Keeping score in the digital cinema game: the virtual print fee is winning by a landslide

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Digital Cinema technology has been viable for several years; the problem has been getting it into the theaters. Itâ''s not that theater owners, for the most part, wouldnâ''t love to trade in their film projectors, itâ''s that converting a multiplex to digital is an expensive operation; about $70,000 a screen.

In the December 2006 issue of IEEE Spectrum author Russell Wintner described a creative solution to this dilemma: a deal between the vendors of digital equipment, the movie studios, and the theaters in which the vendors would provide the equipment to the theaters at no charge, and would be reimbursed by fees paid by the movie studios when they load digital files of movies onto the theater systems. Wintner termed this charge a virtual print fee. An interesting idea at the time, but would anyone sign on? Wintner predicted that they would.

And indeed, they have. Wintnerâ''s group, Access IT, signed four studios this spring--Disney, Fox, Paramount, and Universalâ''and is busy converting 10,000 North American screens to digital (AccessIT had already installed systems for projecting bits onto 4000 screens with a studio backed virtual-print deal). And last week a consortium of three of the largest theater chains, Digital Cinema Implementation Partners (DCIP), announced that they put together a financing package that will fund converting 20,000 North American screens to digital and signed on five studiesâ''Lionâ''s Gate Entertainment, Paramount Pictures, Twentieth Century Fox, Universal Pictures Universal Pictures Walt Disney Co., Again, studios will pay a virtual print fee.

Later last week Sony Corp., partnering with Paramount and Twentieth Century Fox, separately announced that it would convert 9000 screens in North America, Europe, and Asia. Again, the conversion will be financed by a virtual print fee. All the consortia are estimating this fee to be between $700 and $1000.

As far as Wintner is concerned, the more of these deals that happen the better. â''It means,â'' he says, â''the initiative I helped start in 1996 has succeeded with a commitment to replace 35mm film in all theatres across the U.S. and Canada (a total of about 38,000 screens).

Next up for Wintner? Taking advantage of digital cinemaâ''s 3D capability. â''These announcements,â'' he says, â''will add enormous momentum to 3D initiatives.â''

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