Rain Network leading the charge since '04

RIO DE JANEIRO — Like exhibitors in many countries, Brazil’s exhibitors are eager to convert theaters to digital using the Digital Cinema Initiatives standards approved by U.S. majors. The conversion will eventually mean a huge cost savings from sending cumbersome prints around the world.

But although Brazil already has a fully functioning digital cinema operation with Rain Network, distributors and exhibs are predictably having trouble deciding who will pay for the conversion.

Since May 2004, Rain Network has been converting screens to digital in Brazil, screening mainly U.S. indie and local pics. It remains to be seen whether there is room for two different digital systems spread between the country’s screens, which total about 2,100 for both conventional and digital screens.

Most likely, Rain theaters will continue to show mostly U.S. indie and local films, while, exhibs that invest in the DCI standard will be able to show pics from Hollywood studios,

Local distribs and exhibs are far from reaching an agreement for sharing of the cost of digital projectors and computer hardware and software.

“We have not yet started talks with distributors,” says Gonzaga de Luca, institutional relations director of the Ribeiro Group, Brazil’s No. 2 exhib.

The transition to digital is aggravated by Brazil’s heavy tax load on equipment imports. According to Luca, local exhibs pay about $105,000 for a full kit with a DCI-approved DLP Cinema projector, up from about $75,000 in the U.S.

So far, exhibitors are slowly converting on their own without a cooperative conversion agreement. Cinemark, the country’s top exhib, dedicated the first DCI screen in December, part of a multiplex in Sao Paulo. The Ribeiro Group will open the second on Feb. 28, in a Rio multiplex.

Luca says 3-D capability, which adds a marketing hook, should encourage exhibs to contribute to the cost of conversion.

Meanwhile, Rain is expected to continue its expansion into urban arthouses, as well as in mainstream theaters in smaller towns.

According to chief operating officer Fabio Lima, Rain has agreements with 12 local exhibs to eventually digitize of 312 screens, with 81 already done.

Lima says he sees the DCI expansion in Brazil as an opportunity. U.S. majors continue to refuse to supply pics to be screened by Rain’s open Microsoft system, which is vulnerable to security concerns. But they will not be able to prevent local exhibs with DCI-compliant DLP projectors from screening Rain’s pics too, by linking a Rain server to the projector.

“Rain does not sell digital projectors or systems. We are a content aggregator. The more digital projectors in Brazil, the better,” Lima says. “We will be seeking agreements with exhibitors with DLP projectors so they can screen our films too.”

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