Digital cinema deals signed by studios and exhibitors with integrator Arts Alliance Media (AAM)is close to breaking the D-cinema deadlock in Europe, according to analyst Screen Digest.

While rollout has continued apace in the US, there has been an impasse in Europe with a few exceptions such as the UK's digital screen network.

Disagreements over a fair business model for distributors and exhibitors have been the main stumbling block.

But AAM's virtual print fee-funded plan - whichis nowsupportedby four studios - hasrecently receivedthe backing of a cinema chain. The agreement with 400-screen French exhibitorCircuit Georges Raymond is significant, says report author David Hancock.

'The insurmountable obstacle of exhibitor access to key content has been removed with four studios now backing a roll-out programme and the building blocks for a mainstream market deployment are in place.'

There are other signs of progress, he suggests. In the UK, Odeon and Empire Cinemas have been working on 3D installation with Odeon declaringitsintentionto install 500 digital 3D screens.

Germany and Norway have shown signs of a strong commitment to digital change.

Screen Digest predicts that more than three-quarters of this market will be digitised by 2012.

'The key building blocks for the European market are moving into place and the CGR deal indicates that a viable model has been found,'said Hancock.

'However, it would be naïve to suggest that the conversion to digital is proving easy, and the key issue that continues to tax people in Europe is how to pay for it for all levels of the market.'