Digital projectors poised to take over world's theaters by late 2015

Old-fashioned film projectors could be relics by the end of 2015. Texas Instruments Inc., which makes the DLP Cinema computer chips used in digital projectors, predicted Wednesday that the world's theater industry would be entirely digital in the next four years.

The Dallas company said that the number of its DLP digital projectors installed around the globe had reached 51,620 screens, an 84% increase over the last 12 months. Much of the growth has been in China and Europe.

Currently, more than half of the world's 125,000-plus screens and 62% of U.S. screens have been converted digitally as studios move rapidly to phase out costly film prints. The transition also has been accelerated by the popularity of 3-D blockbusters like "Avatar," which, in most cases, require digital projectors in order to be played in cinemas.

"When we started in 2005, we really thought it was going to take 10 or 15 years for digital cinema to be fully adopted, but in a matter of a few years we've gone past a tipping point," said Jack Kline, president of Christie Digital Sytems USA Inc. in Cypress, which licenses technology from Texas Instruments and has shipped and installed more than 26,000 digital cinema projectors to date. "It's astounded us at how quickly it was adopted."

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-- Richard Verrier 

Photo: Moviegoers at the Century 8 Theater in North Hollywood.  Credit: Jay Clendenin / Los Angeles Times

Studio veteran Chris McGurk named CEO of digital cinema company Cinedigm

After holding senior executive posts at four Hollywood studios, Chris McGurk has taken the top job at a digital cinema company.

McGurk, a 22-year movie industry veteran, on Monday was named chief executive of Cinedigm Digital Cinema Corp. The firm installs digital cinema projectors and software and also distributes movies, pre-show advertisements and other content to theaters via satellite.

Cinedigm has struggled to shore up its balance sheet since the credit markets collapsed in 2009, closing a $172.5-million credit facility in May and another for $75 million in November.

Since June, when former head Dale "Bud" Mayo left, Cinedigm has been led by a pair of senior executives who served as interim co-CEOs.

McGurk was most recently chief executive of Overture Films, which was shuttered by parent company Liberty Media this last summer after a disappointing run over the last three years prompted owner John Malone to sour on the movie business. McGurk was previously chief operating officer of Metro-Goldwyn-Mayer and Universal Pictures and was president of the Walt Disney Motion Picture Group.

In an interview, McGurk said he was satisfied that Cinedigm has resolved its financial issues and that he thought it was well positioned for growth as more theaters switch to digital projection and look for alternative content. Because studios are producing fewer films, he said he would seek out other types of non-mainstream content, such as sporting and arts events and small independent movies, to distribute through Cinedigm's system directly to theaters.

"We're going to hopefully provide a whole new business model to exhibitors," he said.

Cinedigm has about 6,000 screens across the U.S. and is looking to install a total of 10,000, McGurk said. It's the nation's second largest digital cinema technology provider after DCIP, a partnership of the major theater chains AMC, Regal and Cinemark.

McGurk was known to be on the hunt for a new opportunity most of last year, as Overture was up for sale by Liberty since early 2010. The executive said his experience meeting with potential investors and buyers influenced his decision to take the job at Cinedigm.

"I saw that money was beginning to come back to entertainment, but [investors] didn't want to invest in traditional production or releasing," he said. "Investors are now focused on new media and digital businesses. This is that kind of opportunity."

-- Ben Fritz

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Chris Albrecht's e-mail misfire led to McGurk and Rosett's exit from Overture

Photo: Chris McGurk. Credit: Jay L. Clendenin / Los Angeles Times.

3-D makes more money for 'Dragon' but doesn't draw more people

3-D is still a box office boon, but the digital technology can't create a hit.

"How to Train a Dragon" put a damper on the momentum for 3-D created this year by blockbuster hits "Avatar" and "Alice in Wonderland" as it opened to a less-than-impressive $43.3 million domestically and $31 million overseas in 35 foreign territories.

Theaters showing "Dragon" with a digital 3D screen averaged 65% higher box office than those with only 2-D, while Imax 3-D screens averaged  almost four times as much as 2-D. Distributor Paramount Pictures' aggressive push to book "Dragon" at as many 3-D locations as possible, despite competition from "Alice in Wonderland" and next week's "Clash of the Titans," paid off as a combination of higher ticket prices and attendance for 3-D provided a boost to the bottom line for "Dragon."

Audience enthusiasm for 3-D, however, didn't make them more enthusiastic to see the movie, which cost $165 million to produce. Despite an aggressive marketing push for "Dragon," its domestic opening was 27% lower than that of DreamWorks' last animated feature, "Monsters vs Aliens," which played on fewer 3-D screens on the same weekend last year.

Overseas, the new film's performance was mixed in comparison with its predecessor. "Dragon" is playing better than "Monsters" did in Brazil, Germany and Russia but started slower in Australia, Italy, Mexico and Spain. Since the international performance of "Monsters vs Aliens" was a disappointment for DreamWorks Animation, the studio was surely hoping that its new picture would play well in more countries.

Those who saw "How to Train Your Dragon" seemed to love it, however, with domestic audiences giving it an average grade of A, according to market research firm CinemaScore. Combined with excellent reviews and no major new family films coming until DreamWorks' own "Shrek Forever After" in May, there's some reason for the studio to hope "Dragon" will play well in the weeks to come and end up a winner.

"We're anticipating long-term playability," said Anne Globe, DreamWorks Animation head of worldwide marketing. "Word-of-mouth and reviews should propel us."

(For more on the opening of "How to Train Your Dragon," as well as the debut of "Hot Tub Time Machine," see our initial box office post.)

Although "Alice in Wonderland's" domestic run is winding down with $17.3 million this weekend, it  is still humming overseas, bringing in $46 million from 51 foreign territories thanks in part to strong openings in France and China. It has now collected a total of $293 million domestically and $363 million internationally.

"The Blind Side," meanwhile, is posting decent numbers in key foreign territories such as Britain, Germany and Mexico but is not turning into  the $255-million box-office phenomenom it has been in the U.S. and Canada. So far, the inspirational football movie for which Sandra Bullock won an Academy Award has grossed $22.4 million overseas.

In limited release, Focus Features expanded "Greenberg" from three theaters to 181 and took in a pretty good $1.1 million, bringing its total to $1.2 million.

Director Atom Egoyan's "Chloe" opened to a soft $1 million at 350 locations.

Disney opened its animation documentary "Waking Sleeping Beauty" to a modest $33,100 at five theaters.

Here are the top 10 movies at the domestic box office, according to studio estimates and Hollywood.com.

Hollywood's battle of the screens: 'Dragon' breathes into nearly 2,200 3-D locations

In the battle between major studios for 3-D screens, the dragon came in a little behind "Alice," with the "Titans" still looming.

Although exact numbers are still being worked out, people familiar with the situation said that DreamWorks Animation's "How to Train Your Dragon," which is being distributed by Paramount Pictures, will play in about 2,150 theaters in the U.S. and Canada with a 3-D screen this weekend.

Disney had 2,250 theaters for "Alice in Wonderland" when it opened March 5, with "Avatar" still playing in 661.

"Alice" is expected to continue playing in several hundred 3-D theaters this weekend; "Avatar" has virtually finished its 3-D run.

There are a little more than 2,300 theaters in the U.S. capable of projecting 3-D movies, the majority of which have multiple 3-D screens.

Warner Bros. is still booking theaters for its 3-D movie "Clash of the Titans," which opens next week. With theaters still rapidly adding 3-D screens, it remains to be seen how many it will get. However, Paramount has already booked roughly 800 of the slightly more than 1,000 theaters with just one 3-D screen to play "Dragon" for at least a few weeks.

Paramount and DreamWorks also have a longstanding commitment for all 186 domestic large format Imax screens to play "Dragon" in 3-D until "Iron Man 2" opens on May 7.

Paramount and Warner have both engaged in high-pressure tactics to book the limited number of 3-D screens for their two films. Paramount has angered some theater owners with its policy of not providing a 2-D copy of "Dragon" to theaters that decline to play it on a 3-D screen.

--Ben Fritz

Photo: A scene from "How to Train Your Dragon." Credit: DreamWorks Animation.

3-D movie boom leading to 3-D ticket price hikes

With 3-D movies such as "Avatar" and "Alice in Wonderland" burning up the box office, theaters are betting that consumers are willing to shell out more to put on glasses to see "How to Train Your Dragon" and "Clash of the Titans."

Analyst Richard Greenfield of BTIG surveyed 10 theaters in different major cities across the country and found that, on average, they are raising ticket prices for 3-D movies by 8% this weekend. The price of a movie in 3-D on large format Imax screens is going up even faster, rising an average 10% for adults and 12% for children.

2-D ticket prices, meanwhile, are going up 4% on average for adults and 3% for children.

The average surcharge to see a movie in 3-D is now $4. For Imax 3-D, it has gone up to nearly $6.

Although BTIG's survey is not nationwide and includes only major metro areas and not small towns, it's a clear sign that, despite the economic downturn, movie ticket prices continue to rise, with 3-D leading the way.

"Avatar" has grossed more than $737 million domestically so far and generated more than 80% of that revenue from 3-D-equipped theaters. "Alice" has taken in more than $270 million and did about 70% of its business from 3-D-equipped theaters on its opening weekend. Imax screens have proved even more lucrative for both movies than regular-sized digital 3-D screens.

Greenfield estimated that about one-third of the 10% rise in box-office revenue so far this year is due to higher prices for 3-D movies, and two-thirds is due to higher attendance.

"How to Train Your Dragon" this Friday and "Clash of the Titans" next weekend are the third and fourth 3-D event movies, respectively, in a growing wave coming to theaters this year.

--Ben Fritz

Photo: Director Wim Wenders wears 3-D glasses at the premiere of his short film "The Flight" in Italy on March 19. Credit: Fabio Campana / EPA.

Fight over 3-D screens heats up with high-pressure tactics

Ever since Time Warner's Warner Bros. announced its plans in February to open "Clash of the Titans" in 3-D on April 2, just one week after DreamWorks Animation's 3-D "How to Train Your Dragon" debuts, studio executives and theater owners have known there would be an all-out battle for the limited number of 3-D-capable screens.

The battle is heating up this week. Exhibition executives at the ShoWest industry conference in Las Vegas have been buzzing about the pressure they're under from Viacom's Paramount Pictures, distributor of "Dragon," and Warner Bros. to book their respective movies.

Paramount has taken the unusual and aggressive step of telling theaters with a 3-D-capable screen that if they choose not to show it in 3-D, they won't be provided with a 2-D copy to show instead. 

"It's an underhanded threat," said one California theater operator who asked not to be identified for fear of reprisals.

Walt Disney Studios, meanwhile, is looking to keep as many 3-D screens as possible for "Alice in Wonderland," which has grossed more than $220 million domestically in its first 12 days.

For much more on the battle for 3-D screens and Paramount's high-stakes gambit to ensure that "How to Train Your Dragon" secures as many as possible, see the story in Thursday's Times.

-- Ben Fritz and Richard Verrier

Photo: A scene from "How to Train Your Dragon." Credit: DreamWorks Animation.

Big step forward for 3-D at home

As if Fox doesn't have enough to worry about with the theatrical opening of its $300-million-plus 3-D spectacle "Avatar" at midnight tonight, there has been lots of speculation about whether the movie's DVD sales will be comparatively low because of the difficulty of watching 3-D at home.

With such a strong emphasis on watching the movie in digital 3-D in theaters, audiences may be turned off to watching it at home because technology to make the same viewing experience possible on televisions lags far behind.

In good news for "Avatar" and the many other 3-D movies coming in the next few years, the Blu-ray Disc Assn. today agreed on a standard for high-definition viewing of 3-D movies at home. In practice, that means it will be easier for studios to release movies in 3-D for the still small but fast growing number of homes with Blu-ray players.

For more details on the new Blu-ray 3-D standard, see the story on The Times' tech blog.

-- Ben Fritz

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