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Financial Times
June 25th, 2007
Studios agree projector deal
By Andrew Edgecliffe-Johnson in London
Two Hollywood studios will today announce a long-awaited compromise in their battle with European cinemas over who should bear the cost of upgrading to digital projection
equipment.
Studios have been hoping to save an estimated $1bn a year around the world by phasing out celluloid prints, which typically cost about $1,200 each, and switching to secure digital forms of distribution.
Cinemas, however, had refused to bear the full upfront costs of installing new projectors, which can cost about $75,000 each.
The compromise, brokered by Arts Alliance Media (AAM), a digital film financing and services company, will see Twentieth Century Fox and Universal Pictures International effectively share the cost with distributors through an undisclosed "virtual print fee".
The deal, which will enable the conversion of 7,000 of the 30,000 screens in Europe over the next five years, could be expanded to include other studios.
Howard Kiedaisch, chief executive of AAM, said it was also negotiating with Buena Vista International, Paramount Pictures International and independentfilm companies, and would seek to sign up morepartners at CinemaExpo, which starts today in Amsterdam.
Studios have already signed some similar deals in the US, where Access Integrated Technologies aims to install 4,000 digital systems by October, but Europe's digital cinema roll-out had stalled because of the complexities of its different territories, languages and print configurations.
In the UK, AAM has used a $20m Film Council grant to convert 240 screens.
"These milestone agreements finally offer European exhibitors a viable commercial model to adapt their screens to digital cinema," Mr Kiedaisch said.
Copyright The Financial Times Limited 2007