Showeast 2012: Is the End of Film One Year Away?

Movie Theater Interior - H 2012
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Movie Theater Interior - H 2012

"There is a lot of nervousness," says cinema consultant.

“Film could very well end in a year, and it won’t be the decision of studios,” Michael Karagosian, founder of MKPE Consulting, said in a conversation with The Hollywood Reporter, just prior to the start of the annual Showeast theater owners conference. “It will be the decision of a court over Kodak. Fuji took their last print orders and is going to end production in March.”

The pending demise of film and its impact on those in exhibition that still rely on celluloid will be an urgent issue at Showeast, which runs Nov. 5-8 in Fort Lauderdale, Fla.

While film giant Kodak filed for Chapter 11 bankruptcy protection earlier this year, Karagosian says, “I believe the studios felt that they could rely on Fuji, possibly even Agfa, for some print stock. Now that they don’t have a [certain] fall back, there is a lot of nervousness. Without film stock, nobody is going to be able to make a film print.”

The exhibition community has been shifting from film to digital projection for more than a decade. The earliest digital cinema releases — Star Wars Episode I: The Phantom Menace, Tarzan and An Ideal Husband — opened on just a few digital cinema screens to paying audiences in the U.S. in the summer of 1999.

But while forecasts suggest that more than 80,000 digital projectors will be installed in theaters worldwide by the end of the year, that is still a far cry from the estimated total of 125,000 screens in the global cinema market.

Pressure is on exhibitors to complete the transition to digital, and their options include investing in new lower cost projection systems or taking advantage of “Virtual Print Fee” deals through which the studios contribute to the cost of conversion. The concern though is that film prints might not be available in the interim, Karagosian pointed out, adding that this reality is particularly worrisome for regions such as South America, where 75 percent of screens still use celluloid.

This situation did not come without warning. In his keynote at Showest in 2011, National Association of Theatre Owners president John Fithian predicted that domestic distribution of movies on celluloid could cease before the end of 2013.

During his address, Fithian reported that Fox had already notified exhibitors of its intent to end film distribution in the U.S. within two years. He asserted: “No one should rely on the distribution of film prints much longer.”