CBG is a buying cooperative organized under the National Association of Theatre Owners (NATO). When first formed, its membership counted for over 8000 screens. Management of the unit is separate from that of NATO, and a cinema owner does not have to be a NATO member to belong to the cooperative. The mission of the cooperative is to obtain financed digital cinema systems for all of its members (with emphasis on “all”). However, members are not required to install systems.
As a buying cooperative, CBG does not provide services, systems, or system financing. In 2008, following the evaluation of responses to its RFP, CBG signed with Cinedigm (formerly AccessIT) to provide digital cinema systems to its membership. While Cinedigm had previously negotiated VPF agreements with several studios, it was well known that these agreements would not provide financing for all of CBG’s members. A renegotiation was discussed, but eventually the status quo won. By the end of 2008, CBG recanted with its smaller members, saying that it would not be able to include them in the Cinedigm deal. No plan was offered for helping smaller members finance digital cinema systems, departing from its original mission.
My prediction for CBG in 2008 was that a “fully negotiated” deal with a 3rd party integrator would not take place by year end. I could stretch it a bit and say I was right, since Cinedigm has not yet signed with all 6 major studios. But I was not expecting CBG to agree to a deal that would not include its smallest members.
The steps taken have made CBG into little more than a front for Cinedigm. Disappointed, many of CBG’s larger members are seeking direct deals outside of CBG. While this is a potentially embarrassing situation for NATO, the lack of financing for digital cinema systems has given it breathing space to reassess.