US cinema chains prepare for the next technological upswing

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Now the move to digital is all paid up, cinemas band together to get the best deal ahead of the next technological revolution.

Both in the U.S. and right here in Britain, there are… differences of opinion, shall we say. At least when it came to working out an equitable division of finance for the move to digital projection in cinemas. Lots of cinemas have converted to digital projection since the early 2000s, and it’s been a very, very costly business. One driven primarily by distributors.

After all, at the time, cinemas were far less likely to turn a major profit from the switch to digital (unlike the original move to 3D), whereas studios were keen to benefit from the vastly-reduced costs of digital shooting and distribution.

The answer then, came in the form of virtual print fees, a subsidy paid by distributors that remains the source of much contention. Here in the UK for instance, it’s estimated that the cost to distributors amounts to some £628m and counting (…and still counting. Some VPF deals run far into 2020).

In America then, with VPFs almost a done deal, NATO – the National Association of Theater Owners – have banded together to ensure that they are properly organised ahead of the next wave of technological innovation, reports Variety. Whatever that innovation turns out to be. Bottom line: if it it involves a hard cash investment in multiplexes, they’ll be ‘conversations’ about who foots the bill.

Whilst some argue that exhibitors did markedly better out of the digital deal than distributors, American cinema chains did find themselves at the mercy of distributors when it came to determining the specifics of the technology. After all, if the distributors were paying the lion’s share of the bill (up to 75% here in the U.K.) then they largely got to decide on the technical specification.

It will be interesting to see if a similar development arises on this side of the pond, and of course, what that next technological revolution will look like. Glassless 3D? 5Dx? 6DX? Whatever it’ll be, the cost and benefits will likely be divvied up a little differently…

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