Lionsgate, AccessIT sign print fee deal

Phase 2 negotiations have also begun

Digital cinema integrator Access Integrated Technologies has formalized a virtual print fee deal with Lionsgate.

Per the new agreement, Lionsgate will provide movies to digital cinema equipped theaters in AccessIT's Phase 1 digital cinema program -- which encompasses slightly more than 3,700 screens -- and will pay VPFs under a long-term agreement similar to those signed by all the other major studios. The 10-year deal extends to November 2017.

Since October of 2006, Lionsgate has provided 23 digital titles for AccessIT's Phase 1 network of exhibitors and paid VPFs. This agreement serves to formalize the distributor's intent to supply movies in the future, and to pay VPFs according to a set schedule. Lionsgate expects to distribute 18 films this year.

AccessIT and Lionsgate have also begun negotiations on a Phase 2 agreement, which incorporates virtual print fee deals that already have been established with Disney, Fox, Paramount and Universal, which have committed to provide movies to as many as 10,000 digital-cinema systems in the U.S. and Canada. The Phase 2 plan includes the majority of Cinema Buying Group's 8,000 screens. AccessIT CEO Bud Mayo said the company is making "excellent progress" toward securing debt financing based on the VPF model, and Phase 2 deployment is scheduled to begin in July.

Lionsgate is also in VPF deal negotiations with other digital cinema integrators.

"We're very bullish on the future of digital exhibition and we want to be on the forefront, along with the major studios, in expanding it through North America," said Steve Rothenberg, president of domestic distribution at Lionsgate.

There are nearly 5,000 digital cinema screens currently installed in North America, out of a total number of screens estimated to be around 39,000. Deployment deals generally rely on a VPF model through which studios contribute an agreed fee per screen, per movie to offset exhibitors' installation costs. There has been a lot of attention on this subject during the past week, as a number of deal negotiations with some of the major studios have been at an impasse over the financials.