1. Digitisation of French Cinema Régine Vial – Les Films du Losange (France)

2. I. The Law Date: promulgated on September 30, 2010 VPF: Obligation to pay a digital contribution Number of digital contributions per film: number based on the maximum number of screenings during the two first weeks.

3. Hands Up, 2010 (a film by Romain Goupil) French release dateJune 9, 2010 Number of prints in first week 113 Number of prints in second week 141 Maximum number of prints 141 Duration of exploitation17 weeks Number of screenings658 screenings

4. Duration of the digital contribution: 10 years from the first equipment. In all cases, the contribution will end before December 31, 2021 The price of the digital contribution: -A free price which can be different for each case -Negotiated with the third party or the exhibitors -Respecting 3 principles : Equality Transparency Objectivity

5. Legal principle: The digital system has to be less expensive than the 35 mm print for the distributors No link between programming and digital contribution is allowed. The Non Film (Operas, Sports Events, …): has to pay a VPF

6. II. The consequences of the law Number of digital screens: 1608 in 507 theaters 3 cases: -Third Parties : They pay the equipment for the exhibitors (notably theaters chain) -The exhibitors pay themselves the equipment. They can have subsidies (local subsidies) -The Ministry of Culture gives a subsidy of 75% of the price of the digital equipment for theaters which have 1 to 3 screens and which cannot receive enough digital contributions. The amount of this subsidy : €125 millions. 2000 screens will be equipped by this national subsidy.

7. The price of the equipment: 65 000 Euros (including the cost of the credit) Independent Distributors are trying to pay only 75% of the equipment of the theaters, but the exhibitors want generally 85%. Independent distributors need a precise estimation of the digital equipment of each screen + an annual payment report (to know the state of amortization and how many VPF have been paid).

8. III. DIRECT DIRECT: a grouping of economic interest. 14 independent distributors together: AD Vitam ARP Distribution BAC Films Diaphana Distribution Le Pacte Les Films du Losange Happiness Distribution Haut et Court Memento Films Distribution Pretty Pictures Pyramide Distribution Rezo Films Sophie Dulac Distribution Wild Bunch Distribution

9. DIRECT: More than 10 000 prints per year 12% of the admissions 125 films this year Most of the cultural diversity

10. The negotiation of VPF: The main third parties: -Ymagis (they propose a public price per minute. Public price = €7,5. 1 minute = 27 meters in 35mm) -Arts Alliance -XDC -Cinelia (a grouping of independent exhibitors) -EuroPalaces (a chain of theaters, with 700 screens only commercial multiplexes) -Independent Exhibitors on their own. Elaboration of a standard agreement between DIRECT and independent exhibitors

11. We are working to find out: The fair price for the digital contribution The real cost of digital distribution with a materialized support (DCP, hard disk, KDM, move-overs from one screen to another screen) The cost of digital distribution with dematerialized support (For example, Smartjog = €120 currently to send a feature film to a screen). Conclusion