Indie exhibs plead for equality with 'plexes

AMSTERDAM — As the international exhib confab CineEurope (formerly Cinema Expo Intl.) starts its 20th edition Monday, the digitization of multiplexes and movie houses remains a major topic on the agenda.

For many small and medium-sized independent cinema operators across Europe, digital conversion has created a great divide.

Despite increases in subsidies helping indie exhibs with digital conversions in Germany, local arthouse cinema org AG Kino warned in a statement last week that “the market dominating position of the U.S. studio distributors is contributing to a situation in which film diversity in Germany and freedom of programming in cinemas is in great danger.”

It fears this will create an irreversible market concentration and lasting structural changes in the theatrical industry.

The Hollywood majors formed the Digital Cinema Initiative to establish a standard for digital cinema systems that ensures a uniform and high-level minimum 2K resolution quality, as well as tight copyright security to fight piracy.

For many small players, however, the high price of DCI equipment makes digital upgrading unaffordable. German arthouse and indie exhibs rely on state subsidies to upgrade.

AG Kino, which represents 300 cinema operators, said cinema digitization is speeding up in Germany and it praised federal and regional subsidy programs aimed at preserving the cultural diversity and the cinema landscape, especially in small towns and rural areas as well as in cities, calling it an “essential contribution in strengthening German and European film,” which make up a large part of the programming of subsidized theaters.

“Cinema digitization in Germany is accelerating. Digital screenings bring opportunities for the industry. For the future of the film theater industry in Germany, it’s of vital importance that all have the same opportunities to participate.”

AG Kino has laid out a four-point roadmap for what it calls a fair, speedy and comprehensive digitization of Germany’s small and medium-sized cinemas.

It wants open technology, which would allow small arthouse theaters to use more affordable, non-DCI standard projectors.

The majors and some big local distribs oppose this but AG Kino says it’s economically necessary if small cinemas are to survive. While the org also supports a common standard and tight copyright security, it says these must be in accordance with the economic reality of the cinema.

It’s also pushing for clear rules for virtual print fee (VPF) payments. AG Kino wants legislators to cement VPF guidelines into law. VPF deals, in which distributors compensate cinema owners for the cost of installing digital projection equipment by paying for each first-run film screened, have made digitization a piece of cake for multiplex operators, but left the little guys by the wayside as they rarely offer first-run releases.

The practice, the org argues, violates competition laws by favoring some theaters over others, and only a change in the law can create a fair playing field. AG Kino is in contact with the EU’s antitrust watchdog on the matter.

Following on from that, AG Kino wants a common VPF financing model for independent cinemas. It is working on a financing model that would enable easy access to VPF deals with all types of distributors.

In addition, AG Kino is working on a separate plan that would see independent theaters organizing themselves into buyer pools, which would allow for more affordable group pricing.

Lastly, the org wants secure subsidy programs to ensure that federal and regional support programs, with assistance from the EU, would help to continue the rapid technical upgrades, especially with regards to cinemas that focus primarily on European film.

With the roadmap, AG Kino says it is striving to secure the independence of Germany’s film theaters and insure that programming diversity and the market share of domestic and European cinema is not endangered.

Whether the majors, which continue to adhere to DCI specifications, are listening remains to be seen.

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