German exhibitor Cineplex Deutschland, the second largest in the territory, has agreed terms with pan-European integrator XDC, to enable full conversion of its 451 screen estate to high-end digital cinema. The commitment follows days after fellow circuit Kinopolis concluded a similar deal for 125 screens, also through XDC. Cineplex is now one of three major exhibitors, including largest circuit Kieft and Kieft, to have accelerated their digital plans in the past few months, providing a clear signal that the German market is now ready to embrace digital at a rapid pace.
The recent flurry of deals comes after the German federal film board (FFA) withdrew its plan to partially fund a working model for total digitisation of the national screen base, based on the market solidarity approach. This withdrawal came after several years of debate and the evolution of various working models. It also followed a legal dispute between the FFA and exhibitors, one still being pursued by some of the latter. The digital plan was, in part, intended to address or counter some of the underlying issues behind the dispute such as levies, but this was not accepted.
An increasingly large section of the German screen base will now operate under the commercial VPF business model, the majority through XDC's network. This contrasts strongly with the original concept of the market solidarity approach which was intended to carry the weaker or smaller exhibitors with the strong or major multiplex operators. The situation in Germany has also been to some extent mirrored in France, where a large-scale proposal for digitisation by the CNC was rejected by the French competition authority, but, in this case, due to the inclusion of the French film body in the role of the commercial third party aggregator.
While the provision of wide-ranging public support for commercial cinemas is thought to potentially undermine the competitive relationship between exhibitors and distributors, there are renewed signs that public funding will not be excluded from digital cinema in entirety. For example, the FFA is now working on a new model aimed at aiding a small cross section of exhibitors and in turn this is similar to an existing fund by the Bavaria Film and TV Fund, specifically aimed at funding local exhibitors with fewer than six screens. In addition, there are several other public support mechanisms being studied at a regional level including one by the European Commission.
In contrast, non-EU territories have had greater success developing a national programme for digital cinema, notably Norway, where the total number of screens is much lower and the existing public support for municipally operated cinemas is already high.
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