South Africa: Cinemas must go digital to survive

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With the rise of video downloads, South African movie theatres will have to step up their game if they hope to remain operational. According to George van Gils, head of Questek Advanced Technologies, of SA's 720 movie theatres, only four are digitally equipped. “The industry worldwide has been slow moving in terms of technology. Most theatres are still using celluloid and electromechanical devices to screen films.”

Cinemas have never had to make the change, because advances in film have been in the production arena, he adds. “[But] if cinemas don't start including digital equipment and start screening films in, for example, three dimensions (3D), the digital home will take up the opportunities they are missing.”

However, Van Gils says 3D film will be the catalyst to revitalising the industry's technology. Last year, major Hollywood production houses released a total of four movies created in 3D. “This year we are expecting 18, and who knows what will happen after that.”

3D movies require cinemas to install digital technologies that could cost upward of R1 million just to show a picture. The cost of the conversion to digital includes the purchase of a digital projector at roughly R750 000; a silver screen for the best quality at around R100 000; and other sundries, such as a server to house the film and connectivity to retrieve it. “All of this adds up.”

According to Van Gils, the technology has been available for several years; however, the question of who provides that capital layout has prevented most movie houses implementing it. “Traditionally, the production houses paid for extraneous costs, such as the printing and distribution; now theatres are being asked to put in large overheads for digital film.”

He says 3D film has made the option more plausible for cinemas to pay, because the ticket prices can be increased to offset the capital outlay. Just over 4 500 cinemas globally have made the conversion to digital. In the US, the costs are offset with a payment model known as the virtual print fee. 3D film has sparked an increase in moviegoers across SA. According to the Advertising Research Foundation, average four-week attendance to cinemas increased to 760 000 in 2008 from 710 000 in 2007.

The advantages of moving to digital, especially in the local market, should outweigh the possible expenses, says Van Gils. “Firstly, the quality of digital is better than film. The first few runs of film are good, but after cinemas have screened it a few times, it loses quality.”

He says in SA, cinemas often receive second run films – films that have been screened in international cinema runs – to screen in local theatres. “So the quality for the local market is already degraded.”

However, he says 2010 will see one of the biggest advantages of including digital equipment. “The World Cup will be in June, which is the middle of winter. The games will be shown between seven and eight in the evening to accommodate prime time television in Europe. It will be freezing.”

The alternative to the outdoor screens planned across the country for the 2010 matches would be to bring them into movie theatres. According to Van Gils, this can be done with the digital streaming via the new technology in movie theatres.