Tag Archives: XDC

CinemaCon 2011: Digital Funding Partnership Pacts With XDC For D-Cinema Deployment In UK

Cinema Exhibitors' Association and XDC

At the outset of CinemaCon this past Monday Steve Perrin gave an interesting presentation titled “Harnessing The Power of the VPF”. As the Chief Executive of Digital Funding Partnership (DFP) Perrin is in a position to know a thing or two about virtual print fees. He’ll have some help in this department now that DFP has entered into an agreement with XDC for the deployment of digital cinema in theatres throughout the United Kingdom.

The Cinema Exhibitors’ Association created DFP in 2009 to help small and mid-sized theatre owners in the UK secure funding for digital cinema conversions. The group is a legal entity consisting of approximately 400 screens at 130 mainstream and specialized cinemas operated by more than 100 theatre owners.

Perrin spent more than a year studying the country’s booking patterns, box office receipts and endless market data in an attempt to determine whether VPF deals would work for independent cinemas in the UK. In doing so he confirmed that VPFs work best for large theatre circuits which play mostly mainstream content. Smaller cinemas showing less mainstream content at varying turn rates are not as attractive to local or international distributors, making it difficult, if not impossible, for theatre owners to gain access to VPF deals.

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Cinema City Grows With Palace Cinemas Acquisition

Cinema City Growth Chart.png

Earlier this month Israeli based Cinema City International became the third largest theatre chain in Europe when they acquired Palace Cinemas. The deal includes 8 multiplexes in the Czech Republic, 4 multiplexes in Hungary and 3 multiplexes in Slovakia. This gives CCI an additional 141 screens and makes it the largest exhibitor in Central and Eastern Europe.

The sale of Palace was somewhat inevitable. The chain was founded by Arthur Goldblatt and V.J. Maury and backed with investment from a private equity firm, Argus Capital Partners. Presumably Argus wanted to cash in on their more than ten year investment in Palace. It appears they should be very happy. CCI paid EUR €28 million (or USD $38.16) for Palace which is more than six times the company’s 2010 EBITDA. The acquisition was financed with cash CCI had on hand and existing credit lines.

The acquisition has a number of upsides for CCI, not the least of which is their entry into Slovakia. The company is also increasing it’s market share in both the Czech and Hungarian markets. CCI entered the transaction as the third largest exhibitor in the Czech Republic with 13% of the country’s admissions and 15% of its box office. After picking up Palace they’ll be the country’s largest exhibitor with 111 screens across 13 venues representing 40% of admissions and 45% of the box office.

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Odeon Selects Unique Digital’s Platform For Digital Rollout

Odeon + Unique.jpg

Odeon & UCI Cinemas Group took another step forward in their digital cinema rollout this week by announcing their selection of Unique Digital’s software suite to help them manage digital content and equipment in converted theatres.

With 1,802 screens spread across 202 venues in seven countries, Odeon is Europe’s largest cinema circuit. They are so large in fact, that Odeon struck their own virtual print fee (VPF) agreements with Hollywood studios. Rather than rely on a deployment entity such as Arts Alliance Media or XDC, Odeon is handling the rollout all on their own.

However, it wouldn’t make much sense for Odeon to build their own digital cinema management software. That’s where Unique Digital comes in. [Full Disclosure: I have ongoing business dealings with Unique]. Odeon has selected to deploy Unique’s Rosetta Bridge, a theatre management system (TMS) and Cinema Accord, a back office system focused on managing digital content, keys and VPF agreements.

Based in London, and with offices in Dublin, Ireland and Bergen, Norway, Unique is one of Europe’s leading providers of software and network solutions that give motion picture exhibitors the ability to manage and support their cinema operations, including all content and equipment. In February, Unique was selected by Norway’s Film & Kino to help convert 90% of the country’s movie screens to digital.

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Screen Digest’s David Hancock Discusses Europe’s D-Cinema Funding Shortfall

Europe's Digital Shortfall (Courtesy Screen Digest)

Europe's Digital Shortfall (Courtesy Screen Digest)

On June 21st, just in time for Cinema Expo, Screen Digest published a report titled “Digital Cinema Moves Into The Mainstream“. Twelve pages in length and with 10 tables and charts, the report uncovered a significant “digital shortfall” in the amount of financing required to convert all of Europe’s screens to digital. David Hancock, a senior analyst at Screen Digest, authored the report and we asked him to shed some light on its key findings. (The interview appears after the jump).

Details From The Report
Not counting Russia there are roughly 32,600 screens throughout Europe for which a digital rollout will cost EUR €2.1 billion (or USD $2.65 billion). Of those screens 23,800 are covered for digital conversion through virtual print fees offered by Hollywood studios. Upwards of 5,000 screens will be handled directly by theatre owners themselves. Theoretically that means there is funding of EUR €1.65 billion (or USD $2.1 billion) for d-cinema conversions, leaving a gap of EUR €450 million (or USD $568.4 million) to cover all Europe’s screens.

And who is being left out of the funding equation? Well, it’s mostly art houses, seasonal theatres, repertory venues and mobile cinemas.

The United Kingdom and The Netherlands have set up special funding groups to help solve this problem. Support funds have also been established in such countries as the Czech Republic, Finalnd, France, Germany, and Sweden. On region in Poland plans to pull money out of a tourism fund and Italy is giving tax credits to any theatre which converts. The European Union is offering assistance through its MEDIA Programme.

Driven mostly by 3D content, the number of European screens equipped for d-cinema at the end of the first quarter in 2010 had risen 16% over 2009 to 5,333, or a full 15% of the region’s screens. Presently 75% of all digital screens in Europe are 3D capabe. Thanks to competition among France’s largest exhibitors, the country leads the 3D screen count with more than 700. The U.K. and Germany are second and third hovering around the 500 screen mark.

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SmartJog Continues Partnership Spree With XDC and Fox

SmartJog Logo.jpgIs it just me, or has anyone else noticed that SmartJog has been on a roll lately when it comes to partnerships? After announcing an agreement with Ymagis in February, they formed a partnership with XDC just before ShoWest and earlier this week entered into a deal with Twentieth Century Fox to deliver digital cinema content.

The agreement with XDC mirrors the one SmartJog signed with Ymagis in that XDC will deploy SmartJog’s technology in theatres it has contracted with. Specifically, each cinema will receive a SmartJog Gateway server which will act as a central library storage device that receives the content. The two companies will integrate their solutions to better automate the delivery of digital cinema content. What wasn’t clear from the press release was whether XDC would eventually integrate SmartJog’s technology directly into their own theatre management system (TMS).

SmartJog’s solution will enable XDC, which operates primarily in Europe, to deliver digital content into its theatres directly from their mastering facility in Liège, Belgium. Additionally, XDC will also be able to deliver content to any of the more than 160 cinema complexes in SmartJog’s digital cinema network throughout Europe. Commenting on the agreement, Fabrice Testa, XDC’s Vice President Sales and Business Development was quoted in the release:

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Euroscoop and Apollo Cinemas Set To Go Digital

euroscoopIf there was any debate over whether digital cinema would ever roll out in the European market one would hardly know after the past two weeks. Sure there have been lots of discussion at the European Cinema Summit and Cinema Expo about which European countries would be eligible for virtual print fees, which would have to go it on their own and wether the European Commission would offer any subsidies, but at the same time several theatre chains have been announcing their plans to deploy the new digital technology.

After yesterday’s announcement that Hungary’s Palace Cinemas had selected XDC for the conversion of 170 screens, Euroscoop, a chain with theatres in Belgium and The Netherlands, has also signed an agreement with the European integrator. Finance by their VPF agreement, XDC will install DCI-compliant digital cinema equipment on Euroscoop’s 61 screens starting in September and finishing before the end of the year.

Euroscoop will be using XDC’s CineStore Solo server and central library server, the CineStore Plaza. Each of the circuits six theatres will get XDC’s theatre management system and will be fully networked. Euroscoop has elected to go with Barco projectors. Read More »

Palace Cinemas Selects XDC For D-Cinema Deployment

Palace + XDCJust a few months after announcing the installation of 12 digital 3D screens, Palace Cinemas, a leading Central European exhibitor has selected XDC as the d-cinema integrator which will deploy digital cinema throughout all its 170 screens. Installations will be financed using XDC’s virtual print fees and will commence in the latter half of 2009.

Budapest based Palace is the largest theatre circuit in Hungary, the Czech Republic and Slovakia. Of course, XDC will rely on the CineStore server they manufacture in each installation. Every one of Palace’s 20 theatres will be networked and use the CineStore Plaza as their central storage server in conjunction with XDC’s TMS. No word on what projectors have been selected, though they are sure to be DCI-compliant.

In Amsterdam for Cinema Expo, V.J. Maury, Palace Cinemas Chief Executive Officer, seemed excited that digital cinema was finally rolling out at circuit-wide. Read More »

Palace Cinemas Brings 3D To Central Europe

Palace Cinemas 3Digital

Central Europe will soon be able to experience 3D digital releases the way filmmakers had intended thanks to Palace Cinemas.  Tomorrow the exhibitor will announce they will be adding twelve 3D digital screens to their circuit just in time for Dreamworks Animation’s “Monsters vs. Aliens” to premiere on March 26th.

Palace, which is the largest exhibitor in the Czech Republic, Slovakia and Hungary, will install three screens in Prague, two screens in Brno, two in Bratislava and an additional five in Budapest, where the company is headquartered.  The news is a bit of a coup for Masterimage.  The Korean company’s 3D technology has been selected for 11 of the installations.  Palace, which already has one RealD system, will install an additional RealD screen at West End, one of their premiere venues in Budapest.  Recently RealD and Dolby have stolen the spotlight when it comes to making announcments about new 3D installations.

“We like Masterimage, said Palace CEO V.J. Maury of why they chose the technology.  “It’s a combination of great 3D on the screen and the right price.  And we wouldn’t add another RealD screen at West End if it were not for its excellent 3D picture.”

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Digital Cinema Integrators Continue to Bleed Money

There is a standing joke in the industry that to make a small fortune in digital cinema you need to start with a large fortune. Sadly, this sentiment seems to be vindicated by the latest quarterly figures from Cinedigm (formerly AccessIT). The company’s scorecard is impressive enough:

Cinedigm Digital Report Card

And the revenue has been going up year-on-year and quarter-on-quarter, as the press release proudly trumpets:

Access Integrated Technologies, now doing business as Cinedigm Digital Cinema Corp. (“Cinedigm” or the “Company”) (NASDAQ: CIDM), reported a 10% increase in year-to-date revenue to $65.1 million, and a 6% increase in revenues, to $22.7 million for the fiscal 2009 third quarter ended December 31, 2008, versus the year-ago periods. The Company posted an Adjusted EBITDA (defined below) of $11.0 million or $0.40 per share, an improvement from the fiscal 2008 third quarter of $8.4 million.

But is there any profit? No, the company is still burning through money. $17.4m in losses in the most recent quarter to be precise. What are the implications of this? The 10-Q transcript makes for grim reading; Read More »

XDC Nabs Those Elusive VPF Deals – Including WB

XDC in Cannes 2008

There will be champagne rather than rose wine or Belgian beer being poured, toasted and drunk tonight in Cannes as XDC announces that they have secured VPF deals with four of the Hollywood studio, including the one that has eluded others, namely with Warner Bros. From Forbes.com:

Broadcast equipment manufacturer EVS said its unit XDC has signed agreements with Warner Bros. Entertainment Inc., Paramount Pictures Corp., Twentieth Century Fox Film Corp. and The Walt Disney Studios to invest up to 600 million euros in the deployment of up to 8,000 digital cinema installations in Europe.

The roll-out period under the agreement – which will see more than 65 percent of the value of projectors, servers, applications and services being co-financed — will last for a maximum of 5 years, with each digitised screen co-financed over a period of maximum 10 years.

The group also said agreements with two other studios, Universal Pictures and Sony Pictures are in a very advanced stage and are expected to close shortly.

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