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Author Topic: Having a look at the Paramount direct VPF contract.. John T. Hendrickson, Jr Jedi Master Film Handler Posts: 889 From: Freehold, NJ, USA Registered: Apr 2001 posted 03-15-2009 10:59 AM                     It seems to me that you would use an "integrator" only when: A. You do not possess the necessary skills to perform the specific task. B. The task could be performed more cheaply by an outside source. C. The task would be a waste of your time, considering you could be doing more important work. So, we are talking about "outsourcing", are we not? On the other hand, when a company (or an individual owner) can eliminate the middleman, it behoves them to do so. I am not a theatre owner, but if I were, I wouldn't be crazy about sharing the profits of DCinema indefinitely with an integrator. I am not opposed to progress, but I have yet to be convinced of the efficacy of throwing out all of my 35mm equipment and replacing it with DCinema. Of course, the driving force in all of this is 3D. If you are in a highly competitive area (which is the case where I am), and someone else goes for it, then you will have to weigh the loss of patrons going to the other guy verses the additional cost to you. In the end, I feel that one way or the other, you are not going to make money. Thank God I'm not an owner. Interestingly, I attended a symposium in early February on the possibility of getting independents on board with 3D here in the tri-state area. The sponsors of the program flatly stated that the symposium would not have been possible without Paramount's announcement about VPFs, and assured the gathering that there was pleanty of time to get screens up and running for MvA. We are now less than two weeks away from the opening of MvA, and I'm wondering how many participants from that symposium signed on and took the deal.  |  IP: Logged Julio Roberto Jedi Master Film Handler Posts: 938 From: Madrid, Madrid, Spain Registered: Oct 2008 posted 03-15-2009 03:09 PM                    While I don't deny the utility of outsourcing your equipment maintenance and "purchase" to another company as a convinience, what I really "don't buy" is that you were almost "forced" to go through them. The "threat" is: if you don't use an integrator, you get no VPF. If you don't use an integrator, we'll make you pay up your nose for equipment upgrades until full DCI compliance. Etc, etc. It's almost like RealD before MasterImage, Dolby, XpanD and dual-projection (Imax) became strong players. It was like: if you want 3D, you have to go through us in our terms. We'll forbid you to use any other equipment for 10 years and we'll tell you how long to play 3D movies, etc. Come on. Not only they keep parts of the profits but they also exert a lot of power and pressure about what you can and cannot play, for how long, and how (i.e. AccessIT forcing their releases on their equipment). Again, I don't mind the integrators. It's the lack of alternatives and the excuse of the legal complexity for VPF that bothers me. Same with RealD. I don't mind a vendor that leases equipment on whatever terms. But don't tell me how to run my theater and what I can or can not do on top of taking my money. Either take my money and do what I say or don't take it and tell me what to do. But don't do both. If I am paying YOU, you should do what I want. If you are paying ME, then I shall listen to your requests.  |  IP: Logged David Zylstra Master Film Handler Posts: 432 From: Novi, MI, USA Registered: Mar 2007 posted 03-15-2009 06:37 PM                     quote: Julio Roberto Not only they keep parts of the profits but they also exert a lot of power and pressure about what you can and cannot play, for how long, and how (i.e. AccessIT forcing their releases on their equipment). The only "parts of the profits" AccessIT gets contractually off phase 1 is alternate content - there is NO pressure about what we play and don't play beyond a restriction on not playing a film if the studio has not previously cleared it with AccessIT (i.e. paid a VPF). Our contract explicitely states we can refuse any content offered and there are clauses that keep AccessIT out of what films are booked. quote: Julio Roberto We'll forbid you to use any other equipment for 10 years and we'll tell you how long to play 3D movies The original standard RealD contract was 5 yrs (and the one I signed last year was only for 5 years); and RealD has NO control over how long we play 3D movies, but the studios already dictate how long we need to keep a specific 2D title (digital and 35mm) so there is no change here - if we agree to a 4 week run then we have to show any title for 4 weeks. The only requirement to not use anyone else's 3D system is on negotiated price - i.e. if I were to install a Dolby 3D on one of our screens we would lose our preferred pricing on future RealD licenses, I'm sure if Dolby or Master Image went with a lease model they would put the same restrictions on the exhibitor. quote: Julio Roberto But don't tell me how to run my theater and what I can or can not do on top of taking my money. Neither the AccessIT nor RealD contract tells us how to run our theatres, the only restriction is on studios that have not made prior arrangements with AccessIT to show their digital film on their projectors (there has been only once in 3+ years where AccessIT has questioned a title we had). From what I know of the studio contracts with the integrators they have similar "gotchas" that this Paramount direct VPF contract does (i.e. the same restrictions on missed shows applies to AccessIT as well as DCI compliancy).  |  IP: Logged Julio Roberto Jedi Master Film Handler Posts: 938 From: Madrid, Madrid, Spain Registered: Oct 2008 posted 03-15-2009 06:39 PM                    Thanks, David, for clearing that up. I was under the impression they were, legally or otherwise, a bit more pushy on the terms I expressed that seems to be the case according to your review on your experience with them. I stand corrected and downgrade AccessIT and RealD "pushiness" and "interference" ratings quote: David Zylstra The only "parts of the profits" AccessIT gets contractually off phase 1 is alternate content So is it correct they don't get any profits from maintenance contracts either? That wouldn't seem to be possible, right? Or is it only after phase 1 that they start charging for maintenance or "rent" on the equipment? Or is ownership transfered to you or new terms have to be signed with them? I never saw an AccessIT contract. Over here, other integrators such as Arts Alliance have more presence in the market.  |  IP: Logged David Zylstra Master Film Handler Posts: 432 From: Novi, MI, USA Registered: Mar 2007 posted 03-15-2009 09:59 PM                     The maintenance contracts are through Christie Digital, I'm not sure if they share any funds with AccessIT - if a DoReMi issue is software related the Christie NOC has to involve the AccessIT help desk. One of the requirements of the AccessIT deal (and TDC, Kodak, etc?) are that the exhibitor is required to keep a maintenance contract to ensure the equipment stays repaired - they tell me this is a "studio requirement" to ensure the equipment is kept DCI compliant. It is nice to be able to have a light engine replaced with no charge to us, or a DoReMi for that matter (after 3 years we are still seeing a 30% failure rate on the DoReMi units, I'm told the latest DCI units that we are getting eventually are more reliable). Don't forget that AccessIT has several divisions to bring money in: they compete with Deluxe and Technicolor to master and distribute digital content, they have their own satellite delivery system for "print" delivery, they have an advertising division to provide revenue from on screen advertisements, an alternate content division that has some programming and a live 3D system.  |  IP: Logged Julio Roberto Jedi Master Film Handler Posts: 938 From: Madrid, Madrid, Spain Registered: Oct 2008 posted 03-15-2009 10:17 PM                    quote: David Zylstra It is nice to be able to have a light engine replaced with no charge to us Although we know we are paying for it one way or another  |  IP: Logged David Zylstra Master Film Handler Posts: 432 From: Novi, MI, USA Registered: Mar 2007 posted 03-16-2009 07:19 PM                     You got that right - over the life of the contract we'll end up paying more, not to mention cutting our reliance on our local service company or in house tech staff by relying on the manufacturer for service.  |  IP: Logged Mark Gulbrandsen Resident Trollmaster Posts: 16657 From: Music City Registered: Jun 99 posted 03-16-2009 08:21 PM                     David, We are just a few more film studio direct VPF contracts away from seeing that whole middle company thing implode. Had to believe AIX is still in buisness to be hinest. They must be hanging by a thread right about now. Then it'll be the local dealers that reap the benefits. Then sales and service will return to normal. Mark  |  IP: Logged Justin Gorka Expert Film Handler Posts: 174 From: High Wycombe, England Registered: Apr 2006 posted 03-17-2009 12:41 PM                     Still waiting in the UK......  |  IP: Logged Julio Roberto Jedi Master Film Handler Posts: 938 From: Madrid, Madrid, Spain Registered: Oct 2008 posted 03-18-2009 02:51 AM                    Yeah. Still waiting everywhere in the world. Why do they think that Digital adoption has been/continues to be so slow? And they better start offering "solid" 10 years deals and a small windows to jump in and not that crappy 9 years 8 months or whatever they have set their high horses to. Or, at least, they should advertise well in advance when they are going to start offering it so it catches their clients well prepared. But until at least 2 or 3 additional majors jump in, Paramount alone doesn't cut it at all, specially when forcing entire convertion in such short period of time. Also, the DCI standard compliance mess needs to be settled once and for all before jumping into big $$$$$$ mistakes.  |  IP: Logged

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