23rd June 2009

DIGITAL CINEMA INSTALLATION - EXPRESSIONS OF INTEREST

The Cinema Exhibitors' Association is seeking from UK cinema operators initial expressions of interest as to their involvement in some form of negotiation to secure funding for the purchase and installation of digital cinema equipment in their theatres. Responses are invited by 1 July 2009.

Installation of digital cinema technology offers cinema exhibitors a range of potential benefits, including higher picture quality, greater flexibility of programming and the ability to exhibit a range of so-called ‘alternative content’, such as live cultural, music and sporting events. However, the cost of such equipment remains unattainable for many operators, in particular the large number of smaller independent UK cinemas.

The Cinema Exhibitors' Association (CEA) therefore wishes to explore the potential that might exist for some mutually beneficial arrangement for funding conversion to digital technology by UK cinema owners. This would be a market-driven solution, benefiting the widest possible number of operators.

This invitation is concerned solely with the funding of that change. Should negotiations proceed, decisions might be made on the potential for subsequent action on the purchase and installation of that equipment, but cannot be presumed at this stage. Equally, once the outcome of this exercise is known, there is no presumption that it would be the CEA which continued to lead should this process develop further.

A number of operators are discussing mechanisms by which they can fund the purchase and installation of digital projection equipment in some or all of their cinema sites. These include so-called ‘Virtual Print Free’ agreements with studios, established either directly or through third party companies. Others are dealing directly with equipment manufacturers and installers.

The nature of any negotiation arising from this exercise – including that of the funding model adopted – would be very much dependent on the size and nature of the grouping of cinemas represented. For that reason, and before any further action can be taken, the CEA is seeking expressions of interest from all UK cinema operators.

In considering their response to this invitation, exhibitors are invited to consider the following:

• The invitation is not limited only to CEA members, but rather to all UK cinema operators representing the widest possible range of interests
• Any indication of interest on the part of any individual operator is at this stage absolutely without commitment as to their continuing to be involved as this proposal develops
• Equally there is no guarantee that all operators who express interest at this stage will be able to be participate in any negotiated arrangement, should that be the eventual outcome.

The CEA invites responses by 1 July 2009. Expressions of interest should be submitted by completing the below pro forma and sending it via email to digitalcinema@cinemauk.org.uk or to:

CEA
22 Golden Square
London W1F 9JW.

Expressions of interest pro forma – MS Word

Any queries should be directed to the CEA Office at the above addresses or on 020 7734 9551.