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  1. Norway – on the brink of a digital roll outAn overview Presentation Oslo 03.05.10 Jorgen Stensland Director of Consultants Film & Kino

  2. 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

  3. 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)

  4. 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

  5. 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 VPF-agreements. • 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.

  6. Overall model structure (simplified) • Master leasing agreement • Lease payments • VPF invoice/payment Distributors Film & Kino Financial institution Technical and commercial advisory board (Representatives from distributors, F&K, system integrators and theatres) Project organizationSupporting roll-out process and information sharing • Selection of system integrat-ors through public bid • Master agreement for standard digitization packages • Payment NOC/service • Reporting • Net payment/ contribution • Reporting System Integrators (equipment suppliers) Exhibitors (cinemas) • Payment for extra equipment Payment for digital system

  7. 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)

  8. 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.

  9. 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.