Tag Archives: Virtual Print Fee

Universal and Disney Close To VPF Deal With DCIP

September 8, 2008

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 »

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DCIP Reaches VPF Agreement With Fox

By J. Sperling Reich

July 25, 2008

After industrywide speculation and concern over the absence of any news about virtual print fee (VPF) agreements being signed by Digital Cinema Implementation Partners (DCIP) the company finally announced their first deal which rumor has it is with Twentieth Century Fox. The news was reported by Reuters and has not yet been made official by DCIP, however the company’s CEO, Travis Reid was quoted as saying:

“A party has signed a deal and we think it won’t be long until we have multiple studios.”

There are no details yet about the terms of the deal, nor any confirmation that it is with Fox, though during a conference call on Thursday Regal Entertainment’s CEO confirmed that a VPF agreement had been reached with at least one studio:

“We can’t disclose which studio, but we consider it to be a major milestone. It is always difficult in getting someone to be willing to be the first.”

Paramount is also rumored to be close to announcing a deal with DCIP, as is Walt Disney Studios.

DCIP was formed by North America’s three largest exhibitors - AMC Entertainment, Cinemark and Regal Entertainment - to manage and finance the rollout of digital cinema equipment and technology within each circuit. With 14,000 screens between them it is easy to see why the industry eagerly awaited news that the studios had come to some form of agreement with DCIP to subsidize the cost of installing digital cinema equipment. Due to the large size of the rollout, such a deal was viewed as a bellwether for the types of VPF deals other exhibitors would be able to get. Recent VPF deals announced by other integrators such as AccessIT in the United States and XDC in Europe did little quell everyone’s anticipation over news from DCIP.

No doubt even DCIP was getting a little anxious over the lack of progress on their VPF agreements they were able to make public. The company was founded in February of 2007 by the three theater chains and had hoped to wrap up their negotiations with studios over VPFs by the end of last year. As almost anyone working in or following the industry now knows, the studios began playing hardball with integrators such as DCIP on the contractual terms of the VPF agreements, haggling over every last detail including usage fees for alternative content and the length of the deal. XDC’s VPF with Hollywood studios is reportedly only USD $850 per film, per run.

And there’s one main reason that the rollout of digital cinema has stalled at around 5,000 screens in North America (out of 37,000); rolling stock prints range from USD $1,200 to $1,500 so even with VPFs the the distributors save heaps of money, whereas exhibitors are forced to pay for expensive digital cinema equipment they claim won’t save them any money or increase their revenue. That the standards for this equipment are still being determined by SMPTE and DCI hasn’t helped matters either.

However, in 2009 Hollywood studios plan to release upwards of 11 movies in digital 3D which will require the equipment to be installed on a broader scale. Presently the number of screens equipped for digital 3D in North America hovers around 1,300, making it difficult to release two such films into the market at the same time. News of the DCIP deal may be a relief for a few studio executives have otherwise to struggle to find enough digital screens to place their 3D releases on. Studios have actually begun to push some of their 3D releases back into 2010 to make certain they will have enough screens to put them on.

The thinking within the industry is that once DCIP starts announcing VPF agreements the rollout of digital cinema should ramp up soon thereafter. Michael Lewis, chief executive of 3D systems provider RealD, told Reuters:

“When the DCIP deal drops, then digital cinema is really on its way.”

Here’s to hoping Mr. Lewis is also fortune teller.

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Screenvision’s Loss Is XDCs Gain

By Patrick von Sychowski

December 18, 2007

Pan-European digital cinema integrator XDC has poached the Benelux head of pan-European cinema advertiser Screenvision to head up its virtual print fee effort as the company get a 7.5m euro cash injection. Serge Plasch is replacing Laurent Minguet as head and will go head to head with the likes of Arts Alliance Media in promoting digital cinema all over Europe. From the press release:

Serge Plasch (40), has been Managing Director of Screenvision Benelux since 2001 where he reinforced the leadership of that major advertising saleshouse for the Cinema Industry. Speaking fluently four languages, English, French, Dutch, German, he will contribute to strengthen XDC position in the large but fragmented European Cinema market. Enthusiast over this new opportunity, the new Managing Director & CEO says : “After years of talks and trials, large DC deployment is starting. All market players are convinced that Cinema will be digitized and that will improve the business model of the industry, for the good of the audience. XDC has proven its skills to operate DC screens through a full range of services and technologies. XDC is the first DC Content lab in Europe and it has built the largest early stage DC network exceeding 300 systems for leading cinema groups. I am also very pleased to work closely with a very motivated team and in particular with Bernard Collard.

Though tucked away at the bottom of the press release, but in many ways no less important, long-term consultant to XDC John Burchill Hughes has been appointed “special advisor to the Board of Directors and member of the management board for content related matters.”

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Sony Is Officially Fourth Euro VPF Studio

By Patrick von Sychowski

December 7, 2007

As revealed in this blog some time ago, Sony Pictures International (SPI) is the fourth Hollywood studio to sign up to Arts Alliance Media’s European virtual print fee (VPF) based digital cinema deployment deal, that has so far found one cinema taker in France. The write up in the Hollywood Reporter is cagey on which territories will be part of this deal:

Under the agreement, SPRI has pledged to supply its films “to certain European countries” in digital format to AAM-deployed, DCI-compliant digital-cinema screens. Territories include “those in Western Europe,” SPRI said.

The releasing arm also has pledged “to make financial contributions in order to promote digital cinema.”

SPRI’s move comes after the November decision by French exhibition chain CGR Cinemas to sign with AAM to convert all its 400 screens to digital.

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French Cinema Converted To Digital Cause

By Patrick von Sychowski

November 20, 2007

Arts Alliance Media (AAM) has converted an exhibitor in the staunchest of anti-digital countries, France, to buy into its virtual print fee (VPF) model for deploying digital cinema. Circuit George Raymond (CGR Cinemas) will convert all of its 400 screens in the first deal of its kind that AAM has signed with a European exhibitor. The press release from AAM is as bullish as you would expect from this long awaited announcement:

CGR Cinemas is a leading and expanding cinema chain in France. The company is well known for the success of its multiplexes in many mid-size cities across the country, for the efficiency of its cost management and for its profitability. By becoming the first European cinema chain to join the AAM initiative and go fully digital, CGR Cinemas is demonstrating that it is an innovative company, ready to embrace new technology to deliver the best possible quality cinema experience.

This agreement between CGR Cinemas and AAM shows that the VPF-based business model has now been fully adapted to meet the particular requirements of the European exhibition market.

However, not everyone is convinced that the VPF model is home and dry just yet in Europe. The Hollywood Reporter’s Stuart Kemp injects a note of caution in his analysis:

AAM is hailing the move by CGR Cinemas as the clearest signal yet that virtual print fee, or VPF, agreements will eventually rule the pricing roost between exhibitors and distributors across Europe.

But at the moment, Warner Bros. and the Walt Disney Group, alongside French indie distribution players, have not yet signed up to the virtual print fee agreements brokered here by AAM. Read More »
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AccessIT Signals Phase 2 of Digital Deployment

By Patrick von Sychowski

November 7, 2007

AccessIT logo AccessIT, the company that kick started the roll-out of digital cinema in the United States, has given details of its ‘Phase Two’ deployment plans. With the goal of the first 4,000 digital screens now in sight, the speculation had been whether they could extend the first phase to the ofte-stated aspiration of next converting a further 10,000 screens. While there are no hard specifics in the press release, there is plenty enough to suggest that it wll happen:

Further solidifying its global leadership in Digital Cinema, Access Integrated Technologies, Inc. (”AccessIT”) today announced its intent to provide up to an additional 10,000 networked Digital Cinema systems to exhibitors across the United States and Canada. The Company has reached substantial agreement with several of the major movie distributors who fully supported its initial “Phase One” deployment of close to 3,750 screens, completed last month. Agreements are structured so they may be amended to international deployment as well. AccessIT also is in active negotiations with several exhibition chains that were ready to commit to “Phase One” but were unable to participate due to timing. This “Phase Two” deployment is anticipated to begin in the first quarter of 2008 and to continue for three years. While AccessIT has not yet executed final agreements, announcements regarding studio and exhibitor signings are expected shortly.

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