Following changes to the agreements, the Commission closed an own-initiative preliminary inquiry into the contracts made between major Hollywood film studios and cinemas which had obtained financing from ‘integrators’ to install digital technology. Cinemas are switching in droves to digital systems (around 50 per cent of all European cinemas will have them by the end of 2012) for the cost savings and increase in quality associated with the technology. Smaller cinemas were worried that they would not be able to afford them. To encourage cinemas to install digital systems, major Hollywood studios introduced a commercial model used in the US, a virtual print fee (VPF) arrangement. Under the VPF model the integrator organises financing and installs the equipment, which it owns until repayment. When digital films are shown, the film distributor pays towards the recovery of costs. Although the contracts incentivised cinemas to upgrade equipment, competition concerns arose in relation to VPF contracts under which the major studios had favourable terms (including lower VPF payments). This could potentially disadvantage smaller distributors. To meet the concerns expressed, the Hollywood film studios concerned offered changes to the contract.