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Frank L. Stavik • Managing Director, Fidalgo Film Distribution

"The grave for small distributors"

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- The managing director of Fidalgo Film Distribution explains how the digital reality has changed the situation for independent distributors in Norway

Norway is the first country in the world in which all cinema screens have been fully digitized for a year. The technical transition also involves new business models and distribution strategies. Fidalgo Film Distribution Managing Director Frank L. Stavik explains how the digital reality has changed the situation for independent distributors.

Cineuropa: What kind of impact has the digital roll-out had in Norway?
Frank L. Stavik: I was rather sceptical about the theories of saving money from day one. The reality proves that there are no savings to be made in a digital reality – quite the contrary. You are faced with increased costs on releasing films in every possible way. The idea is that you don't have the costs of 35mm prints, subtitling them and so on. However, now you have to have many more cinemas for your premiere, which means you have to make a lot of digital copies with which to supply the cinemas and you need to put a lot more money into marketing than you did before when you release a small film with three to five prints. As a consequence, your expenses go up instead of down. But the results may not necessarily be any better because with the small films you don't really get a large audience anyway. Basically what you are left with is a release that costs you much more than before but makes no more money. In the long run, this will be a grave for small distributors.

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What is the most-cost intensive factor?
The most important problem for the smaller independent distributors is that the Virtual Print Fee is becoming so high, it will kill a lot of small distributors. If you are unlucky, you invoice the cinemas for a minimum rental fee and then you are invoiced back by the organization of the cinemas for a virtual print fee for the screening that is two and a half times larger, so you lose money on distributing a film. The Norwegian VPF is, at approximately EUR250 per theatre, quite low compared with many European countries. But if the film is shifted to another theatre, then you have to pay again. And if the film is shifted to a third cinema you pay a third time. Luckily, there is now a support system to compensate for smaller films, so the effect is somewhat less crippling.

Is this model mainly made for the majors?
Totally. In Norway, the agreement was signed between the cinema organization Film + Kino and the Hollywood studios. The independents had to sign an agreement that we all disagreed with, because it was basically a gift to the studios at the expense of the independents. If we hadn't have signed it, we would be not allowed to screen our films in any cinema in Norway.

Are the Hollywood films released with more prints?
Absolutely. A blockbuster such as Harry Potter would open in 35mm with 120 prints in Norway. Now, it is released with 200 prints. We only have between 300 and 400 screens and a lot of them are one-screen village cinemas that only screen once or twice a week. The smaller films go to the smaller screens at the less interesting times. If you don't get an evening screening, you are stone dead.

What is your future prognosis?
I fear that the most of the national smaller distributors will be gone in at most five years. Smaller distributors will have bigger and bigger problems finding audiences for quality films. The worst-case scenario is that all the independent distributors disappear and that the cinemas are being divided between Hollywood films and national films. Everyone else will struggle really hard to survive.

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