Picture sharpens for Digital Cinema rollout
The purse strings appear to be loosening for the long-delayed rollout of digital cinema.
Until recently, the credit crunch had discouraged lenders from forking over money to help pay to convert theaters to digital systems, which are required to show 3-D movies. That was causing considerable heartache among major studios, which have invested heavily in dozens of 3-D movies coming out in the next two years, including 17 in 2010 alone.
But there are signs that lenders are now willing to bankroll the costly conversion. The latest evidence of that came during the industry trade event Showeast this week when Cinedigm Digital Cinema Corp., a Morristown, N.J. that supplies and installs digital equipment in theaters, announced that it had received commitments from GE Capital and French bank Societe Generale to finance $100 million to install 2,133 additional digital screens worldwide next year.
Adam M. Mizel, chief financial officer for Cinedigm, called the commitments a "milestone" that will "enable exhibitors to take advantage of the significant benefits of digital cinema."
In August, JP Morgan Chase & Co. signaled that it was moving ahead with plans to secure $525 million in financing to retrofit up to 15,000 screens for digital technology over the next five years at AMC, Cinemark and Regal, the nation's largest theater chains.
Separately, Technicolor also announced this week that it was partnering with Deluxe Entertainment Services, Eastman Kodak Co. and Fujifilm to create a fund to help exhibitors finance up to 500 silver screens to be installed in North America and the United Kingdom. Silver screens are a component in digital systems and cost $5000 to $10,000 each. Technicolor has been marketing a low cost, film-based 3-D system to smaller theater circuits that can't afford to buy digital projectors, which can cost $75,000 each.
For now, 3-D has a long way to go before it becomes mainstream. Currently, 7,241 of nearly 39,000 screens in North America are digital, and only 3,061 of those are 3-D ready.
-- Richard Verrier
Photo credit: Gary McCarthy