Territories make progress on digital print fees

MADRID– Europe’s digital cinema makeover has taken off rapidly, overtaking theater conversions in the U.S.

That was one conclusion of an EU-Spain conference, The Independent Exhibition Sector and the Challenges of Digitization, held March 5-6 in Barcelona.

Europe’s first D-Cinema switchover summit served as a wake-up call.

“More than anything else, it created awareness of digitization issues, plus communication between the different sectors involved,” says Ignasi Guardans, head of Spain’s ICAA film institute.

The forum also flagged the dramatic scale and rate of conversion.

Digital screens increased 196% in Europe in 2009, 3D installations by 506%, according to conference panelist David Hancock, at Screen Digest.

According to Hancock, out of 30,000 screens across Europe, 22,600 (plus a proportion of Sony’s target screens), now have in place virtual print fee deals — where distributors pony up most conversion costs working through digital-deployment integrators such as XDC, Arts Alliance and Ymagis.

The makeover goes beyond multiplexes.

Some top-tier European arthouses, part of the EU network Europa Cinemas, are going digital to screen subtitled 3D prints of Tim Burton’s “Alice in Wonderland,” Europa Cinemas’ Claude-Eric Poiroux says.

“Our arthouses screen American and European auteurs in subtitled versions, while the multiplexes dub. Burton is an auteur. We have to screen him in competitive conditions — in 3D,” Poiroux explains.

Where exhibitors go, distributors follow: By 2013, there will be more digital than 35mm screens in Europe, Hancock predicts.

But Europe’s digital cinema sea change has raised multiple concerns.

Indie distributors don’t see much cost savings, since they need to supply both digital copies and 35mm prints.

To access European theater screens under studio-backed VPF deals with integrators, distribs may have to sign their own VPF deals, contributing to conversion.

That’s no slam dunk. VPF deals normally run 10 years.

“The question’s how many indie distributors will commit to 10-year VPF deals when their own future’s so brittle,” says Jonathan Davis, U.K. Film Council consultant.

Ymagis is negotiating with Gallic indie distributors for VPF film-package deals, says Ymagis founder Jean Mizrahi.

There are 6,000 single-screen theaters in Europe, and a further 1,200 two-screens, says Henning Camre of Copenhagen’s European Think Tank, an associate conference co-ordinator.

Distributors have no VPF plans for about half Europe’s cinemas. So there’s real danger of a digital divide, where smaller screens, particularly in Eastern Europe, and smaller distributors are locked out of 3D movies or outlets for European films.

Europe’s D-Cinema rollout will involve not only private-sector investment but also public intervention.

“The big challenge in Spain is that most of what needs to be done needs to be implemented and in many cases approved by every single regional government,” Guardans says.

So he was delighted that all Spain’s regional film authorities attended the conference.

A mixed model looks to be emerging from France, where its CNC film board, teaming with municipal, regional and EU authorities, looks set to aid many single and two-screen theaters via direct subsidies or bank loan guarantee schemes, says CNC’s Lionel Bertinet.

One large question, says Poiroux, is what digital and 3D films Europe’s production and distribution sectors will be supplying.

In France, French films accounted for 45.7% of the B.O., U.S. movies 44.5% in 2008. Through February, U.S. share skyrocketed to 60.3% as audiences flocked to “Avatar.”

Europe’s biggest S3D bet looks like Belgian Ben Stassen’s “Sammy’s Adventures,” 20 minutes of which were shown to upbeat response at Europe’s Cartoon Movie, March 5.

Europe — and Hollywood — will be eyeing “Adventures” with keen interest — to see if Europe can conjure up a homegrown 3D hit.

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