Korean cinema rivals unite for digital

By | November 13, 2007 4:16 am PST

In the first international example of digital cinema bringing together exhibitor adversaries, South Korea’s CJ-CGV and Lotte Cinema have pacted for a digital cinema deployment venture. The two cinema majors have formed a 50/50 joint venture to accelerate digital cinema deployment in a country that it already at the forefront of D-Cinema installations. According to Screen Daily:

CJ CGV and Lotte Cinema own 430 and 290 screens respectively. The two rival chains hold almost 40% of the nation’s screens, making it easier for them to negotiate with local and foreign distributors through the joint venture.

D-cinema Korea expects to select, order and test its new equipment, such as projectors and cinema servers, and to have the business up and running by the first quarter of next year. The company is starting with about $3.3m in capital and will be run jointly by co-CEOs appointed from each side.

The partners plan to make digital equipment available to theatres at a third of the cost, and transfer ownership of the equipment to theatres after 10 years.

While Variety observes that:

D-Cinema Korea will open shop by the start of 2008 and plans to finance roughly 33% of the cost of purchasing and installing digital projectors, with full ownership to be transferred to theaters after 10 years.

Distributors will be charged a virtual print fee upon the release of each title to help recoup the initial investment.

CGV logoWhat this means is that Korea now has its own version of DCIP, which unites Regal, AMC and Cinemark in the US, and could serve a sa model for exhibitors in other countries of how to make a common cause for digital cinema.

Despite recent woes for the Korean cinema industry, the country is one of the leading countries when it comes to digital deployment, averaging as it does five per cent, which puts alongside the the likes of US, UK, Norway and Belgium. There is both a push for digital 3D and as Screen Daily noted in the article above, one of the two partners until recently had an integrated partnership for deploying digital:

Lotte Cinema previously signed a MOU with multiplex chain Cinus and leading telecom KT over a year ago. KT subsequently started a digital cinema transmitting service with Cinus while Lotte saw no other particular developments. Its partnership with CJ CGV has now effectively cancelled out the MOU.

What both articles fail to further deduce from this is that with exhibitors world wide getting smart about digital and working together to make it happen, it is another nail in the coffin for the third-party digital cinema business proposition promoted by the likes of AccessIT and Arts Alliance Media.

Patrick von Sychowski
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Patrick von Sychowski

Patrick was a Senior Analyst at Screen Digest, went on to launch the digital cinema operations of Unique and Deluxe Europe, then digitised Bollywood at Adlabs/RMW, and now writes, consults and appears on panels about cinema all over the world.
Patrick von Sychowski
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