THE DIGITAL CHALLENGE
Interview with Gianantonio Furlan, Chief Executive Officer, Furlan Cinecity Group

It opened its 14 theatres to the public in December 2005 and, with 5 digital projectors, all Cinemeccanica 2K, the Cinecity Multiplex of Limena, a small urban centre in the north east of Italy, only a few kilometres from Padua, is one of the best equipped DLP Cinema^TM digital complexes in the world, the biggest in Europe. It is part of the Furlan Cinecity Group which already has another two multi-screen cinemas in the area. We asked the Managing Director, Gianantonio Furlan, to tell us about the early months of this experience and to help us sum up the situation of digital projection in Italy and in Europe. In order to hear, from someone who has invested in it, and heavily so, what the opportunities are at present, what can be expected from the near future, what exhibitors should be demanding. And what they should change their ideas about.

Mr. Furlan, why as many as 5 digital theatres in a single complex?
Digital projection has been one of the very few technological innovations in recent years. It therefore represents a definite added value for the theatre and a marketing opportunity, since it can be presented to the spectator as a chance to enjoy a better viewing experience. The high number of digital theatres in our Limena complex – unique in our country – allows us to make digital one of the main qualitative differences compared to our competitors.

Have you already had the opportunity to use all the theatres at the same time?
Yes, because we have screened the same film simultaneously in several theatres. However, up to now we haven’t had 5 digital titles available in the same period. Last Christmas, for example, there were only Narnia and Harry Potter in this format. The problem is that there is an incomprehensible delay in distribution, which is slow to provide new films.

Who are the distributors of digital films in Italy at present?
At the moment they are almost exclusively majors, such as Buena Vista, Twentieth Century Fox, Warner Bros and UIP.

The Italian experiences are, unfortunately, still isolated and few in number. Amongst them those belonging to Lucky Red deserve mention, with films like The March of the Penguins and, last year, Deep Blue.

But who is “putting the brakes on”?
The problem is that in America the majors are still warming up their engines but don’t show any signs of moving. And if they don’t start moving, the market doesn’t get started. I don’t know if the reason is prevalently technical, linked to the standardisation of the different formats – so that, for example, no single compression format is used by everyone to date – or if the main reasons are to be found elsewhere.

In other words?
I think that amongst the main problems is the fact that the exhibitors, first and foremost the Americans, are opposed to taking on market transformation costs, which are borne entirely by the cinemas at present. And this is because clearly, in the real roll out phase, the various benefits will be to the advantage of the distributor.

In your case, did you pay for the transformation costs alone or did you have any contribution from outside?
Not only did we cover the costs completely on our own, but in the early days we were even asked for guarantees against the digital packaging of the film. Since there are few digital theatres in Italy, the distributor did, in fact, have to meet a very high average cost, between 15.000 and 20.000 euros, to create an Italian version of the film. This is why we were asked for guarantees against these costs so that, in a way, we also contributed to paying for the making of the copies.

Does digital advertising have a positive effect on turnover?
We haven’t any experience in this field yet. Advertising will certainly be one element that could be used and the digital format will make it simpler to deliver the material, edit it and move it from theatre to theatre. However, up to the present, it is still a matter of experimentation and, since only a handful of brands are involved, it is generally a case of analogical material being transformed into a digital format.

Isn’t there more room opening up for local advertising?
It doesn’t look like it to me. Here, too, there’s nothing different compared to what is already happening with the analogical format, where the agents collect material on a national basis, with an eye to the local circuit as well. And even when the commercial is produced using cheaper, digital means, this has nothing to do with the way these commercials are projected.

Do you already have any alternative events planned for your programmes?
For now we’re just looking out of the window, trying to examine what the market is starting to offer. There have, for example, been mentions of agreements on screening the matches in the coming world football championships. However, for alternative events, too, both in Europe and, above all, in the United States, the ways of going about it have yet to be established. To make it possible for a concert to be screened live, for example, there would have to be a network of theatres interested in the event and up to the present, circumstances do not make this possible.

Let’s talk about these conditions then: what steps are needed for digital projection to become significant, and thus a feasible alternative, both in Italy and in Europe?
I think that in order to achieve this shift, the suggestion that the transformation process should be shared, in terms of cost, by exhibition and distribution is quite inadequate. We exhibitors have to decide what goes on in our theatres, so the investments must be made and controlled by us, as has always been the case.

A good transformation model might, instead, consist partly in an investment by the exhibitors and partly in a reduction of rental costs by the distributors, as some compensation for the investments made by the exhibitor.

Maria Vittoria Gatti

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