Moviecom and other large exhibs enter digital era

RIO DE JANEIRO — With some of the best beaches in Brazil, the 778,000 residents of Natal, on the country’s northeast coast, have a variety of sunny leisure options.

But when it comes to movies, locals have few choices. The 10 screens in town show only productions distributed by the majors — mostly Hollywood blockbusters and occasionally a commercial Brazilian pic released by Columbia or another major. U.S. indie, European, Asian and smaller local pics are not available.

This situation is soon to change, however, thanks to the introduction of digital exhibition.

“The digital capability will allow us to create two weekly screenings of Brazilian and art films in our theater in Natal,” says Joao Passos Neto, president of Moviecom Cinemas. “We know the demand for this kind of film is there. But currently we cannot afford the high costs of shipping prints of independent films.”

The fifth largest Brazilian exhib, Moviecom is the latest to enter the digital era in the country. Moviecom recently inked a deal with the local Rain Network to gradually digitize its 87 screens in 18 towns across Brazil.

A few days earlier, Arcoiris, the country’s No. 4 exhib, with 95 screens, inked a similar agreement.

While most countries are still testing the digital waters, digital exhibition is a reality in Brazil. Eight exhibs, most of them art circuits in big cities, currently operate 95 digital screens with Rain’s system.

With the deals with Moviecom and Arcoiris, Rain will reach the commercial circuits of medium-sized towns. In two years, when the transition to digital is completed for all 182 of Moviecom’s and Arcoiris’ screens, Brazil will have 277 digital screens. The country’s total screen account is currently about 2,000.

“Rain has introduced a successful business model that fits the needs of art exhibitors in cities and commercial chains with a strong presence in not-so-big towns,” Rain chief operating officer Fabio Lima tells Variety.

Big exhibs, such as Cinemark and the Ribeiro Group, took a wait-and-see attitude on digital, sitting it out until the DCI specifications were put in place. But other exhibs saw a window of opportunity, sharing the $20,000-$30,000 conversion price equally with Rain.

Current projection is done with a 1.3K system, but plans are to upgrade when 2K systems become available in Brazil.

The screens remain hybrid and the exhib is free to program both analog and digital screenings. Rain transmits the pics’ files via Comsat to its client exhibs, which pay per screening.

While art circuits in larger cities save on the high costs of making prints, small-town exhibs also will save on print transportation costs. They’ll also be capable of launching pics simultaneously with urban opening.

The digital business model also has brought exhibs increased ad revenues. Digitally shot commercial spots are economical to produce, so small businesses near theaters are ramping up advertising. Rain has established an ad sales department that’s also targeting large corporations for theater advertising. Rain and exhibs share the ad revenues.

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