Screen Digest predicts European digital cinema funding
shortfall of €450m
July 1, 2010
Source: Screen Digest
Rapid mainstream take-up accelerates
public sector’s need to realise their role in the conversion
of cinema screens to digital projection technology
According to global media market analysts Screen Digest’s
new report, ‘Digital Cinema moves into the mainstream’
the rapid progress of the digital cinema conversion in many
countries is requiring an equally rapid appraisal of how to
cover costs for those cinemas that may not fit into a commercially-funded
conversion model. click here for more information
There are 32,600 screens in Europe (excluding Russia), of
which around 23,000 are targeted by private companies for
a commercial rollout (backed by the US studios), and a further
4-5,000 screens will organize their own rollout directly (essentially
larger circuits), leaving around 4-5,000 European cinema screens
that need to find a funding solution outside of these routes.
The overall conversion to digital will cost Europe an estimated
EUR2.1bn, of which the commercial model (known as the Virtual
Print Fee model and itself being adapted to bring in a wider
number of screens) will fund EUR 1.65bn.
This leaves a ‘digital shortfall’ of EUR 450m, which
needs to be found for these extra screens. This does not mean
these screens are necessarily at risk of closure, but it does
underline that other approaches must, and are, being found.
Art-house screens, part-time cinemas, multi-arts venues, and
repertory cinemas are the most at risk of failing to find
funding for conversion to digital.
New approaches to digital transition
The funding group approach is being undertaken in the UK and
Netherlands, bringing together a group of exhibitors to use
scale to organise a rollout. The more traditional support
fund is also being explored in many countries, such as France,
Germany, Finland, Sweden, Czech Republic and Poland.
A support fund is also being prepared by the European Commission’s
MEDIA Programme. Both France and MEDIA are also exploring
a guarantee system, which will underwrite loans granted to
smaller exhibitors for digitisation. Italy is the sole European
country to offer a tax credit to exhibitors buying digital
cinema equipment as an incentive to convert.
A Polish group in the Malopolska region has digitized using
tourism funding from the European Regional Development Fund,
creating a network of digital art-houses, offering local communities
a wide range of programming in the cinema space.
David Hancock, Head of Cinema, Screen Digest, and the report’s
author says “The creativity that Europe is known for
is being shown more than ever in the approach to digital cinema
conversion. In the past year, policy-makers have woken up
to the fact that they may be needed to help a small number
of screens to convert, specifically those that won’t
fit into a mainstream model. The wide range of approaches
reflects the diverse nature of Europe’s film industries”.
European d-screen growth
There were 5,333 digital screens in Europe at end first quarter
2010, a rise of 16 per cent over end 2009, of which 4,529
were in Western Europe. This translates to 15 per cent of
the continent’s screens, and has been driven largely
by digital 3D (75 per cent of digital screens are equipped
with digital 3D). However, with the recent series of commitments
to conversions by major European circuits, a momentum is building
behind the wider 2D digital conversion.
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