Digital Cinema deal done?

Below is a link to an article from the Hollywood Reporter about a major deal between 5 of the Studios and the three biggest cinema chains in the US. This should finally get the ball rolling on a major changeover to digital from 35mm film to digital projectors.

There are many reasons for conversion but the main one is the cost savings of not having to make and ship millions of feet of film. I read the studios may save up to $1 Billion a year, that seems a bit much but it will be significant.

The basic issue has been the fact that the studios would be the ones to save most of the money but the cinemas didn't want to pay for the cost of the equipment which won't really make a difference most of the time. 99% of the time the audience wouldn't know whether it's watching film or digital. Converting a theatre can cost upwards of $100,000, more if 3D is involved.

They have finally agreed on what is called a Virtual Print Fee which is so obvious it should have been agreed upon earlier. Basically each time a digital print is used the studio will pay the theatre the amount it saved by not having to make a film print. Once the equipment is paid for the payments stop. Makes a lot of sense to me.

One issue that's been looming over this whole debate is what to do about smaller chains and independent theatres. The situation could be especially difficult with second run theatres that use the 'leftover' prints from the first run theatres. The studios won't want to pay us a VPF since they didn't save any money by not making a print.

I'm sure something will be worked out. For example I went to see a movie at the Hyland tonight and all the trailers were for movies from a smaller company called Mongrel Media. Mongrel tends to specialize in smaller Art type releases that rarely play in the big multiplexes. They mostly play in places like the Hyland and Western Film.

To me it would be in Mongrel's and other smaller distribs interests to work out some sort of VPF with the theatres that plays their films. Otherwise most of those theatres will close because they can't afford to convert to digital without help.

http://www.hollywoodreporter.com/hr/content_display/news/e3i891ca34060aefcb3a74bc5b69a35f952