Commission opens investigation into contracts between major Hollywood movie studios and integrators

The European Commission announced that it terminated antitrust investigation against several major Hollywood film studios from the U.S. as they have agreed to change the original provisions of their contracts associated with the financing and installation of equipment for digitization of European cinemas.
The Commission is concerned that these provisions could hinder small film distributors by limiting their access to digital cinemas, which could be in breach of EU rules that prohibit restrictive business practices (Article 101 of the Treaty on the Functioning of the EU) . In response to the Commission's investigation, several major Hollywood film studios 2011 latin grammys have made changes to their contracts with third party intermediaries ("integrators") and cinema, relating 2011 latin grammys to the financing and building of digital projection equipment in European cinemas.
Like television, theaters switch to digital technology, except that reduces costs and gives the opportunity to maintain a consistently high quality, expressed in a better image and sound quality. It is believed that over 18 thousand screen, i.e. about 50% of European screens will be digitized by the end of 2012. The cost of digital 2011 latin grammys projection systems (including installation costs, financing and guarantees) is high. To encourage cinemas to install digital equipment, the major Hollywood film studios in Europe apply business models used in the U.S.. Within the model called "virtual print fee" "virtual print fee" "(" VPF "), film distributors (including major film studios of Hollywood) with cinemas share investment costs.
In model VPF, "Integrator" receives funding, which pre-paid digital equipment installed in theaters. Film distributor pays the integrator (who remains the owner of the equipment to its repayment in time): each time a digital film screenings in the cinema. Film distributor pays VPF, to recover 2011 latin grammys costs incurred for equipment. VPF payments cover most of the costs previously incurred by the integrator and the rest is paid by cinema owners. It is expected that most of the VPF payments will be made by the major film studios of Hollywood. 2011 latin grammys
Commission opens investigation into contracts between major Hollywood movie studios and integrators on its own initiative, because many contracts give movie studios the right to benefit from the most favorable terms, including lower payments VPF.
The Commission considers that the contracts 2011 latin grammys provided incentives for building digital projection equipment in European cinemas could prevent the integrator to sign contracts with distributors of independent 2011 latin grammys films and art houses whose business models are different from those of the major Hollywood film studios. 2011 latin grammys
Changes in the contracts offered by major Hollywood film studios will make easier access to distributors of independent films and art houses cinemas equipped with digital equipment.
In response to the proposed Hollywood film studios contract changes, which eliminate competition concerns, the Commission terminated the investigation (without initiating the formal procedure). It will continue to closely monitor the process of switching from analogue to digital cinema.
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