A thawing in the credit markets is key to kick-starting the sluggish digital conversion process and should occur within the next quarter, a leading banker told attendees on the third day ofShoWest.
Speaking on a digital financing panel, JPMorgan Investment Banking managing director Andrew Sriubas said once markets returned to stability the financing should materialise for the deployment of digital cinema through third parties like Digital Cinema Implementation Partners.
The global economic crisis has put on hold plans involving ‘integrators’ like Digital Cinema Implementation Partners - a consortium of the three largest US exhibitors AMC, Regal and Cinemark - as well as self-financing schemes such as Paramount’s direct-to-exhibitor proposal.
On the day of the panel Paramount announced it would offer digital cinema support directly to international exhibitors, echoing the North American model unveiled back in January that cuts out the middleman integrator by allowing exhibitors to source local financing for cinema conversion. Paramount claims the process requires less capital up-front than one that involves an integrator.
‘We’ve had small exhibitors who can’t get the attention of integrators come up to us and ask about the direct-to-exhibitor plan,’ Paramount’s executive vice president of operations Mark Christiansen said. He conceded that more studios need to get on board to persuade Wall Street to unlock financing capital.
Julian Levin, Twentieth Century Fox’s executive vice president in charge of digital exhibition, said his studio had done deals with third party integrators that covered 60,000 screens around the world. The key now is to unlock the credit to secure financing.
Levin reiterated his frequent warning that exhibitors needed to sign up to the scheme sooner rather than later or risk facing higher costs in the future. Under the current proposals, the studios have agreed to contribute towards exhibitors’ installation costs of digital equipment through the payment of VPFs or virtual print fees.
‘If you are not already an early adopter - and a lot of people believe transition is inevitable - you need to get involved and engage in understanding how the financing works,’ Levin said after Southern Theatres CEO George Solomon expressed doubts over digital format and the complexities of financing the conversion. Levin continued: ‘We may not be there forever contributing VPFs at the current level we are offering today.’
Solomon retorted by commenting dryly about Fox’s decision to no longer subsidise the cost to theatre owners of providing disposable 3D glasses. Earlier in the day Dolby announced that for a limited time it would offer exhibitors who instal its Dolby 3D Digital Cinema System to get two 3D glasses for the price of one.
In related news, South Korea’s D-Cinema Korea announced it had reached non-exclusive digital cinema deployment agreements with Fox International, Paramount Pictures International, and Universal Pictures International. Under these agreements, the three studios will supply digital versions of their films to the DCI-compliant digital projection systems installed by D-Cinema Korea in South Korea.
Introducing a Sony summer showreel earlier in the day, Sony’s president of worldwide distribution Rory Bruer mentioned briefly that a Ghostbusters remake and a third Men In Blackfilm were in the pipeline. The reel included first footage of the sci-fi thriller District 9set in South Africa that Peter Jackson is producing. QED International handled overseas sales. Among others titles were Angels & Demons, romantic comedy The Ugly Truth, comedy The Year One, drama Julie & Julia and the thriller remake The Taking Of Pelham 123.