A virtual print fee (VPF) agreement appears close to becoming a reality for Australia’s independent exhibitors with the news that US-based Cinedigm Digital Cinema has agreed to act as the intermediary between them and the major Hollywood studios.
The Independent Cinemas Association of Australia (ICAA) has travelled a very rocky road over several years to help independents move into the digital era. In a statement yesterday it said an agreement is scheduled to commence on April 14 and that members could start earning VPF payments from that date.
ICAA represents about 650 screens, according to vice president Benjamin Zeccola, from the Palace Cinema chain. He confirmed that these screens accounted for about 30% of box office revenue.
“The cost of changing projectors is prohibitive for some cinemas and if not for the subsidy some would struggle to make the transition, diminishing the independents and giving the major chains an advantage,” he said. But many have made the move already.
ICAA members Ross Entwistle and Barry Peak spent last week in the US meeting with Cinedigm, the six studios and Christie, which is likely to handle network operations on ICAA’s behalf.
ICAA originally partnered with Omnilab, the intention being that this Australian company would manage the installation of digital projectors, guarantee compliance, collect and disburse VPF revenue – and monitor operations through its own central hub.
Rival outfit Digital Cinema Network (DCN) subsequently accused its former chair, Michael Smith, of breaching his fiduciary duties to DCN by handing documents he shouldn’t have to Omnilab. Omnilab did not come off well and its appeal was dismissed in December. Zeccola described severing the ties with Omnilab as a “clean break” for ICAA.
“We began to get a sense that Omnilab would not be proceeding and, while still considering their options, they very generously gave us the opportunity to explore other opportunities,” Zeccola told ScreenDaily. “The ICAA executive feels very grateful to Omnilab for the effort they put in … They are well and truly out of pocket.”
Zeccola would not disclose the length of the agreement or the value of the VPF, because negotiations were continuing, but said these key parameters were “largely similar” to the old deal.
He said the passage of time had lead to new opportunities: the studios have now done deals across the world; Cinedigm has the infrastructure, expertise and contacts because of its extensive work in North America; and Christie’s facilities are “more economical and more reliable”.
“There was no Australian company that presents itself as capable besides Omnilab,” he said.