Trends of cinema-going in Europe and worldwide Multiplexes in Europe Digital Cinema worldwide Talk by Elisabetta Brunella Secretary General, MEDIA Salles at the CICAE course “Art Cinemas = Action + Management” 9-18 March 2005, Venice, Italy MEDIA Salles is an initiative of the MEDIA Progranne of the European Union with the support of the Italian Government.

MEDIA Salles is an initiative of the MEDIA Progranne of the European Union with the support of the Italian Government.

CINEMA-GOING IN WESTERN EUROPE 2003 overall result –5.1% compared to 2002 from 958 to 909 million spectators admissions on the 5 main markets are decreasing D: -9.1%, E: -2.3%, F: -5.6%, UK: -4.9%, I: -5.5% total screens in 2003: 27 243 (+2.5%) screens are stable in D, still growing in E (+6.8%), I (+6.4%), UK (+0.9%), F (+0.6)

CINEMA-GOING IN CENTRAL AND EASTERN EUROPE 2003: total admissions are decreasing: -3.9% from 102 in 2002 to 98 million spectators in 2003 the main markets record different trends in admissions: CZ: +13.5%, HU: -11.4%, PL: -6.7%, RO: -14.8%, TR: +0.5% total screens in 2003: 4 709

HOW FREQUENTLY DO EUROPEANS GO TO THE CINEMA?

FREQUENCY PER CAPITA IN THE 5 MAIN MARKETS OF WESTERN EUROPE Average frequency per capita in Western Europe in 2003: 2.32

FREQUENCY PER CAPITA IN THE 5 MAIN MARKETS OF CENTRAL AND EASTERN EUROPE Average frequency per capita in Central and Eastern Europe in 2003: 0.53

EASTERN and CENTRAL EUROPE WESTERN EUROPE vs EASTERN and CENTRAL EUROPE

WESTERN EUROPE (18 countries)

WESTERN EUROPE- 2003 One cinema every 332 Km2 One screen every 135 Km2 (18 countries) One cinema every 332 Km2 One screen every 135 Km2 One cinema per 35 522 inhabitants One screen per 14 408 inhabitants Average size of cinema: 2,5 screens Frequency per capita: 2,32 tickets per year Average ticket price: 5,77 euro

CENTRAL and EASTERN EUROPE (15 countries)

CENTRAL and EASTERN EUROPE - 2003 (15 countries) One cinema every 578 Km2 One screen every 430 Km2 One cinema per 53 415 inhabitants One screen per 39 724 inhabitants Average size of cinemas: 1,3 screens Frequency per capita: 0,53 tickets per year Average ticket price: 2.82

CENTRAL and EASTERN EUROPE WESTERN EUROPE vs CENTRAL and EASTERN EUROPE Frequency per capita in Western Europe is four times higher than in Central and Eastern Europe (2,32 vs 0,53). The average ticket price in Western Europe is almost double that of Central and Eastern Europe (5,77 euro vs 2,82 euro). In the 1998 – 2003 period, - gross box office in Central and Eastern Europe increased by 50.4%, as against the 21.7% increase recorded in Western Europe, on the other hand, admissions in Western Europe increased by 7,5% and in Central and Eastern Europe decreased by 0,1%, the average ticket price in Western Europe increases slightly, growing from 5,10 to 5,77 euro, as against the increase from 1,87 to about 2,82 recorded in Central and Eastern Europe. Western Europe has 1 screen every 14 408 inhabitants whilst Central and Eastern Europe have 1 every 39 724 inhabitants. The ratio of the two regions is over 2:1 (2,75).

WHICH MOVIES DO EUROPEANS WATCH AT THE CINEMA?

ADMISSIONS IN EUROPE BY FILM ORIGIN

MARKET SHARES IN WESTERN EUROPE - 2003 D:gross distribution revenues FIN: percentages of admissions I: Cinetel data

MARKET SHARES IN CENTRAL AND EASTERN EUROPE - 2003 CS, EE, HU, PL: new releases PL: percentage of admissions

ADMISSIONS IN EUROPE BY FILM ORIGIN Breakdown of admissions by film origin is stronly affected by the success of US films which mantain an extremely high share of total admissions, around 70%, over the years. In alternative years, specifically in 1997, 1999 and 2001, Domestic films gained significant shares of admissions, as did, to a lesser extent, European films in general. Thanks to the success of a few titles, the latter managed to influence the overall market trend. In 2003, faced with a predominance of US films, it was mostly Domestic films that managed to play a significant role in Europe, gaining significant shares of box office (F: 34.5%, DK: 23.2%, I: 22.0%, S: 18.9%, CZ: 23.7%, CS: 18.5%, PL: 9.8%) Instead the market shares of non-domestic European films remain quite small.

ADMISSIONS FOR DOMESTIC FILMS GERMANY Total admissions in 2004: 156.7 m. (+5.2%) From TOP 10 FILMS (by admissions): 1. (T)RAUMSCHIFF SURPRISE - PERIODE 1 (D): 9 137 506 admissions 3. 7 ZWERGE (D): 6 486 540 admission 5. DER UNTERGANG (D, I, A): 4 521 903 admissions % of top 3 DOM on total admissions: 12.9%

ADMISSIONS FOR DOMESTIC FILMS CZECH REPUBLIC Total admissions in 2003: 12.1m. (+13.5%) From TOP 10 FILMS (by admissions): 1. PUPENDO (CZ): 958 300 admissions 5. JEDNA RUKA NETLESKÁ (CZ): 457 500 admissions 6. KAMENÁK (CZ): 417 700 admissions 7. ŽELARY (CZ, A, SK): 386 800 % of top 4 DOM on total admissions: 18.3%

ADMISSIONS FOR DOMESTIC FILMS SERBIA AND MONTENEGRO Total admissions in 2002: 4.8 m. (-0.4%) -15.3% (2001/2000) From TOP 10 FILMS (by admissions): 1. ZONE (CS): 1 005 156 admissions (21.1% on total admissions) 3. MRTAV 'LADAN (CS): 176 372 admissions 5. MALA NOCNA MUZIKA (CS): 153 687 admissions 8. LAVIRINT (CS): 121 041 admissions 9. JEDAN NA JEDAN (CS): 112 810 % of top 5 DOM on total admissions: 32.9%

ADMISSIONS FOR DOMESTIC FILMS POLAND Total admissions in 2001: 27,6 m. (+ 32,3%) From TOP 10 FILMS (by admissions): 1. QUO VADIS (PL): 4 276 674 admissions 2. W PUSTYNI I W PUSZCZY (PL): 2 221 137 admissions 3. PRZEDWIOŚNIE (PL): 1 742 587 admissions 7. WIEDZMIN (PL): 606 288 admissions % of top 4 DOM on total admissions: 32%

TRENDS IN CINEMA ADMISSIONS Concentration of admissions on few titles CS: top 3 films = 31.9% on total admissions top 10 films = 52.1% on total admissions PL: top 10 films = 44.6% on total admissions EE: top 10 films = 43.2% on total admissions UK: top 10 films = 41.9% on total admissions CZ: top 10 films = 34.9% on total admissions D: top 10 films = 34.3% on total admissions

CINEMA-GOING WORLDWIDE: INTERNATIONAL MAJOR MARKETS WESTERN EUROPE vs INTERNATIONAL MAJOR MARKETS

CINEMA-GOING WORLDWIDE: ADMISSIONS (x 1 000 000) NUMBER OF SCREENS Russia: the number of screens refers to the theatres of new generation

WESTERN EUROPE - USA: NUMBER OF ADMISSIONS

WESTERN EUROPE - USA: NUMBER OF SCREENS

USA: THEATRES BY NUMBER OF SCREENS Source: MPAA

MULTIPLEXES IN EUROPE

MULTIPLEXES IN EUROPE 10 160 screens in 944 sites in 30 countries (as at 31 October 2004) 10 160 screens in 944 sites in 30 countries

TREND OF NUMBER OF SCREENS IN MULTIPLEXES IN EUROPE Screens in European multiplexes are still in the growth but more slowly: +6.7% between 2004 and 2003 +9.5% between 2003 and 2002 The growth of screens, especially of those located in multiplexes with 9, 11, 16 screens and in megaplexes (sites with at least 16 screens), is slowing down.

MULTIPLEXES IN WESTERN EUROPE: NUMBER OF SCREENS (as at 31st October)   2000 2001 Var% 01/00 2002 02/01 2003 03/02 2004 04/03 8 screens 1208 1376 13,9% 1448 5,2% 1584 9,4% 1680 6,1% 9 screens 1026 1179 14,9% 1314 11,5% 1395 6,2% 1449 3,9% 10 screens 950 1070 12,6% 1260 17,8% 1310 4,0% 1390 11 screens 407 473 16,2% 583 23,3% 693 18,9% 715 3,2% 12 screens 888 1056 1140 8,0% 1236 8,4% 1368 10,7% 10,13 screens 182 286 57,1% 312 9,1% 338 8,3% 364 7,7% 14 screens 518 588 13,5% 686 16,7% 798 16,3% 868 8,8% 15 screens 270 300 11,1% - 345 15,0% 405 17,4% >=16 screens 601 805 33,9% 31,2% 1142 8,1% 1144 0,2% Total 6050 7133 17,9% 8099 8841 9,2% 9383

MULTIPLEXES IN CENTRAL AND EASTERN EUROPE: NUMBER OF SCREENS (as at 31st October)   2000 2001 Var% 01/00 2002 02/01 2003 03/02 2004 04/03 8 screens 48 80 66,7% 128 60,0% 152 18,8% 168 10,5% 9 screens 27 54 100,0% 81 50,0% 90 11,1% 117 30,0% 10 screens 130 62,5% 160 23,1% 170 6,3% 180 5,9% 11 screens 22 55 150,0% 66 20,0% - 44 -33,3% 12 screens 24 72 84 16,7% 96 14,3% 13 screens 26 39 65 14 screens 42 28 56 33,3% 15 screens 15 >=16 screens 20 36 80,0% Total 269 441 63,9% 594 34,7% 678 11,6% 777 13.3%

DENSITY OF SCREENS IN MULTIPLEXES IN THE MAJOR MARKETS In major markets, the countries with the highest density of screens in multiplexes are United Kingdom (60.0%), Belgium (52.4%), Spain (50.5%) and Luxemburg (38.5%). The analysis of the situation of the number of screens during the years shows that the percentage on the total of: the number of screens in multiplexes grows, but with decreasing rates in the last four years; the percentage of screens in multi-screens cinemas shows a small but constant decrease; the percentage of screens in single-screens cinemas records the greatest flexion.

TREND OF NUMBER OF ADMISSIONS IN MULTIPLEXES The concentration of admissions in multiplexes in Europe is growing. In 2003, in 8 countries multiplexes account for more than 50% of admissions

MULTIPLEXES IN EUROPE: CONCENTRATION OF ADMISSIONS (Western Europe)

MULTIPLEXES IN EUROPE: CONCENTRATION OF ADMISSIONS (Central and Eastern Europe)

DIGITAL CINEMA WORLDWIDE

DIGITAL SCREENS WORLDWIDE (cinemas equipped with DLP CinemaTM projector ) In the last two years digital screens ranged from 154 (February 2003) to 291 (December 2004) + 89% Source: “European Cinema Yearbook – 2004 final edition”

DIGITAL SCREENS WORLDWIDE (cinemas equipped with DLP CinemaTM projector ) In total, the most significant increase took place in the last 6 months February 2003/June 2004 (16 months): +91 screens June 2004/December 2004 (6 months): +46 screens Considering figures by continent, the quickest increase was registered in Asian and European countries, while the US, the first country equipped with digital projectors, show a much lower growth percentage.

DIGITAL FILMS WORLDWIDE “Digital films: scarce but growing supply of movies in a digital format” (as at December 2004) NOTE: films released in DLP CinemaTM technology.

NEW DIGITAL TECHNOLOGIES D-cinema is growing, standards are now being established, new digital technologies can offer exhibitors new business opportunities (both D-cinema and E-cinema): alternative content and film programming for specific audiences digital cinema advertising

WHAT’S GOING ON IN EUROPE Palace Cinemas, Czech Republic - Hungary DIGITAL PROJECTION: WHAT’S GOING ON IN EUROPE Palace Cinemas, Czech Republic - Hungary 2 screens equipped with DLP CinemaTM projectors (Palace Slovansky Dum in Prague, MOM Park in Budapest) Digital Hollywood films (i.e. Finding Nemo, The Day After Tomorrow) Alternative contents: Music events: David Bowie and Bon Jovi Live concerts; DVDs premiere (i.e. The Beatles – Concert for George) Sports events: UEFA Euro 2004 DVDs projections for specialized audience: i.e Bowling a Columbine, Apocalypse Now Redux (that probably would not have been shown at the cinemas in 35mm)

WHAT’S GOING ON IN EUROPE DIGITAL PROJECTION: WHAT’S GOING ON IN EUROPE Arcadia, Italy 2 screen equipped with DLP CinemaTM projector Digital Hollywood films (i.e. Atlantis: The Lost Empire, Star Wars Attack of the Clones, Pinocchio, Alien Director’s Cut, The Day After Tomorrow, I Robot, The Incredibles) Alternative contents: Music events: David Bowie Live Concert Stanley Kubrick: A Life in Pictures Star Wars Episode II - Attack of the Clones - making of

WHAT’S GOING ON IN EUROPE Kinepolis Group, Belgium DIGITAL PROJECTION: WHAT’S GOING ON IN EUROPE Kinepolis Group, Belgium “A strategic choice: digital as an added value and a competitive advantage” 10 screens equipped with DLP CinemaTM projectors in Belgium Digital Hollywood films (i.e. Finding Nemo, Brother Bear) Alternative contents: digital previews of Aspe series, a popular weekly TV movie series broadcast of TV News special digital screenings of local productions for the young audience (Plop en de Toverstaf) broadcast of prestigious events and concerts

WHAT’S GOING ON IN EUROPE Belgium, Luxembourg, The Netherlands, France DIGITAL PROJECTION: WHAT’S GOING ON IN EUROPE Utopia Group, Belgium, Luxembourg, The Netherlands, France 10 screens were recently equipped with DLP CinemaTM projectors in 3 countries: BELGIUM: 2 screens in Utopolis Mechelen, 2 screens in Utopolis Turnhout (October-November 2004) LUXEMBOURG: 3 screens in Utopolis Luxembourg (March-October 2004) THE NETHERLANDS: 3 screens in Utopolis Almere (November 2004)

WHAT’S GOING ON IN EUROPE DIGITAL PROJECTION: WHAT’S GOING ON IN EUROPE UK Film Council, United Kingdom Digital Screen Network: the world’s first large scale digital screen network with the aim of improving access to specialised films and broadening the range of films available to audiences throughout the UK. UK Film Council has recently selected Arts Alliance Digital Cinema to install and run the Digital Screen Network: AADC will provide a network of up to 250 screens throughout the UK, covering installation, training, servicing, warranties and upgrades. Each cinema will guarantee a minimum number of specialised (art-house/foreign language) film screenings a week in return for the equipment. AADC will also be able to create digital cinema masters for specialised film content and to deliver them to cinemas at a pre-agreed price.

WHAT’S GOING ON IN EUROPE Carlton Screen Advertising, UK DIGITAL PROJECTION: WHAT’S GOING ON IN EUROPE Capa, Norway Leading Norwegian cinema advertising company: conversion of its Scandinavian network to satellite deilvered e-cinema projection, developing a larger base of advertising clients and offering exhibitors a reduction of reel-assembly time and more flexibility. Carlton Screen Advertising, UK Leading UK cinema advertising company: investment in digital advertising to distribute digital video contents via satellite to the cinemas.

WHAT’S GOING ON WORLDWIDE DIGITAL PROJECTION: WHAT’S GOING ON WORLDWIDE Regal CineMedia, US Digital Content Network (DCN): the world’s largest digital network for the delivery (via satellite) of on-screen and in-lobby marketing and advertising products as well as digital video contents to over 5,000 Regal Cinemas’ screens in US: delivery of “The 2wenty”, the Regal CineMedia 20-minute pre-show programme offering advertising and entertainment, delivery of alternative contents (HD format): simulcasting of live music concerts and events, delivery of educational, entertainment and sports programming.

WHAT’S GOING ON WORLDWIDE DIGITAL PROJECTION: WHAT’S GOING ON WORLDWIDE China vs India Digital vs Electronic CHINA: fast growth of d-cinemas, supported by local authorities: 55 D-cinemas and screens as at June 2004, 67 D-cinemas and 74 screens as at December 2004. INDIA: the world’s largest digital theatre country with around 130 e-cinemas in small towns and rural areas.

and with ANEC, FICE, ADN, ProjectScope “DigiTraining Plus: New Technologies for European Cinemas” 6 - 10 April 2005, Kuurne, Belgium in collaboration with and with ANEC, FICE, ADN, ProjectScope The second edition of the course devoted to digital cinema specifically addressing European cinema exhibitors

“DigiTraining Plus: New Technologies for European Cinemas” MAIN TOPICS • Introduction and general overview of the international market of digital projection: number of digital installations worldwide, digital products, main operators, comparison between EU, US and Asian markets, the most recent updates on the market. E-cinema and D-cinema. The point of view of distribution on digital projection. Analysis of significant cases: the experiences of independent European companies and international companies. • Content: distribution of digital content, alternative content, advertising. Technical overview: projectors e servers, sound systems, installation and monitoring, anti-piracy measures. Demo of digital screening: from high-definition tv to digital cinema. Visit to a cinema with digital installation.

www.mediasalles.it The application form, the provisional programme “DigiTraining Plus: New Technologies for European Cinemas” The application form, the provisional programme and general information on the course are available on the MEDIA Salles’ website: www.mediasalles.it Course fee 400 euro for enrolments within 21 March 500 euro for enrolments after 21 March (covering tuition, teaching material, 4-nights accommodation and meals)

www.mediasalles.it The Course Report of the 2004 edition is already available on the MEDIA Salles’ website Including the course programme, the speakers’ presentations, the participants’ comments, data on digital cinema-going worldwide. “DigiTraining Plus: New Technologies for European Cinemas” 31 March – 4 April 2004, Kuurne, Belgium

For further information: infocinema@mediasalles.it www.mediasalles.it