The price of admission to see a movie may be worth it in a couple of years.
Blackstone and JPMorgan are arranging the financing for Digital Cinema Implementation Partners, a consortium of the three largest U.S. theater chains, Regal Entertainment Group, Cinemark Holdings Inc. and AMC Entertainment Inc., which combined operate 14,000 screens nationwide.
The cinema chains are doing the deal in concert with five Hollywood studios The Walt Disney Co., Viacom’s Paramount Pictures, News Corp.’s Twentieth Century Fox and General Electric Co.’s Universal Pictures and Lions Gate Entertainment Corp., sources told Reuters last week.
The details of the funding were not immediately available. JPMorgan and Blackstone were unavailable for comment.
The work would begin in 2009 and could take 3.5 years to complete.
For some time, the studios have wanted to embark on the upgrade project, but have been unable to nail down the financing. With the financing in place, work can begin with the goal of making it possible for the studios to send films digitally to theaters, which would be a sea change for studios, allowing them to cut costs immensely on prints and distribution, as well as to more easily present 3D films to theatergoers.
“Our initial goal is to convert existing theaters of our owners, AMC and Cinemark, and Regal,” Travis Reid, CEO of Digital Cinema Implementation Partners, told Reuters. He added that each screen upgrade costs about $70,000.
Already, Hollywood and theaters around North America are in the middle of a major expansion of 3D screens and a major change in the technology being used for 3D films. In spring 2007, there were just 720 screens equipped to run 3D films, but that number has now jumped to 1,300. For the studios and the theaters alike, adding 3D screens is a boon because of ticket premiums of $3 or more.
And that’s why several studios are planning on rapidly increasing the number of films they release in 3D. —Reuters