FOCUS ON ITALY: the challenges of digital for the Italian cinema industry. 1,000 screens have changed to the new technologies, 2,500 have yet to be digitalized

Between the end of October and beginnings of November, first at Eurovisioni and then at the Rome Film Festival, several conferences were held in Italy on the digitalization of cinemas.
At these meetings some advance news was presented from a highly interesting study, carried out by MEDIA Salles and the European Audiovisual Observatory, entitled “The European Digital Cinema Report”, which analyzes the costs and benefits of this technological transformation and the way digital roll-out is progressing in European countries.
In particular, attention was drawn to the fact that the digital shift involves high costs and may come to even 3 or 4 times the cost of traditional 35 mm equipment.
From the debate amongst the numerous and authoritative figures from the cinema industry present and from the data provided by the analysts from the European Audiovisual Observatory, it emerged that, although digitalization represents a great opportunity for the cinema industry in general, at present considerable problems of a financial and economic nature are preventing small and medium-sized exhibitors from proceeding to digitalize their theatres. This is why in Italy around 2,500 screens have yet to be digitalized.
From several sides the observation was made that for these companies – faced with the considerable financial effort required and with the higher running, maintenance and amortization costs – as things now stand there appears to be no appreciable gain making the investment economically interesting or accessible, even in terms of a reduction in the cost of work.
Nicola Borrelli, Director General for the Cinema at the Ministry of Cultural Affairs, pointed out with extreme concern that Italy is one of the big European markets with the lowest rate of penetration by digital and that in 2011 very few new systems have been installed.
We can therefore state that the digital roll-out in Italy is practically at a standstill.
If this situation is not promptly tackled, there will be the risk of seeing many traditional cinemas closing down, the market being drastically re-dimensioned and consequently a crisis for national film production, whose films are programmed mainly in this type of theatre.
In the interests of the entire cinema industry we must therefore remove, as quickly as possible, the obstacles that stand in the way of small and medium exhibitors adopting digital technology at present.
This means facilitating investments, both by coming up with a formula that allows small and medium-sized theatres to actually benefit from tax credit, and by foreseeing further, specific incentives for this type of cinema.
To the same purpose, the agreement signed between exhibitors and distributors must be reviewed, so that everyone can make use of VPF, which is at present unlikely to be accessible to small and medium-sized movie theatres.
Yet all this is not enough unless - in view of the fact that the higher box-office deriving from 3D is starting to decline - some prospect of practical use in justifying the investment is offered at the same time.
In this respect, it is essential to make sure that distribution, in its own interests, allows so-called “multi-programming” in cinemas, in other words the possibility of projecting different films on the same day in different time slots with a consequent increase in the number of spectators and thus in box-office.

Luigi Grispello
Vice President ANEC
Vice President MEDIA Salles