Kinepolis talks to U.S. majors about VPF deals

Yelmo Cines, Spain’s biggest cinema theater loop, is negotiating to screen Spanish soccer league games at its digital cinemas, the company confirmed at San Sebastian’s first Digital Audiovisual Forum on Thursday.

Also revealed at the confab: Pan-European exhibition group Kinepolis is in negotiations with four Hollywood majors for a virtual print fee deal that would aid the digitalization of its chain.

Both moves underscore the momentum that has built up behind the digital makeover of plexes in Europe.

Yet some speakers questioned the ability of Spain’s smaller circuits to meet the cost of conversion and suggested that they may need government aid to make the changeover.

Yelmo Cines’ managing director Fernando Evole declined to go into the details of the d-cinema soccer talks.

However, the rights are held by Mediapro, which is trying to open up new revenue channels for league soccer matches, having paid a reported E600 million ($857.2 million) per season for three years beginning with the 2009-10 season.

Belgian cinema chain Kinepolis is in negotiation to convert its 23 plexes in Belgium, France, Spain, Poland and Switzerland to digital.

The deal would mark Kinepolis’ first pacts with majors under a formal virtual print fee arrangement — under which cost of conversion is paid upfront by distributors or third parties and then recouped over time, partly from exhibitors’ payments.

Digital conversion offers three advantages for Kinepolis, according to managing director Manu Claessens: the possibility of using cinema theaters as conference centers; far more agile cinema advertising; and screening of alternative content.

Evole estimated that Yelmo’s 12-14 digital screenings of operas this year will sell about 70,000 tickets.

“That’s a new public that doesn’t go that much to the cinema,” Evole said.

He outlined 10 reasons why digital cinema is not taking off in Spain. Explanations included insufficient contribution from distributors for virtual print fee pacts and a lack of state support and of exhibitor access to financing.

The clear driver for digital cinema conversion in Spain remains the boffo returns from stereoscopic 3-D movies. Of Yelmo’s 370 screens, 26 are digital stereoscopic 3-D.

“My Bloody Valentine 3D” went out on 148 digital 3-D screens. That number will increase by the time of “Avatar’s” release and through 2010, during the course of which, Evole said, 33 digital 3-D movies will be available for release in Spain.

The forum took place on the eve of the San Sebastian Film Festival, which opened today with Atom Egoyan’s “Chloe” and runs through Sept. 26.

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