Sony Expands Virtual Print Fee Program with New Low-Up Front Cost Option

October 26, 2011

Source: Sony Digital Cinema

Sony Electronics’ Digital Cinema Solutions group is expanding its menu of purchasing and financing options with a new lower up-front cost, no interest Virtual Print Fee (VPF) Program. This newest program further enhances Sony’s efforts to help make the digital cinema conversion easier for exhibitors of all sizes.

“The transition to digital cinema is a reality, but so are the conversion costs for an exhibitor,” Tim Smith, Vice President, Business Development, Digital Cinema Solutions, Sony Electronics. “That’s why Sony has put in place several flexible purchasing and financing options for exhibitors in North America that can make converting to digital easier and more affordable.”

Sony has deployed its 4K projection systems under studio VPF agreements with exhibitors of all sizes across several countries. Payment agreements are in place with all six major U.S. studios for a variety of territories, as well as more than 100 independent studios worldwide.

In addition to the new low up-front cost program, Sony also offers direct purchase, exhibitor-managed financing and lease options. Each has its own distinct benefits, and Sony also offers a full range of programs for exhibitors in other countries, with options and benefits varying by region.

In both the lease and exhibitor-managed programs, motion picture studios subsidize not only the projectors, but also the library servers/networks, 10-year parts warranty, shipping costs and Sony’s proprietary theater management software.

“Exhibitors installing Sony 4K through the exhibitor-managed program also get certainty of ownership costs combined with the ability to potentially take advantage of IRS bonus depreciation* programs,” added Smith.

Through the Sony leasing program, exhibitors essentially enter into an industry-unique 10-year operating lease arrangement with Sony with a one-time exhibitor contribution, which is a low initial payment bringing numerous tax* and balance sheet benefits.

Many exhibitors are able to treat this payment as an operating lease on their balance sheet, with the ability to distribute that cost across the term of the agreement. Through this lease, Sony is providing interest-free financing, and lower sales taxes,* where applicable, because they are frequently charged only on the one-time lease payment, rather than on the total value of the system.

In some instances, the lease can be assignable in the event that a complex is sold or closed. In many cases pre-deployed Sony systems and non-Sony systems can be included under the lease to take advantage of the studio subsidy collectively.

All of these terms require credit approval and exhibitors should work with their tax advisors to understand and maximize the value of the lease.

The Sony VPF model is designed to be the most comprehensive VPF offering on the market. The package includes Sony’s fully DCI Compliant system (4K projector, 2D lens, screen server/media block, Screen Management and Sony’s proprietary theater management software, central server and storage network, 10-year parts warranty, 2-year labor warranty, 24/7 help desk, Cinewatch™ remote system monitoring), along with shipping costs and installation. There are also options available to extend the labor warranty to a full 10 years as well as to provide preventative maintenance services.

“Sony’s VPF model is customizable to fit an individual operation’s financial needs as well as its timeline for converting to digital,” Smith said. “Sony will work with an exhibitor throughout the entire process of digital conversion, to ensure that all the exhibitor’s needs are being met at every step.”

These VPF and finance options are just one component of Sony’s full range of technology solutions for digital cinema, including remote monitoring, 24/7 Network Operations Center and help desk, digital menu board and box office signage, video surveillance, and much more. Future Sony alternative content offerings will bring additional value to exhibitors.

* Please see your tax professional for guidance and advice. Sony does not provide tax advice.

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