3-D 'train wreck' looming?

NATO head sees financial impasse

National Association of Theatre Owners president John Fithian sent 3-D stakeholders a stern warning that they face a "potential train wreck" in 2009.

Next year is widely considered a pivotal one for the format, with a least 10 3-D features slated for release, including James Cameron's anticipated "Avatar"; DreamWorks Animation's first 3-D feature, "Monsters vs. Aliens"; and several titles from Disney.

"We are at an extremely critical juncture in the transition to digital cinema, but the (deployment) deals have to be done," Fithian said Sunday at the National Association of Broadcasters Show's Digital Cinema Summit. "We are at an impasse over the financials."

The deployment deals generally rely on a virtual print fee model through which studios contribute an agreed fee per screen, per movie to offset exhibitors' installation costs.

"Unless digital cinema deals are made in the next one to two months, we will not have time to (deploy the screens) for 2009," Fithian said.

"Despite that, some of my friends at the studios are insisting that they should pay lower VPFs (in current negotiations) than they did in the first round of deals," he said, asserting that the model worked in the first round. "3-D cannot be an excuse for lowering VPFs."

He warned that if the studios want the planned 3-D rollout, and in time for 2009, "these deals need to be struck right now."

Today, nearly 5,000 digital cinema screens — with slightly more than 1,000 3-D capable — are installed in North America. Stakeholders have been citing at least 4,000 3-D-ready screens as a target for spring 2009, in order to accommodate the scheduled releases.