Digitization across Europe looks set to spread like wildfire over the next few years, following a slew of digital deals.
Digital cinema company Arts Alliance Media has inked a partnership with Cineworld Group, the second-largest exhib in Europe, for the conversion of its 790-screen circuit to digital over three years.
The watershed deal, through which Cineworld will acquire, install and operate digital projections in its 77 cinemas, will be financed from its existing financial resources and cash flow. It will cost an estimated £30 million ($44.2 million) in addition to the $14.7 million the exhib already spent on digitizing a third of its screens over the past 18 months.
Arts Alliance has more than 700 digital screens with more than 2,300 screens signed up. CEO Howard Kiedaisch expects to announce more partnerships soon.
“The deal fits into what has been happening over the past few months,” said David Hancock, head of film and cinema at media analysts Screen Digest. “There’s a momentum in Europe, particularly now that we’re seeing the bigger exhibitors jump on board — we’re firmly into a mainstream digital role.”
The deals he’s referring to include February’s announcement from UGC, which inked with Paris-based digital cinema provider Ymagis for digital conversion of its 605 screens: 373 in France, 88 in Spain, 80 in Belgium and 64 in Italy.
Ymagis has contracts with more than 840 screens in France and 1,250 screens across Europe. Last week, it was appointed by Benelux/French exhib Utopia to complete the digital rollout for its 90 screens.
In April, Kieft Group, which owns Germany’s Cinestar, inked with XDC to rollout digital equipment under a virtual print fee contract for 150 digital screens.
Europe’s biggest cinema chain, Odeon, has signed pacts with Universal, Disney, Fox, Paramount and Warner Bros. to receive digital features to DCI-compliant digital projection systems at its sites. It said the move to 100% digital projection is expected to be completed by the end of 2012.
Hancock said these announcements show that the credit crunch is “wearing off.” Before the economic crisis, he said, these deals were all put on hold because access to finance was restricted.
“A lot of the deals that were fairly advanced at the time can now be made viable again,” he said, adding that, in the U.K. alone, “around 75% of the screen base is committed to digital by 2012.”
Kiedaisch believed that Europe is beginning to see the “domino effect” fall into place.
“It’s been a long time coming,” he said. “But now that the 3D business has started to pick up and the financial crisis is teetering out, digital conversion is going to ramp up pretty quickly now.”
With the number of 3D titles increasing — this year saw 36 titles released in the format, such as “Clash of the Titans,” and forecasts for 2011 are expected to surpass 50 — Kiedaisch fears the demand could lead to a shortage of digital projectors.
“If you order a digital projector now it can take up to six months or more to get it,” he said. “They’re in so much demand that it’s pretty limited at the moment.”