Norway – on the brink of a digital roll out An overview Presentation Oslo Jorgen Stensland Director of Consultants Film & Kino

Norways Cinemas 4,5 million people, annual admissions about 12 million. 230 Cinemas/420 screens & ambulatory cinema. 50 Cinemas have 90% of the business. Unique cinema structure cinemas/culture houses nationwide. Political authorities agree that people should be offered culture where they live Digitalization will benefit smaller cinemas and give them new opportunities

FILM&KINO Hybrid organization. Owned by the Norwegian Local municipalities Interest organization for the Cinema and Video industries Collects a tax on behalf of the government: The Norwegian Cinema and Film Fund. Tax on cinema tickets and DVD. Approximatly 80 mill NOK yearly (10.4 mill Euro)

Pilotprojects tested Technical issues, how the projects use formal testing and routines for interoperability, automatization, functionality and moving of equipment. Organizational issues: How the bigger cinemas in the region can help the smaller ones. (support, advisory work) Digitizing multiplexes to understand and evaluate how a theatre will function with most screens digitized in regard to content and revenue

Digital Roll-out Total roll-out costs are estimated at 400 mill NOK (50,6 mill Euros). 40 % of the roll-out costs will come from VPF- agreements. Total contribution from Film & Kino and the cinemas will be about 60% of total costs. Film & Kino will contribute with 100 mill NOK. Film & Kino are guarantors of the whole agreement in regard to a financial institution.

7 Overall model structure (simplified) Film & KinoDistributors Exhibitors (cinemas) System Integrators (equipment suppliers) Financial institution VPF invoice/payment Master leasing agreement Lease payments Payment for extra equipment Technical and commercial advisory board (Representatives from distributors, F&K, system integrators and theatres) Project organization Supporting roll-out process and information sharing Selection of system integrat-ors through public bid Master agreement for standard digitization packages Payment NOC/ service Reporting Net payment/ contribution Reporting Payment for digital system

Benefits after Roll-out Increase in premieres and early access to popular films (average time in small cinemas to get a copy of a new film in Norway is 45 days) Easier and Cheaper distribution Alternative Content. Better quality on the shows. ”Only first runs” Increased business! Lillesand Cinema (NDA) had an increase in business of 26% 2006 with only a few digital premieres. Not only for cultural purposes. Local cinemas generate business for restaurants, shops, cafes etc. A study in Bergen (population ) stipulates this to 100 mill NOK a year (13 mill Euro)

Successfactors for total rollout Political support on governmental, and local levels (and European). Financial support through the political level. One project leader must plan and control the process. Joint venture: All participants in the business chain must cooperate.

Current status Deals with 6 studios signed Agreements with cinemas and System Integrators signed. Film & Kinos contribution not considered state aid by the European Surveillance Agency in a preliminary assessment. Public tenders finished in february. Roll-out starts may/june.