Cinema Exhibtors' Association Report

Why have attendances increased in cinemas?

"...first two months of the previous year had benefited 

from the extraordinary box office of Avatar, the increased level of cinema 

admissions during the same period in 2011 was all the more remarkable, 

with the UK film The King’s Speech enjoying exceptional success and going 

on to become the second largest film of the year. The months immediately 

following however saw a significant tailing off in audiences as they 

responded to good weather and a generally downbeat slate of films." - CEA Annual Report

The cinema attendance increased due to big blockbusters such as Avatar which was a new type of film of its kind, this boosted the admissions because it was unique and had such a good review and publicity. The Kings Speech also had the same affect, but it was because it was based on a true story and had a big impact on British people and their tradition. The quality has increased dramatically. The reason for attendances to go down it because of the spring and summer months where there is good weather and people decide to go outside instead. Even then, big blockbusters are released in the summer because children aren't at school.   

"Four of the top ten films at the UK box office were available in digital 3D, 

and while there were increasing signs during 2011 that audiences were 

becoming more discerning in which films they chose to see in that format, 

3D income still contributed almost a quarter of UK box office." - CEA Annual Report

The increase in audience is also affected by the definition. 3D has mixed views from audience goers but it still rakes in 1/4 of the box office. This suggests people want to see film in a different format, so HD, IMAX, HFR and 3D, because you can't get all these formats within your living room. Also screening TV shows like Strictly Come Dancing to make a event out of that.  

What is the DFP and the VPF?

 

DFP - Digital Funding Partnership

Established by the CEA to support small/medium sized cinema operators who wish to go digital and get off film. It costs 50k per screen to change it to DFP. Major distributors are unwilling to accept any lower standard, so the cinemas will lose the different types of films. There is no public support for them to help fund it. 

VPF - Virtual Print Fee

For the DFP to happen, you need to conclude a virtual print fee based funding agreement with XDC Digital Cinema. It is a sum of money paid to the cinema when a film is played on a VPF supported system on the release date of the film, (a 'tun'). The VPF is complex and it is very difficult to access for small, individual operators. So if a cinema plays enough first run films over the funding period, say 10 years, then it covers off about 75-80% of the equipment and finance costs. It is a good proposition for major, commercial operators e.g a national circuit. But what about second runs which are played in small cinemas? - they can't access it, so there are 'co-operative' of some 400 screens covering all types of independent owned cinemas. They are then collectively and in aggregate have sufficient first run programming (turns) to enter into the VPF deals on the same basis as major circuits. The DFP acts as a 'quasi circuit' and has fully financed deal with a third party whereby that party will receive sufficient VPFs to pay back all relevant costs. The strategic beauty is that all cinemas benefits no one loses. The scheme is supported and backed by all studios, major UK circuits, BFI and Minister of Culture.   

What may happen to those who don't use the DFP?

If a small cinema doesn't have the money to go digitally and if the plan is to go fully digitally by 2012, then those cinemas will not be able to get any of the new films, therefore loose money and eventually go bankrupt. You loose small independent cinemas who can't afford to get DFP, so you are left with the mainstream chain cinemas. 

Issues: 

- Competition for equipment and technical expertise for physical installations

- Space and facilities required in projection booth (e.g air con)

- Training and Mind set issues (I don't like digital)

- Loading and playing out content

- Security, unlock keys for encrypted content etc.

- Basically a complete new way of operating

What problems face 'alternative content'?

It would be expensive to rent screen rooms for other purposes and there would need to have forms filled in liability. I personally think the main problem would be that people/public would find it odd to adjust to the idea of using the cinema for more than just watching a film. I would assume that it wouldn't have that much of a impact straight away, because people are unaware you can do that and it hasn't been given it's own section in the cinema like films have. For example, we know what films are going on where but we don't know whether they are screenings of concerts, games or public work. One example which I have only now been aware of is Cinema City's renting of rooms for people to use to their own accord (This has been made free for BFI Academy members such as myself only recently, which is a rare opportunity). Any other content the BBFC must verify it so cinemas are reluctant to do it because of the cost.