Norway – on the brink of a digital roll out

An overview

Presentation Oslo 03.05.10Jorgen Stensland

Director of ConsultantsFilm & Kino

Norways Cinemas

• 4,5 million people, annual admissions about 12 million.

• 230 Cinemas/420 screens & ambulatory cinema.• 50 Cinemas have 90% of the business.• Unique cinema structure cinemas/culture houses

nationwide.• Political authorities agree that people should be

offered culture where they live• Digitalization will benefit smaller cinemas and give

them new opportunities

FILM&KINO

• Hybrid organization. Owned by the Norwegian Local municipalities

• Interest organization for the Cinema and Video industries

• Collects a tax on behalf of the government: The Norwegian Cinema and Film Fund. Tax on cinema tickets and DVD.

• Approximatly 80 mill NOK yearly (10.4 mill Euro)

Pilotprojects tested

• Technical issues, how the projects use formal testing and routines for interoperability, automatization, functionality and moving of equipment.

• Organizational issues: How the bigger cinemas in the region can help the smaller ones. (support, advisory work)

• Digitizing multiplexes to understand and evaluate how a theatre will function with most screens digitized in regard to content and revenue

http://www.flickr.com/photos/dekcuf/276051660/

Digital Roll-out

• Total roll-out costs are estimated at 400 mill NOK (50,6 mill Euros).

• 40 % of the roll-out costs will come from VPF-agreements.

• Total contribution from Film & Kino and the cinemas will be about 60% of total costs.

• Film & Kino will contribute with 100 mill NOK.• Film & Kino are guarantors of the whole

agreement in regard to a financial institution.

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Overall model structure (simplified)Film & KinoDistributors

Exhibitors(cinemas)

SystemIntegrators(equipment suppliers)

Financial institutionVPF invoice/payment

• Master leasing agreement

• Lease payments

• Payment for extra equipment

Technical and commercial advisory board(Representatives from distributors, F&K, system integrators and theatres)

Project organizationSupporting roll-out process and information sharing

• Selection of system integrat-ors through public bid

• Master agreement for standard digitization packages

• Payment NOC/service

• Reporting

• Net payment/ contribution

• Reporting

Payment for digital system

Benefits after Roll-out

• Increase in premieres and early access to popular films (average time in small cinemas to get a copy of a new film in Norway is 45 days)

• Easier and Cheaper distribution• Alternative Content.• Better quality on the shows. ”Only first runs”• Increased business! Lillesand Cinema (NDA) had an

increase in business of 26% 2006 with only a few digital premieres.

• Not only for cultural purposes. Local cinemas generate business for restaurants, shops, cafes etc. A study in Bergen (population 350 000) stipulates this to 100 mill NOK a year (13 mill Euro)

Successfactors for total rollout

• Political support on governmental, and local levels (and European).

• Financial support through the political level.

• One project leader must plan and control the process.

• Joint venture: All participants in the business chain must cooperate.

Current status

• Deals with 6 studios signed

• Agreements with cinemas and System Integrators signed.

• Film & Kinos contribution not considered state aid by the European Surveillance Agency in a preliminary assessment.

• Public tenders finished in february.

• Roll-out starts may/june.