Video | Business Headlines | Internet | Science | Scientific Ethics | Technology | Search

 

Digital cinema is moving but obstacles remain

Press Information for Immediate Release


At last, digital cinema is moving but big obstacles remain

A wave of 3D film releases in 2009 will see 20% of the world’s cinema screens converted to digital projection, according to a new report* from analysts Dodona Research, but serious doubts remain over when business conditions are likely to allow completion of the process with the conversion of the remaining four-fifths of screens.

In a new Digital Cinema Briefing report Dodona say there are currently close to 12,000 screens converted to digital projection worldwide, with 5,000 of these 3D enabled, numbers which will rise to 18,000 and 10,000 respectively by the end of this year – in time for the release of James Cameron’s Avatar. Further out, Dodona see scope for the number of 3D screens to continue to climb over the next few years, perhaps representing 20% of the 110,000 cinema screens worldwide by 2012. But beyond this the company is more sceptical, pointing to the fact that a wholesale shift to 3D on the part of the film production industry seems unlikely in such a short timescale, and to the apparent absence of an alternative driver of conversion.

For both film distributors and exhibitors running dual systems to accommodate both 35mm and digital film prints causes unwanted complications and makes costs higher than they would be using either technology alone. In particular, the significant cost and environmental benefits arising from replacing 35mm with digital technology are largely neutralised.

But while 3D offers a compelling business case, based on audience enthusiasm for the technology and the consequent ability to sell premium price tickets to pay for it, to date no such model has emerged to finance 2D conversion. Despite distributor contributions in the shape of virtual print fees, where distributors make a payment every time a digital print is substituted for a 35mm one, and new revenue streams from showing opera, popular music concerts and sporting events, cinema owners find it hard to justify replacing their 35mm projectors with more expensive digital equipment.

Tougher financing terms since the onset of the banking crisis last year make this doubly difficult, and have revealed the flaws in the business models put forward so far. Dodona observes, for example, that integrators – firms which finance, install and service equipment at the same time as running networks to distribute product to cinemas – do not yet appear to be making acceptable returns, or to be able to raise finance in sufficient quantities to roll out installations quickly. The five largest VPF deals integrators have struck with studio distributors potentially cover conversion of 35,000 screens, but out of these only around perhaps 7,000 installations have been completed.

In the end it seems likely that some movement in the financial goalposts will ultimately be necessary to kick start a rapid shift towards complete conversion, either in the shape of lower equipment prices or a bigger contribution from the distribution sector (in the long run distributors stand to make the biggest savings as it is they who today pay for thousands of costly 35mm film prints each year). Encouragingly, widespread suspicions that Sony’s recent deals with AMC, Regal and other circuits have been the result of big discounts, suggest that some of the preconditions for real progress are at last being met.

Equally, the report points out, the deals struck between AMC, Regal and Sony emphasise the early stage nature of the digital cinema equipment market. Until a few weeks ago Texas Instruments’ DLP technology almost completely dominated the market with more than 95% of installations. Adding the 10,000-plus screens of Regal and AMC to its order book gives Sony a potential installed base of projectors almost equal to that of Christie, Barco and NEC - the three Texas licensees – combined.

A similar battle is emerging in 3D. While the first mover and market leader, Real D, appears to have an unassailable lead in the important United States market, elsewhere in the world alternative products from Dolby, XpanD and MasterImage are likely to make a much stronger showing.

As report author Karsten Grummitt observes, “There has been so much discussion about digital cinema for so long that it is easy to forget that the commercial deployment of the technology is really still only beginning. Everything about this market is still to play for. Nothing is settled yet.”


*Digital Cinema Briefing £595 from Dodona Research www.dodona.co.uk


ENDS


Notes to Editors

Dodona Research is a leading provider of information and independent analysis concerning the cinema industry worldwide. Our client list includes film distributors and exhibitors, financial institutions, government bodies, industry suppliers, real estate firms, consultants, advertising agencies and others, in over 50 countries.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

DIY Law: Government Exempts Some Home Improvements From Costly Consents

Homeowners, builders and DIYers will soon have an easier time making basic home improvements as the Government scraps the need for consents for low-risk building work such as sleep-outs, sheds and carports – allowing the construction sector ... More>>

ALSO:

Media Awards: The New Zealand Herald Named Newspaper Of The Year, Website Of The Year At Voyager Media Awards

The New Zealand Herald has been labelled a “powerhouse news operation” as it claims the two biggest prizes – Newspaper of the Year and Website of the Year – along with many individual awards at the 2020 Voyager Media Awards Website of the ... More>>

ALSO:

ASB Bank: ASB Takes The Lead Again With New Low Home Loan Interest Rate

ASB has moved again to support its customers, cutting a number of home loan rates, including the two-year special rate to a new low of 2.69% p.a. Craig Sims, ASB executive general manager Retail Banking says the reduced rate will be welcome news for many ... More>>

ALSO:

Nathan Hoturoa Gray: The Problems With Testing And Case Statistics For Covid-19

To begin to understand disease transmission in a country requires adequate testing of your population with properly vetted, accurate tests. As the world struggles to find what 'adequate percentage' of the population is necessary, (estimates predict ... More>>

ALSO:

RNZ: Fletcher Building To Lay Off 1000 Staff In New Zealand

The construction company will cut around 10 percent of its workforce as it struggles with the fallout from Covid-19. More>>

ALSO:

Can Pay, Won't Pay: Cashflow Moves Urged

Government Ministers are asking significant private enterprises to adopt prompt payment practices in line with the state sector, as a way to improve cashflow for small businesses. More>>

ALSO:

Gordon Campbell: On Why We Should Legally Protect The Right To Work From Home

For understandable reasons, the media messaging around Level Two has been all about “freedom” and “celebration”, but this is not necessarily going to be a universal experience. When it comes to workplace relations, Level Two is just as likely to ... More>>

ALSO:


Telecoms: Spark Welcomes Spectrum Allocation And Prepares For 5G Rollout Over The Next 12 Months

Spark welcomes spectrum allocation and prepares for 5G rollout over the next 12 months Spark today welcomed the announcement of the direct allocation process of 5G spectrum, with the Company to be offered management rights to 60 MHz of 3.5 GHz ... More>>

ALSO:


Trade: Record Monthly Surplus As Imports Dive

Imports in April 2020 had their biggest fall since October 2009, resulting in a monthly trade surplus of $1.3 billion, Stats NZ said today. “This is the largest monthly trade surplus on record and the annual goods trade deficit is the lowest ... More>>

ALSO:


Media Blues: Stuff Chief Executive Buys Company For $1

Stuff chief executive Sinead Boucher has purchased Stuff from its Australian owners Nine Entertainment for $1.
The chief executive was returning the company to New Zealand ownership, with the sale is expected to be completed by 31 May.
"Our plan is to transition the ownership of Stuff to give staff a direct stake in the business as shareholders," Boucher said in a statement.... More>>

ALSO:

RNZ: Bar Reopening Night 'much, Much Quieter'

Pubs and bars are reporting a sluggish first day back after the lockdown, with the fear of going out, or perhaps the joy of staying home, thought to be a reason for the low numbers. More>>

ALSO:

Stats NZ: New Zealand’s Population Passes 5 Million

New Zealand's resident population provisionally reached 5 million in March 2020, Stats NZ said today. More>>

NIWA: Seven Weeks Of Clearing The Air Provides Huge Benefits: Scientist

Seven weeks of lockdown has provided evidence of how pollution can vanish overnight with benefits for the environment and individuals, says NIWA air quality scientist Dr Ian Longley. Dr Longley has been monitoring air quality in Auckland, Wellington ... More>>

ALSO:

Government: Milestone In Cash Flow Support To SMEs

A significant package of tax reforms will be pushed through all stages in Parliament today to throw a cash flow lifeline to small businesses. More>>

ALSO:



University Of Canterbury: Astronomers Discover The Science Behind Star Bursts That Light Up The Sky

University of Canterbury (UC) astronomers are part of an international team that has revealed how explosions on the surface of a white dwarf star can increase its brightness by thousands or millions of times making it look like a new star. For ... More>>

Air NZ: Air New Zealand Adds Business-timed Flights For Regions

Air New Zealand will operate business-timed flights in and out of a number of regional ports from next month.
The flights will allow customers in Hamilton, Tauranga, Napier, New Plymouth, Palmerston North, Nelson, Dunedin and Invercargill to undertake a day of business in either Auckland, Wellington or Christchurch... More>>

ALSO: