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Exclusive: Sony, Regal Sign Digital Deal

Deal puts Sony on track to become the digital cinema market leader in North America.

The digital cinema tide has turned toward Sony.


Regal Entertainment Group — one of North America’s largest theater chains with 6,793 screens in 551 theaters — has selected Sony 4K digital cinema projectors for its circuit, according to a source.


The deal, combined with the recent news that AMC Entertainment inked a deal to install the 4K technology — appears to put Sony on track to become the new digital cinema market leader in North America.


To date Texas Instruments’ DLP Cinema-based 2K projectors from Barco, Christie and NEC have dominated the market, with nearly 5,500 installed. Sony, in contrast, has a few hundred in place. But in March, Sony demonstrated that it was closing the gap when AMC — with 4,628 screens and 309 theaters in five countries — selected its gear.


AMC’s deployment is slated to begin this quarter and finish during 2012. No word yet on the financing and rollout schedule for the Regal theaters.

Regal and AMC are both members of Digital Cinema Implementation Partners — a joint venture between the two circuits and Cinemark that was formed to plan and deploy d-cinema. But in the dire economic climate, DCIP has not yet raised the needed funding required for a wide rollout. Sony announced last fall that it would offer deployment financing plans.


3D stakeholders in particular have been hoping for rollout news. This is because d-cinema projectors are required to enable digital 3D, and a growing slate of upcoming 3D releases has increased demand for screening venues.


The top grossing movie of the year so far, Dreamworks Animation’s 3D “Monsters vs. Aliens,” has already earned $190.5 million domestically and $333.5 worldwide and is still in theaters. Still, when the film opened March 27, roughly only 2,000 of the screens supported digital 3D, which was less than half of what was originally anticipated.


It will need to surrender any remaining screens it’s on to Disney/Pixar’s “Up” on May 29. Including the Pixar film, at least five more 3D titles will open this summer that will need to share the limited number of venues.


That can have significant impact on the bottom line for productions that have invested in the 3D format. DWA, for instance, estimates that it costs an additional $15 million to give three-dimensional imagery to one of its releases.


The 4K format supported by the Sony projectors consists of four times the amount of picture information found in 2K, which is commonly used for digital cinema production and distribution.


But Sony has been bullish about 4K. Last October, it revealed its intent to release the majority of its filmed productions in 4K. As it turns out, among its early 4K releases is Sony/Columbia’s “Angels & Demons,” which topped this weekend’s box office with $48 million in the domestic market and $152.3 million worldwide.


As part of its strategy, Sony is developing 4K digital cinematography cameras, storage and postproduction equipment.