Theater operators are understandably loath to help finance this windfall for the studios, particularly if the rapidly changing state of the technology means that costly new equipment could be rendered obsolete in short order. The cinema chains' woes have led some in the movie business to think of new methods to help finance the digital conversion. Walt Disney Co., an enthusiastic backer of digital technology, has suggested the studios create an intermediary to guarantee exhibitors' leases of high-tech equipment, defraying the cost from a combination of distribution savings and higher rental charges from theaters. He says Disney has not discussed the plan with other studios or with theater owners. Theater operators also fear that the claimed advantages of digital projection will not be enough to sell more tickets.
Studio executives say that concern is groundless.
Digital theaters in Europe, he says, have consistently outdrawn competitors and retain higher percentages of the audience after the opening week. Even AMC, King says, does not think audiences will pay a higher price simply to see a digital screening. Indeed, the financial benefits of digital conversion for theater owners are largely conjectural. Digitally equipped theaters could show rock concerts and sporting events such as boxing matches, as well as broadcast corporate sales meetings. Theater industry experts doubt this will be enough extra business to finance the conversion.