Can 3-D save the cinemas
CINEMA group Palace Amusement has tripled its capital expenditure amid a Digital 3-D build-out project earmarked as a saviour in an industry ravaged by pirates, even while the firm continues to operate in the red.
According to Palace’s unaudited financial statements released on Monday for the nine months ended March 31 2011, funds allocated towards capital expenditure was $64.5 million at the end of the period under review compared to $21.1 million at the end of the corresponding period last year. This comes against the background of the company’s plan to spend some US$2 million ($167 million) to have Digital 3D at all its cinemas by 2012.
Over the period under review, $14.6 million was allocated towards the Carib Cinema at Cross Roads in Kingston, $11 million towards Palace Cineplex located in the Sovereign Centre in St Andrew, $12.2 million for Palace Multiplex in Montego Bay and almost $10.7 million at Odeon Cineplex in Mandeville.
The project was being rolled out while the cinema group posted a second consecutive quarter of losses. The group posted net loss of $7.8 million at the end of the nine month period under review. Revenues of $500 million was marginally higher than the corresponding period last year.
But this may be a small price to pay for future viability in an industry facing stiff competition from live streaming of movies online and a booming bootleg dvd market that has impacted negatively on theatre attendance. Indeed, Palace stated in its latest annual report that 3-D films offered the best defence against piracy due to the difficulty of replicating the experience.
“The group is still on track with the phased implementation of Digital 3D screens at all cinemas by 2012. Retooling remains at some US$150,000 per screen,” stated the firm in its annual report.
“Digital films worldwide are bringing audiences back to the cinema. All major companies are now producing digital as well as analog films, simultaneously as they prepare for the inevitable retiring of analog to the annals of history,” added Palace.
Palace has three Digital 3-D screens at Carib; two at Palace Cineplex and two at Palace Multiplex.
The move by Palace is in line with a worldwide movie indistry that is moving towards 3-D. There were only just over 100 3-D screens across theatres in North America in 2005 compared to more that 2,000 3-D equipped screens in 1999, reported the Wall Street Journal. There are a total of about 43,000 movie screens in North America.
However, local industry experts such as Paul Shoucair, while optimistic that the move to 3-D will indeed provide cinemas with a boost in the short run, he said that the industry will have to do more to fend off the black market in the long run. Shoucair is himself a victim of the rampant piracy in the movie and music industry. Just a year ago he was forced to shut down his Mobile Music store that sold cds and dvds.
“I think it’s going to be a cat and mouse game between technology that is slightly ahead in the cinemas and technology that’s slightly behind in the household,” noted Shoucair, who now operates the New Leaf Vegetarian restaurant at the same
“3D in three year’s time will be in people’s house and you’re going to come back to the same problem.
He added: “What it will come down to is the only thing that is going to save the movie industry is going to be how well they are able to enforce the copyright online…We are going to end up with everybody watching streaming and if you can’t control that streaming, you’re dead.”