UK circuit signs up to digital conversion with AAM - Screen Digest Commentary

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UK circuit signs up to digital conversion with AAM

 

Published: 14 Jun 10

UK's second largest cinema circuit Cineworld has signed a digital conversion deal with UK and European digital cinema services company Arts Alliance Media (AAM). Cineworld has agreed a VPF deal covering all 790 screens in 77 sites, to be digitised over the next three years. The total cost of the switch will be around £40m ($59m), of which Cineworld has already laid out £10m ($14.7m) for the 3D-driven installations in 2009 and 2010. Satellite capability will be provided to all sites by partner company Arqiva. In addition, AAM has also completed its Euro50m ($68.6m) financing deal with Sankaty Advisors.

 

This is significant for several reasons, not least its size, but the main one is that it underlines the end of the credit crunch as concerns digital cinema. There is a definite momentum builiding behind the wider 2D digital rollout in several European territories, with recent major deals happening in Germany, Benelux, France and UK. The fear had been that after a rush to install 3D screens, which is still ongoing, there may be a lull before the wider rollout. However, these deals indicate that digital conversion is now viable again, after an eighteen month hiatus caused by the global financial problems. The growth in Europe's d-screens was 16.4 per cent in the first quarter of 2010, building on an impressive 192 per cent between 2008 and 2009. As at end March 2010, there were 5,334 d-screens in Europe (75 per cent are 3D-equipped), of which 4,530 are in Western Europe and 804 in Central/Eastern Europe. In the UK, there were 809 d-screens at 1Q 2010, of which 561 were 3D. With this deal, and the Odeon progress, a total of 1,700 screens (less the ones that are already digital from these two companies) have been added to the UK's future digital screen base in the past couple of months (although they won't all be installed before end 2012). Cineworld is also a proponent of alternative content, and equipping all 77 sites with satellite will significantly expand the potential audience base for non-movie programming in cinemas.