplexx to Serbia. “With multiplexing and digitisation, we expect that by 2017 the number of admissions will double, up to 5 million.”

Though Montenegro has been an independent state since 2006, theatrical distribution still works through Serbian companies. Last year the country finally produced two national films, Nemanja Becanovic’s The Ascent and Branko Baletic’s Local Vampire.

CROATIA

The Croatian box office was dominated by Hollywood product last year, but the real winner in the territory, where local films rarely sell more than 15,000 tickets, was the children’s cult novel adaptation Koko And The Ghosts by Daniel Kusan. The Kinorama production sold 79,384 tickets, grossing $281,688 between October 2011 and February 2012, scoring the best local opening in five years and becoming the second-highest local grosser since 2002. Kinorama is now preparing a sequel.

The Parade, released in December 2011, finished its run in Croatia after 20 weeks with an impressive 167,429 admissions and a box-office gross of $781,452.

In May, the Croatian Audiovisual Centre announced support for the digitisation of independent cinemas. Currently Croatia has the largest number of digital screens in the region, 90 out of a total of 136. It also has the strongest festival scene, with festivals in Motovun and Zagreb driving interest for independent films.

SLOVENIA

In 2011, the Slovenian Film Fund transformed into the Slovenian Film Centre. The key difference is that the centre is now a public agency that subsidises film productions, whereas the fund used to invest in film projects and share the box-office income with the producers.

Slovenia produced seven films in 2011, including two majority co-productions. The country also participated as a minority co-producer on eight regional projects, including The Parade which sold 32,872 tickets and grossed $193,140.

Theatrical attendance in 2011 stayed at about the same level as 2010 - around 2.9 million admissions, with a total box office of nearly $16m. This is by far the highest per capita attendance in the region, as Slovenia’s population is only 2 million people.

Slovenia had a minor festival hit in 2011 with Nejc Gazvoda’s debut A Trip which world-premiered in Sarajevo and went on to more than 20 international festivals. It drew 12,985 admissions and grossed $59,953, an impressive showing for a Slovenian arthouse film.

MACEDONIA

Macedonia has had two strong festival films in the last couple of years: Vladimir Blazevski’s low-budget Punk’s Not Dead, which won Karlovy Vary’s East of the West award in 2011, and Teona Strugar Mitevska’s The Woman Who Brushed Off Her Tears, co-produced with Germany, Slovenia and Belgium and starring Victoria Abril, which premiered at the 2012 Berlinale. Macedonia currently has only 20 screens for its 2 million inhabitants, so Punk’s Not Dead’s 13,274 admissions is considered a success. But a nine-screen multiplex will open in the capital Skopje in September, which should finally create an opportunity for additional films to be released in the territory, including studio product.

Meanwhile, the region’s best known actor internationally, Rade Serbedzija, is preparing his directorial debut in Macedonia, the Second World War epic The Liberation Of Skopje, produced by Partysans Production, which has been awarded $623,000 from the Macedonian Film Fund.

The pick of Sarajevo

This year’s Competition section at the Sarajevo Film Festival will include the world premiere of Austrian director Florian Flicker’s Crossing Boundaries and the international premiere of Serbian director Miroslav Terzic’s debut feature Redemption Street, a political thriller starring Rade Serbedzija. Regional premieres include Aida Begic’s Children Of Sarajevo; Radu Jude’s Everybody In Our Family; Turkey’s The Voice Of My Father by Orhan Eskikoy and Zeynel Dogan, which participated in CineLink 2010 and premiered this year in Rotterdam; and Emin Alper’s Beyond The Hill, which won prizes in Berlin and Istanbul.

Sarajevo’s In Focus sidebar presents regional films that screened and won awards at big international festivals. This year it includes Bence Fliegauf’s Just The Wind, winner of this year’s Silver Bear in Berlin; Maja Milos’ Clip, winner of a Rotterdam Tiger award; Yorgos Lanthimos’ Alps, which world premiered last year in Venice where it won best screenplay; and Cristian Mungiu’s Beyond The Hills, which won best screenplay and best actress in Cannes. In Focus will also pay tribute to Turkish director Seyfi Teoman, who died in May, by screening his film Summer Book.