Norway heads for rapid

SAWA August 2009 Newsletter - Supplied by Screen Digest

Norway's film agency has signed Virtual Print Fee (VPF) deals with five
studios and will now begin a two-year territory-wide conversion to digital
cinema. Film & Kino has spent the past three years negotiating the deal with
US studios (Warner, Fox, Disney, Sony and UIP, representing Paramount and
Universal), all of which have signed except Sony with whom talks are
ongoing. The conversion applies to larger cinemas but also to mobile and
rural cinemas, all of which will benefit from digital prints. The studios
will pay around 40 per cent of the total conversion costs through a
significantly lower VPF than would apply to a commercial third-party
deployment entity deal. The remainder-Nkr 100m ($15.3m) in total- will be
financed by Film & Kino and the exhibitors themselves, which are mostly
municipal authorities rather than private companies.

Film & Kino has divided Norway into regions and will ask service and
equipment providers to bid for regional deployment contracts. The tender
process is intended to introduce competition into what could otherwise be a
monopoly contract. Roll-out will begin at end 2009. The real benefit of the
Norwegian model is that it minimises the transition period, in which dual
formats exist and is therefore costly, confusing and disruptive for the
industry. Norway has the advantage that the cinema sector is mainly in
public hands, and therefore the public agency leading the conversion, Film &
Kino, can more easily align the interests of exhibitors and other parties.
The Norwegian model has also been picked up on by other Scandinavian
territories of Denmark and Finland, which are both exploring a co-ordinated
approach to digital conversion. In the past 15 years, these markets have
switched from significant public to private ownership, which may complicate
matters but they do have a history of the public sector being involved with
commercial market affairs. Finland may find it more difficult to approach
studios in the way Norway did, as it has fewer screens (Norway 428 screens;
Finland 324). However, the prospect of fully digitising any market is always
going to be interesting, as is the reduced VPF that distributors will pay.

Film & Kino: Norway; +47/22 47 46 28; www.filmweb.no