MORRISTOWN, NJ, and CYPRESS, CA,—Jun 21, 2005
Access Integrated Technologies and Christie Digital Systems Sign Ground-Breaking Agreement For Digital Cinema Rollout Plan Targeting 2,500 Screens Within Two Years
Newly Created Funding Vehicle, A Digital Cinema Industry Milestone, Features Minimal Cost to Exhibitors
In a major move designed to
accelerate the long-awaited implementation of Digital Cinema nation-wide, Access
Integrated Technologies, Inc. ("AccessIT") (AMEX: AIX) and Christie Digital
Systems, USA (Christie) today jointly announced a preliminary agreement to
create the movie industry's first practical Digital Cinema funding framework.
The plan satisfies the diverse concerns of movie studios and exhibitors by
standardizing content format, delivery and presentation. It minimizes financial
risks for studios and exhibitors by establishing an innovative template that
allows private investment in the burgeoning Digital Cinema industry. The
agreement includes a two-year plan for a 2,500-screen rollout, with over 200
screens to be operational by the end of 2005.
To facilitate the agreement, AccessIT has formed a subsidiary, Christie/AIX, to
act as a funding vehicle and administrator. Under the terms of the agreement,
the new entity will provide funding for a turnkey Digital Cinema solution that
includes the latest generation 2K resolution Digital Cinema projectors and all
related hardware systems. AccessIT and interested third-party lenders will
provide capital for the systems. Christie/AIX will serve as intermediary
between content owners - including major studios and independent distributors,
who will pay "virtual print fees" - and exhibitors, who will be responsible for
installation costs, software license fees, and a 10-year maintenance contract,
with a cost structure similar to conventional film maintenance. The company
anticipates that when implemented, the current plan is expected to have a
material impact on AccessIT's future financial performance, contributing to the
company's reported revenues, EBITDA, and cashflow over the next-ten year period.
Christie/AIX, contracting with Christie, will provide exhibitors with a full
range of DCI-compliant hardware and software including the industry-leading
Christie CP2000 DLP Cinema(tm) projectors, media players and central server
equipment. This includes AccessIT's vendor-agnostic library/central server
software called Theatre Command Center (TCC). Christie will perform all field
installation and support services. AccessIT will offer its digital delivery and
content management services, under commercial terms, to customers of
Christie/AIX who utilize the company's fully managed, satellite-based content
The Christie/AIX plan will be in effect through 2018. Term sheets have already
been signed by key Hollywood studios, and substantive agreements in principle
have been established with national exhibitors for delivery of a large,
undisclosed number of systems. Funding for the first 200 screens will be
implemented by Christie/AIX immediately upon the signing of definitive
agreements with the studios that have signed term sheets.
"This landmark agreement represents the crucial and long-awaited first step to
make the transition to Digital Cinema a practical reality for both exhibitors
and the film studios," said Bud Mayo, President and Chief Executive Officer of
AccessIT. "Christie and AccessIT have laid the foundation - not only for a
rollout to 2,500 screens, but for an innovative, flexible template and
real-world solution for the entire industry to launch a Digital Cinema
deployment to all 36,000 movie screens throughout the United States and Canada,
using multiple vendor sources."
Jack Kline, President/COO of Christie USA, added, "AccessIT continues to
demonstrate its unique understanding of both the business and technical
requirements of Digital Cinema. We share a unified vision of the future of
digital entertainment. AccessIT's unique capabilities, combined with Christie's
market-leading services and technologies, as well as our understanding of
exhibition and long history in the industry, make us the natural choice to fulfill the long-anticipated promise of Digital Cinema.
It's a significant step toward helping to revitalize the entertainment
experience for millions of movie-goers in North America and around the world."