Omnilab's Christopher Mapp
Do you ever have days where you’re sorry curiosity got the better of you? Back on February 1st Omnilab Media Cinema Services announced that it had signed a virtual print fee agreement with Paramount Pictures. I decided not to post anything about it at the time believing that news of deals with additional studios would shortly follow.
It is highly unusual for a deployment entity to make public announcements about VPF deals unless they include three or four studios. In fact, some studios won’t allow press releases to be published unless an integrator has signed agreements with minimum number of studios. There are several reasons for this, not the least of which is that financing for most third-party rollouts can not be accessed until deals with several studios have been completed.
Apparently, I wasn’t alone in thinking we’d quickly be hearing about Omnilab’s additional VPF deals. The company’s managing director, Christopher Mapp, stated:
“The negotiation process with distributors for VPF contracts has been long and complex, however, with the excellent cooperation of the major distributors we are set to sign several more agreements imminently. We are in the final stages of our negotiations with other major studios and are also intending to contract with many Australian independent distributors.”
This last bit is a given since any distributor wishing to play content on equipment deployed by Omnilab under a VPF agreement would be need to pay a VPF as per the the studio’s strict contracts. The issue of independent distributors probably relates more to Omnilab being selected last September as the preferred digital cinema integrator by the Independent Cinema Association of Australia (ICAA).
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Popularity: 5% [?]
When was the last time you heard about a movie trailer being pulled out of theatres because audiences complained it was too scary? Especially a teaser trailer? It seems unimaginable doesn’t it?
Well, apparently it’s not impossible as this is just what happened last week when Paramount Pictures was lucky enough to get the teaser trailer for “Paranormal Activity 2″ to run in front of “Twilight Saga: Eclipse” at certain Cinemark locations. After the initial midnight show on opening night, as well as one in the wee hours of the morning, the theatre chain received a number of complaints from patrons in Texas claiming the “Paranormal Activity 2″ teaser trailer was too scary. Many felt its content was inappropriate to be placed in front of a film aimed at teenagers.
Sure enough, Cinemark had to inform Paramount a day or two into the run that they would be pulling the trailer from a number of theatres. There was no word on whether the trailer was tacked onto the front of another film title.
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Popularity: 7% [?]
(From left) G. Solomon, J. Levin, M. Christiansen and G. K. Macdowell
Las Vegas is a city known for its many spectacles; bright lights, showgirls, casinos, fancy restaurants and prize fights are all just some of the attractions. So, it should come as no surprise that ShoWest, the annual gathering of motion picture exhibitors and distributors in Las Vegas, decided to add to the city’s attractions with their own version of a prize fight. On Wednesday, the convention held a lunchtime panel discussion titled “Show Me The Money! Does Digital Self-Financing During A Credit Crisis Offer Hope?”. One might ordinarily expect a panel discussion on financing to be incredibly dry, though whenever you mix senior level studio executives with independent theatre owners and raise the topic of the stalled digital cinema rollout, you are bound to see some sparks fly.
No doubt the ShoWest panel was put together in the wake of Paramount Pictures’ direct-to-exhibitor virtual print fee announcement. Indeed, Mark Christiansen, Paramount’s Executive Vice President of Operations was one of the panel members. He was joined by Julian Levin, EVP of Digital Exhibition and Non-Theatrical Sales & Exhibition at Twentieth Century Fox, Bill Campbell, Managing Director of the Cinema Buying Group, George Solomon, Southern Theatres CEO and Andrew Sriubas, a Managing Director of JP Morgan Investment Bank. Moderating the brouhaha was the general counsel for the National Association of Theatre Owners, G. Kendrick Macdowell.
Christiansen started off by explaining that Paramount had a lot of exhibitors asking if they could install digital cinema equipment on their own, rather than rely on integrators to do so. Paramount was able to capitalize on their existing relationship with theatre owners to put the direct-to-exhibitor virtual print fee agreement together. Since the 21-page document was made public in January, the industry has been combing over it in search of any detail that might be missing. Christiansen doesn’t think they’ll find much. Read More »
Popularity: 32% [?]
Scrabble Entertainment has announced virtual print fee (VPF) deals with five Hollywood studios (“Hello Scott from SPE, in the back.”) to roll out digital cinema in India. This may be the last notable VPF deal for some time, if not for ever.
Scrabble has signed up Walt Disney Studios, Warner Bros., 20th Century Fox, plus Paramount and Universal, with only Sony Pictures yet to come on board. At the press conference in Las Vegas on the second day of ShoWest 2009, three of the studio representatives joined Scrabble’s CEO Ranjit Thakur on stage to praise his efforts. Tom Molter from Warner Bros said that WB has supplied more digital cinema titles internationally than any other studio (definitely true for India) and was looking forwards to doing more of this with Scrabble. Julian Levin from Fox praised Ranjit’s determination and effort, acknowledging that negotiating with the Hollywood studios is a “very difficult and complicated process.” Lastly Jason Brenek from Disney was happy that Scrabble digital cinema roll-out would include 3D installations, understandable given Disney’s 17 3D titles over the coming three years. Jack Klein from Christie was also up on stage. Christie is the 2K digital cinema projector supplier of choice for Scrabble, but what is not discussed is that Christie is said to have helped behind the scenes to facilitate the VPF deals for Scrabble. Universal and Paramount were not on stage, though they had signed up as well (Paramount’s logo was on the banners, though Universal’s was missing), though this may be due to the fact that both are represented jointly in India by the (elsewhere largely defunct) UIP, with Paramount branding, in India, meaning that there is some untangling to be done still.
Screen International covered the agreement:
Scrabble has signed contracts with Twentieth Century Fox, Warner Bros, Walt Disney Studios and Paramount Pictures that become effective on April 1, and the company is in the process of finalising deal points in the agreement with Universal Pictures. The agreements are based on the self financing virtual print fees model, which is essentially a pay-per-use or booking system. Read More »
Popularity: 40% [?]
Paramount's Mark Christiansen
Since January 22nd, when we first posted our story on Paramount’s direct-to-exhibitor virtual print fee agreement, we have received quite a bit of correspondence on the topic. Some typed out their thoughts in the comments section of the post, (and thank you for that). Many of your emails asked questions about the agreement that we were simply unable to answer as we did not have enough information. So, we felt it would be best to turn to the most qualified person to answer some of these questions; Mark Christiansen, Paramount’s executive vice president for motion picture distribution.
We compiled all of your questions into an email and sent it off to Mr. Christiansen. He was kind enough not only to respond, but also to let us post the VPF agreement for your review. At the time of his response in February, Mr. Christiansen said the feedback he was receiving about the deal was entirely positive and he was happy to report that between 10 and 12 exhibitors had already made commitments to sign the agreement. He understandably declined to state exactly which exhibitors given that details were still being worked out.
You might think some of Mr. Christiansen’s responses are rather brief, though please keep in mind he was answering these questions via email. When necessary we’ll provide our own interpretation of his responses, which are noted as such. Please do not mistake this for Mr. Christiansen’s own opinions or responses.
Celluloid Junkie: Why did Paramount wait until now to put together a VPF they can offer direct to exhibitors? Why not last year or earlier?
Mark Christiansen: DCI compliance testing was not available. We wanted to have a testable specification in place before going directly to exhibitors.
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Popularity: 40% [?]
Since January 22nd, when Paramount Pictures announced their plan to offer virtual print fees directly to exhibitors, the news has been a frequent topic of conversation throughout the exhibition community. It didn’t take long before a copy of the agreement began circulating through the industry, in large part thanks to the National Association of Theatre Owners. With this year’s ShoWest less than a month away there is no better time to review the agreement in detail.
For those who have not seen a copy of the agreement, which is in draft form, it can be viewed on this post and downloaded here. The first thing to take note of is that the document isn’t the size of a phonebook. While many integrators VPF agreements can be upwards of 100 pages long, Paramount’s direct-to-exhibitor VPF is only 21 pages. And just because the document is a draft of the agreement an exhibitor will ultimately sign doesn’t mean it’s going to expand. After all, it’s not as if Paramount will be entering a brand new relationship with a highly leveraged third party. The studio is entering an agreement with the same exhibitors they’ve been doing business with for decades.
The agreement has 24 sections, one schedule and two exhibits. Keeping in mind that I am not a lawyer, nor do I pretend to be, I’ll review each section pointing out some of the more pertinent bits and what they might mean for an exhibitor. Some of the sections are standard boilerplate and will not be covered in as much detail.
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Popularity: 48% [?]
Sometimes rebound relationships can really pay off. At least that’s what Walt Disney Studios is hoping now that it has agreed to enter a long-term agreement with DreamWorks to distribute upwards of six films a year starting in 2010. The deal was put together very quietly over the last several weeks as DreamWorks simultaneously tried to negotiate an agreement with Universal Pictures which had originally been announced back in October of last year. That deal fell apart late last week when Universal and DreamWorks could not agree on a set of terms and as Universal reportedly discovered DreamWorks was negotiating with Disney. When speaking with The Hollywood Reporter on Saturday the studio’s official line was:
“Universal Pictures has ended discussions with DreamWorks for a distribution agreement. Over the past several weeks DreamWorks has demanded material changes to previously agreed upon terms. It is clear that DreamWorks’ needs and Universal’s business interests are no longer in alignment. We wish them luck in their pursuit of funding and distribution of their future endeavors.????”
What a few of those “material changes” amount to says a lot about theatrical motion picture distribution and just where a studio realizes a profit when releasing a film. The deal that DreamWorks was originally negotiating with Universal was a straight distribution partnership. Such deals will usually see the production company paying for the production of a film while the studio pays for film prints, marketing and advertising in exchange for recouping costs and a share of the box office gross. That share can range anywhere from 8% to 15% of the gross – not the net – receipts. Read More »
Popularity: 30% [?]
On the eve of the National Association of Theatre Owners’ meeting with equipment vendors to review digital cinema requirements on Friday, Paramount Pictures has thrown the exhibition industry a curve ball in the hopes of resuscitating the stalled rollout of the technology. Rather than work solely through integrators such as Digital Cinema Implementation Partners (DCIP) and Cinedigm (formerly AccessIT), Paramount has become the first Hollywood studio to offer North American exhibitors financial assistance for digital cinema installations.
What’s significant about Paramount’s announcement is that previously studios have refused to cut deals to reimburse exhibitors for digital cinema installations directly with exhibitors for fear of future anti-trust litigation. Instead, they relied on digital cinema systems integrators to provide a buffer between themselves and theatre owners. But, with the digital cinema rollout at a near stand still, Paramount seems to be throwing caution to the winds.
Paramount has a vested interest in seeing digital cinema take off, specifically to increase the number of 3-D capable projection systems. This March the studio will be releasing Dreamworks Animations’ “Monsters vs. Aliens” in 3-D and presently the United States and Canada only have about 1,200 screens properly equipped with 3-D systems. Paramount has been promoting the film heavily for nearly a year at industry trade shows and will be airing a 3-D commercial for the movie during the upcoming Super Bowl telecast.
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Popularity: 60% [?]
And then there were four. Four studios that is. Or so says the Wall Street Journal which broke a story today reporting that Universal Pictures and Walt Disney Company have reached a virtual print fee deal with Digital Cinema Implementation Partners, the joint venture formed by North American exhibitors Regal Entertainment, Cinemark and AMC Entertainment to finance, install and maintain digital cinema equipment in their theatres. The three chains, which represent a combined screen count of around 15,000, would like to start rolling out digital cinema as soon as the fourth quarter of this year, in time for the flood of 3D movies studios have slated for release next year.
Previously, DCIP had reached a VPF deal with Twentieth Century Fox, though the studio has never confirmed the news. The signing of four studios is a crucial milestone which DCIP must cross in order to secure the USD $1 billion in financing the company has lined up from J.P. Morgan Chase to pay for all the expensive digital cinema equipment required to outfit theatres. The Wall Street Journal had reported that Paramount Pictures had also signed a VPF agreement with DCIP, which had been rumored in the press but never officially announced. Indeed, by the end of the day Variety had taken the air out of the Wall Street Journal’s big scoop by confirming that Paramount Pictures had not yet signed with DCIP. Read More »
Popularity: 57% [?]
Late last Thursday my Twitter list of entertainment journalists lit up with posts about “Super 8“. It was the evening of the all-media screening Los Angeles and as soon as the credits rolled journalists and critics began praising the film on Twitter. That kind of buzz can’t be bought, or at least that’s what I thought at the time.
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