D-cinema steadily rolling out across Europe

Key to progress is cooperation

When the president of the European cinema-support agency Media Salles makes a statement like, "Digital cinema will eventually send the traditional 35mm projector to the dump or to the science museum," you know the end of sprockets and celluloid must be at hand. But Jens Rykaer had more to say in a recent editorial to Media Salles members: "For almost two decades we have been discussing what has been characterized as the most revolutionary event in film since sound."

Strong words indeed, but if the numbers found in Media Salles' 2006 European Cinema Yearbook are any indication, Rykaer's predictions aren't as bold as they might seem. After an 81% increase in digital installations during 2005, with another 383% growth recorded last year, the latest figures represent the highest adoption rate since the 1999 introduction of d-cinema. By regions, throughout 2006, Asia and Europe expanded by 70% to 347 and 168% to 531 screens, respectively, while North America gained a staggering 1,031% for a total of 2,866 screens globally.

Elsewhere, Nancy Fares, business manager for DLP Cinema products at 2K chip manufacturer Texas Instruments, updates that year-end count of installations to 4,228 currently in commercial cinemas worldwide. As of mid-May 2007, European exhibitors had 652 digital screens in operation. "U.K. and Germany currently have the most DLP Cinema installations," she notes. "The trend is yet to be determined which country or exhibitor will lead the curve in going digital."

Looking ahead, media consultancy Screen Digest, which will be presenting a new 3-D report at Cinema Expo, anticipates 1,181 Western European screens by the end of this year and 5,530 by 2010; in Central and Eastern Europe digital screen numbers should be 34 and 195 by those times, respectively.

In North America, AccessIT Digital Cinema alone has completed some 2,600 screens of its 4,000-screen rollout and is financing the initiative in cooperation with projector manufacturer Christie. AccessIT's Media Services Group president Chuck Goldwater is equally confident that the company can "replicate internationally what we have successfully done domestically. European cinema operators are now where their U.S. colleagues were two years ago."

"Europe is a very diverse market, with differing exhibition and distribution landscapes and views on digital cinema," adds Fiona Deans, d-cinema director at U.K. agency Arts Alliance Media, which is overseeing a 10-screen trial for Norway's Film & Kino.

In addition to the problems that come with dealing with a host of local and independent distributors, the European exhibition community is facing the same issues as its American counterpart -- most importantly, who exactly is going to pay for any widespread d-cinema implementation?

Julian Levin, executive vp digital exhibition at 20th Century Fox, points out that his company already has closed various Virtual Print Fee arrangements in the U.S. in order to fund the rollout. He expects to make similar announcements in Europe and other areas of the world in the near future. "It is becoming increasingly important that exhibitors move quickly now and adopt a financing plan," he urges. "Fox's continuing financing support may not be around indefinitely."

Options on the table include the possibility of third-party integrators and financiers footing the digital bill, along with exhibition-driven initiatives that could use contributions from screen advertisers.

Institutional support is another model that has proven very effective in the U.K. Since the country's Digital Screen Network is publicly funded through the U.K. Film Council, Deans says exhibitors themselves have not had to invest significantly in the technology. "It's not a commercial rollout, and the funding is coming from the government," she says. "The understanding exhibitors have of the new technology, processes and management will stand them in great stead for the commercial rollout to come."

All exhibitors interviewed for this report agreed that having all distributors onboard and manufacturers drop their prices are their biggest obstacles. Laura Fumagalli of Milan-based Arcadia multiplex calls the challenges "probably more diversified than the U.S. domestic market" and names "the availability of digital releases on a more constant basis" as a major concern. Lauge Nielsen, managing director of Amsterdam-based Pathe Theatres agrees: "Right now, it is sort of a Catch-22, (meaning) no hardware installed, no copies made available."

By the same logic, the release of certain important titles can prompt a major surge. In the most recent case, 3-D-enabled digital installations grew to more than 700 for Buena Vista's recent animated release "Meet the Robinsons."

In fact, the availability of digital 3-D has been described as the "killer app" by many in the industry. "It may well be," declares Brian Kercher, GM of Kodak Digital Cinema in Europe, Africa and the Middle East. "It's clearly popular with studios -- they have more 3-D movies in their plans -- and beneficial to exhibitors because (3-D) movies play longer and generate higher boxoffice and concession purchases."

About half of the 80 Kodak systems installed worldwide -- 27 of which are located in eight cinemas in four European countries, including the very first in Greece at Village Cinemas -- are already equipped with Real D systems. In Germany, NuVision's reusable active shutter glasses have proven particularly successful with 15% of the country's 146 d-cinema screens, while Dolby Digital Cinema (which has more than 300 screens in 19 countries) is coming off a highly successful trial of its new 3-D system in the U.S.

"3-D has demonstrated that it can pull in additional boxoffice for certain features," confirms Tom Cotton, vp business development of Technicolor Digital Cinema, Europe (which has 31 systems installed at Belgium's Kinepolis Group, using Barco projectors and Dolby d-cinema servers). "It has a strong marketing effect, creating demand for digital cinema. In this sense it is important. However, the benefits of digital in 2-D would be sufficient to warrant the switch-over once the economics have been established between exhibition and distribution."

Going forward, industry veterans agree that the most important challenge facing the continued move to digital cinema is an understanding among all parties that in order for the transition to proceed smoothly, everyone must be on the same page.

"It will take all the relevant stakeholders in distribution, including U.S. studios and local distributors, (along with) all exhibitors, first-run key locations, second-run and country location exhibitors," concludes 20th Century Fox executive vp digital exhibition Julian Levin. "(Everybody has) to actively engage, discuss and deal with each issue related to digital cinema and close the financing and modeling gaps in each situation and for every country."

Despite the massive task, Levin isn't afraid to declare one much-needed digital certainty: "These discussions are substantially underway."
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