Box office may be doing well, but attendance at ShoWest was reportedly 30% down this year. If it wasn’t for the bad economy, one might have thought it was part of a devilish scheme to encourage Nielsen to step aside for when NATO gets back into the trade show business in 2011. But then again, it could have equally been a signal to NATO to “think small” in its future trade show planning.
The news everyone was waiting to hear was from Andrew Sriubas, Managing Director, JP Morgan Media Investment Banking. In a panel discussion, Andrew suggested that deployment funds for DCIP (Digital Cinema Implementation Partners, a joint venture of AMC, Cinemark, and Regal) could be available as early as July. This news was as positive as one could expect.
Same panel, but different discussion, was that between Paramount’s Mark Christiansen and and Fox’s Julian Levin regarding direct VPFs to the exhibitor. Paramount’s direct VPF offer is distinguished by several features: it has a fixed term, with no accountability to recoupment of equipment costs, and it will pay for a single 3-D screen. Paramount’s concept is to efficiently manage the VPFs through its booking system. Fox’s approach is more “traditional,” tied to recoupment, and geared to get an exhibitor started with digital projection, leading up to a full deployment through an integrator. What couldn’t be discussed on stage, however, was whether or not Fox would pay the same fees as Paramount has publicly committed to. ($825 per 3-D booking, $725 per 2-D booking.) Rumors on the blogs are that Warner Bros is gearing up to also offer a direct VPF deal. I would expect WB, though, to offer the lowest VPF payment of any studio.
For exhibitors, the problem with direct VPF offers is that they’re announced serially, and are not negotiated up front en masse. An exhibitor that signs up for the Paramount VPF may be in for a surprise when the other studios weigh in with smaller payments. The “most favored terms” clause in Paramount’s agreement allows it to pay no more than the lowest payment of a competitor, as undoubtedly will similar clauses in agreements from other studios.