European cinema: opportunities and challenges in the digital era
Outline of the Community (European Union) legislation about European cinema: opportunities and challenges in the digital era
Topics
These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.
European cinema: opportunities and challenges in the digital era
Document or Iniciative
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 24 September 2010 on opportunities and challenges for European cinema in the digital era [COM(2010) 487 final – Not published in the Official Journal].
Summary
This Communication sets out the strategy developed by the European Commission to help European cinema owners in the transition to digital cinema.
Obstacles to developing digital cinema
The European cinema market is very mixed. It includes different language zones and many different operators. This diversity can make it more difficult for global deals or national roll-outs to be implemented.
Another obstacle lies in the limited levels of activity in many European cinemas. 31% of European screens are in single-screen cinemas while only 10% of European cinemas are multiplexes. In view of the higher costs of digital equipment, this situation makes the digitisation process harder.
Investment in digital equipment has to be borne by exhibitors, but savings will be made by distributors thanks to the lower cost of digital copies. Investment in very expensive digital equipment may prove to be economically unviable for a number of cinemas, particularly independent or arthouse cinemas.
Finally, a consequence of digitisation will be staff redundancy for projectionists and laboratory technicians. In order to limit the social consequences of the cinema digitisation process, the transition period needs to be carefully managed and significant funding should be allocated for training professionals.
Standardisation and equipment needed for digital transition
The International Organization for Standardisation (IOS) is considering standardising the equipment needed for digital transition based on the model developed by the Digital Cinema Initiative (DCI). This model is based on (among others) “2k” resolution (a resolution of 2048×1080) or “4k” (a resolution of 4096×2160 for screens over 15 metres), and the introduction of the JPEG 2000 format using digital technologies such as HDTV Broadcast, Blu-Ray and video-on-demand. However, 2k equipment is very expensive and European cinemas will not reap short-term benefits from it, except perhaps those that screen 3D films.
Over 80% of European screens are less than 10 metres wide. For this type of screen, it is possible to use projectors with a lower resolution as the quality is more than sufficient and they are less expensive than 2k equipment. However, studios would need to agree to this type of technology being used to screen their films.
The EU shall seize the opportunities offered by the standardisation process in order to obtain the flexibility needed to enable all viable cinemas in Europe to use digital projection.
Possible financing models
Distributors can sign agreements with “integrators” who finance the acquisition of digital cinema equipment on behalf of exhibitors. These intermediaries then collect the distributors’ contribution to repay part of the investment made. However, this VPF (Virtual Print Fee) model may prove to be unsuitable for smaller and arthouse cinemas, and may have an impact on the programming freedom of exhibitors.
Member States or regions may also co-finance cinema digitisation projects using the EU’s Structural Funds through projects linked with urban regeneration, rural diversification, cultural tourism or the information society and human capital, in particular.
Furthermore, arthouse or smaller cinemas could group together and “mutualise” their costs in order to access private investment or European funds, subject to compliance with European competition rules. In addition, they may benefit from State aid for culture and heritage conservation.
Possible intervention at EU level
EU intervention accompanying digital transition will be carried out in accordance with:
- Article 167 of the TFEU;
- the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions;
and will take account of the funds available from:
- the MEDIA Programme;
- the European Investment Bank (EIB).
The MEDIA Programme is a useful tool in that it:
- provides a training scheme for professionals;
- sets digital technology objectives in the field of distribution and dissemination;
- offers the possibility to create a new action specifically aimed at the digital transition of European cinemas.
Action envisaged by the European Commission between now and 2012 to accompany the transition to digital cinema projection for European cinemas includes:
- a report on the adoption of digital cinema projection standards;
- a study on the costs of digital equipment;
- a Recommendation on promoting digitisation of European cinema;
- a Communication on appropriate criteria for assessing State aid for digital projection.