D-cinema lags in Latin region

ShowEast panelists cite lack of studio spending

ORLANDO -- Latin American exhibitors aren't holding their breath for the digital revolution.

Only 50 or so theater screens in the region have been converted to what Hollywood considers movie-quality digital projectors, though more positively, nearly all of those installations are equipped with 3-D capability.

Worse, nobody predicts 2009 will be a watershed year for digital conversions in the region. Throughout much of the rest of the world, it is assumed some auditoriums in most major markets soon will boast digital systems, but Latin America will remain a 35mm world for the foreseeable future.

Here's why:

-- The major studios don't spend as much to distribute film prints in Latin America because of lower costs and fewer releases. Therefore, they are less inclined to subsidize the rollout of digital systems in the region.

-- The existing base of digital screens is so scattered among regional markets that they tend to be only in the most lucrative venues. That makes it more difficult to claim that digital clearly is boosting revenue, which would be helpful in spreading the digital gospel to smaller markets.

If prospects of a rapid conversion to digital seem faint regionally, it is perhaps equally notable that Latin American theater circuits have proved enterprising in their ability to tap other funding sources in the face of resistance by the major studios. Panelists at an opening-day session during the ShowEast exhibition confab said "screen sponsorships" seem the way to go.

Telecom companies and others have shown an encouraging willingness to pay as much as 100% of installation costs in return for naming rights on digital screens for one or two years, Cine Hoyts general manager Heriberto Brown said.

But National Amusements vp international Mark Walukevich said even those efforts are constrained by studios' unwillingness to offer digital versions of movies because of the region's low digital-screen count.

"We want to make these screens strictly digital -- we don't want to have to install 35mm equipment next to the digital projector -- but right now, the content doesn't allow that in Latin America," Walukevich said.

But there have been other promising signs, according to members of the panel, moderated by Bill Mead of the Web site DCinemaToday.

Warner Bros. senior vp international distribution Thomas Molter said his studio saw 30% of its regional boxoffice for "Journey to the Center of the Earth" from 3-D screens.

"It's truly a testament to the fact that digital does work," he said.



But exhibitors emphasized that they have learned quickly that not every 3-D film will fetch extra-dimensional boxoffice numbers.

"A bad film is a bad film, in 2-D or 3-D," Cinemark International president Valmir Fernandes said.

Another panel on Latin American distribution noted the ongoing problem with movie piracy, a key reason studios are adamant about releasing films only on equipment compliant with security and resolution standards set by tech consortium Digital Cinema Initiatives. Separately on Monday, the Motion Picture Assn. presented a special anti-piracy leadership award to Peru copyright czar Martin Moscoso.

But studio executives on the panel said currency fluctuations and regional economics remain the overriding factors shaping Latin American boxoffice territory by territory. This year is pacing about 2% behind 2007, the panelists noted, though Mexico has continued its growth trend and could finish 2008 up 5% from a year ago.

As for next year, the panelists were unanimous in their optimism the industry will cope well, despite a burgeoning global recession.

"If we're not recession-proof, we're at least recession-resistant," Sony vp Latin American distribution Steven O'Dell said.

If studios begin to feel a financial squeeze, modest staff reductions would be much more likely than marketing cuts, the panelists said.

Paramount's Jorge Peregrino, Fox's Eduardo Echeverria, Disney's Martin Iraola and Warners' Redo Farah said the trend toward day-and-date movie releases in the U.S. and worldwide probably has reached its peak. Some films always will be held for later release in various territories, for a wide range of reasons, the panelists agreed.

"We like to release on pay day!" Universal regional vp Mauricio Duran said.

Although a majority of ShowEast panels Monday were devoted to international themes, an afternoon session focused on industrywide marketing trends. Perhaps chief among those: Theater advertising is shifting dramatically from newspapers to the Internet. There has been an accompanying trend toward online ticketing, which occasionally is offered free to customers, the panelists noted.

ShowEast continues through Thursday at the Marriott Orlando World Center.
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