If there is one area where there the European dam is inevitably going to break it is digital cinema. If there is not unanimityabout the benefits - although few are yet seeing its potential to change the relationship between cinema and audience - there is at least recognition of inevitability.
And even given the very real fear that small theatres may be left behind, there is wide acceptance that we are entering a new era for cinemas.
But the 'when' is extremely important. Digital cinema may indeed bring benefits and cost savings but only when there is a critical mass of people using it.
Like vinyl in the music business, there may be a tidy niche for celluloid for years to come, and vast archives will remain to be digitised.
But the mainstream is now at a clear tipping point and soon celluloid will simply no longer be commercially viable; and the analogue and digital cannot run side by side.
A single standard has been the cornerstone of the film business for more than 100 years.
This current interim period is already straining parts of the industry - with the finances of change eating into margins before any benefits of mass adoption can be reaped.
The commercial director at Carlton Screen advertising, for example, recently warned: 'Unless we go digital in the next two or three years, I am not convinced we will still be in business. To run half the estate in digital and half in 35mm is not possible in any way.'
EUROPE FALLS BEHIND
In the US, the rollout has been gathering pace over the last two years but Europe has begun to lag badly behind.
Digital cinema has long been a stop-start affair and as with other areas of digital progress, there are key concerns.
» Independents will lose out again to the muscle of the majors
»That financial gains will be illusory
»That Hollywood will dominate, damaging cultural diversity.
In all cases, such fears are not without foundation.
STANDARDS
A single standard (35mm) was the bedrock on which the film industry was built.
So the drive tofind one unassailable interoperable specificationhas therefore logically been seen as an essential element in the development of digital cinema.
The Digital Cinema Initiatives (DCI) standard has been designated by the studios as its choice.
DCI includes system requirements, minimum picture resolution, security and interoperability.
Critics have claimedthe specifications are more attuned to the needs of big distributors than independents and there was much initial debate in Europe.
That impasse continues. 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.
The independents around the world who took digital change seriously and developed their own networks are feeling understandably aggrieved and some have even called for a less restrictive indie standard.
But while that message will find more supporters, the debate for most is over.
A single standard is now broadly, if reluctanctly, accepted by the vast majority.
VIRTUAL PRINT FEE (VPF)
David Hancock, Head of Cinema at Screen Digest - and one of the leading global authorities on D-cinema - feels that there has been enough of a recent shift in conditions to indicate that the deployment of digital in Europe is finally moving forward.
'Yes there are still obstacles, but there are obstacles and then there are insurmountable reasons. There aren't really any insurmountable reasons left,' he said.
There are many reasons for the US lead in the market, but the dominance of the studios in the US system has been a key factor.
In a largely homogenous market it is possible to roll out a business model that covers a critical mass of the industry.
In the US, studio support for the Virtual Print Fee (VPF) as the mechanism for sharing costs of digital change has driven the process.
The VPF is a means of financing conversion in which distributor and exhibitor contribute over a period of years to installing the necessary equipment for making the digital shift. Exhibitors are subsidised by distributors in installing equipment while distributors can make substantial savings in the cost of prints.
The VPF model has been proven in North America, with more than 3,700 digital screens installed to date. A European market, fragmented geographically, socially, legally and technologically is a harder proposition.
Bigger European exhibitors are also keen to see if they can strike a better deal than the one on the table (see below).
Smaller exhibitors in Europe are most concerned that they are disadvantaged in the VPF model and have been looking to other approaches.
All are sceptical that D-cinema will yield the savings on print costs that have been widely heralded and they may be right, at least in the short term.Only when a critical mass of exhibitors have made the switch can cost savings really begin to be realised.
Alternative payment deals have come and gone but it increasingly looks like it's a case of VPF or go it alone, whereby an exhibitor decided that they have more chance of capitalising a private deal than tying themselves into a VPF deal. That can only apply to a small section of the indie market.
The absence of a widely-accepted alternative in the mean time is looking more and more like the only game in town, particularly since there is now a deal on the table accepted by a number of Hollywood studios.
EUROPEAN VPF PROPOSALS
In Amsterdam in 2007, Arts Alliance Media (AAM) made a bid tobreak the European deadlock.
Itannounced a deal with Universal Pictures International and Twentieth Century Fox on VPF and called on exhibitors to sign up. Click here for more.
The deal could extend to 7,000 screens in UK and Ireland, Germany, Austria, Switzerland, France, Spain, Italy, the Nordic region and the Benelux.
In December, another studio was added when Sony Pictures Releasing International signed a non-exclusive long-term agreement with the company for digital cinema deployment. Content deals have also been signed with leading independents.
For much of 2007, however, there was a deafening silence from theatre owners but a breakthrough deal came at the end of the year with 400-screen French chain Circuit Georges Raymond (CGR) signing up.
The conversion of 200 screens is due 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.
However, it remains to be seen whether this will prove a tipping point in the development of digital cinema in Europe.
GOVERNMENT INTERVENTION
The fragmentation discussed earlier, suggests that government may yet have to take a key role.
In the UK, a far-sighted plan has been implemented, the Digital Screen Network, covering 240 screens in 210 cinemas across the UK at a cost of $24m (£12m).
The investment ties participating cinemas to showing a proportion of non-mainstream films. Also in the UK, Odeon and Empire Cinemas have been working on 3D installation with Odeon declaring its intention to install 500 digital 3D screens.
The UK has the largest digital screen network in Europe but it still represents no more than 5% of all screens. But the initiative has kick started a process and was not intended tofoot the bill in the long term.
Other states including Norway have also provided state support for adapting to the new technology through taxes on tickets and DVDs as well as through its film agency.
It is precisely this type of support that is necessary if the European market is to make the transition successfully but it will happen only at state level.
The European Commission which publicly intervened at recent conference on digital cinema in Romania to rule out the possibility of direct capital funding at a wider European level.
Such intervention would be in direct conflict with the European Commission's stated goal of a single European market for the digital age.
EUROPE-WIDE POLICIES
European bodies have not, however, been inactive in D-cinema.
Under Commissioner Viviane Reding, who heads DG Information Society and Media, the Commission does have a long term strategy in place to address Europe's transition to the digital age and convergence, such as MEDIA 2007; the European Commission's support scheme for the audiovisual industry supports projects focused on Digital Cinema Distribution (DCD), and first-round project funding took place in these areas in 2007.
In the end, only one DCD project was successful in gaining first-round funding. Commissioner Reding said that was 'a reflection on the state of play on digital equipment in cinema theatres.'
In other words, the Commission would like to show more support but there is not enough activity yet to justify it.
Europe-wide funding is also available through the Council Of Europe's Eurimages scheme, which provides funding for the co-production, distribution and exibition of European cinematographic work.
The scheme will co-fund the digitisation of prints to a maximum of 80%, or Euro 100,000, whichever is lower.
But there is a long way to go.
THE CULTURAL DIMENSION
However, it is clear that what European level focus there is on digital cinema in theatres is as concerned with the cultural challenges facing the European market as the economic impact.
While both Eurimages and the MEDIA programme recognise the economic importance of European cinema, they also place a strong emphasis on 'reflecting and respecting Europe's identity and cultural heritage'.
Indeed, it is the importance of the ongoing promotion and preservation of European cultural diversity in content that has been a recurring theme on the few occasions that digital cinema gets a specific mention in EC statements.
Overall, threats to access to European content are perceived to come as much from the potential of US studios to make more prints available and the cost of digitising European content, as from uncertainty over how independent cinemas will be able to afford the transition to digital technology.
INDIE OPPORTUNITIES
However, there is a train of thought that the advent of digital technologiescould present more of an opportunity than a threat to independent cinema in Europe. Exhibitors, at least in theory,will be provided with the opportunity to show more - not less - independent content. D-cinema's promises include the ability to broaden programmes.
Hancock at Screen Digest certainly supports this theory. 'There is a section of exhibitors that will 'get' what can be done with digital cinema and when they do they will start demanding more independent cinema,' he argues.
Hancock believes that the key is for exhibitors to treat the new world as a digital environment and not merely the old system with digital technology superimposed.
Enhanced flexibility in the scheduling and control that digitisation makes possible could allow cinema to evolve rapidly in terms of being able to show more prints, as well as offering a broader range of material.
There is also the opportunity for independent theatres to show other forms of content such as music or sporting events to audiences - a trend that is already taking off in the US, particularly with digital 3-D presentation.
Rather than being a threat, the end result could be higher occupancy for independent cinemas.
Finding business models that allow independents to finance the transition will be crucial, but again there are examples that this is not an insurmountable obstacle.
One US cinema buying group working under the auspices of The North American Theatre Organisation (the US version of the Cinema Exhibitors Organisation) put out a call for tender to put in digital cinema in independent cinemas. A bulk model such as this could feasibly transfer to the European market.
Equally, there are already examples of successful self-funding by independent cinemas in Europe. Kino in the UK has exploited the scheduling possibilities of digitisation to rework their own business model, for example.
THE ADVANTAGES OF DIGITAL CINEMA
WIDER FILM CHOICE...Lower cost prints and ease of access should make it economically viable to offer a wider choice of film.
Targeting specific markets offers the potential of creating niche screenings to fill quieter times of the week.
That does not always have to be new content. A UK experiment in Summer 2007, revealed a strong public appetite for classic cinema that had been largely untapped.
NON-FILM CHOICE...Digital screens around Europe have been experimenting with non-film content. The most popular fare so far has been pop concerts by major stars, such as Genesis (pictured)...and opera.
Marc John, head of digital development at the UK 's Picturehouse chain said an opera season from the Met in New York had packed out theatres - both at an initial $25 (£12.50) and the subsequent $50 (£25).
PROGRAMMING...Bud Mayo, CEO of D-cinema pioneer Access IT at a recent conference spelled out what he believes is the irrefutable argument for new technology - that it will boost off-peak admissions by offering more choice. (Click here for more)
'Nobody is in a theatre for the most part Monday to Thursdays,' he said.
Filling the gaps in the schedule would break free of the restrictive dominance of the opening weekend and allow word of mouth to develop.
3D...3D was barely a passing thought in the original discussion of D-cinema buit has since generated major interest. All but one of the animations on Disney and Pixar's 2008-2012 schedule are in 3D and the format has been championed by major film-makers such as James Cameron.
The fact is that without rapid development of 3D in Europe, audiences are likely to have to watch 3D films in two dimensions - and the potential for premium-rate screenings will simply not be available.
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