Global digital cinema growth takes center stage

The continuing worldwide digital rollout and the challenges facing the fast-changing exhib industry took center stage as CineEurope kicked off in Amsterdam on Monday, before Paramount unleashed “Transformers: Dark of the Moon” at two venues.

The screenings followed a sneak peak at Par’s upcoming pics, including “Puss in Boots” and a presentation to Antonio Banderas, the voice of Puss, who received the CineEurope Award of Excellence for contributions to European Cinema.

Presenting a forecast of global digital growth for the first half of 2011, David Hancock, senior analyst and head of film and cinema at research firm Screen Digest, said the number of digital screens worldwide has reached 47,000, 40% of total screens, with growth in all areas, including the U.S., Europe — where the number doubled in the past 12 months — and Asia.

However, Latin America and parts of Asia remain problem areas, Hancock said.

Virtual print fee (VPF) financing models, which have helped exhib chains in North America and Europe convert to digital, don’t work with economic models of exhibs in other regions.

As part of the VPF deal, distributors compensate cinema owners for the cost of installing digital projection equipment by paying for each first-run film screened.

The U.S. and China are driving growth, accounting for about 55% of the world’s digital screens. The U.S. alone has 20,000 screens, while China has 5,500 — more than 70% of its total screens.

A combination of assistance from public agencies and funding from private financiers continues to boost China’s digital rollout and the number of screens is estimated to increase by 11,000 in four years’ time, Hancock said.

China will be among a slew of countries that will be completely digital by next year. Others include South Korea, Norway and possibly the Netherlands.

There are 12,000 digital screens in Europe — about 37% of total screens — including 10,000 in Western Europe and 2,000 in Eastern Europe.

While Europe’s digital growth remains below the global rate, many leading countries have seen digital cinemas surpass the 50% mark, including France, with some 2,600 digital screens. Gallic exhibs have also benefited from both public assistance and private financing schemes.

Public funding programs, vital for smaller theaters and arthouse cinemas, have also helped operators in the U.K., Germany and more recently in Scandinavia and Eastern Europe.

Hancock estimated that by January, there will be more digital screens in the world than 35mm. “Come next January, 35mm will, after 100 years, be a minority medium for cinema,” Hancock said. “That’s probably a point worth reflecting on.”

Follow @Variety on Twitter for breaking news, reviews and more