LONDON — Half of worldwide screens will be digital by 2013, according to a report by cinema analysts Dodona Research.
This year has seen an explosion in digital conversion with 4,627 screens, 5% of the global total, switched to digital up to September.
Penetration is deepest in the U.S., home to 78% of the world’s digital screens. The U.K. and South Korea boast the second and third most digital screens.
Other advanced Euro digital cinema territories are Luxembourg and Belgium, where aggressive conversion led by forward thinking exhib circuits Utopia and Kinepolis, respectively, means almost 50% of both small markets are digital.
Report predicts upcoming slew of high-profile 3-D releases will increase exhib’s appetite for digital conversion.
Dodona points to the example of the Odeon UCI circuit, which has announced its intention to install 500 3-D systems, despite having fewer than 100 screens converted to digital at present.
Recent widespread adoption has been facilitated by the emergence of third party integrators willing to cover the large conversion costs, says the Dodona report.
These integrators typically finance purchase of the equipment, seeking to repay loans by levying an array of usage charges. While the cost of installation, maintenance contracts and sometimes content delivery charges are paid by exhibitors, the main source of revenues to support conversion comes from virtual print fees. These are paid by distributors out of their notional savings from not having to strike 35 mm film prints.
The report, although upbeat on the prospects for continued conversion, does identify a variety of hurdles standing in the way of the d-cinema revolution.
“The next step in the market’s evolution is probably going to need a fall in the price of equipment, or higher virtual print fees, or bigger exhibitor contributions, or all of these,” report author Karsten-Peter Grummitt said. “Strategies in this market need to move on from the ‘who pays?’ face-off of the last few years to focus on how to get this done.”