Sony inks d-cinema deal; Warners 'close'

Second-phase rollout moving ahead

With official word Thursday that Sony has inked a virtual-print-fee agreement with the biggest digital-cinema integrator, Warner Bros. becomes the sole holdout in exhibition's second-phase rollout of d-cinema systems.

But that soon could change.

"We're in the middle of negotiations," Warners domestic distribution president Dan Fellman said. "We're close. So we might be the last one, but we're going to get there."

Sony signed its VPF pact with Digital Cinema Implementation Partners several weeks ago, but the news was delayed pending internal review of the formal announcement.

Through VPFs, studios volunteer to pay the equivalent of print costs for years after switching to digital distribution as a means of defraying most exhibitor costs to convert auditoriums. Sony refers to its VPF as a "digital conversion fee."

For Warners, set to release more films this year than any other distributor, the cost of a VPF is likely to run considerably higher than that for studios with lower annual output. Sony also is among the most prolific film distributors.

"We share in DCIP's commitment to bring digital projection to thousands of movie screens," Sony worldwide distribution president Rory Bruer said.

DCIP is a joint venture of the three largest domestic circuits -- Regal, AMC and Cinemark -- representing 14,000 screens in the U.S. and Canada. Cinedigm, a third-party facilitator of d-cinema installations for smaller theater chains, also has been signing studios to VPFs.

But both integrators are in a holding pattern as bank financing needed to back VPFs has been unavailable during the protracted credit crunch. Industry estimates suggest the funding impasse might ease substantially by summer.

DCIP chief Travis Reid called the Sony deal "an exciting step in furthering our mission to upgrade and enhance the moviegoing experience."

DCIP previously inked VPFs with Disney, Fox, Paramount, Universal and Lionsgate.

Sony is negotiating a second-phase pact with Cinedigm. In Europe, the studio has struck d-cinema deals with integrators Arts Alliance Media and XDC.