Digitisation of

French Cinema

Régine Vial – Les Films du Losange (France)

I. The Law

Date: promulgated on September 30, 2010

VPF: Obligation to pay a digital contribution

Number of digital contributions per film:number based on the maximum number of screenings during the two first weeks.

Hands Up, 2010 (a film by Romain Goupil)

French release date June 9, 2010

Number of prints in first week

113

Number of prints in second week

141

Maximum number of prints

141

Duration of exploitation

17 weeks

Number of screenings 658 screenings

Duration of the digital contribution: 10 years from the first equipment. In all cases, the contribution will end before December 31, 2021

The price of the digital contribution: - A free price which can be different for each

case - Negotiated with the third party or the

exhibitors- Respecting 3 principles :

EqualityTransparency

Objectivity

Legal principle: The digital system has to be less expensive than the 35 mm print for the distributors

No link between programming and digital contribution is allowed.

The Non Film (Operas, Sports Events, …): has to pay a VPF

II. The consequences of the law

Number of digital screens: 1608 in 507 theaters

3 cases:

- Third Parties : They pay the equipment for the exhibitors (notably theaters chain)

- The exhibitors pay themselves the equipment. They can have subsidies (local subsidies)

- The Ministry of Culture gives a subsidy of 75% of the price of the digital equipment for theaters which have 1 to 3 screens and which cannot receive enough digital contributions. The amount of this subsidy : €125 millions. 2000 screens will be equipped by this national subsidy.

The price of the equipment: 65 000 Euros (including the cost of the credit)

Independent Distributors are trying to pay only 75% of the equipment of the theaters, but the exhibitors want generally 85%.

Independent distributors need a precise estimation of the digital equipment of each screen + an annual payment report (to know the state of amortization and how many VPF have been paid).

III. DIRECTDIRECT: a grouping of economic interest. 14 independent distributors together:

AD Vitam ARP Distribution

BAC FilmsDiaphana Distribution

Le PacteLes Films du Losange

Happiness DistributionHaut et Court

Memento Films DistributionPretty Pictures

Pyramide DistributionRezo Films

Sophie Dulac DistributionWild Bunch Distribution

DIRECT:

• More than 10 000 prints per year• 12% of the admissions• 125 films this year• Most of the cultural diversity

The negotiation of VPF:

The main third parties: - Ymagis (they propose a public price per minute.

Public price = €7,5. 1 minute = 27 meters in 35mm)

- Arts Alliance- XDC- Cinelia (a grouping of independent exhibitors)- EuroPalaces (a chain of theaters, with 700

screens only commercial multiplexes)- Independent Exhibitors on their own.

Elaboration of a standard agreement between DIRECT and independent exhibitors

We are working to find out:

The fair price for the digital contribution

The real cost of digital distribution with a materialized support (DCP, hard disk, KDM, move-overs from one screen to another screen)

The cost of digital distribution with dematerialized support (For example, Smartjog = €120 currently to send a feature film to a screen).

Conclusion