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Virtual Print Fees (VPFs)

April 2009 by Michael Karagosian

Nearly all major studios report that they’re overwhelmed with deployment agreement negotiations at this time. By the sound of it, these are largely non-US deals. It’s likely that a number of these deals involve significant education of the prospective deployment entity.

From experience in working on such deals together, international virtual print fee agreements can be very difficult to negotiate. Distribution costs in a region can vary significantly, ticket prices can be wildly different, and equipment costs may be burdened with local taxes. My guess is that some number of these deals will never close.

Even if challenging, it’s notable that the international interest level appears to be very high. This is a remarkable achievement for the studios, who strive to achieve worldwide adoption of the DCI specification.

But even with a virtual print fee, sentiments could shift if the interested parties find they still can’t afford the equipment. Digital distribution is desirable in many regions to bring efficiency to regional production. The challenge of introducing high priced digital cinema equipment in the international market is that it not frustrate those who want digital distribution, and push them instead to alternative technologies.

So while this could be a boom time for virtual print fee deals, there still exists the possibility of a backlash against the DCI format if the economics of the VPF fall flat.

Filed Under: Deployment Entities, Distributors Tagged With: VPF

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