German Film Board moves on d-cinema

To contribute up to €40 mil over five years for conversion

COLOGNE, Germany -- The German Film Board (FFA) has pledged up to €40 million ($56 million) over the next five years to help convert German cinemas to digital technology.

Germany lags behind in the digital race. Unlike countries such as England, where exhibitors have been rapidly upgrading their equipment, the digital rollout in Germany has been bogged down by fights between distributors, cinema owners and film funding bodies over who will pay for it.

The Film Board hopes its cash will help kick-start digitalization. But the FFA said it would only be able to pay out if multiplex owners Cinestar and UCI, as well as other smaller theater chains, drop their ongoing suit against the FFA.

The exhibitors sued over a levy -- between 1.8%-2.3% of their boxoffice revenue -- that they are forced to pay to the FFA to help finance and promote German films.

Earlier this year, Germany's federal administrative court ruled the levy unconstitutional because cinema owners are required to pay it while a similar levy on German TV channels is voluntary.

The FFA is adjusting its financing structure to appease the court but still hasn't reached an agreement with exhibitors on the original suit. In the meantime, cinema owners are paying the levy under caveat, meaning the FFA cannot spend their money until the suit is resolved. Without that cash, the FFA's digital cinema plans could be dead in the water.