Thevexed issue of UK cinema rentals - the sums paid to distributors by exhibitors- has come into sharp focus following remarks by John Wilkinson, chiefexecutive of the Cinema Exhibitors' Association.

UKrentals are reputed to be among the lowest in Europe, but Wilkinson has told ScreenInternational that in some cases they should be reduced further once the UKFilm Council's recently announced Digital Screen Network is up and running.

TheCouncil is planning to spend £11.5 million in equipping up to 250 cinemas inthe UK with digital projection equipment. Distributing films to cinemas indigital format is expected to be significantly cheaper than using traditional35mm prints which are expensive to produce and transport.

"Digitalisation should reduce rental rates becausewe're told the greatest advantage is that the distributors are saving money. Intheory and hopefully in practice, rental rates, which have been under severeupward pressure, will fall back," Wilkinson commented.

Wilkinson's remarks have provoked a strong reaction withinthe UK distribution community. "The UK is one of the very lowest (inEurope) for rentals," responded one senior distribution figure. "TheUK is a terrible territory to do business. The costs of advertising are veryhigh and your potential returns are low because we're one of the worstterritories for rentals."

Eve Gabereau of Soda Pictures suggested that Wilkinson wasmissing the point. "It's a misinterpretation to think that our costs willgo down as a distributor," she said, pointing out that although the printcosts will be reduced, there will be new bills for distributors to pay, forinstance the cost of creating a master, making copies and encoding.

"We will still have to spend money to release the films(digitally)," Gabereau said. "I can't see the costs actually goingdown."

See this week's issue of Screen International for fullstory.