2.digital cinema
TRANSCRIPT
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David HancockDavid Hancock
Senior Analyst, Film and CinemaSenior Analyst, Film and Cinema
Screen DigestScreen Digest2323rdrd June 2006June 2006
Independent DistributorsIndependent Distributorsand the Digital Revolutionand the Digital Revolution
Europa Distribution ConferenceEuropa Distribution Conference
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OverviewOverview
• Introduction• Digital cinema: what is it?• Digital cinema: where are we now?• Digital cinema: who is doing it?
• Digital cinema: potential for the distributor• Conclusion
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Screen DigestScreen Digest –– who are we?who are we?
• Media market research and consultancy since 1971• Core of our activity is a series of continuously
updated databases• Cover all aspects of film and cinema, and all screen-
based media• Flagship product: Screen Digest monthly magazine –
research based• Also Cinema Intelligence – online database and
analysis
• Consultancy, Reports, briefings and more…
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Digital cinemaDigital cinema
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What is digital cinema?What is digital cinema?
• Digitisation of the distribution and exhibition of movies and other content
• Two broad types
– D-cinema– E-cinema
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E-cinemaE-cinema
• Lower-end systems• Key driver territories
– India– Brazil
– Parts of Europe (Cinema Net)– South Africa
• Indie/European/niche titles• Alternative content
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Choice of e-cinemaChoice of e-cinema
• Folkets Hus: Sweden (first-run local films)• Docuzone: Europe (documentaries)• Portugal: Ministry of Culture/RIMT (cultural network)• South Africa: Shout Africa (rural network)
• India: DPI/Valuable, Adlabs, Pyramid Saimera, RIMT.E-city Digital Cinema (mainstream)
• China: China Film Group (rural)• Brazil: Rain Networks (ads and local movies)
• USA: Screening Room Entertainment (niche andbistro)
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Digital cinemaDigital cinema
• Where are we now?
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Global d-screen growthGlobal d-screen growth
D-screen development
0
100
200
300
400
500600
700
800
900
1999 2000 2001 2002 2003 2004 2005
EUROPE
35%
19%
11%
14%
15%
27%
June 05- DCI
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D-screen development by region
0
500
1000
15002000
2500
3000
1999 2000 2001 2002 2003 2004 2005 2006
Western Europe Central and Eastern Europe North America
Central and South America Africa Middle East Asia-Pacific
D-screens by regionD-screens by region
335
849
2,467
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D-screens in Europe in 2005D-screens in Europe in 2005
D-screens in Europe
0
5
10
15
20
25
30
35
40
UK
Germ
any
Italy
Ire
land
Belg ium
Fran
ce
Netherl
ands
Au
stria
Switze
rland
S
pain
Swed
en
Denmark
Luxemb
ourg
Norw
ay
Portug a
l
Czec
h Rep
ublic
Hun
g ary
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Digital releasesDigital releases
• Jumped in 2005 to 97 films, 47 in 2004• 2006 set to grow even higher (46 by April)• Digital screening of European films growing in
importance
– In 2004, nearly all releases studio and other– In 2005, Europe came firmly on stream
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Digital film releasesDigital film releases
Digital film releases by region
0
20
40
60
80
100
120
1999 2000 2001 2002 2003 2004 2005
US studio films European films Other
35
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Digital releases in EuropeDigital releases in Europe
First-run d-releases
0
5
10
15
20
25
30
USA
Italy
Franc
e
Luxembour
g
Netherland
sUK
Belg iu
m
German
y
Austr
ia
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Widest digital releases in 2005Widest digital releases in 2005
11Buena VistaChronicles of Narnia5
11Buena VistaChicken Little4
14Warner BrosThe Island3
18Warner BrosHarry Potter and theGoblet of Fire2
2520th CenturyFoxStar Wars: Episode 31
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Digital cinemaDigital cinema
• Which European companies are doing it?– Exhibitors
• Kinepolis, Utopolis, Cinecitta, Nordisk Film, City Screen, Odeon,Vue, Cineplexx, UCI, Giometti, Cinecity, Jogchem
– Third party facilitators
• XDC, Arts Alliance, DCL, Unique, Éclair, FHP, (Technicolor-Thomson)
– Projectors• Barco (OEM: Cinemeccanica, Kinoton)
– Servers• EVS, Doremi
– 3D• Xpand
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D-cinema: why do it?D-cinema: why do it?
• Distributor- Flexible and cheaper distribution- Less rigid planning structures- Increased slates
• Studio– Stem Piracy (estimated at $6.1bn, 80% abroad)– lower costs
• Exhibitor- More control and wider diversity- Offer variety of screenings– New revenue streams
• Audience- Superior viewing quality- Variety of content- Wider diversity of programming
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Lower costs for distributionLower costs for distribution
• Digital distribution costs include:EncodingEncryptionSound encodingCost of print
• Discounts available under certain models for volume
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Lower costs for distributionLower costs for distribution
• Digital distribution costs less than 35mm equivalent
• Folkets Hus, Sweden– Cut release costs from Euro2,700 per print to Euro162
• Tartan Films, UK
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Tartan films - example of costsTartan films - example of costs
85,100(£58,354)102,090(£70,000)16,722(£11,466)100English-languagefilm
1,910(£1,310)
8,166(£5,600)
6,256(£4,290)
8English-languagefilm
11,243(£7,710)
17,500(£12,000)
6,256(£4,290)
8Foreign-language
film
DigitalsavingEuro
35mmreleaseEuro
DigitalreleaseEuro
No of prints
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Digital for distributorsDigital for distributors
• Bigger slates – greater screening flexibility forexhibitors should encourage them to demand morefilms
• Cheaper to distribute, so less risk for niche titles– Saraband in UK– Broke even at £40,000 BO, due to digital
• Therefore, offers smaller films chance to achieve awider and more profitable release than under 35mm
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Conclusion - Implications of digital cinemaConclusion - Implications of digital cinema
- New breed of content and more content -local andregional
- Versions of same content – 3D- Lower entry costs to market – new players
- Possible change to window release patterns- Dual formats during transition period- Change in distribution patterns – VOD …- Live transmissions
- Alternative Content- Cross-border content and distribution patterns
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Thank youThank you