Digital Cinema and the Future of Independent Circuits: the US Solution

Of the little under six thousand screens that were equipped with digital projectors using DLP Cinema or, in very few cases, Sony 4K technology by the end of 2007, the vast majority is to be found in North America. From representing around 30% of the world’s offer of digital cinema, this area has grown in only two years to represent almost 80%.

Despite considerable growth rates and although it is the world’s second largest market, Europe is still some way behind, particularly when we consider that the total number of screens in the Old Continent amounts to over three quarters of America’s whilst, where digital is concerned, the ratio falls to one fifth.

To explain North America’s leap forward, reference is always made to the publication of the DCI specs in 2005 and the adoption of a business model that aims to finance the transition, the so-called VPF, particularly suitable for a market characterized by the limited number of players. Not only do the 6 studios account for around 90% of distribution in the United States, but the main exhibition companies control numbers of screens that are inconceivable for Europe: Regal, for example, which is the number one exhibitor, counts as many as 6,763 theatres out of the country’s total of approximately 39,000.

In a decidedly more fragmented context, such as that of Europe, where alongside the studios that control an average 70% of the market there are hundreds of distribution companies and a range of exhibition companies, the VPF model not only meets with practical difficulties of application but can certainly not be considered the universal solution. From several sides – exhibitors with less negotiating power but also public institutions – voices of concern are being raised as to the “victims” that would fall to VPF. “Federating” or “integrating” the screens considered less attractive by the studios has, for example, become the objective of an initiative such as the Norwegian one by Film & Kino, described in issue no. 38.

However, it is significant that the specific demands of the small to medium-sized exhibition companies have come to light in the United States, too. Here, NATO, the exhibitors’ association, has created CBG, a buyers’ group to which 600 US and Canadian companies belong, for a total of eight thousand screens, which aims to make the transition to digital possible even in chains which would not be able to benefit from the VPF model on their own. Acting as “integrator” after a selection process which also saw participation by Technicolor, Kodak and Digeserv, will be Access IT, which will not only install the equipment – corresponding to DCI specs – but will also provide the necessary training and assistance to guarantee a smooth transition from 35mm to digital. Wayne Anderson, Managing Director of CBG declares: “Our mission is historic: ensure that independent cinemas survive and thrive in the digital age.”

Elisabetta Brunella