Digital cinema is quietly happening

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Access Integrated Technologies announced yesterday that four major Hollywood studios (Disney, Fox, Paramount and Universal) had committed to provide digital versions of their films to up to 10,000 theaters in the U.S. and Canada. That’s close to a fourth of all the screens in those two countries (about 39,000 here, 2,800 up north) The announcement came on the heels of a trio of releases about deployments by Thomson’s Technicolor Digital Systems, which has agreements with four major Hollywood studios (Fox, Sony, Universal and Warner Bros.) and DreamWorks SKG to distribute digital movies to up to 5,000 theaters. Meanwhile, Sony announced Monday that it plans to offer a competing digital-cinema package to exhibitors.

Clearly, the digital cinema transition has now shifted from experiments and test cases to steady roll-outs. Today, AccessIT has installed its systems at 371 theaters and multiplexes in 40 states. That represents about 3,700 screens, or less than 10% of the U.S. total. With the deal announced yesterday, combined with Thomson’s and Sony’s work, the digital inventory should approach 15,000 U.S. and Canadian screens within the next few years. The growth is happening because all six of the major studios have embraced the business model that AccessIT and Thomson have put forward: instead of spending millions of dollars on giant reels of film, which are vulnerable to theft, wear and tear, they are helping exhibitors buy digital projection systems. Those systems are so expensive -- roughly $85,000 per screen -- that theater owners have been reluctant to make the investment themselves, especially with the studios reaping most of the savings from the switch away from film (according to AccessIT, studios save more than $1,000 per print, which translates to $2 million or more per film in wide U.S. release). Now, studios are putting their savings into a fund that pays for digital projectors and servers. It’s a win not just for studios and exhibitors, but also for viewers: many of the digital systems also can support 3-D projections, providing an experience that film and DVD can’t match.