"No appetite for second VPF", CEA

A second virtual print fee (VPF) to fund future industry innovation is highly unlikely, agreed a panel of exhibition experts yesterday at a conference on the future of cinema.

“My understanding – and it’s fair to say, the understanding of colleagues at the International Union of Cinemas (UNIC) and the National Association of Theatre Owners (NATO) – is that there is no appetite from studios for a second VPF, even if no studio is prepared to state that publicly,” said Phil Clapp, CEO of the Cinema Exhibitors’ Association (CEA), during the panel titled ‘Designing the Future’.

“I think you can understand it, whether you like it or not….our understanding is that there will be no further fundamental industry-wide VPF,” he continued.

The panel agreed that the implementation of technological developments such as laser projection and immersive sound would not require the same breadth of collective action, which has been resented by many in the industry.

“We’re seeing a much more fragmented market,” he continued. “This is a good thing because it’s a fragmented audience, but it also makes designing ‘systems’ to deal with change more difficult.”

Clapp acknowledged that the controversial VPF – the subsidy paid by a film distributor towards the purchase of digital cinema projection equipment – was “the least worst option in terms of digitisation”.

In response to a question about the lifespan of their digital projectors, Sony Digital Cinema executive Tim Potter said: “That’s a difficult question to answer. We can reliably say that projectors will be fine over a ten year period.

“Our projectors have ten year warranties…There are many moving parts to our digital cinema solutions, like any IT system, and certain parts will fail at times but these can easily be replaced and as long as you get your projector serviced annually it should keep going and going. For how long? It’s difficult to say.”

Cineworld national operations manager Matt Eyre added that while exhibitors are planning for the next phase of digitisation some of the technology requires upgrading sooner than anticipated:

“You need to be aware of your assets and their projected lifespan when you install them,” he said. “We have good notice of this. We do have a financial plan in place for [replacing or upgrading] projectors. Servers are an annual accrual but they are going quicker than we thought they might.”

The session was part of the CEA-organized Cinema of the Future conference, held at London’s Cineworld O2.