In Rome, the MEDIA Salles and European Audiovisual Observatory presentation: an opportunity to take stock of digitalization in Italy

The digitalization of Italy’s cinemas is experiencing a slowdown. Proof comes from the data revealed by MEDIA Salles on the day organized to celebrate the twentieth anniversary of the MEDIA Programme, which took place on 20 October at the Hotel Bernini Bristol, at the Rome Film Festival’s Business Street. In the morning session, devoted to the digital transition in Europe, several players from the sector were present, including the President of Agis and Anec, Paolo Protti, the Vice President of MEDIA Salles and Acting Vice President of Anec, Luigi Grispello and the President of Anem, Carlo Bernaschi. Also present was the Director General for Cinema of the MiBAC (Ministry of Cultural Affairs), Nicola Borrelli.

According to the figures presented by Elisabetta Brunella, Secretary General of MEDIA Salles, from 1 January 2011 to October 2011 the number of digital screens in Italy rose from 912 to 1,080 (+18.4%), whilst on the other leading European markets the increase was much higher: in Germany, in particular, the number of digital screens rose from 1,239 to 2,000 (+61.4%), whilst, when taking into consideration the first six months of 2011, the increase in France was of 43.2% (from 1,885 to 2,700 digital screens), in the United Kingdom 42.8% (from 1,400 to 2,000), in Spain 32.1% (from 772 to 1,020) and in Russia 27.5% (from 941 to 1,200).
It should also be noted that from 1 January 2010 to 1 January 2011, in Italy the number of digital screens rose from 434 to 912 with a 110% increase.

More generally, and taking into consideration the figures updated at 1 January 2011, there were 10,341 digital screens in Europe, equal to 30% of total screens, and according to MEDIA Salles, between the end of 2011 and the beginning of 2012 50% of all screens should be equipped for digital. 8,417 screens, on the other hand, are equipped for 3D, equal to 81% of all digital screens. Brunella also pointed out that the development of digital cinema is not due to the spread of 3D alone, but also to incentives provided by individual countries and to initiatives by the large exhibition circuits.

In his talk Martin Kanzler, an analyst from the European Audiovisual Observatory, placed particular emphasis on the difficulties faced by small theatres in the digital shift. Despite a drop in costs connected to the technology and the purchase of digital projectors, according to Kanzler the cost of converting and managing the new systems are still high for the exhibitors. “In this context,” he stated, “it is the small structures that cannot buy wholesale and do not have the opportunity to make use of the scale economy made possible by the new technology that suffer most. Yet, at the same time, the small exhibitors will shortly have to make the change to digitalization, so as to avoid the risk of being kept out of the market at a time when large-scale distribution will be changing over to digital only.” The risk, according to Kanzler, is thus that the traditional theatre, which also plays an important social role, will be penalized and so, therefore, will independent and quality cinema which finds its natural place in these structures.

As well as the problems pointed out by Kanzler, in his talk Paolo Protti stressed other critical elements linked to the spread of digital. One issue involves the evolution of the technological system. “In the space of only a few years,” he remarked, “digital technology has changed considerably and it is impossible to try and keep up constantly with this evolution, otherwise we would have to change our digital installations every 2 years. This is why we should agree on a system of shared standards.”
Another important aspect is the question of 3D. “In past years,” says Protti, “the success of 3D films was one of the engines of the digital spread but today this is no longer so: the 2011 figures show a slowdown in theatrical viewing of 3D and this is probably due both to the fact that the tickets cost more and the economic crisis is making itself felt, and because we are paying the price of distributing films originating in 2D and later transformed into 3D, which were obviously not appreciated by audiences.”

Moreover, according to Protti, in order to decide to take on the expenses entailed by digital, theatres should be able to fully exploit its potential by using a more streamlined system with the offer of alternative content and more flexible programming. Alongside these aspects comes the problem of public financing, both in terms of the contributions to capital accounts, “at a standstill since 2009,” explains Protti, “because the resources are lacking,” and in terms of tax credit, “once again at a standstill until the measure on credit transferibility, contained in the decree on development, has been approved.” “These measures,” concluded Protti, “are crucial for the sector. It must be the State that takes the decisions.”

Luigi Grispello placed most emphasis on the small and medium-sized exhibitors who not only gain fewer advantages in terms of cost reduction, for example the cost of work, compared to big structures, but are also unable to make use of tax credit and in addition find it hard to take advantage of VPF (virtual print fee, the basic model by which distributors and exhibitors contribute to investment in the new technology, ed.) “to which,” he added, “distributors have been asked to make modifications, in order to make it more accessible to smaller structures, partly by placing the emphasis on multiprogramming.”

Carlo Bernaschi also confirmed the need to review the VPF agreement with distributors. “Exhibitors, together with distributors and the State should make efforts to smooth the way for the digital shift, otherwise, in a year’s time, when the majors have switched to digital only, the damage to theatres that have lagged behind, and thus for the entire market, will be irreversible. It is mainly the distributors, he added, who must realize what a delicate moment this is, especially for Italian cinema, which runs the risk of no longer being able to count on the traditional structures.” Bernaschi also stressed the problem linked to the lack of intervention by many Regional Authorities which, he states, “as well as having few resources, in some cases do not accept regional aid being accumulated with contributions from the State.”

Nicola Borrelli also finds the situation worrying. “Even up to last year,” he says, “the problem we were discussing was that producers of digital projectors might not be able to meet the demand. Now, instead, the demand has collapsed.” “As a country,” he added, “we cannot allow ourselves to lose the traditional theatres that are a guarantee of visibility for Italian and European quality cinema. In addition, we must talk to the regional and local Authorities in order to coordinate interventions and agree on this crucial path to follow not only for the cinema industry but also for the social development of our cities.”
Roberto Cicutto, Director of The Business Street, Giuseppe Massaro, of the MEDIA Desk Italia, Silvia Sandrone, Antenna MEDIA Torino, André Lange, European Audiovisual Observatory also made contributions to this session.

Marta Proietti (in collaboration with Giornale dello Spettacolo)