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PRIVATE AND CONFIDENTIAL Page 1January, 2006 Common Questions - Answered.

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Presentation on theme: "PRIVATE AND CONFIDENTIAL Page 1January, 2006 Common Questions - Answered."— Presentation transcript:

1 PRIVATE AND CONFIDENTIAL Page 1January, 2006 Common Questions - Answered

2 PRIVATE AND CONFIDENTIAL Page 2January, 2006 “Is the system tested?” Under the US rollout model, there will be an initial “plugfest” to ensure compatibility between equipment providers and content sources Following this, a selection of combinations will be placed in a beta test – covering 180 to 240 screens in 3 to 4 projector-server combinations This beta test will continue until Technicolor, the studios, and exhibitors are comfortable with the levels of reliability being achieved (est. 3-6 months) For European deployments, beta testing will be assessed on a case-by- case basis (i.e., are the projectors and servers the same or different) Given European deployments will likely occur after the US beta test, Technicolor is confident that its system will be fully tested by the time it is deployed in Europe

3 PRIVATE AND CONFIDENTIAL Page 3January, 2006 “Do all major studios support it?” Firstly, the Technicolor rollout is and will remain fully compliant with the studio-driven DCI standard. Currently 5 Studios have signed up, and a further 2 are committed to agree by the time of the beta test In Europe, additional local distributors would need to agree to using the digital equipment, which is why it is important for Technicolor to have European content preparation capabilities – it will be able to provide digital prints for those local distributors

4 PRIVATE AND CONFIDENTIAL Page 4January, 2006 “Is alternative content use permitted?” Exhibitors pay a secondary cost burden in the rollout model – the primary cost being borne by the studio through the payment of a virtual print fee (VPF). This exhibitor contribution is negotiated in part on the basis of the usage of the equipment The exhibitor would either pay: a flat fee, a revenue share, or a combination of the two to cover alternative content and screen advertising usage The exhibitor is then free to conduct its business directly with these non-theatrical content providers

5 PRIVATE AND CONFIDENTIAL Page 5January, 2006 “Who maintains it, and who owns it at the end?” The exhibitor is responsible for maintenance, and the tested assumption is that maintaining a digital system should not be markedly more costly than a 35mm system The exhibitor will be responsible for consumables (e.g. lamps) At the end of the term, it is expected the exhibitor will own the equipment, purchasing it from Technicolor at a residual value

6 PRIVATE AND CONFIDENTIAL Page 6January, 2006 “Is it a closed system?” An important feature of the system – one that the studios insisted upon – is its openness and separation between distributor and equipment usage Any service provider able to deliver DCI compliant digital prints in the format accepted by the Technicolor system will be able to distribute content to the systems Technicolor will also be providing these services and competing with those entities Technicolor will also be competing to deliver content to digital systems other than its own

7 PRIVATE AND CONFIDENTIAL Page 7January, 2006 “Does the exhibitor lose control?” Technicolor will never be in a position to control what screen you show a movie on, whether any showing is permitted; exhibitor master agreements with studios will need to be appropriately negotiated regarding security keys Technicolor will not provide any screen specific information to studios other than that contractually agreed upon by you and the studios Technicolor will gather operating and billing related data from the systems, which will be used in an aggregated manner

8 PRIVATE AND CONFIDENTIAL Page 8January, 2006 “Do you have the capital to fund this?” Technicolor Digital Cinema is not a startup. It has a 90 year history serving the film industry, and is a division of Thomson, S.A., part of the CAC 40. Thomson has extensive relationships with lender and leasing companies which have indicated a strong intent in providing Thomson the funding for our rollout. We expect to have a definite financing structure in place as we exit the beta test.

9 PRIVATE AND CONFIDENTIAL Page 9January, 2006 Digital Screen Advertising

10 PRIVATE AND CONFIDENTIAL Page 10January, 2006 Screen Advertising Systems In parallel to a digital cinema rollout, TDC won the contract to install and manage the network operations of the digital cinema advertising system for Screenvision US (HD, non-DCI system) This network expertise is easily transportable, flexible, and upgradeable – the projector being the only barrier to 2K advertising By working closely with screen advertising sales houses, TDC believes it will be an important participant in the digital screen advertising value chain in Europe As D-cinema and E-cinema converge, TDC will be well placed to offer the most competitive distribution and management service to screen advertisers and exhibitors

11 PRIVATE AND CONFIDENTIAL Page 11January, 2006 Unencrypted digital advertising transmission Customers Exhibitors National Advertisers Regional Advertisers Local Advertisers Alternate Content Playlists Playdates Content Cinemas Media Asset Management Transmission Activity Management Creative Services Internet Playlist scheduling Technicolor Network Operations Uplink Post Production Encoding Monitoring Traffic Management Live broadcast transmission Internet Web interface (TED) Technicolor Production Network (TPN) Tape/Hard Media Exhibitor Broadband Backchannel to NOC Screen Advertising System Design Support

12 PRIVATE AND CONFIDENTIAL Page 12January, 2006 Summary

13 PRIVATE AND CONFIDENTIAL Page 13January, 2006 Technicolor’s Competitive Advantage Proven expertise in delivering quality solutions in both analogue and digital environments Single point of accountability from deployment through distribution services … enabling a zero defect environment Deep technology experience … but technology agnostic Legacy of trust and established ability to continuously provide service models that meet changing distributor and exhibitor needs Has secured agreements with studios and now exhibitors in the US, and is looking to extend that model to Europe Offers a seamless path from digital screen advertising to Digital Cinema

14 Thank You

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