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» Film-Tech Forum   » Operations   » Digital Cinema Forum   » Direct Paramount-Exhibitor VPF Agreements (Page 1)

 
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Author Topic: Direct Paramount-Exhibitor VPF Agreements
Kevin Fairchild
Expert Film Handler

Posts: 125
From: Kennewick, WA, USA
Registered: Oct 2008


 - posted 01-22-2009 03:50 PM      Profile for Kevin Fairchild   Email Kevin Fairchild   Send New Private Message       Edit/Delete Post 
Here is a copy of a letter we got today.

quote:

PARAMOUNT PICTURES ANNOUNCES DIRECT-TO-EXHIBITORS
DIGITAL CINEMA DEAL

First Studio To Implement Agreement To Accelerate
Expansion Of Digital Footprint


HOLLYWOOD, CA (January 22, 2009) – Paramount Pictures, a unit of Viacom Inc. (NYSE: VIA and VIA.B), today announced it has become the first studio to offer digital cinema support directly to exhibitors across the United States and Canada. The move is expected to accelerate the roll-out of digital and 3-D projection systems in theatres. The announcement was made by Jim Tharp, President of Domestic Theatrical Distribution.

The deal works in parallel with previously announced agreements with DCIP (Digital Cinema Implementation Partners), Cinedigm, Kodak, and Sony but allows exhibitors to seek financing for d-cinema systems locally rather than wait for comprehensive integrator agreements, which require significantly more upfront capital, to be completed. In addition, the agreement allows exhibitors to own and control their equipment (which is required to be DCI/SMPTE compliant), and to switch to an integrator-supported agreement at a later date if desired. The new agreement also includes independent theatres that do not belong to any integrator groups.

In making the announcement, Tharp said, “We are excited about the potential of more theatres offering more of Paramount’s films in the highest quality digital and 3-D. Today’s announcement is a good step forward to providing more audiences with the very best in movie viewing.”

NATO President and CEO John Fithian said, "Paramount is getting out front on this critical industry transition and we applaud them. Direct arrangements between distributors and exhibitors won't work for everyone, but for some of our members, it could make the difference in surviving and thriving in the digital era. And it certainly enables some exhibitors to get wired much faster -- and that means more 3-D screens sooner. We urge all studios to give this creative option a fair chance."

To date, Paramount has signed nine digital cinema integration deals, the most of any major studio. They include domestic agreements with Cinedigm (previously Access IT) Phase 1 and Phase 2, Kodak, Sony, and DCIP, three deals with European integrators XDC, Arts Alliance Media and Ymagis, and two deals with Asian integrators DCK and GDC. So far, more than 3,500 screens have been converted to digital under Cinedigm’s Phase 1 plan.


About Paramount Pictures Corporation
Paramount Pictures Corporation (PPC), a global producer and distributor of filmed entertainment, is a unit of Viacom (NYSE: VIA, VIA.B), a leading content company with prominent and respected film, television and digital entertainment brands. The company's labels include Paramount Pictures, Paramount Vantage, Paramount Classics, MTV Films and Nickelodeon Movies. PPC operations also include Paramount Digital Entertainment, Paramount Famous Productions, Paramount Home Entertainment, Paramount Pictures International, Paramount Licensing Inc., Paramount Studio Group, and Worldwide Television Distribution.



[ 01-22-2009, 06:24 PM: Message edited by: Kevin Fairchild ]

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Todd McCracken
Master Film Handler

Posts: 263
From: Northridge, CA, USA
Registered: Mar 2008


 - posted 01-22-2009 04:59 PM      Profile for Todd McCracken     Send New Private Message       Edit/Delete Post 
Thanks for posting this, interesting read.

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Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99


 - posted 01-22-2009 05:29 PM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
CBG communications are supposed to be private to the members only. I suggest removing the CBG part of that memo and leaving the Paramount document (which is public).

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Kevin Fairchild
Expert Film Handler

Posts: 125
From: Kennewick, WA, USA
Registered: Oct 2008


 - posted 01-22-2009 06:25 PM      Profile for Kevin Fairchild   Email Kevin Fairchild   Send New Private Message       Edit/Delete Post 
Thanks Mike, post had been edited.

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Julio Roberto
Jedi Master Film Handler

Posts: 938
From: Madrid, Madrid, Spain
Registered: Oct 2008


 - posted 01-22-2009 11:31 PM      Profile for Julio Roberto     Send New Private Message       Edit/Delete Post 
Thank you for posting that.

OMG, maybe they are finally listening. This could have a major impact in the amount of small theaters converted to digital now that distributors might start inking generic deals with independent exhibitors to participate in the investment of digital convertion.

I hope others follow soon and that UIP in Europe does the same.

If, i.e., Universal/Paramount, start offering a generic deal such as $1000 discount for each movie projected digital for 2 weeks instead of 35mm film for the next 5 years, many customers could start migrating one or two screens to digital and booking uip films in them exclusively (as long as there are enough).

When other distributors do the same, new digital screens could be added. Those that don't participate will get the sparkling 35mm backup projector treatment.

The equipment will be paying for itself with the VPF and, when the contract is over, the burden to replace/maintain will stay with the theater. But at least the transition would've been made.

Note that the industry itself is acknowledging that digital equipment will only last about 10 years before becoming too obsolete to maintain.

This is nothing new as, we all know, even relatively new "digital" simple machines like DTS decoders, SDDS, or even certain models of persistant Dolby have become hard to maintain/obsolete. Think QuVis, JVC, 1.3K DLP projectors, etc.

I repeat. Many manufacturers of digital cinema equipment themselves have stated in the past that expected life of equipment is 10-15 years tops. Forget the 20-30 years of old 35mm and (some) analog equipment.

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Scott Norwood
Film God

Posts: 8146
From: Boston, MA. USA (1774.21 miles northeast of Dallas)
Registered: Jun 99


 - posted 01-23-2009 08:49 AM      Profile for Scott Norwood   Author's Homepage   Email Scott Norwood   Send New Private Message       Edit/Delete Post 
So, um, what is the deal? How much are they willing to pay? Do they make a distinction between different types of theatres? Do they pay more to theatres that have more expensive equipment? Will they guarantee that every Paramount release--both past and present--will be available for DLP? Have they suggested that there might come a time when 35mm prints of new titles will no longer be available to exhibitors who are unwilling or unable to make the conversion?

If the cost of equipment and installation is (say) $80-100k/screen and it lasts for 8-10 years, then the cost to the exhibitor is $10k/screen/year, not including finance charges or maintenance. That's about $200/screen/week.

If the numbers work out to be at least break-even, I see this as being a good thing for independent exhibitors (assuming that other studios offer similar deals), as it cuts out the middlemen and reduces the conversion cost for everyone.

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Mark J. Marshall
Film God

Posts: 3188
From: New Castle, DE, USA
Registered: Aug 2002


 - posted 01-23-2009 09:11 AM      Profile for Mark J. Marshall     Send New Private Message       Edit/Delete Post 
quote: Julio Roberto
Forget the 20-30 years of old 35mm
How about 70 years? The Everett in Middletown Delaware has two E7s that were installed in used condition in 1940, and they still run like tops.

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Mark Gulbrandsen
Resident Trollmaster

Posts: 16657
From: Music City
Registered: Jun 99


 - posted 01-23-2009 09:24 AM      Profile for Mark Gulbrandsen   Email Mark Gulbrandsen   Send New Private Message       Edit/Delete Post 
quote: Mike Blakesley
CBG communications are supposed to be private to the members only. I suggest removing the CBG part of that memo and leaving the Paramount document (which is public).

I personally have no problem if any CBG stuff gets posted here. This is the beginning of the end of CBG anyway. They've done absolutely nothing for any exhibitor in their entire existance.

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Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99


 - posted 01-23-2009 10:36 AM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
Well it doesn't matter to me either, but CBG members sign a contract saying they will not distribute group communications publicly so I figured he might be jeopardizing his job if his employer got in trouble because of the thing being posted.

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Mark Gulbrandsen
Resident Trollmaster

Posts: 16657
From: Music City
Registered: Jun 99


 - posted 01-23-2009 01:50 PM      Profile for Mark Gulbrandsen   Email Mark Gulbrandsen   Send New Private Message       Edit/Delete Post 
I know about that but I have a number of customers that are VERY unhappy with the CBG and whom have given me all the news letters and such... I've been very tempted to post em on here a number of times but there is really very little usefull info in them anyway... always just more put-offs than anything else.

quote:
If the cost of equipment and installation is (say) $80-100k/screen and it lasts for 8-10 years,
Actually Dolby and Christie are both stating 15 years, and knowing these companies, their reputations, and the fact that they have alot of product to support it'll be more like 20 years. Face it Scott, just about all DTS 6 units are still in service after 16 years... its not that difficult to support this stuff.

Mark

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Kevin Fairchild
Expert Film Handler

Posts: 125
From: Kennewick, WA, USA
Registered: Oct 2008


 - posted 01-23-2009 03:11 PM      Profile for Kevin Fairchild   Email Kevin Fairchild   Send New Private Message       Edit/Delete Post 
I also have the 21 page contract. Anybody at Film-Tech want to upload this for me?

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Steve Guttag
We forgot the crackers Gromit!!!

Posts: 12814
From: Annapolis, MD
Registered: Dec 1999


 - posted 01-23-2009 04:43 PM      Profile for Steve Guttag   Email Steve Guttag   Send New Private Message       Edit/Delete Post 
I have not seen the 15-year statement on that one Mark and supporting a DTS system that is not nearly as complicated and uses much from other industries is not the same animal as something that primarily uses propritary stuff from a single source.

Another nasty thing I seem to be bumping into is how much the distributors can demand info on equipment, require upgrades and are just generally demanding period. For a film print...it doesn't seem to be a big deal...to get a digital HD...my what hoops one has to jump through...at least to get into the system...it isn't just a matter of registering your player/projector to get the KDMs going. Oh and some studios are not forcing the issue on the POTS line...I had to upgrade a 2-week old unit to handle that...I guess email and the internet was too easy...on the upside...most will feel more secure without haveing their expensive systems connected to the internet.

Steve

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Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99


 - posted 01-23-2009 04:46 PM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
quote: Mark Gulbrandsen
Actually Dolby and Christie are both stating 15 years, and knowing these companies, their reputations, and the fact that they have alot of product to support it'll be more like 20 years.
Those are great companies but in truth, with the speed technology changes, how can they possibly guarantee this stuff will be usable in five years, let alone 20?

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Steve Guttag
We forgot the crackers Gromit!!!

Posts: 12814
From: Annapolis, MD
Registered: Dec 1999


 - posted 01-23-2009 05:12 PM      Profile for Steve Guttag   Email Steve Guttag   Send New Private Message       Edit/Delete Post 
Mike,

While I don't know about Dolby (which controls much of their product)...Christie and Barco both offer up to 10-years worth of warranty beyond their standard 2-years.

So, if you invest in the rather modest cost...you can legally require them to repair or replace the equipment to keep it running for at least 10-years...beyond that...its anybody's guess.

Steve

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Scott Norwood
Film God

Posts: 8146
From: Boston, MA. USA (1774.21 miles northeast of Dallas)
Registered: Jun 99


 - posted 01-23-2009 05:38 PM      Profile for Scott Norwood   Author's Homepage   Email Scott Norwood   Send New Private Message       Edit/Delete Post 
Does the buyer have to purchase the 10-year warranty up front? Or can it be extended on a year-by-year basis? A twelve-year warranty (which is pretty impressive, all things considered) isn't much good if there is nothing to play on the unit in twelve years. In any case, I fully expect that far better equipment will be available then and that quality-minded exhibitors will want to upgrade by then. Think about the "state of the art" in video projectors in 1997 and compare that with what is available now.

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