Expo Hails Groundbreaking Deal

"Cinema Expo 2007 opened with a bang today as news spread around the show's RAI center HQ that one of the major roadblocks to the expansion of digital cinema across Europe has been lifted.

Twentieth Century Fox, Universal Pictures Intl. and European digital film distribution services outfit Arts Alliance Media have reached virtual print fee agreements, which could accelerate digital cinema deployment across Europe.

The groundbreaking deal -- the first virtual fee agreement made in Europe -- will see 7,000 digital screens deployed in the next few years, according to AAM. Europe has 32,000 screens.

The virtual print fee is a way for movie distributors to subsidize the $75,000-plus cost of converting an analog screen to digital. Because distributors don't have to pay for 35mm print rentals, they save money on digital movies and are willing to help subsidize the transition.

Fox and Universal have committed to distribute digital content to AAM DCI-compliant digital cinema projection systems in the U.K., Ireland, Germany, Austria, Switzerland, France, Spain, Italy, the Nordic region and Benelux.

"This represents a significant step in that it is the first virtual print fee deal," said London-based digital cinema expert David Hancock, from research org Screen Digest. "There could have been no further d-cinema rollout progress without this step."

However, Hancock added a note of caution: "The concept still has to be sold to most European exhibitors."

"These milestone agreements finally offer European exhibitors a viable commercial model to adapt their screens to digital cinema and put together a sustainable rollout strategy," said AAM CEO Howard Kiedaisch.

The agreements are non-exclusive and AAM is locked in similar discussions with Buena Vista Intl. and Paramount Pictures Intl.

Kiedaisch promises "further signings with other studios and independent distributors shortly."

"This arrangement represents the very first significant plan to finance and roll out DCI compliant digital projection systems across Europe," said Julian Levin, Fox's executive veep, digital exhibition and non-theatrical sales and distribution.

"The image quality, content, security and distribution/exhibition efficiencies, including 3-D exhibition, offered by digital projection clearly exceeds 35mm film. We are delighted to have closed this arrangement with our colleagues at Arts Alliance Media who have the experience and technical expertise to manage this process."

AAM installed the U.K. Film Council's 240-screen digital screen network in April.

"The digital world is the future, and we as a studio are committed to its continual and sustained growth," said Duncan Clark, executive VP of Universal Pictures Intl. "We look forward to supplying our movies to this new digital platform and, along with audiences, reaping the rewards by continuing to enhance the theatrical experience."

By Archie Thomas, Variety