Although digital cinema has been available in Korean theatres since 2005, only 107 (or about 5%) of the 1,980 screens in South Korea are digital.
CJ CGV and Lotte Cinema own 430 and 290 screens respectively. The two rival chains hold almost 40% of the nation's screens, making it easier for them to negotiate with local and foreign distributors through the joint venture.
D-cinema Korea expects to select, order and test its new equipment, such as projectors and cinema servers, and to have the business up and running by the first quarter of next year. The company is starting with about $3.3m in capital and will be run jointly by co-CEOs appointed from each side.
The partners plan to make digital equipment available to theatres at a third of the cost, and transfer ownership of the equipment to theatres after 10 years.
CJ CGV and Lotte Cinema stated: 'The global film industry is changing rapidly and at this point we can no longer delay in stepping up local digital cinema.'
The companies pledged to cooperate also with the Korean Film Council (KOFIC), which has made d-cinema one of its recent focuses, and said they planned to 'encourage broad participation' in the industry.
In Korea, a single print costs $1,650-$2,200 to strike. With d-cinema, film distribution time can be cut down from a week to a single day. KOFIC estimates that $26.5m could be saved a year using d-cinema.
Lotte Cinema previously signed a MOU with multiplex chain Cinus and leading telecom KT over a year ago. KT subsequently started a digital cinema transmitting service with Cinus while Lotte saw no other particular developments. Its partnership with CJ CGV has now effectively cancelled out the MOU.