Common Questions - Answered

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Common Questions - Answered
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Is the system tested?

• Under the US rollout model, there will be an
  initial plugfest to ensure compatibility
  between equipment providers and content sources
• Following this, a selection of combinations will
  be placed in a beta test covering 180 to 240
  screens in 3 to 4 projector-server combinations
• This beta test will continue until Technicolor,
  the studios, and exhibitors are comfortable with
  the levels of reliability being achieved (est.
  3-6 months)
• For European deployments, beta testing will be
  assessed on a case-by-case basis (i.e., are the
  projectors and servers the same or different)
• Given European deployments will likely occur
  after the US beta test, Technicolor is confident
  that its system will be fully tested by the time
  it is deployed in Europe

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Do all major studios support it?

• Firstly, the Technicolor rollout is and will
  remain fully compliant with the studio-driven DCI
  standard.
• Currently 5 Studios have signed up, and a further
  2 are committed to agree by the time of the beta
  test
• In Europe, additional local distributors would
  need to agree to using the digital equipment,
  which is why it is important for Technicolor to
  have European content preparation capabilities
  it will be able to provide digital prints for
  those local distributors

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Is alternative content use permitted?

• Exhibitors pay a secondary cost burden in the
  rollout model the primary cost being borne by
  the studio through the payment of a virtual print
  fee (VPF). This exhibitor contribution is
  negotiated in part on the basis of the usage of
  the equipment
• The exhibitor would either pay a flat fee, a
  revenue share, or a combination of the two to
  cover alternative content and screen advertising
  usage
• The exhibitor is then free to conduct its
  business directly with these non-theatrical
  content providers

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Who maintains it, and who owns it at the end?

• The exhibitor is responsible for maintenance, and
  the tested assumption is that maintaining a
  digital system should not be markedly more costly
  than a 35mm system
• The exhibitor will be responsible for consumables
  (e.g. lamps)
• At the end of the term, it is expected the
  exhibitor will own the equipment, purchasing it
  from Technicolor at a residual value

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Is it a closed system?

• An important feature of the system one that the
  studios insisted upon is its openness and
  separation between distributor and equipment
  usage
• Any service provider able to deliver DCI
  compliant digital prints in the format accepted
  by the Technicolor system will be able to
  distribute content to the systems
• Technicolor will also be providing these services
  and competing with those entities
• Technicolor will also be competing to deliver
  content to digital systems other than its own

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Does the exhibitor lose control?

• Technicolor will never be in a position to
  control what screen you show a movie on, whether
  any showing is permitted exhibitor master
  agreements with studios will need to be
  appropriately negotiated regarding security keys
• Technicolor will not provide any screen specific
  information to studios other than that
  contractually agreed upon by you and the studios
• Technicolor will gather operating and billing
  related data from the systems, which will be used
  in an aggregated manner

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Do you have the capital to fund this?

• Technicolor Digital Cinema is not a startup. It
  has a 90 year history serving the film industry,
  and is a division of Thomson, S.A., part of the
  CAC 40.
• Thomson has extensive relationships with lender
  and leasing companies which have indicated a
  strong intent in providing Thomson the funding
  for our rollout.
• We expect to have a definite financing structure
  in place as we exit the beta test.

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Digital Screen Advertising
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Screen Advertising Systems

• In parallel to a digital cinema rollout, TDC won
  the contract to install and manage the network
  operations of the digital cinema advertising
  system for Screenvision US (HD, non-DCI system)
• This network expertise is easily transportable,
  flexible, and upgradeable the projector being
  the only barrier to 2K advertising
• By working closely with screen advertising sales
  houses, TDC believes it will be an important
  participant in the digital screen advertising
  value chain in Europe
• As D-cinema and E-cinema converge, TDC will be
  well placed to offer the most competitive
  distribution and management service to screen
  advertisers and exhibitors

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Screen Advertising System Design

• Customers
• Exhibitors
• National Advertisers
• Regional Advertisers
• Local Advertisers
• Alternate Content

Live broadcast transmission
Activity Management
Cinemas
Playlist scheduling
Traffic Management
Media Asset Management
Unencrypted digital advertising transmission
Playlists Playdates
Creative Services
Post Production
Encoding
Internet
Cinemas
Content
Unencrypted digital advertising transmission
Technicolor Network Operations
Web interface (TED) Technicolor Production
Network (TPN) Tape/Hard Media
Transmission
Uplink
Internet
Cinemas
Monitoring
Support
Exhibitor Broadband Backchannel to NOC
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Summary
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Technicolors Competitive Advantage

• Proven expertise in delivering quality solutions
  in both analogue and digital environments
• Single point of accountability from deployment
  through distribution services enabling a zero
  defect environment
• Deep technology experience but technology
  agnostic
• Legacy of trust and established ability to
  continuously provide service models that meet
  changing distributor and exhibitor needs
• Has secured agreements with studios and now
  exhibitors in the US, and is looking to extend
  that model to Europe
• Offers a seamless path from digital screen
  advertising to Digital Cinema

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