Norway – on the brink of a digital
roll out
An overview
Presentation Oslo 03.05.10
Jorgen Stensland
Director of Consultants
Film & Kino
Norways Cinemas
• 4,5 million people, annual admissions about 12
million.
• 230 Cinemas/420 screens & ambulatory cinema.
• 50 Cinemas have 90% of the business.
• Unique cinema structure cinemas/culture houses
nationwide.
• Political authorities agree that people should be
offered culture where they live
• Digitalization will benefit smaller cinemas and
give them new opportunities
FILM&KINO
• Hybrid organization. Owned by the Norwegian
Local municipalities
• Interest organization for the Cinema and Video
industries
• Collects a tax on behalf of the government: The
Norwegian Cinema and Film Fund. Tax on cinema
tickets and DVD.
• Approximatly 80 mill NOK yearly (10.4 mill
Euro)
Pilotprojects tested
• Technical issues, how the projects use formal
testing and routines for interoperability,
automatization, functionality and moving of
equipment.
• Organizational issues: How the bigger cinemas
in the region can help the smaller ones. (support,
advisory work)
• Digitizing multiplexes to understand and evaluate
how a theatre will function with most screens
digitized in regard to content and revenue
Digital Roll-out
• Total roll-out costs are estimated at 400 mill NOK
(50,6 mill Euros).
• 40 % of the roll-out costs will come from VPFagreements.
• Total contribution from Film & Kino and the
cinemas will be about 60% of total costs.
• Film & Kino will contribute with 100 mill NOK.
• Film & Kino are guarantors of the whole
agreement in regard to a financial institution.
Overall model structure
(simplified)
• Master leasing
agreement
• Lease payments
VPF invoice/payment
Distributors
Film & Kino
• Selection of system integrat-ors
through public bid
• Master agreement for standard
digitization
packages
• Payment NOC/
service
• Reporting
System
Integrators
(equipment suppliers)
• Net payment/
contribution
• Reporting
Exhibitors
(cinemas)
• Payment for extra equipment
Payment for digital system
7
Financial institution
Technical and
commercial advisory
board
(Representatives
from distributors,
F&K, system
integrators and
theatres)
Project organization
Supporting roll-out
process and
information sharing
Benefits after Roll-out
• Increase in premieres and early access to popular films
(average time in small cinemas to get a copy of a new film
in Norway is 45 days)
• Easier and Cheaper distribution
• Alternative Content.
• Better quality on the shows. ”Only first runs”
• Increased business! Lillesand Cinema (NDA) had an
increase in business of 26% 2006 with only a few digital
premieres.
• Not only for cultural purposes. Local cinemas generate
business for restaurants, shops, cafes etc. A study in
Bergen (population 350 000) stipulates this to 100 mill
NOK a year (13 mill Euro)
Successfactors for total rollout
• Political support on governmental, and local
levels (and European).
• Financial support through the political level.
• One project leader must plan and control the
process.
• Joint venture: All participants in the
business chain must cooperate.
Current status
• Deals with 6 studios signed
• Agreements with cinemas and System
Integrators signed.
• Film & Kinos contribution not considered
state aid by the European Surveillance
Agency in a preliminary assessment.
• Public tenders finished in february.
• Roll-out starts may/june.