D-cinema, as in dragging

Factors converge to crimp int'l rollout plans

If the digital-cinema revolution took its time getting traction among U.S. exhibitors, the situation in Europe has been downright slo-mo.

D-cinema proponents say there has been a perfect storm of woes impeding progress in European territories — a tendency to lag behind U.S. rollouts, a pullback in Hollywood studios' generosity in funding installations on both sides of the Atlantic and now the spreading global financial crunch.

"Everybody is suffering from the state of the financing market," said Gemma Richardson, a spokeswoman for London-based Arts Alliance Media. "We have five studios on board, so we're rolling. But we're trying to get everybody to pitch in and help, and that means from the pricing of equipment by the manufacturers and right on down the line."

An installations facilitator, Arts Alliance has been among those companies at the center of the European digital rollout.

"We're having conversations with the top cinema chains throughout Europe, and it's just a question of who wants to get in the game," said Howard Kiedaisch, Arts Alliance's New York-bred CEO and a former international exec at Universal and PolyGram.

Arts Alliance's deal this year with the French theater chain Circuit George Raymon marked the first funded through a virtual print fee arrangement with Hollywood studios. Through VPFs, studios agree to pay exhibitors the equivalent of what print runs would cost for several years after converting to digital distribution.

Funding d-cinema by tapping studio largesse has been much more widespread in the U.S. But in the U.S. and Europe, Hollywood studios recently have insisted on much lower VPFs than in the earlier days of the U.S. digital rollout.

That's been a drag on how many circuits sign up for installations.

In some cases — like a near $1 billion deal recently struck by four studios with the Belgium-based d-cinema service XDC — impressive financing is in place. But third-party facilitators such as XDC or Arts Alliance still need to hammer out VPF-related agreements with individual exhibitors.

"That's just what I call a hunting license," one d-cinema wag said of XDC's deal with Warner Bros., Disney, Paramount and Fox.

Europe's d-cinema rollout will figure in several sessions set for CinemaExpo International 2008. The annual exhibition confab kicks off today here.

Europe has only 1,300 screens equipped for movie-quality digital projection, with many of the installations involving lease-only arrangements with systems vendors and others funded with government subsidies. The U.S. has almost 5,000 movie-quality digital screens, dating from an initial round of deals in late 2005 and early 2006.

"The reality is that only as of February of this year are we where the U.S. was in December of 2005," Kiedaisch said.

Cinema Expo International is produced by the Nielsen Film Group, a division of Nielsen Business Media, parent company of The Hollywood Reporter. (partialdiff)