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Market Insight

Scrabble Entertainment launches US lease-to-own scheme

April 30, 2013

David Hancock David Hancock Director – Research and Analysis, Cinema & Home Entertainment, IHS Markit
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Indian digital deployment company Scrabble Entertainment has launched a lease-to-own digital cinema funding scheme for the US market, under which the lease term includes an option to buy at the end of the funding term. Five studios have signed up to the VPF-backed US lease-to-own programme (Warner, Disney, Paramount, Universal, Fox) and Scrabble is still negotiating with Sony. Partnering with Scrabble is Christie Digital Systems, providing equipment and managed services (Network Operating Centre). The remaining 15 per cent of the US market are proving problematic to convert, due mainly to the nature of the business models employed. They are generally arthouse cinemas, drive-ins, and smaller independent cinemas.

Scrabble has VPF-backed deployment deals in place for India and parts of Asia and Middle East and is often the only player in a market, especially in the Middle East. It also moved into Latin America in 2012, gaining studio backing for a VPF programme starting in 2013, initially in Mexico, Brazil and Chile. The major investor in Scrabble is UFO Moviez, Indian e-cinema network, which recently increased its stake from 52 per cent to 76 per cent. Its initial investment was in September 2011. The aim for UFO is to increase its overall screen count to around 5,000 screens, both DCI screens under the Scrabble umbrella and e-cinema screens within UFO's Indian network. The latter has around 2,500 screens signed up and installed. Outside of India, Scrabble has 650 screens in the Middle East. In India, Scrabble is the only DCI deployment entity, as the market for d-cinema was initially aimed at the multiplex market which plays Hollywood content. The single screen cinemas, which are the e-cinema core, focus on the extensive range of Indian films. However, a recent d-cinema equipment deal between Barco and Real Image, the rival e-cinema network, has altered the market dynamics between the two technologies.

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