London, UK—Dec 10, 2008
Arts Alliance Media Secures 43 Million Euro Financing and Partnership with Arqiva for Conversion of European Cinemas to Digital, Satellite and 3D
Arts Alliance Media (AAM), Europe’s leading provider of digital cinema technology, deployment and content today announced that it has signed agreements for 43 million euros of funding from pan-European services company Econocom and various private investors, together with a long term strategic partnership agreement with Arqiva Satellite & Media for the satellite distribution of films and alternative content live events into European cinemas.
Econocom Financial Services, will provide financing of 20 million euros for the purchase of equipment to complete the Circuit George Raymond’s (CGR Cinémas) digital cinema deployment in France. CGR Cinémas, based in La Rochelle, have already installed 126 digital screens to date via its virtual print fee-based rollout agreement with AAM and is aiming to complete the digital conversion of 100% of the circuit’s 400 screens by Spring 2009. This confirms CGR’s position as the European leader of digital cinema roll-out. The CGR deployment will complete in time to play next year’s highly anticipated 3D movie releases, such as My Bloody Valentine (Lionsgate), Monsters vs. Aliens (Dreamworks), Up (Pixar/Disney), Ice Age 3 (Twentieth Century Fox), Planet 51 (Sony Pictures), Toy Story 3D (Pixar/Disney) and Avatar (Twentieth Century Fox). Currently, there are thirteen 3D movies scheduled for theatrical release in 2009.
The additional 23 million euros (of the total 43m) has been raised from private investors and will fund the continued growth of AAM, with particular focus on building up the group’s infrastructure and support network for its European digital cinema deployment business, as well as developing new and emerging revenue streams. The new investors will have a minority shareholding in the AAM group.
Howard Kiedaisch, AAM’s Chief Executive Officer said, “We are delighted to announce this fantastic news, especially in today’s challenging economic climate. The significant investments and new partnerships with Econocom and Arqiva are a tremendous boost, and strengthen us to forge ahead with building the largest digital cinema delivery network in Europe, to which we can deliver digital content – films, alternative programming and live events.”
Christian Levie, Chief Funding Officer, Econocom, said, “Digital cinema is transforming the moviegoing experience and taking film exhibition and distribution into a new and exciting future. We are proud to be a part of this revolution and to be joining forces with Arts Alliance Media, a proven leader in this business. The digitisation of CGR’s screens in France is the first step for us and we look forward to a long and successful partnership with AAM throughout Europe.”
Jocelyn Bouyssy, General Manager of CGR Cinémas, added, “We are delighted to see that, in the current market, the VPF model is clearly validated and supported by financial partners. We hope that the completion of our digital roll-out in Spring 2009 will convince all French distributors to jump on board and seize the tremendous opportunities of digital cinema and 3D.”
Chantal De Vrieze, Country Manager Belux, Econocom, said, “Econocom Financial Services was chosen for its flexible approach towards the digital cinema roll out needs and VPF model as well as for its ability to find an appropriate financial structure in those turbulent markets.”
Barrie Woolston, Commercial Director at Arqiva Satellite & Media, added, “We’re thrilled to partner with Arts Alliance Media and move into the cinema business, which is going through a huge digital transformation. Satellite transmission of films to cinemas is the future of film distribution and exhibition and our extensive international satellite infrastructure together with AAM’s proven digital cinema expertise is a strong proposition for European cinema exhibition and distribution.”
Patrick Foley, AAM’s Chief Financial Officer, concluded, “To be able to attract investors and partners of this calibre further verifies our digital cinema business and will open up great opportunities for AAM.”
The Arqiva/AAM partnership agreement sets out an action plan for the development of a content delivery platform and network for film distribution via secure satellite. Extensive research, development and testing has already been completed. In October 2008, AAM and Arqiva successfully distributed the 2008 Palme d'Or winning film, Entre Les Murs, to CGR Cinema's megaplex site in Villenave d'Ornon, Bordeaux, France. The full digital cinema package, a 216 GB file, was transmitted via the Intelsat 905 satellite direct to the library server at the cinema, without any operator intervention. Arqiva and AAM have also been working together recently on the live HD transmissions of the opera and ballet performances from the Royal Opera House and other leading venues to cinemas across Europe.
To date, AAM has a European footprint of 402 installed and operated digital cinema screens and its in-house digital cinema lab has mastered over 422 digital cinema titles. AAM was the first digital cinema provider in Europe to sign up studios and exhibitors to its digital cinema rollout plan. AAM has digital cinema deployment agreements, utilising the virtual print fee model, with Twentieth Century Fox, Universal Pictures International, Paramount Pictures International, Sony Pictures Releasing International and Walt Disney Studios International and various independent film distributors. The VPF business model is a means of financing the conversion to digital cinema, where both distributor and exhibitor contribute over time towards the total cost of the digital projection and server equipment, funded up front by the rollout entity (AAM).
Widespread commercial digital cinema rollout across Europe will enable exhibitors, distributors and the entertainment industry at large to reap the substantial benefits of digital cinema: consistently high quality non-degradable prints, new programming opportunities - premium ticket shows and alternative content, notably 3D films and live satellite events (opera, concerts, sports, etc), as well as vastly reduced print production and logistics costs.