Studios reach digital cinema upgrade deal

Five Hollywood studios have reached a long-sought financing deal estimated at over $1 billion with a group of theater exhibitors to digitally upgrade 20,000 US and Canadian cinema screens. The upgrades will enable studios to send movies digitally to theaters, saving them billions of dollars in print and delivery costs. Once outfitted with digital projectors, theaters can add 3-D capabilities. Hollywood has a lot riding on the conversion, with studios like DreamWorks Animation SKG Inc and Disney aggressively planning to roll out 3-D films. These studios will need enough 3-D screens to support their slates. Hollywood and theater chains believe 3-D will not only boost attendance, but also command higher ticket prices. About 5,000 of the 37,000 cinema screens in the United States are digitally equipped and the ultimate aim is to transform all 125,000 screens worldwide. Studios involved in the deal include Walt Disney Co, Viacom Inc's Paramount Pictures, News Corp's Twentieth Century Fox, General Electric Co's Universal Pictures and Lions Gate Entertainment Corp.