D-cinema lifts off; eyes '13 orbit

Half of all screens could be digital in six years, report says

After more than 10 years in development, digital cinema finally took off this year, with 4,627 screens converted through September, nearly 5% of the global total.

The news, unveiled Monday in a report from U.K. analysts Dodona Research, represents a boon for equipment manufacturers, who heard that the d-cinema market could be worth more than $8 billion by 2013.

By that year, half of all cinema screens worldwide could employ digital technology in lieu of traditional 35mm projectors, according to the report. And the adoption of digital will see the $1.5 billion market for the printing of releases "all but disappear."

The beginnings of digital take-up can be traced to the birth of third parties willing to finance the huge conversion costs, Dodona said. Such investors finance the purchase of equipment, seeking to repay loans by levying an array of usage charges.

While the cost of installation, maintenance contracts and sometimes content delivery charges are paid by exhibitors, the main source of revenue to support conversion comes from so-called virtual print fees. These are paid by film distributors out of their notional savings from not having to strike 35mm film prints.

The main factor slowing further adoption, according to the report, has been the absence of any obvious source of extra revenue from installing the new technology.

While cinema exhibitors have been quick to note the benefits to distributors of much lower print costs, they have been skeptical about the potential impact of alternative content such as sports events or concerts.

But there is a consensus building that 3-D "will be the driver that takes the market to the next level," Dodona said.

With at least 5,000 3-D systems expected to be in place by 2009, this will clearly provide a considerable impetus to the digital conversion process as 3-D systems require a digital projector.