Latin America is by far the laggard in converting to digital cinema. Ever pragmatic, approximately 25% of the market replaced film projectors with digital 3-D projectors, for which they can charge a higher price for ticket. But Latin America has been slow to convert the remaining 75%. Some studios have shopped direct VPF deals to exhibitors, but either the eagerness to go direct with exhibitors wasn’t shared by all studios, or the exhibitors didn’t feel the deals were sweet enough. But the deadline to convert is approaching, and that could very well become the theme for this year’s ShowEast.
By the end of 2012, it’s expected that the demand for motion picture film prints will have dropped 70%. For any business, this is a disastrous situation. Fuji reacted by planning the shutdown of its motion picture film printing operations in March 2013, and closing its order desk for prints last month. Doing so places a strong reliance on Kodak to continue operations. But Kodak
The region is not without challenges. Brazil’s currency is not pegged to the dollar, for example, while digital cinema equipment is, raising currency conversion problems as equipment is purchased and VPFs are collected. Further, not all economies are stable in the region, and not all governments have western-government-friendly financial policies. Studios report difficulties getting their money out of certain countries.
On the other hand, Latin American exhibitors stand to get the best value out of their equipment expenditures, as manufacturers step in with lower cost .7” projectors with integrated servers, a further development of the integrated media block.
ShowEast, to be held the first full week of November, is largely a cinema show for Latin America. With a 5-year holiday on import duties for cinema equipment in Brazil taking effect this year, there are said to be no less than six deployment entities poised to announce deals there, for an independent market of no more than 1400 screens. The challenge for exhibitors, then, becomes who to pick? If managed in the manner that US exhibitors managed the selection of digital cinema deployment entities, everyone will get a piece of the action. In the US, there’s a market of over 20,000 independent screens, which allows for the luxury of independent thinking. But there’s not much room for division within Brazil, or any nation in Latin America, for that matter. If the clock starts ticking at ShowEast, and the clock stops ticking when the courts decide that it’s time for Kodak to stop making print film, then there won’t be much time to wobble. Latin American exhibitors will soon find themselves having to make a decision, and to make it enjoined with their fellow operators.