Reg. Trib. Milano n. 418 del 02.07.2007
Direttore responsabile: Elisabetta Brunella

International Edition No. 38 - year 3
24 July 2008


A variety of business models for the digital transition

In the last number of the DGT online informer, in the editorial by Jens Rykaer and in Nancy Fares’ testimony, there were several mentions of the theme of the business model - or rather, business models - that should consent a transition over to the digital system that is as homogeneous as possible, in terms both of timing and the quantity of screens involved. All members of the cinema community know that maintaining a double distribution mode - analogue and digital – is a weight that the industry cannot support for long. Equally so, we are aware of the risk implied by a process of transformation that creates a divide between those who can afford it and all those who would remain excluded. Because of this, lately, not only has the debate intensified about the economics of digital cinema, but there has also been an increase in the number of projects that aim to realise a virtuous balance between the savings that the new technology promises in the field of distribution and the investments that it requires in the exhibition sector. In this number we spotlight the Norwegian initiative, and in the coming editions we will continue to discuss what is happening in other countries, on both sides of the ocean. The goal is to understand what are the directions that can be taken in order to maintain clear relations between distribution and exhibition that allows both to share both the duties and advantages of the system and also to conserve the freedom of the specifics subjects involved, in terms, for example, of the acquisition of the products to propose to the public, whether they are films or alternative contents. I would hope therefore that there would be a variety of solutions, based upon both direct investment on behalf of the exhibitors and with the intervention of third parties, that provides a climate of trust to the exhibitors involved in an epochal change in the history of cinemas.

Walter Vacchino
Vice-President of MEDIA Salles

(Per leggere il testo in italiano cliccare qui)

Digital technology will bring innovation to traditional advertising tools

“Release dates in line with those of TV, a drastic reduction in the cost of producing material, the opportunity to calibrate the campaign according to the target, the genre and the film: these are the advantages that the world of advertising expects from the spread of digital projectors in cinemas. A technological revolution which, from the point of view of professional advertising, represents an important innovation in a traditional tool, similar to what is happening in terms of posters, where paper is being replaced by digital screens.” This is what Paolo Duranti, Managing Director of Nielsen Media Research for Southern Europe, has to say when commenting on the data supplied by MEDIA Salles on the situation of digital projection worldwide which, at the end of 2007, was available in a little under 6,000 screens equipped with DLP Cinema or Sony 4K technology.

During the annual meeting with the members of the International Advertising Association, which took place on 20 June at the Catholic University of Milan, Duranti, who also predicts a market growth in advertising of around 2.6% in Italy, expressed cautious optimism as regards the trend of spending on the big screen in Italy in 2008. The year should close with a 0.9% increase, after a 2007 which suffered from an 8.4% drop, due also to the disappearance of some advertising agencies and to the consequent reorganisation of the market.

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Elisabeth Berradouan manages sales operations for France and Southern Europe (Italy, Spain and Portugal) at XDC.
“I have over 18 years of experience in the fields of image and new technologies. In the 90’s, I started with Barco as Key Account Manager. In 2001, I moved as Head of Digital Cinema, responsible for business development and sales of Barco D-Cinema solutions first in France and then extended to Spain, Portugal, Switzerland and Luxembourg. Before working for Barco, I spent 5 years as Sales Executive in the luxury sector. I hold a BA in Literature and I speak fluently French, English, Spanish and Portuguese and I have a working knowledge of Italian. My multilingual skills are of course a strong asset for my present position at XDC. I’m glad to have been retained by XDC to assist them in their expansion in France and Southern Europe. XDC is already servicing over 350 screens in Europe. I’m contributing to expand the activities in Southern Europe. My main duties are to present the XDC business proposal to the exhibitors and to explain them why XDC is today the best choice to go digital.”

XDC Announces VPF Agreements with 6 Studios

XDC is the Belgium-based company created by the EVS group and operating in several European countries to act as integrator in the cinemas’ transition to digital technology, by proposing solutions that aim on the one hand to boost the availability of digital content and on the other to finance technological innovations. Many will recall the proposal made some years ago: the installation of an electronic or digital system on the basis of a sort of a monthly fee to be paid by the exhibitor.

XDC has recently started a new phase: at the closure of the Cannes Festival, the company announced that a non-exclusive agreement, along the lines of the Virtual Print Fee, had been reached with four studios to finance the adoption of DCI compliant digital systems on 8,000 European screens. A similar announcement followed a month later, concerning the agreement with Sony Pictures and Universal.

The six major US distributors agree on the one hand to make their digital content available for the European market and, on the other, to allow XDC a contribution proportional to the amount they will save by distributing their films in digital format instead of on 35mm.

Thanks to this mechanism, the cost of the digital transition would be shared approximately two thirds by distributors and one third by exhibitors.

(Click here to read the whole article)

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Digital cinema the Norwegian way: immediately and for everyone. The project backed by the Norwegian Government presented at a seminar in Kristiansand

Small but fast. This is how the Norwegian market’s shift to digital might be defined, according to the information emerging from the international seminar organized at Kristiansand by Norgesfilm and by Nordic Digital Alliance. In a country of four and a half million inhabitants, who buy around 12 million tickets a year in their 230 cinemas, most of which are owned by the municipalities, the digital adventure had already begun in 2001, with advertising on the big screen shifting to the electronic format. The adventure continued with the launch of two trials, run in 2006, based on a total of 33 fixed digital projection systems and one mobile one. These experiments were conducted on the one hand by Nordic – Norway’s Digital Operability in Cinema – a consortium in which the participants were, amongst others, the University of Trondheim and Unique Digital, the company responsible for digitalisation of advertising – and, on the other hand, NDA – Nordic Digital Alliance. The latter organization counts amongst its owners Arts Alliance Media, based in London but with a Norwegian founder – Thomas Hoegh –, and the cinema in Kristiansand, one of the big 7 on the Norwegian market. Today in Norway digital screens have reached a total of 40 (two of which have Sony 4K technology) out of an overall 440, thanks also to the private initiative of the cinemas in Bergen (4 screens) and Lillehammer, with a projector financed by the national film library. But the Norwegian recipe for digital would not be complete without a basic ingredient, which is Film&Kino, the organization that brings together the Country’s municipal cinemas and collects, on behalf of the Government, the tax on cinema tickets (about 2.5% of ticket price) and on DVDs, which brings in approximately 10 million euros a year, destined for the Norwegian Cinema & Film Fund.
Film&Kino has had free rein in using the “extra money” deriving from savings on the use of this annual income, which today amounts to a little over 15 million euros. This figure provides the basis for financing a digital transition that is meant to be not only quick but also complete. “The Norwegian Government,” Lene Løken, director of Film&Kino points out, “believes it should guarantee wide opportunities for access to cinema-going for all citizens, including those who live in areas where the cinemas would not be able to find a commercial balance, if left at the mercy of the market. Therefore, in a country like ours, where around fifty screens generate 90% of the box-office, public institutions have set themselves the objective of ensuring that the digital transition will involve all 440 of the present screens, creating benefits for the smaller theatres and giving them new opportunities,”
The economic model that has been identified to cover the total cost of the operation, estimated at around 50 million euros, was described by Jørgen Stensland, director of the Film&Kino consultants: “The investment by Film&Kino and the cinemas, which will amount to around 33 million euros, will cover 60% of total expenditure. The remaining 40% will be generated by distribution on the basis of the VPF agreements that we are negotiating with the studios, if we reach an agreement. Film&Kino will act as the credit institutes’ guarantor for the whole operation. We foresee costs being amortized in six years, although as a precaution contracts will be signed for eight. Theatres can choose how to pay their share in a variety of ways: everything up front, for example, or by a leasing agreement of up to six years. Special contracts will be signed with cinemas that are already equipped, as long as they have equipment that meets DCI specifications.” The Norwegians thus have clear ideas on digital: all, “no-one excepted”, will have to meet the objective and it’s quality DCI 2K for all of them, including travelling cinemas. “Using this strategy set up by public intervention,” continues Stensland, “we are facing up to an ambitious challenge: to obtain from the digital transition only the advantages it promises. On the basis of what we are learning from the two trials, which are being regularly monitored by an independent body, we foresee that the winners will be high-budget films and art-house movies. A larger number of popular movies and more quality titles will be available more quickly, even in small cinemas, which will improve their financial balances. And there will be more opportunities for European films.”
Projects for the distant future? “Practical short-term prospects: we calculate between 12 and 16 months to roll-out,” is Stensland’s reply. “We are a small market and wish to proceed all together and have projectors and servers before the suppliers are flooded with demands for huge quantities from bigger markets and companies. And we also have the advantage of having a single body to guide the transition and manage the different phases.” So digital the Norwegian way: immediately and for everyone.

Elisabetta Brunella

The Italian version of this article was published in the Giornale dello Spettacolo dated 4 July 2008 that was circulated on the occasion of the Cinema Professional Day devoted to digital projection - Rome, 8 July 2008.

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From Journey to the Center of the Earth onwards: the calendar of the 3D releases
It was released on 11 July in the United States and, day-and-date, on other markets, such as Canada, Brazil, the United Kingdom and Taiwan, then reaching France (16 July), Argentina (17 July), Mexico and Turkey (18 July), to continue its journey around the world from August onwards: this is Journey to the Center of the Earth, presented by Dan Fellmann, President of Warner Bros Distribution, as the first full-length narrative feature in 3D, shot with real actors.
Although it seems to me that it does not qualify for this record – which should, if anything, go to Jean-Jacques Annaud’s The Wings of Courage, released in 1995 in Imax 3D -, Brevig’s film is nonetheless keenly awaited by those who see stereoscopic projection as added value for big-screen viewing. Also available in 2D, it will certainly be the most widely distributed movie in 3D. For this occasion RealD, leaders in the installation of 3D systems, with over 1,000 units in North America (around 97% of the total) and 200 in the rest of the world (around 90%), has announced a co-branding initiative with New Line Cinema and Warner Bros. The announcement follows closely on the heels of the agreement with Regal, the most important exhibition chain in the United States and worldwide, which foresees installing 1,500 3D projection systems, with RealD technology using passive glasses.
Jeffrey Katzenberg, CEO of Dreamworks Animation and above all “guru” of the 3D experience,
sees in Regal’s and RealD’s partnership, “a defining moment for the greatest transformation in movie-going in 70 years. The future of cinema comes to theatres in 2009, when audiences for the first time can enjoy the extraordinary new innovations in 3D filmmaking and exhibition.”
And while the cinemas get equipped, production houses announce a wealth of titles which will be available in 3D in the next couple of years. Because, as we know, to set up a virtuous cycle the technological adaptation of theatres and availability of products must keep pace with one another.

Elisabetta Brunella
(Per leggere il testo e consultare la seguente tabella in italiano cliccare qui)


The calendar of the 3D releases in the US




11 July 2008

Journey to the Center of the Earth

New Line /Walden Media/Warner Bros

8 August 2008

Fly Me to the Moon

New Wave/Summit Entertainment

October 2008

The Nightmare Before Christmas*

Buena Vista/Disney

21 November 2008


Buena Vista/Disney

16 January 2009

My Bloody Valentine


6 February 2009


Rogue/Focus Features

27 February 2009

Jonas Brothers

Buena Vista/Disney

27 March 2009

Monsters vs. Aliens


29 May 2009



1 July 2009

Ice Age 3

Blue Sky/20th Century Fox

24 July 2009



24 July 2009



24 July 2009

Planet 51

New Line/Warner Bros

2 October 2009

Toy Story


6 November 2009

A Christmas Carol


18 December 2009


20th Century Fox

12 February 2010

Toy Story 2


26 March 2010

How to Train Your Dragon


21 May 2010

Shrek Goes Fourth


18 June 2010

Toy Story 3


5 November 2010



December 2010

Rapunzel Unbraided


Summer 2011



Christmas 2011

The Bear and the Bow


Summer 2012

Cars 2


Christmas 2012

King of the Elves




Tim Burton/Disney


Alice in Wonderland

Tim Burton/Disney


Tintin (Spielberg/Peter Jackson: 3 films)



Step Up 3


* to be released every year before Halloween

New MEDIA Salles offices

On 30 June 2007 MEDIA Salles relocated its offices to the Milan headquarters of Agis, Italy’s entertainment industry association.
Our new address is:

MEDIA Salles
c/o Agis Lombarda
Piazza Luigi di Savoia, 24
I-20124 Milano
Tel. +39 02 6739781 Direct line +39 02 67397823
Fax +39 02 6690410