The decision of French cinema chain Circuit George Raymond to sign a virtual print fee agreement for sharing the cost of digital cinema with Arts Alliance Media represents a significant step in the evolution of d-cinema in Europe.
With its 400 screens, Circuit George Raymond (CGR) is the first significant exhibitor to sign up to a scheme announced by Arts Alliance Media (AAM) earlier this year. However, it remains to be seen whether this will prove a tipping point in the development of digital cinema in Europe.
AAM announced its plans at CinemaExpo in Amsterdam having already signed up Universal Pictures International and Twentieth Century Fox to the most developed model for sharing costs between distributors and exhibitors - the virtual print fee (VPF). Paramount Pictures International added its support recently.
A model agreement'
The VPF model has been proven in North America, with more than 3,700 digital screens installed to date, but many exhibitors elsewhere have been reluctant to sign up.
Bigger European exhibitors are also keen to see if they can strike a better deal than the one on the table, which some believe compares unfavourably with what is on offer in the US. Smaller exhibitors in Europe have been looking at other business models. They are sceptical that d-cinema will yield the savings on print costs that have been widely heralded, particularly given the insistence of the now largely accepted digital cinema initiatives (DCI) standard on a minimum 2k projection quality.
At the weekend's EuropaCinema conference in Bucharest, many independent theatre owners were still clamouring for another debate on standards and new proposals on business models. Most accept that d-cinema itself is now a fait accompli, but few were convinced the VPF business model was a good deal. In a vote at the conference, 25% of exhibitors said they expected smaller theatres to go out of business.
The CGR deal is therefore a welcome break for the advocates of DCI. It is also timely, given the studios have shown signs of losing patience with the stalling in Europe. Julian Levin, executive vice-president digital exhibition, Fox Entertainment, said he understood the issues around VPF but warned there was a limit to the patience of studios for arguments that had led to what he called "organised chaos".
"What's changed in the last 12 months is that people now know something has to happen," says John Graham, general secretary of the European Digital Cinema Forum.
The AAM deal with CGR will not make sense for everyone, he suggests. Some smaller chains are already discussing a go-it-alone strategy in which they will not be tied into exclusive deals with distributors.
Everyone, however, will be spurred by the announcement into taking a serious look at their plans and timetable, says Graham. "It will give impetus to the discussion and push things forward a lot. Everyone now is anxious not to be left behind."
More announcements from major chains are expected over the coming months.
Plans for a network
CGR's rollout will start in early 2008, with 200 screens to be completed by the end of the first year. Under the pact, AAM will create a fully DCI-compliant digital cinema network within CGR. AAM will procure, service and maintain the systems, including projectors, servers and a theatre management system.
AAM's CEO Howard Kiedaisch said: "This agreement is an epic milestone for the industry, for AAM and for audiences Europe-wide. CGR is clearly a visionary leader in the European exhibition community and it is seizing the enormous opportunities that digital cinema offers to strengthen and sustain its business, as well as to revolutionise the movie-going experience."
Jocelyn Bouyssy, CEO of CGR Cinemas, added: "We're delighted to be the first movers in the digital transition and to enter a new era of French and European cinema."