page 1 digital cinema ymagis, its business model and what it really means for european exhibitors,...
TRANSCRIPT
Page 1 www.ymagis.com
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
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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
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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
Who is Ymagis and what is our contribution
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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
Who is Ymagis and what is our contribution
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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
Who is Ymagis and what is our contribution
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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?
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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
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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
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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
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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
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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
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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?
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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?
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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%
5,0%
10,0%
15,0%
20,0%
25,0%
1 to
49
50 to
99
100
to 1
4915
0 to
199
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to 2
4925
0 to
299
300
to 3
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0 to
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400
to 4
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0 to
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to 5
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0 to
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to 6
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Tech
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ost
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f B
ox
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ffic
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35 mm Digital Box Office per print
Technical costs
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Box Office per print according to release size - France
100
1000
10000
100000
0 200 400 600 800 1000
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
Box
Off
i ce
p er
prin
t in
€
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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?
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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
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Thank you for your attention