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EU secures Hollywood pledge not to squeeze out art-house movies

The European Union’s executive said Friday it persuaded Hollywood studios not to squeeze out art-house¬†filmdistributors from European cinemas as new digital technology is rolled out across their screens.

The European Commission had opened an antitrust investigation on contracts signed between Hollywood studios and companies installing digital projectors in cinemas because it suspected that the terms penalized smaller, independent film distributors.

Hollywood

On Friday, the Brussels-based body closed the probe, saying that its concerns had been addressed.

‘I am pleased that Hollywood studios considered our legitimate concerns and modified the contracts so that cinema goers can watch both Hollywood blockbusters (and) small budget and art-house films with the latest state-of-the-art technology,’ EU competition commissioner Joaquin Almunia said in a statement.

Installing digital technology in cinemas costs around 75,000 euros (105,000 dollars), according to commission estimates.

Normally, cinemas pay a fraction of the cost, while the majority is borne by companies installing the technology, which in turn seek to recoup expenses by charging a fee to film distributors each time their films are screened.

Independent distributors expect to be charged less than Hollywood studios, because their offerings are usually far less profitable. But the contracts which the commission objected to – and which have now been amended – ruled out any preferential treatment.

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