The Cinema Exhibitor’s Association Annual Report By Catherine May

Why have attendances increased? Each year attendance climbs dramatically, and in 2011 it

reached the high figure of 171,562,192 Box office continued to grow year on year, breaking the £1

billion barrier for the first time at £1.038 billion, an increase of 5.1 per cent on 2010.

Digitisation of the sector had increasingly developed throughout each year and in 2011, it did so much that by the end of the year over 2,700 screens, 72 per cent of the UK base, had been converted to digital, almost doubling the number in place at the end of 2010. Of these, 475 were 3D-enabled.

Therefore the quality of the film and the cinema experience is becoming increasingly more desirable.

2011 also saw continued success in the fight against film theft. Two individuals responsible for a number of such incidents were successfully prosecuted during the year for attempting to capture and distribute films recorded in cinema theatres.

One of these involved the first successful prosecution under the existing legislation in Scotland.

This increased audience attendance as due to the reduction in piracy it now gives people less opportunity to watch films illegally for a cheaper price.

Why have attendances increased?

What is DFP? The DPF is the Digital funding

partnership. The Cinema Exhibitors’ Association

established the Digital Funding Partnership (UK) in 2010 to help secure finance to allow small and medium-sized UK cinema operators to purchase digital cinema equipment.

What is VPF? Virtual Print Fee (VPF) is the name given to a

subsidy paid by a film distributor towards the purchase of digital cinema projection equipment for use by a film exhibitor in the presentation of first release motion pictures.

The subsidy is paid like a fee per booking of a movie, intended to match the savings that occurs by not shipping a film print.

The model is designed to help redistribute the savings realized by studios when using digital distribution instead of film print distribution.

What might happen to those who don’t use DFP? Smaller firms who don’t use the DFP may

suffer financially, as it allows operators to purchase digital equipment which will enhance the performance of the cinema and therefore make it a more desirable location.

Without the use of DFP small to medium sized cinema operators may loose custom due to a lack of quality and establishment.

Alternative content During 2012, the CEA became aware of an issue

related to the fees required by the BBFC for classification of so-called ‘alternative content’ events – live theatre, ballet, sports and gaming for example. There was some evidence that producers of such content were choosing not to bring some events to the UK given what they saw as the disproportionate burden the current level of classification fees represented when considered against the limited release of such screenings. (It was noted that similar concerns might apply to certain films with limited theatrical release patterns.)

Recognising this as a potential barrier to growth in an area of activity that was proving increasingly lucrative for many of its members, the Association, working with some of the key UK distributors of such content, approached the BBFC about this issue. They were open to exploring a number of options to address this issue, including the potential introduction of a different fee structure for this material.

Alternative content

Alternative content As a non profit-making organisation, the

BBFC is required to cover their costs and so any reduction in fees in one area of their activities must be made up by an increase elsewhere. At the end of 2011, all sides were considering the potential implications of such a move.