Paramount tries to kick-start digital cinema

http://www.forbes.com/feeds/ap/2009/01/22/ap5954783.html

Associated Press, 01.22.09, 07:17 PM EST

Anxious to promote the rollout of digital projectors in movie theaters that has been stalled by the credit crunch, Viacom Inc.'s Paramount Pictures said Thursday it would pay theater owners directly to help cover costs for the equipment.

The urgency comes as the movie studio is preparing to distribute DreamWorks Animation SKG (nyse: DWA - news - people ) Inc.'s "Monsters vs. Aliens" in late March in 3-D.

Digital projectors are required before upgrades can ready a screen for 3-D, and DreamWorks' Chief Executive Jeffrey Katzenberg has frequently complained about the slow pace of installation.

"We're trying to rekindle this fire," said Mark Christiansen, Paramount's executive vice president of operations.

He said the tightened credit markets have delayed large-scale rollout plans, such as the $1 billion-plus plan to outfit 20,000 movie screens in North America announced in October in a deal between five major Hollywood studios and Digital Cinema Implementation Partners, a consortium of major theater chains.

Thursday's deal would allow any theater owner in the U.S. or Canada to sign on to receive payments from Paramount of under $1,000 per movie per screen to help offset a roughly $70,000 per screen outlay for digital equipment.

The new proposal would work alongside any other agreements that are already in place.

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"Trying to get $10 million or $100 million today is almost impossible," said Christiansen. "Now a local theater owner can get financed on a local level and we will support them. We can get digital cinema rolling from the local level up instead of from a national level down."