Over half of Europe’s screens
are now digital
but single-screen cinemas are struggling
A new report
from the European Audiovisual Observatory and MEDIA Salles shows
that around 18 500 digital screens had been installed in Europe
by the end of 2011. This means that over 52% of European screens
are now capable of digital projection, up from just 4% three years
ago (see graph).
the initial phase of large-scale digital conversion during 2009
and 2010 had been more or less entirely driven by 3D installations,
roll-out in 2011 was – for the first time – driven by 2D screens.
This suggests that roll-out has entered its second major phase and
is now driven primarily by full conversions of larger circuits under
VPF* schemes and by public initiatives ranging from legislation
(France), publicly funded industry-wide conversion schemes (Norway
and the Netherlands) to direct public funding schemes, 60 of which
have been identified at national, sub-national and pan-European
level, including the new MEDIA 2007 scheme.
on a comprehensive site-by-site listing of analogue and digital
cinemas as of 2010 clearly shows that small cinemas and exhibitors
significant problems converting to digital. By the end of 2010 only
11% of single-screen cinemas had installed a digital screen, compared
to 89% of multiplexes (see table). These small cinemas, however,
form a characteristic part of the European cinema landscape, with
single-screen cinemas alone accounting for almost 60% of all European
cinemas. Though presumably not vital for overall box office results,
these smaller cinemas play an important social and cultural role
in many communities. The fact that these screens have not yet converted
highlights tends to confirm that commercial financing models cannot
cover all European cinemas, causing a funding gap for between 15%
and 20% of European screens.
At the same time,
given the high penetration rates in various European markets, the
end of 35mm distribution seems to be approaching rapidly. Distributors
in Belgium, Luxembourg and Norway, which was the first country worldwide
to become fully digital in mid-2011, were expected to end 35mm distribution
as early as 2011/2012 and a total of 11 territories had converted
at least 50% of their screens by mid-2011, including the two leading
markets France and the UK.
Once large distributors switch to digital distribution in such major
markets, demand for film stock will drop significantly, putting
pressure on 35mm economics on a pan-European level. This could cause
financial strain for those distributors and exhibitors still depending
on it. Many of these are presumably small companies now faced with
a growing competitive disadvantage: digital cinema increases the
economies of scale related to both film exhibition as well as distribution
so bigger companies stand to benefit more than smaller players from
the transition to digital, both in terms of cost savings as well
as in increased revenue potential. This economic reality will ultimately
lead to fundamental change in the fragmented European theatrical
landscape and poses a challenge to the European independent sector,
characterised as it is by a large number of small exhibitors and
‘European Digital Cinema Report’ (130 pages) is published
jointly by the European Audiovisual Observatory and MEDIA Salles
and provides the latest figures on digital screens and penetration
rates across 35 European markets, analyses the development of digital
roll-out and provides in-depth structural analysis with regard to
concentration levels by exhibitors and cinemas of different sizes.
It also features a list of the top 50 digital exhibitors in Europe
as well as estimated market shares for 3D technology, projector
and server manufacturers on a country-by-country basis. A special
chapter deals with the specific challenges faced by the European
independent sector. The report lists 60 dedicated public funding
schemes supporting the digitisation process at national, sub-national
and pan-European level, including the new MEDIA 2007 scheme. It
also provides a comprehensive set of key indicators for each of
the 35 European markets covered in the report.
For further information see http://www.obs.coe.int/oea_publ/european_digital_cinema.html.
* The Virtual Print Fee (VPF) is a financing mechanism for funding
the first purchase of digital cinema equipment. It is based on distributors
and alternative content suppliers paying a fee every time a digital
copy of their content is booked.