Jeffrey Katzenberg, exhibitors trade barbs

Countering remarks by DreamWorks Animation topper Jeffrey Katzenberg, National Assn. of Theater Owners prexy John Fithian said exhibs aren’t to blame for holding up the transition to digital movie screens –some of the major studios are.

Fithian will address the thorny issue of digital conversion today when speaking at exhib confab ShowCanada in Banff, Alberta.

On Tuesday, DreamWorks Animation topper Jeffrey Katzenberg broke from his generally upbeat view on the digital transition in suggesting that the three largest U.S. theater chains — Regal, AMC and Cinemark — aren’t moving fast enough, considering the plethora of digital 3-D projects set for release next year by Hollywood studios (Daily Variety, April 30).

Fithian countered that some of the studios can’t agree on what they’ll pay the top three circuits in virtual print fees and that circuits need to have those fees in place before they can make the costly investment.

He wouldn’t name names, but industry insiders say that Disney, 20th Century Fox and Paramount are close to agreement with exhibs, while Warner Bros. is far behind. Universal and Sony are still in talks.

Katzenberg “suggested it is the cinema companies who are dragging their feet,” Fithian said. “That is not the case,” he added.

Fithian also noted that while Katzenberg has pointed the finger at exhibs, his longtime DreamWorks colleague Steven Spielberg seems to be lukewarm about the advent of d-cinema.

There was an outcry among theater owners earlier this year when Par suggested it wouldn’t supply digital prints of Spielberg’s “Indiana Jones and the Kingdom of the Crystal Skull,” because Spielberg wanted the movie played only as film on 35mm screens. Filmmakers including Spielberg sometimes balk at having their movies shown in digital when they were shot on film.

Not providing a film like “Crystal Skull” on digital would slight theater owners who have made the conversion, according to exhibs. Theater owners have long argued that there’s no reason to make the transition if the product isn’t there.

Par changed its position and will be releasing digital prints of “Indiana Jones.” Exhibs aren’t entirely mollified, though, since digital prints will go only to those houses where all the screens are digital. If there’s a mix of screens in a theater, that theater will get only a film print.

The “Indiana Jones” issue is only a side note to the much larger issue of how to hasten the rollout of more digital screens, a prerequisite for installing digital 3-D projection equipment.

Katzenberg has staked his company’s future on digital 3-D, beginning with “Monsters vs. Aliens,” which opens March 27. The year will also see will see a number of high-profile 3-D releases from other studios, culminating with James Cameron’s “Avatar,” from Fox, on Dec. 18.

As of now, there are fewer than 1,000 digital 3-D screens in the U.S. Studios are hoping there will be 4,000-5,000 by the end of 2009. Out of the country’s 37,000 or so theater screens, roughly 5,000 have been converted to digital.

The top three circuits have been slow to make the transition –frustrating studios — yet their entry into the digital arena is key if studios are to have enough screens to play their digital 3-D titles on. Digital Cinema Implementation Partners, a consortium formed by the three chains, is presently trying to secure a $1.1 billion line of credit to help with the conversion.

First, though, DCIP wants virtual print fee deals in place with the majors.

Many of the smaller chains have used third-party digital deployment company AccessIT to install their digital screens, with AccessIT securing virtual print fee deals with the studios. Studios don’t necessarily want to strike the same terms with DCIP as it did with AccessIT given the changing economy and lowered digital equipment prices. AccessIT provides financing, administrative services and equipment.

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