Arts Alliance in $44m digital cinema deal with Cineworld

Currently around 250 of Cineworld’s 790 screens across its 77 cinema locations are digital. The roll out of the remaining screens is expected to take around 3 years and will cost $44m (£30m). It will be financed by Cineworld upfront, with 90% of that cost being reimbursed through the “virtual print fee” arrangement (VPF), which enables AAM to collect fees from the relevant distributors every time Cineworld shows a new film using a digital projector.

AAM’s has signed up around 2,300 screens across 6 European countries to date. Exhibitors can either pay for the digital installation upfront and be reimbursed over time trough the vpf arrangement, as in the case of the Cineworld deal, or AAM can access its own funds to help exhibitors to make the transition.

Arts Alliance Media CEO Howard Kiedaisch told Screen that the Cineworld deal was a “vote of confidence for AAM” as well as being a ”real catalyst” for other exhibitors to embrace digital technology.

“It is mostly fuelled by 3D but there are a lot of other benefits that exhibitors are beginning to realise in terms of content, flexibility, quality,” he said. “Everything else in life has gone digital, the way you listen to music and watch video, it seems bizarre that you have this business to business application that is still stuck in an analogue technology. The big question was who was going to pay for it and the VPF model solved that.”

“Everybody makes a move when the next big 3D films come out, but it takes a bit of time to install the technology. In November and December there are around 8 [3D] films. If exhibitors don’t have enough screens they are going to have to take films off to put other films on, which would be a real shame, especially with the kind of results you get out of most 3D films during that holiday period in particular,” he added.

Steve Wiener, CEO of Cineworld added: “Digital is a core part of our strategy and we are pleased to be partnering with Arts Alliance Media to continue our rapid roll out of digital projection facilities to encompass our entire estate.