Channeling digital: U.K., French firms teaming up

Deal will see 400 screens converted

French exhibition chain Circuit George Raymond (CGR Cinemas) has sealed a deal with U.K.-based digital distribution supplier Arts Alliance Media to digitalize its entire 400-screen circuit, the parties said Monday.

AAM is hailing the move by CGR Cinemas as the clearest signal yet that virtual print fee, or VPF, agreements will eventually rule the pricing roost between exhibitors and distributors across Europe.

But at the moment, Warner Bros. and the Walt Disney Group, alongside French indie distribution players, have not yet signed up to the virtual print fee agreements brokered here by AAM.

"We're confident that within the next few weeks the remaining studio distributors will join Universal, Fox and Paramount and the others who have already signed up the VPF plans," an AAM spokesperson said in an interview. "As we speak, there are also meetings going on with our people and independent distributors in France."

The CGR Cinemas digital rollout is scheduled to begin in the first quarter of 2008, with a target of 200 screens during the first year. Through the pact, AAM will create "a fully integrated DCI-compliant digital cinema network" within the CGR Cinemas infrastructure.

By becoming the first European cinema chain to join the AAM initiative and go fully digital, CGR Cinemas is leading the digital charge in continental Europe.

The VPF business model is a means of financing the conversion to digital cinema, in which both distributor and exhibitor contribute over time toward the cost of the digital projection and server equipment, funded up front by the rollout entity (AAM). That model has seen more than 3,700 digital screens installed in North America to date.

AAM said it "is in active negotiations with European distributors and other Hollywood studios for further deals."
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