The Independent Cinemas Association of Australia (ICAA) has struck a new deal with digital cinema integrator Cinedigm Digital Cinema Corp after former partner Omnilab ended its bungled foray into the business.

The association, which represents hundreds of independent cinema owners making the costly transition from 35mm film prints to digital projection, said it had signed a memorandum of understanding with US-based Cinedigm and expects to have the virtual print fee (VPF) scheme in place by April 14.

The VPF will be paid by distributors (who save substantial sums of money by replacing 35mm film prints with digital prints), to exhibitors, who must bear the burden of installing costly digital projection equipment. 

Under the terms of the deal, Cinedigm will provide the VPF contracts, VPF administration, theatre management systems (TMS); as well as deploy digital systems and provide service and compliance support services for independent cinema owners.

"Cinedigm and ICAA have visited all the major studios in LA over the past week and all of those studios have embraced Cinedigm as the integrator for ICAA members," ICAA president Kieran Dell and vice president Benjamin Zeccola wrote to ICAA members.

"In addition, Cinedigm and ICAA have broadly agreed the key commercial parameters with five of the six major studios and will continue constructive and regular discussions with all studios in order to finalise deals with them in the coming weeks."

ICAA expects the costs of implementing the VPF scheme will be considerably lower than previously and that it will also allow cinemas to fully recoup the agreed percentage of system and finance costs for their digital deployments.

It plans to use the Christie Network Operations Centre (NOC) facility, which has the highest percentage of screen uptime (99.999 per cent) and the largest number of systems covered, to look after its independent cinema constituents.

The withdrawal of Omnilab from the digital integration market follows a Federal court finding that it improperly acquired proprietary information from DCN (via Michael Smith, who was originally leading the VPF negotiations on behalf of ICAA) before entering the market. Omnilab lost an appeal against the decision last December.

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