State of Independents: Digital Cinema David Hancock Head of Film and Cinema Screen Digest Europa Distribution Conference Estoril, Portugal, 21 November 2008
Outline of the morning Digital Cinema Infrastructure • Development of global market for digital cinema • Focus on Europe Two key themes for the day: • Public versus Private schemes • Where is the model for independents Presentations and debate
Digital screens doubled in 2007, but marginal growth in 2008 Note: 2007 2K only installations or higher
Growth has stalled in North America, launch point still to feature internationally DCI Note: 2007 2K only installations or higher
Growth has stalled in North America: planned projects are more than enough
Digital content both 2D and 3D coming on stream : majority of digital prints from US Studios
Focus on Europe: single territory growth but not yet reached mainstream launch point UK DE FR BE
Focus on Europe: Where is the progress? • However, there has been progress on creating the market conditions necessary for a European roll-out • Content – Arts Alliance, XDC and Ymagis have now signed VPF-inspired deals with US studios for European screens (7,000, 8,000 and 5,500 screens respectively) • Technology – not quite there in DCI terms but clear path to achieve this • Business Models – mainstream model (such as VPF) is taking hold, but may not respond to all types of exhibitor or distributor and this is where government could intervene, if looking to • Understanding that different models may be needed for different market strata, or need to convince market of a “solidarity” approach. More territories looking at public models.
Content driving 3D upgrades 1,498 3D screens H1 ‘08 Up from 1,284 in ‘07 258 in ’06, 95 in ’05 Top 5 International: China (85) Canada (66) UK (64) Japan (52) Russia (42) Insufficient screens To support simultaneous releases Rescheduling of titles to secure unique release window 3D: Content driving exhibitors to upgrade screens Hannah Montana U23D Journey Beowulf M.T.R N.B.C M.H C.L
Public versus Private • Private schemes • Pros • Third party does the work • Scale brings prices down • Third party takes responsibility for equipment and software upgrades • Equipment tested and full maintenance support • Cons • Staggered and unmanaged roll-out • Longer transition period • Risk to small cinemas as less viable economics • Third-party takes a fee, adds to cost
Public versus Private • Public schemes • Pros • Managed transition, minimises the transition period • Not for profit motive which keeps costs down • Scale brings prices down as far as possible • Cons • Doubts over whether the public sector can do it • Fundamental conflict between exhibitor requirements that need to be managed -needs “solidarity” or “mutuality” • Still need third party expertise to actually undertake the transition
Where do Independents go from here? • What models are out there to help the independent sector to convert to digital? • Is the model the problem? • Is the VPF the problem? • Most other models still include the VPF at their core • Are the stakeholders the problem? • Who else can help to pay and why would they? • Telcos • Screen advertisers • Government/local authorities • Producers • What about a pan-European model • MEDIA • EIB • Europa Cinemas
Indies: single screens at risk in Europe • 31,500 screens in Europe (not inc Russia and Ukraine) • 22 per cent single screens in W Europe • 49 per cent single screens in C/E Europe • 7,884 single screens can be considered at risk • Europa Cinemas counts 1,700 screens in its network 7,884
In summary… • Growth of d-cinema rollout has slowed in US and not yet taken off fully in Europe • 3D is a major catalyst for digital roll-out this year • The market direction is towards the VPF, whether public or private model • This poses a risk for independents: • Who will provide the model for ¼ of the market? • What is the model for indies, and what are the starting points for creating it? • And so on to the debate….
Thank you David.firstname.lastname@example.org