Top theater chains talking upgrade at Showest
Hollywood studios are on the brink of inking a deal with the nation’s three largest theater chains that could lead to a dramatic rise in the number of movie screens undergoing conversion to digital and 3-D.
The digital facelift of America’s moviehouses is expected to be a hot topic at this week’s ShoWest confab.
Digital Cinema Implementation Partners — owned by Regal Entertainment, Cinemark Holdings and AMC Entertainment — is close to securing a $1.1 billion line of credit that the three theater circuits would use to make the costly conversion.
DCIP’s collateral? Studios would agree to pay a “virtual print fee” when their movies are played on digital screens. Other content providers also would pay such a usage fee. Theater owners would use those fees to pay back part of the loan.
All told, DCIP reps 14,000 of the country’s 37,000 movie screens. Under the plan, the digital rollout of Regal, Cinemark and AMC’s screens would take about three years.
Theater owners have long argued that it’s simply too expensive to convert theaters to digital. It has been a particular sticking point with the largest circuits. (Conversion costs an estimated $70,000-$75,000 per screen). Only about 4,600 of the country’s screens have been converted so far.
Studios counter that exhibs will more than make up their costs.
Theater circuits have recently found success with digital 3-D movies including “Hannah Montana/Miley Cyrus: Best of Both Worlds Concert Tour” and “Beowulf.” Theaters can charge higher ticket prices for 3-D fare, of which there is plenty in the pipeline.
But in order to play modern-day 3-D titles, theaters must first be equipped with digital screens.
The DCIP deal for virtual print fees would be modeled after similar agreements the major studios struck with two other groups, Technicolor and AccessIT.
Also at ShoWest this week, Nielsen Co. will announce the launch of research service Nielsen PreView. A first report on moviegoing trends has already been completed.
Full report won’t be released until Thursday, although highlights were made available Monday. Among other findings, the survey of 400 movies released in 2006 and 2007 found that good reviews do indeed translate into more ticket sales. Buzz is also a key factor. Also, family-friendly, PG-rated films without profanity generated the best box office results.