Nowhere is that more evident than in the move to digitalize the nation's 38,000-plus movie theaters, a process that the studios and theater owners have long regarded as essential to bringing down the costs of making and shipping prints -- and also to pave the way for 3-D. After years of discussion, both sides have largely agreed on a formula that will cover the costs of installing digital equipment, now running at approximately $75,000 per screen.
"They are really preparing for the next major overhaul," says Chuck Viane, president of distribution at Disney. "The last big overhaul was stadium seating and reconstructing the infrastructure of their cinemas, and they are now at the doorstep of digital deployment. Once the DCIP deal is struck later this year, you will see a very strong movement across all cinema companies."
What Viane refers to is a deal now being negotiated for Digital Cinema Implementation Partners, a joint venture created by three of the biggest theater chains -- AMC Entertainment, Regal Entertainment Group and Cinemark USA -- to install digital equipment in all of their 14,000 screens in the U.S. and Canada. If the deal takes place as expected, the studios will agree to pay a fee every time the equipment is used to show their films, until the cost of installing the equipment has been covered. That fee, known as the Virtual Print Fee, would be an estimated $700-$1,000 per movie, per screen.