Mark Sarfaty is the CEO of the Independent Cinemas Association of Australia (ICAA) and co-chair of the Australian Cinema Exhibitors Coalition (ACEC). He looks at digital cinema and asks – is it the end of the line for indie distribution?

Buried deep in the international wire of Variety this month was a tiny news story of a brevity which belied its importance to independent producers, distributors and exhibitors.

It reported that the ominously named Euro indie distributor association, DIRE – which includes many prominent Euro sales and distribution outfits like Memento, Pyramide and Wild Bunch – are worried that the transition to digital cinema is going to see indie films squeezed off the screen.

The event which triggered DIRE’s (Distributeurs Independants Reunis Europeens) concern was that some French cinemas had dropped film sessions to run live cinemacasts of the French version of Idol and the World Cup qualifiers.

The group felt that this alternative content has the potential to see independent film “undermined and cinema trivialized.”

The comments by DIRE echo concerns raised by the French Directors Guild (SRF) in a series of trailers played during Directors’ Fortnight at Cannes this year, although the SRF are even more specific about their issues stating “digital cinema prevents the circulation of films and thus their distribution in the long term.”

The issue worrying these Euro filmmakers is the model for global digital transition – a series of financial incentives provided by Hollywood studios called Virtual Print Fees (VPFs).

The VPFs are a partial subsidy to cinemas to convert from 35mm to the Hollywood digital standard (DCI Digital) and frankly, they work best for major multiplexes showing Hollywood content.

Like the rest of the world, Australian cinemas are well advanced in their conversion to digital using the DCI / VPF model.

Local exhibitors have been very clear in public conversation for several years now that the DCI standard would be accepted and endorsed by nearly 100 per cent of Australian cinemas because it is the only model that will enable the playing of 100 per cent of available content.

The changes referred to by DIRE and the SRP can currently be seen playing out on Australian screens.

The World Cup, State of Origin and AFL are all in major circuit cinemas via cinemacast but then the Met Opera, La Scala and others have been playing in indie cinemas for years so why the worry now?

The difference is that for the past few years the alternative content has been only in e-cinema, a much cheaper digital format which enabled live broadcast, alternative content and independent distributor content to be expanded at very low cost and was used mainly in independent cinemas.

The major circuits in Australia knew e-cinema was an interim measure at best and for the past few years have chosen not to play anything other than DCI or 35mm so the penetration of alternative content was relatively low.

At the same time, the financial return to indie distributors on expanded releases of e-cinema files in this period has been relatively high which has from time to time benefited Australian films being distributed via e-cinema, which provided larger apparent print numbers than traditional 35mm.

Now, e-cinema is effectively dead as the major circuits and independent cinemas progressively convert their screens to DCI digital.

While the amount of alternative content in Australia continues to grow, indie distributors will be caught in increasingly heated competition for screen space somewhere between Hollywood output and the surge in sports, concerts, opera, and other events.

Ultimately, the outcomes of DCI digital cinema transition are probably not totally DIRE. Indie distributors can adapt and become leaner and meaner.

Enterprising producers will doubtless find themselves doing more direct-to-screen deals with exhibitors. A potential upside for the local industry is that the print and advertising (P&A) budget disparity between foreign and domestic indie acquisitions can be reduced.

Local producers may be able to spend less on their ‘P’ and a bit more on their ‘A’ and increase their marketing leverage with the cinema and ancillary audience.

But it does lead to some important questions: The VPF model doesn’t work for all cinemas or all films.

Where will those films and cinemas and the audiences they serve go when 35mm becomes extinct? What will happen if remote and rural communities no longer have access to cinemas? Do we have an obligation to promote a film culture that extends to small audiences and should we be looking at supporting them more actively?

We are in the middle of a game changer where traditional roads from script to screen may become dusty tracks and we have to think hard about where we want to go. If we take anything from the French position it must be that we are now at two minutes till midnight for the old world of cinema.

For the sake of retaining a national film culture this is the time to be firmly focussed on what we want the shiny new post-digital transition world to look like.

This article appears in the July issue of INSIDEFILM.

Disclaimer – The views expressed in this column are Mark Sarfaty’s personal views only and do not reflect the views, position or policy of ICAA ACEC or any other entity that he is affiliated with.

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