Europa Cinemas Conference Athens, November 2013

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1 Europa Cinemas Conference Athens, November 2013 Digital cinema: the end of the beginning David Hancock Director, Film and Cinema IHS Electronics & Media

2 The switch to digital cinema 160, ,000 80,000 40, H 13 2D 3D 35mm E-cinema E-cinema is India only 2

3 Digital cinema is no longer niche: 84%* of global screens converted D-Cinema screens by world region 120, ,000 80,000 60,000 40,000 20,000 0 Europe North America Asia Other *inc e-cinema screens in India

4 Global d-screen penetration map 3Q 2013 Global progress: 84.1% 67.3% 90.7% 84.9% 57.0% 82.5% 58.9% Cinema Intelligence countries only India includes d- and e-cinema Source: IHS Screen Digest

5 W Europe: screen infrastructure 3Q % 80% 60% 40% 20% 0% 2D 3D 35mm 5

6 E Europe: screen infrastructure 3Q % 80% 60% 40% 20% 0% 2D 3D 35mm 6

7 Electronic Distribution 7

8 Electronic distribution moves closer Hard drives (HDD) still dominant but new players entering the electronic sphere, including leading HDD replicators (Deluxe, MPS, Ymagis/Smartjog, Unique, dcinex) Satellite is current dominant electronic distribution mechanism, cf DCDC in USA BUT most new services are focusing on broadband as prices come down and speeds go up Ymagis/Smartjog offer is technology agnostic, emphasising end result and budgetary requirements rather than a technology choice For the exhibitor, how to avoid a multiplicity of systems in your sites? 8

9 Sites equipped for electronic distribution 3Q ,500 2,000 1,500 1, Connection Not connected

10 Electronic delivery: announced Operator HQ Target coverage Principal delivery method Arqiva UK Europe Satelite DSAT Cinema France Europe Satellite Globecast France Europe Fibre Gofilex Netherlands Netherlands Fibre Smartjog/Ymagis France Europe Satellite/BB/HDD Unique Digital/Movie Transit Norway Norway/Global Fibre Videovox/AAM Sweden Sweden/Nordic Broadband Deluxe Digital UK Europe Broadband MPS/Lansat UK UK/IRL Broadband DCDC USA N America Satellite Deluxe/Echostar USA N America Satellite Microspace USA N America Satellite Technicolor USA N America Satellite Cinecolor Sat Chile Latin America Satellite Spacenet Mexico Mexico Latin America Satellite Broadmedia Japan Japan Fibre CJ Powercast/T-Joy Japan/Korea Japan, Korea, Taiwan Satellite Real Image Copyright Media 2011 Technology IHS Inc. All Rights Reserved. India India Satellite Thaicom Thailand South East Asia Satellite 10

11 Timeline for 35mm Mainstream 35mm usage Fox ends 35mm provision in Hong Kong/Macau China goes 100% digital and ends 35mm France reaches 100% digital and ends 35mm US 35mm prints ends W Europe 35mm prints ends Mid East 35mm prints ends Africa, Lat America 35mm prints ends 35mm is a niche medium globally Norway goes 100% digital and ends 35mm Benelux goes 100% digital and ends 35mm UK reaches 100% digital and ends 35mm Asia 35mm prints ends CE Europe 35mm prints ends 11

12 Alternative Content Event Cinema 12

13 Alternative content on a growth curve 1, $m Western Europe Central/Eastern Europe North America Central and South America Africa Middle East Asia-Pacific 13

14 Markets are at different stages of capacity 160 AC Events in

15 ...With different content % 80% 60% 40% 20% 0% UK RU FR DE/AT IRL SE NL Ballet Classical Music Documentary Opera Popular Music/Concert Theatre Other 15

16 ...Delivered in different ways % 80% 60% 40% 20% 0% Recorded Live 16

17 ...in different formats. 100% 90% 80% 70% 60% 50% 2D 3D 17

18 Revenues outweigh market presence: the French example x % x 0.2 5x 9.5x * Revenues Admissions Screenings Source: CNC * Provisional data 18

19 Cinema technology 19

20 Technology: the currency of cinema Technology is now driving the film and cinema agenda: Digital capture Collaborative workflows for post-production Secure transfer of digital material Digital archiving IT infrastructure in film studios, distributors and cinemas Electronic delivery to cinemas High Frame Rates/Variable Frame Rates Laser illumination 3D or Immersive sound 20

21 And the key question is... How do we finance all this? 21

22 Thank You

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