Digital cinema company Arts Alliance Media has signed a non-exclusive long-term deal with Paramount for digital cinema deployment in Europe.

Under the pact, Paramount Pictures International has committed to supply its films in digital format to AAM DCI-compliant screens in the UK and Ireland, Germany, Austria, Switzerland, France, Spain, Portugal, the Nordic countries and Benelux.

The deal adds to AAM's existing agreements with Twentieth Century Fox and Universal Pictures International. AAM said it is in active negotiations with other studios.

The deal is significant in that it lends further strength to the virtual print fee model under which studios and exhibitors share costs.

Exhibitors are subsidised by distributors in installing equipment while distributors can make substantial savings in the cost of prints.

The argument about who should pay for d-cinema equipment has held back the advance of digital rollout in Europe.

Such deals have been largely theoretical outside the US because the distributors, exhibitors and technology providers were unsure how much they would benefit from the new digital economics.

Having three studios on board will put pressure on exhibitors to sign up to VPF agreements.

Speaking at Screen Internationa;'s Digital Cinema summit last month, Julian Levin, evp 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.'

Andrew Cripps, PPI's president, said:'PPI is delighted to have reached this agreement with Arts Alliance to roll out DCI compliant digital projection systems across Europe. This is a real step-change in the international arena which will only accelerate as 3D product becomes more commonplace and Paramount is proud to be at the forefront of this.'

Howard Kiedaisch, AAM' s CEO, added: 'This agreement is a giant step forward for European exhibition and distribution. Gaining the support of PPI enables AAM to take our exhibitor discussions to the next level and kick-off widespread digital cinema rollout across Europe.'