Regal Entertainment has pacted with RealD to convert 1,500 of its screens to digital 3-D — a move that could ease the standoff between Hollywood studios and the country’s largest theater circuits over the belabored digital rollout.
Most markets in the U.S. would be able to offer moviegoers 3-D films under the deal. Agreement marks the largest single transaction to date for RealD, the market leader for 3-D screen installations.
There are fewer than 5,000 digital theaters in the U.S. Of those, less than 1,000 are 3-D equipped.
To date, the country’s three largest circuits — Regal, Cinemark and AMC Entertainment — have balked at investing in the conversion to digital, a prerequisite for going 3-D, because of a dispute with studios over how much studios should pay exhibs in so-called virtual print fees.
The industry has long believed that smaller theater owners, as well as international circuits, are awaiting a cue from the big exhibs before converting more screens themselves.
Several weeks ago, DreamWorks Animation’s Jeffrey Katzenberg chided the big three loops for not moving more quickly considering the plethora of 3-D projects set to be released in 2009, including his company’s “Monsters vs. Aliens” and James Cameron’s “Avatar,” from 20th Century Fox.
“What this signifies is that 3-D is here to stay,” said RealD chair-CEO Michael Lewis.
The deal between Regal and RealD won’t take effect, however, until the studios and a consortium formed by Regal, Cinemark and AMC agree on a virtual print fee.
At one point, the consortium — Digital Cinema Implementation Partners — wanted all the major studios to agree. Now, it appears that the consortium is prepared to move ahead with only three of the studios aboard: Walt Disney, Paramount (which distributes DreamWorks Animation titles) and Fox. Insiders said they expect Sony and Universal to follow suit eventually, while Warner Bros. and DCIP are said to be far apart on terms.
Disney has been the pioneer in digital 3-D, although it is Katzenberg who has become the public ambassador of the fight to convert more.
“I believe this partnership between Regal and RealD marks a defining moment for the greatest transformation in moviegoing in 70 years,” Katzenberg said.
Regal chair-CEO Mike Campbell said his circuit looked forward to the finalization of the consortium’s agreement with the studios, so that Regal can commence the expanded 3-D rollout with RealD.
In the joint press release issued by Regal and RealD, Katzenberg was quoted along with Fox prexy of domestic distribution Bruce Snyder and Disney prexy of distribution Chuck Viane. Like Katzenberg, Viane and Snyder believe the deal between RealD and Regal is a sign of real progress.
“We are currently deep into the negotiations with DCIP to keep the digitalization of theaters moving forward. And we are thrilled that RealD and Regal have joined together to make 3-D viewing a reality on a nationwide basis,” Snyder said.
Later this summer, Warner Bros. will release New Line’s 3-D family adventure “Journey to the Center of the Earth.”