Market Watch

Norway Does First Industry-Wide VPF Deal for Local Distributors

October 14, 2010

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Norway's cinema and video agency Film & Kino has managed a European first and agreed a deal for a contribution to digital transition with all local to distributors for the industry-wide digital roll-out. The project is an agreement between exhibitors, distributors and money injected by Film & Kino (the project co-ordinator) and for the full rollout to take effect and the full revenues to be generated, it required such an agreement with all distributors, both mainstream and art house. The total estimated cost of transition for Norway is NOK390m ($68m).  The Film & Kino contribution comes from funds set aside for several years by the Norwegian Cinema and Video Foundation.

In common with the commercial third-parties working in Europe, Film & Kino has already signed a Virtual Print Fee with the US studios (all six in their case), but also in common with other countries and third-parties, Norway had  not agreed a similar deal with all local independent distributors. There is a sprinkling of European distributors who have agreed a VPF with their third-party integrator, mainly short-term agreements, but the search for a model that fits the indie distributor release pattern more closely is on for most. Even though Norway is an exception in the cinema world, most cinemas being in the public-sector, this model will be closely watched by others, especially UK and Netherlands with a funding group approach that will also require an acceptable model for local distributors.

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