Page 1 Digital Cinema Ymagis, its business model and what it really means for european exhibitors, distributors and their relationships SECOND

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Digital Cinema

Ymagis, its business model and what it really means for european exhibitors, distributors and their relationships

SECOND ANNUAL CONFERENCE OF EUROPA DISTRIBUTION Estoril Film Festival 2008, Portugal

November 20-22 2008

Manel Carreras, Director Sales & Business Development


Company created in second half 2007

by cinema industry executives and later joined by technology experts.

During first year secured agreements with major distributors

June 08 started deployment

So far signed contracts with 14 exhibitors for 72 screens

Cinemas ranging from 2 to 10 screens

High % of “Art Houses”

Who is Ymagis and what is our contribution


Digital Laboratory

Provide services to cinema and advertising distributors and advertising agencies

low cost services

Digital cinema roll-out

Contribution model includes all exhibitors

Contribution agreements need to attract all distributors



For Cinema Owners (a.k.a. Exhibitors)

Provide high financial contributions to bare the cost or equipment

Tailoring contributions to their needs

Flexible approach to reach all exhibitors regardless of size

Recognise european markets make up diversity

Factor print circulation



For Content Owners (a.k.a. Distributors)

Establish fair contribution to Digital Cinema transition

Contribution agreements need to attract all distributors

Combine various contribution models

Factor print circulation

Immediate savings and long term greater savings



Headquarters in Paris

Local office in Barcelona

More European offices planed

Plan deployment of up to 5,500

screens in these 10 countries

Where is Ymagis?


Where is some of the money going to come from ?

Total cost of 35 mm, including

teasers, trailers, logistics,

recycling...

Savings for distributor

From 800 to 1400 €

Between 900 and 1500 €

Getting close to 100 €

Minimal savings in the range of 800 € per print

Total cost of digital


Model based on digital/35mm savings

Savings made by cinema and advertising distributors could speed up digital cinema transition process

Matching specific European distribution and exhibition needs

Public funding alone will not cover all costs, it can help though.

Not enough to fund the transition.

Public entities cannot legally channel distributors and advertising agencies’ contributions.

Using the 35mm savings


Can negotiate contributions from film distributors

Can negotiate contributions from advertising agencies

Can finance all kinds of cinemas

multiplexes

independent first run complexes

second run complexes

Using the 35mm savings Ymagis


Digital Cinema must not be a way to discriminate between distributors or content

all distributors must pay a contribution at a rate which does not create a competition distortion

all content (films, alternative content, advertising) must contribute in such a way all content suppliers are treated equally

A fair treatment for all exhibitors

Large circuits should not benefit from special privileges, small independent exhibitors will benefit from the Ymagis model as the big players do.

Art houses should be treated the same way as mainstream theaters.

Our model ensures a fair treatment for all contributors


Ymagis does not want to change any relationships between existing players of the industry

Exhibitors & Integrators

Ymagis is not an Integrator

Exhibitors & Distributors

Ymagis is not a Distributor

Ymagis believes it needs to play a role as neutral as possible.

Exhibitors should be able to acquire, finance and own the equipment they will operate, as they always did.

Our model ensures a fair treatment for all contributors


Exhibitor to acquire the Projection Systems (DCI-compliant). Exhibitors to get their own financing

Ymagis can help provide financing Ymagis to provide regular and fixed payments to exhibitors Deployment in a complex to be flexible

start with limited number of systems progressively reach100% as digital contents availablility increases

No interference with bookings Distributors need only to provide Digital Print

Deployment strategy ensures digital film rotation within cinema

How does it work for exhibitors?


Different distributors have a different approach to Digital Cinema Large distributors may want to compare their overall digital costs vs

35mm costs. Smaller distributors may be willing to include risks considerations

Technical Costs

In small releases 35mm costs represent a large share revenues

With Digital Cinema these don’t have to be a limit to the distribution of small budget features

Savings could be applied to more investment in production, more promotion, more prints, etc

What about us, distributors?


35mm costs represent a high share of distributors’ revenues for small releases.

With digital, technical won’t be anymore a limit to the distribution of small budget features. Savings can go to : more investment in production, more promotion, more prints, etc. 0,0%

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Technical costs


Box Office per print according to release size - France

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High risk – medium to low BO

Lower risk – higher BO

Distributors will have a different approach regarding digital cinema models :

Large distributors will want to compare their overall digital costs vs 35mm costs. Smaller players may be willing to include risks considerations in their approach.

Number of prints per release

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An appropriate model must take into account the diversity of the distribution and exhibition industries in Europe.

Large distributors that only consider costs can find VPF-like models more attractive

Smaller distributors that analyse a model valuing both cost and risk may prefer variable-fees models

Ymagis offers the needed flexibility to distributors

We combine both models to suit your needs

We factor print circulation to establish your contribution

What is the solution?


A Digital Transition Fee model derived from VPF that takes into account print circulation often picked by large distributors

A variable fee model often picked by some small distributors

Various combinations of both models All models must address the circulation issue Exhibitors cannot be impacted by this complexity

Ymagis pays a fixed portion of their investment

We believe in flexibility to answer the market’s complexity


Thank you for your attention

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