Leading European digital cinema service companies Arts Alliance Media and dcinex have agreed a deal under which the two companies would cooperate in selling software and offer joint VPF deals to exhibitors. Dcinex has become a re-seller of AAM's range of software, effectively adding this to its own hardware offerings which have increased in recent months through a range of deals with other manufacturers.
The first software deal under this partnership is German exhibitor UFA Cinemas who will install AAM's TMS (Theatre Management System) in its 41 screens. Dcinex will also offer AAMs VPF financing programme to exhibitors, mainly in Italy and Germany.
It is not every day that two competitors team up to offer a joint range of products and services, and from that point of view, this is a significant deal. A parallel was Deluxe and Technicolor joining forces to manage the decline of 35mm film. In this case, the motivation is different but similar in that we are nearing the end of digital conversion and the market for digital cinema equipment, VPF deals and software is now smaller and those left can be considered the tougher ones to crack. Joining forces to offer a VPF deal makes sense for the lagging markets, such as Italy. Both have considerable experience in VPF deals and the two combined would be a powerful proposition. Equally important, it also means that they stop competing for the remaining exhibitors, reducing the costs of sending out sales teams and identifying potential targets.
A process of consolidation has long been a possibility, and is a standard practice in maturing markets, and this could be a first stage in that process but, whether this deal is more profound or not, it highlights the end is nearing for a long and hard-fought process of digital conversion. Despite starting from the same place (VPF-backed digital deployment for exhibitors), these two companies have evolved along different lines. Arts Alliance Media focuses on software sales, and has developed a suite of products to deal with separate parts of the digital cinema process (TMS, key management, distribution, screen advertising, equipment monitoring). On the other hand, dcinex has moved away from software and hardware manufacturing to focus on equipment provision to its circuit of exhibitors, content services for distributors, and a reseller of other equipment (eg Dolby Atmos, QSC Audio, Philips Lighting, Sony Digital Cinema) into cinemas.
There is still electronic distribution to be resolved in the market, and both these players have their own thoughts on this. dcinex is a joint venture partner in DSat Cinema whereas Arts Alliance has developed a software-based solution to facilitate delivery but has so far not announced a public preference as to a solution.