Deal pumps Euro d-cinema

Helps exhibs recoup equipment costs

Digital distribution provider Arts Alliance Media will use the upcoming Cinema Expo event in Amsterdam to unveil a deal that might help fast-track the wider implementation of digital cinema in Europe.

The deal centers on a Virtual Print Fee — a system common now in the U.S. in which distributors make a payment every time a film is shown digitally — that will help exhibitors recoup the cost of digital projection equipment.

At present, exhibitors in Europe argue that the cost of digital projectors is unjustifiable in terms of the return on investment. For distributors, the endgame is the eventual eradication of the cost of physical prints and the installation of equipment that will facilitate the distribution of 3-D films, seen as the next big growth area for theatrical exhibition.

"At Cine Expo we will be announcing that we have a VPF deal for Europe," AAM's Fiona Deans told delegates Thursday at the RAAM Digital Cinema conference in London. "It might not be what everyone wants, but we think it is a fantastic opportunity for cinemas to digitize with distributors contributing."

Deans said it would be a long-term deal, putting equipment in cinemas for about 10 years.

She said that digital cinema has suffered in Europe because exhibitors have been unable to secure digital content. The AAM deal, she said, will ensure that obstacle is overcome.

"Integral to the Virtual Print Fee deal is the commitment of the distributors to make a very, very high percentage of their films available digitally," Deans said.

In a bid to encourage early adoption, Deans warned that the VPF deal wasn't "for an unlimited number of screens."

"We have a fixed number of screens that we can roll out to," she said. "And once those screens are signed up, we will have to go back to the studios and see whether they want to keep contributing at that level. This is obviously an incentive for people to start talking to us sooner rather than later."

Deans stressed that the VPF deal will not change the exhibitors' relationship with the distributors. AAM will not act as a gatekeeper, she said, merely as an agent for the installation of digital cinema.

"You won't ever be asked to book content from a particular distributor or particular film," she told delegates.

Deans, however, admitted that the VPF agreement currently in place will be "less suitable for second-run cinemas because the VPF changes over time."

This surprised indie exhibitor Gerald Parkes of Parkway Entertainment, who said he was under the impression that one of the main reasons for moving to digital was to level the release-date playing field. There was now no fiscal excuse not to supply a film at the same time to all exhibitors, he added.

"That is the fundamental point; there is no point in spending money on digital if you are not able to trade on a level playing field," he said.
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