News / The Network

 

The Network - 21/07/2009

 

Digital – Norway signs with the studios

 

Norwegian film body, Film & Kino, has just signed with the US studios to set up the first national digital cinema network. Back on the conditions for a full rolling out that takes into account the diversity of cinemas.

 

09_FilmKino

“Without digital, cinemas could disappear.” This is how Rolv Gjestland, consultant for Film & Kino, Norway’s principal cinema trade body, set out the challenge in 2005 posed by the move to digital for cinemas during the Europa Cinemas Conference in a world of competition intensified by other media. At the time, Film & Kino had already been considering a model which would make it possible to equip all Norwegian cinemas. After this consideration period, an agreement was signed last week with the US studios to finance the move to digital in possibly all cinemas in Norway, about 400 screens. It is worth remembering that most of the cinemas in the exhibition sector in Norway are in the possession of the municipalities, members of Film & Kino.

Enabling the small cinemas to go digital
The Norwegian model was originally developed mainly to provide support to small cinemas. In fact, about 200 screens account for just 2% of the box office takings. Very often small cinemas in towns and villages not only offer films but also other activities (opera, theatre…). These cinemas would generally receive the print of the film several weeks after its release. Film & Kino hopes that digitalisation will  give them the possibility of accessing films at the time of their national release.

An historic agreement
However, if the principle of the model was accepted, the method of financing for digital remained the ultimate test to convince exhibitors and distributors alike. After various attempts, the five largest Hollywood studios – 20th Century Fox, UIP (distributor in Norway for Paramount Pictures and Universal Pictures), Walt Disney Studios Motion Pictures International and Warner Bros Pictures International – finally managed to reach an agreement with Film & Kino. The move to digital cinema will start before the end of the year following a call for tenders issued at specialist digital equipment companies.
The aim is to equip all cinemas between now and 2011.

A tripartite model of financing on the VPF
The costs incurred will be shared out between the distributors who will finance digitisation to the tune of 40% via the VPF, Film & Kino and the cinemas will share the last 60%. Exactly how much the cinemas will pay will be decided by the outcome of the public tender. Every time a digital copy is screened in one of the cinemas, the third party operator pays a contribution – the VPF. Distributors only pay a single VPF per cinema and per title whilst exhibitors can subsequently project the film on different screens – including different projections at the same time – in their cinemas.

Assuring the widest possible film releases whilst encouraging diversity of films d’auteurs
When the digital film is projected to a certain number of screens, the distributor does not have to pay the additional VPFs. In fact, in a traditional model, it would not have been profitable for the distributors to pay a VPF for screening a digital film in a small cinema. Thanks to this new system, it is an incentive to the distributors’ to exceed the agreed figure in order to see their film screened, without paying a surcharge, in all kinds of cinemas.
For the films which would be unable to reach this quota - that is the independent films with a more limited potential - Film & Kino intends to see to it that they are available for all cinemas which would like to distribute them. For cinemas largely screening independent films d’auteurs the distributor therefore has the option to pay a contribution per screening and not per copy, provided the film is shown a few times as is the case with alternative content.
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Please read also:

Press Review - Digital roll-out makes rapid progress

Links:

Film & Kino

Pictures (from top to bottom):
Gimle in Oslo, Konsertpaleet in Bergen,
both members of Europa Cinemas and equipped with digital projectors