CBG focused on AccessIT
EmptyThe Cinema Buying Group -- a buying program of the National Association of Theatre Owners for small and independent theater operators -- has inked a far-reaching deal with Access Integrated Technologies, making the digital-cinema deployer the integrator for the CBG's 600-plus members in the U.S. and Canada.
The move represents more than 8,000 screens and is an important next step in the digital-cinema transition.
The majority of the CBG's 8,000 screens are expected to fit into AccessIT's recently launched Phase 2 digital-cinema transition program, targeted for completion within three years. The Phase 2 program incorporates virtual print fee deals that already have been established with Disney, Fox, Paramount and Universal, which have committed to provide movies to as many as 10,000 digital-cinema systems in the U.S. and Canada in conformance with the Digital Cinema Initiatives specification.
Some insiders have sensed caution on the part of some studios and have had some concern that not all would participate in new virtual print fee deals. But of the remaining two major studios, AccessIT CEO Bud Mayo said, "We are in active discussion and what we hope are final negotiations to bring those two to a close in the very near future."
Mayo said some of the terms for a smaller portion of the CBG screens -- drive-ins and sub-run theaters -- will need to be addressed separately from the Phase 2 plan to reflect their differences.
There are an estimated 39,000 screens in North America, and about 4,900 already have been converted to digital. AccessIT's Phase 2 program accounts for up to 10,000 screens, and others are in place, including one from Technicolor Digital Cinema that aims to deploy 5,000 screens.
Meanwhile, Digital Cinema Integration Partners -- a joint venture owned by AMC Entertainment, Cinemark USA and Regal Entertainment Group that represents 14,000 screens in the U.S and Canada -- is expected to complete a deployment deal this spring.
"By the time we are finished with Phase 2, almost all screens in North America will be converted to digital, and somewhere in there we will start to see releases exclusively in digital," Mayo said.
Still, others believe while the deals may be completed, deployment could take quite a bit longer, considering the amount of work involved.
AccessIT's Phase 2 is expected to begin in the summer. Mayo reported AccessIT is making "excellent progress" toward securing debt financing based on the virtual print fee model.
The studios have agreed to pay virtual print fees for movies projected on AccessIT systems for 10 years from the date of installation. While AccessIT did not reveal the specifics of the deals, the studio contribution for Phase 2 is estimated to be about 20% lower than Phase 1, and the Phase 1 studio contribution was about $1,000 per screen, per motion picture.
CBG's selection of AccessIT came after a Request for Proposal process that initially attracted 10 vendors with submissions. The CBG narrowed the list of vendors to four finalists -- AccessIT, Digeserv, Kodak and Technicolor -- and sought additional information before making its final selection.
"AccessIT offered the winning package of extensive experience, exhibitor choice, and competitive cost," said CBG managing director Wayne Anderson.
There had been some speculation in the digital cinema community that CBG would go with AccessIT following the recent announcement of Phase 2.
CBG is beginning to look into options for those exhibitors interested in 3-D systems.
Said Chuck Viane, president of distribution at Walt Disney Studios Motion Pictures. "We're thrilled to see so much interest in installing digital projection in theaters around the country, and we will continue to support and encourage the exhibition world in making this a reality."