Market Insight

Antipodean indies ready to start digital cinema conversion

September 24, 2010

David Hancock David Hancock Director – Research and Analysis, Cinema & Home Entertainment

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Australian and New Zealand market for digital cinema has taken a major step forward with a deal to digitise 700 members of the Independent Cinemas Association of Australia (ICAA), underpinned by the virtual print fee (VPF). The plan hinges on signing VPF agreements with studios, four of which are close to signature and two that may take more time, as has happened with most such agreements around the world. The ICAA is acting as a third-party facilitator and has engaged local company Omnilab Media as its turnkey installer of equipment, including an ongoing maintenance deal. The cinemas will also be linked to satellite in order to be able to access alternative content.


This deal follows the digital conversion plan laid out by Hoyts as part of a consortium of larger exhibitors, excluding the smaller independents, which have now made their own deal. These cinemas are precisely the ones that are in the spotlight at present, with public agencies and trade bodies around Europe and the world seeking a way to bring digital to the non-circuit part of the cinema exhibition sector. The impact of a group gives smaller cinemas access to a better deal for equipment, using bulk buying and the VPF as its core. This deal is similar to what the Digital Funding Partnership is aiming to do in the UK, and the Dutch Digital Programme has negotiated in the Netherlands (albeit with an input of public money). It does highlight the potential effects of scale for the indie market, and serves as a model for independent cinemas to follow for other countries and regions.


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