inside track

Regal, RealD can't begin installations until print fees are worked out

Regal Entertainment Group and RealD have inked a deal to install 1,500 RealD 3-D systems in Regal theaters in the domestic market. Consummation, however, is contingent upon digital cinema deployment arrangements.

In order to have digital 3-D, a theater first requires a digital cinema installation. D-cinema 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. However, many of these deals remain at an impasse.

Digital Cinema Integration Partners — a joint venture owned by Regal as AMC Entertainment and Cinemark — is one of the entities that remains in negotiations.

"We look forward to the finalization of the DCIP deals, which will allow Regal to commence the expanded 3-D rollout," Regal chairman and CEO Mike Campbell said.

Per the deal, RealD will provide the 3-D equipment, and there will be a revenue-sharing agreement with Regal.

There are now nearly 5,000 digital cinema screens in the domestic market, but only slightly more than 1,000 are 3-D ready. Meanwhile, there are at least 10 3-D features planned for a 2009 release; the format's next release this year arrives in July with New Line/Walden Media's "Journey to the Center of the Earth 3D."

RealD has 1,250 3-D systems installed worldwide, with about 1,000 in the domestic market. Lewis said the company has completed deals for an additional 750 systems worldwide that would be deployed when the exhibitors have digital cinema installations.

Said DWA CEO Jeffrey Katzenberg, a champion of 3-D, "I believe this partnership between Regal Entertainment Group and RealD marks a defining moment for the greatest transformation in moviegoing in 70 years." (partialdiff)