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

3-D rollout at movie theater chains gets a boost -- finally

Hollywood's 3-D bottleneck may be nearing an end. That was the upbeat assessment among studio executives, vendors and exhibitors who on Wednesday attended a "3-D Entertainment Summit" at the Hilton Los Angeles in Universal City.

Many conference participants were heartened after JPMorgan Chase & Co. announced late last week 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.

The rollout had been originally scheduled to start last year but was held up by the credit crunch, causing a shortage of 3-D screens (which require digital installations) at a time when movie studios were gearing up to release a slew of high-profile 3-D movies. The delay in digital rollout has been a source of friction between theater chains and movie studios.

To date there are only 2,700 3-D screens in North America, limiting the potential returns that studios can reap from the higher ticket prices from 3-D releases (moviegoers typically must pay an extra $3 to see 3-D films). With the new financing, that number is expected to grow by 4,000 by the of the year, or nearly 10% of all screens in North America.

Dan Huerta, vice president of technology and systems for AMC, said he was "thrilled" by the news, citing high returns generated from 3-D viewings of movies like Lionsgate's "My Bloody Valentine" and "Monsters vs. Aliens" from DreamWorks Animation SKG.

"With attendance flat or on the decline, 3-D has been just a boon for us,'' he said.

Still, some were skeptical about how soon the promised financing would actually kick in.

"I have a lot of scars waiting for this to happen, so I'll believe it when I see it,'' Lars Munson, a partner in the hedge fund Manatuck Hill Partners (an investor in giant-size movie screen company Imax), quipped during a panel discussion.

-- Richard Verrier

Fox and Imax break new ground with free 'Avatar' preview next week

Hollywood's sneak-preview tradition is about to get a James Cameron overhaul.

On Monday, 20th Century Fox will launch an unusual offer on the website for its Cameron-directed film "Avatar": free tickets for an early look at 16 minutes of footage from the futuristic thriller that will be shown in more than 100 Imax 3-D theaters around the world.

With two screenings on Friday, Aug. 21 (at 6 and 6:30 p.m.), the "Avatar" preview will include an introduction from Cameron and some new footage not shown during July's Comic-Con International convention in San Diego. "Avatar," which will be released in December, is Cameron's first feature since 1997's Oscar-winning hit "Titanic," which generated global ticket sales of more than $1.8 billion.

The unprecedented promotion -- which includes more than 30 Imax 3-D screens overseas -- signals just how much Fox has riding on its massive "Avatar" investment (more than $240 million in production costs) and how Imax is trying to position its theaters as the destination for the highly anticipated movie. Imax screens generated about $65 million in ticket sales for "The Dark Knight" last year when the Batman sequel was shown in 94 Imax screens; "Avatar" will be playing at more than 225 Imax theaters when it opens Dec. 18. 

Advance screenings of movie footage for the press and at events such as Comic-Con are fairly common for big-budget Hollywood releases. But it's unprecedented for a studio to show an extended excerpt of a film in such a broad public setting months before it hits theaters.

Fox is not paying Imax to use its theaters for the preview, though the studio is bearing the cost of producing and distributing the digital prints. Imax will provide 3-D glasses.

In what’s sure to be a mad grab among sci-fi fans, tickets will be given away a first-come, first-served basis on the “Avatar” website (www.avatarmovie.com) at noon PST Monday.

“I think that there’s not enough of an understanding of what show business means," Greg Foster, president of Imax Filmed Entertainment said of the sneak preview. "You can’t have business without showmanship. What Fox and ['Avatar' producer] Lightstorm Entertainment and Imax are doing is the personification of the correlation between those two words -- 'show' and 'business.' "

Not coincidentally, Fox will also release the first "Avatar" trailer in theaters around the world next Friday.

-- John Horn and Ben Fritz

Photo: Director James Cameron, left, and lead actor Sam Worthington on the set of "Avatar." Credit: Mark Fellman

3-D starting to look flat at the box office

As more movies play in digital 3-D, there’s evidence that audiences are becoming less interested in the ballyhooed format that many in Hollywood have predicted will stem the long-term erosion of theater attendance.

Box office data for “Ice Age: Dawn of the Dinosaurs,” which opened last Wednesday, shows that theaters with at least one screen playing the film in 3-D generated on average, 1.4x  as much in ticket sales as those that only showed the picture the old fashioned 2-D way. (A breakdown by individual screens within multiplexes was not available.)

The higher gross represents a mix of ticket price surcharges, which are typically $2 to $3 for digital 3-D, and higher attendance.

The ratio of grosses in theaters with 3-D screens to those that are 2-D only has declined significantly and fairly consistently since “My Bloody Valentine,” the first film this year to play on a mix of both, suggesting audience interest in the new format is waning.

Here’s how much higher ticket sales were for theaters with 3-D screens compared with theaters with only 2-D screens on the opening weekends for the five major releases so far this year (the numbers are based on studio estimates, as reported by The Times, Boxofficemojo.com and Variety):

• “My Bloody Valentine 3-D”: 6.4x
• “Coraline”: 3x
• “Monsters vs Aliens”: 2.1x
• “Up”: 2.2x
• “Ice Age: Dawn of the Dinosaurs”: 1.4x

Michael Jackson memorial to play live in 88 movie theaters

Update (Tuesday, 7:05 PM): Cinedigm didn't end up booking nearly as many theaters for the event as it initially claimed it would. In the end, Dern informed the Times, 47 theaters in 24 states broadcast the memorial service. Most, he said, weren't able to displace previously scheduled films that they had advertised and for which they had sold tickets.

One notable absence: Mann's Chinese 6 in Hollywood. Cinedigm and Mann said that the Los Angeles Police Department requested that they not show the event at the theater because it is on the same block as Jackson's star on Hollywood Boulevard. They were concerned about security in the area, though as it turned out, crowds throughout the city today were relatively mild.

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Michael Jackson's memorial service will be a theatrical event too, as digital events company Cinedigm Digital Cinema Corp. has arranged with AEG and the singer's family to broadcast the event live in 88 movie theaters.

Approximately 17,000 people will be able to watch the service at 10 a.m. Tuesday in theaters equipped with digital projection systems and satellite dishes that are part of New Jersey-based Cinedigm's network. The company will be using the same feed going out to from Staples Center to television networks and displaying it in high definition on big screens.

"This gives Michael Jackson's fans a chance to view the memorial in a communal setting with other like-minded folks and celebrate his life together," said Jonathan Dern, president of Cinedigm's entertainment group.

The publicity surrounding Jackson's memorial could provide a boost to the business of showing live events in movie theaters. Since it started a year ago, Cinedigm has used its network primarily for sporting events and concerts.

The company's work in concerts gave it a connection to AEG that, Dern said, allowed it to reach out to the event production company as soon as the memorial was announced and close a deal late Sunday night.

"The pedal has been on the metal since this started," he observed.

Tickets to the theatrical broadcasts will be free and provided by theaters first come, first serve. Cinedigm will post a list of participating locations on its website shortly. Dern confirmed that Mann's Chinese 6 in Hollywood will be among them.

He added that Cinedigm is considering showing an encore presentation of the memorial service in theaters for those who can't attend live.

-- Ben Fritz