Wednesday, September 3, 2008

3D coming to small movie theater operators

In an effort to stay competitive with big chains, a consortium of independent movie theaters and small chains has cut a deal to get three-dimensional technology onto more of its screens.

The Cinema Buying Group, which represents 643 small-theater owners in the US and Canada with some 8,000 screens, said it planned to add 3D equipment at about 1,000 of its screens. That will allow more independent theaters to run 3D versions of coming movies that are generating buzz, such as "G Force" from Walt Disney, about a commando force of small animals, and "Monsters vs. Aliens" from DreamWorks SKG, about monsters battling interlopers from outer space.

The deal is with RealD Corp., a company that licenses 3D technology to theaters. For RealD's system to work, a theater must have upgraded to digital projectors from reel-based projectors, at a cost of about $50,000 to $70,000 per screen. Then, it needs to license the RealD technology, which might cost $20,000 per screen over 10 years, depending on factors such as how much business that particular theater does.

Currently, only a handful of independent theaters have 3D technology. The technology is more likely to be in a theater owned by a big chain; earlier this year, industry giants Regal Cinemas and Cinemark USA signed deals to outfit 1,500 screens each with RealD. Some 1,200 theaters in North America have RealD systems, with 2,000 more expected to be hooked up by the end of the year, including some independent theaters.

Many movie and theater executives hope that 3D, which has advanced well beyond the red and green glasses of years ago, will revitalize the movie industry. The technology isn't available for home viewing, so people who typically watch movies on DVDs must get off the couch and buy theater tickets if they want to catch 3D movies.

Theaters tend to charge a premium for 3D tickets, often $2 to $5 more than regular tickets. That means movies that run on 3D screens can boost theaters' and studios' bottom lines. During opening weekend for this summer's "Journey to the Center of the Earth," 3D screens took in almost four times the revenue of 2D screens showing the movie.

Bolstering per-ticket revenue is crucial for theaters amid weakness in the number of tickets sold compared with a few years ago. Last year, US moviegoers bought 1.4 billion tickets, up slightly from the year before but well below the 1.6 billion sold in 2002. The deal with the independents will be rolled out over the next two years. (nfo from The Wall Street Journal)

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