09/02/2007

Meeting at La Rochelle for the fifth edition of the International Digital Film Forum (IDIFF), film industry professionals have unveiled the latest advances in digital screening equipment for cinemas.

Gaumont have confirmed that EuroPalaces (Gaumont and Pathé theatres) will start digital screenings at the end of next summer. Service providers are multiplying their offers based on the inter-operability of equipment and the possibility of charging distributors for a share of the equipment costs by means of a Virtual Print Fee (VPF), currently used in the US.

These service providers include the Belgian leader XDC, who manage 305 digital screens in Europe (80% of the market); Technicolor, who manage 37 cinemas currently equipped in Belgium and France by Kinepolis; and the UK’s Arts Alliance Media (Digital Screen Network project set up by the UK Film Council), who are also active in Norway.

The service providers – who manage the integration of digital servers-projectors, negotiate on behalf of the exhibitor with equipment manufacturers and film distributors and oversee maintenance, transport, management of encryption keys, encoding and archiving – are aiming for target between 2,000 and 5,000 screens.

However, the situation is more complicated in the European market, which is more fragmented than its US counterpart. The main problem concerns the lack of films available in digital, the systematisation of the creation of digital masters, as well a clear distribution of expenses between film distributors and producers. Indeed, if distributors have to pay for the master, they will be reluctant to pay the VPF. Moreover, the widespread use of colour grading will prove indispensable, as 40% of films are finalised on silver prints in post-production and converted to digital at a very high cost.

In distribution, there is a risk that some sectors will be completely left out of the equation, due to a shortage of films or equipped theatres. Claude-Eric Poiroux also pointed out that the Europa Cinemas network, once a pioneer in distribution, is now behind the times because films available in digital are mainly domestic and US productions. Diversity will therefore be under serious threat, with certain film genres no longer distributed and cinemas that will be obliged to alter their programme.

In exhibition, experts think that each complex will need three theatres equipped with digital in order for films to have a full theatrical run. However, independent distributors may be forced to supply prints in digital and 35mm, as their films will often serve as a variable of adjustment in multiplexes. In addition to this double cost is the fact that cinemas equipped with digital facilities are often the largest and therefore beyond the reach of films made by independent distributors, as pointed out by Adeline Monzier of D.I.R.E, who has, however, said that the VPF will be adapted for the French market.

It should also be added that numerous cinemas are not in a position to set up a digital projector alongside the 35mm projector in their booth, and the costs of adapting projection booths also often implies increased costs in equipment, installation and maintenance.

If an economic model is not put in place, the gap may widen quite rapidly between large and small distributors and exhibitors. It also looks likely that filmgoers will contribute to equipment depreciation costs. Kinepolis have already placed a per-ticket surcharge for their films screened in digital in Belgium (€1) and France (50 cents).

(Translated from French)