Nordisk Film Biografer A/S
Strategy and views on Digital Cinema
by Jan Petersen, CTO/IT Manager, Nordisk Film Biografer A/S

Nordisk Film Biografer A/S has worked with digital cinema for the last three years, both as a concept and as “work in progress”.

We believe that the conversion to digital cinema is the largest operational and technological change to hit the industry since the first “talkie” (The Jazz Singer) was released in 1927.

The paradox is that the conversion is both a big opportunity and a big threat to exhibitors large and small.
The big opportunity is the increased flexibility in both programming and alternative content that must maintain and maybe even increase the stream of revenue by opening our theatres to business events, attracting new audiences to specialized performances, offering 3 D and making cinema advertising more attractive.

The threat is that the equipment needed for digital cinema is very expensive and has an estimated life span that’s substantially lower than our current 35mm projection equipment.

This fact alone could be the death of many cinemas since profit margin in most cinemas is smaller than the increase in equipment costs for initial investment, maintenance and ongoing replacement/upgrading.
For the digital transition to be successful for exhibitors a viable business plan has to be in place. The business plan should address in detail not only the issues of the first transition but also provide for future upgrades and replacement of the digital equipment.
If we look at the cinema industry as a whole the savings provided by digitalizing the industry should be more than enough to finance the expenses for the new equipment including future upgrades and replacements.
There is a huge saving in abandoning the distribution of 35mm copies, a fact that international studios and distributors acknowledge.

Business models are in fact surfacing around the world but unfortunately so far without addressing the long term effects of the transition to digital.
Besides a viable business model,  smooth operational transition is very important to our company. We believe that one of the key factors for  successful transition is the support from all employees especially our group of IT-specialists, cinema technicians and projectionists and we have provided extensive training for our technical staff including attendance at DGT 2004 and 2005.
For these reasons we installed our first digital screens in 2004 and have gained a lot of working experience with digital cinema as well as digital media in general.
It is our strong belief that the initiatives taken are the best way for an optimal and smooth transition into a world of digital cinema. A transition that will happen sooner or later.
Our strategy for digital cinema is to pursue viable business while at the same time, in cooperation with our partners, making sure that our four installations meet the DCI requirements.