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3-D rollout at movie theater chains gets a boost -- finally

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Hollywood’s 3-D bottleneck may be nearing an end. That was the upbeat assessment among studio executives, vendors and exhibitors who on Wednesday attended a ‘3-D Entertainment Summit’ at the Hilton Los Angeles in Universal City.

Many conference participants were heartened after JPMorgan Chase & Co. announced late last week that it was moving ahead with plans to secure $525 million in financing to retrofit up to 15,000 screens for digital technology over the next five years at AMC, Cinemark and Regal, the nation’s largest theater chains.

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The rollout had been originally scheduled to start last year but was held up by the credit crunch, causing a shortage of 3-D screens (which require digital installations) at a time when movie studios were gearing up to release a slew of high-profile 3-D movies. The delay in digital rollout has been a source of friction between theater chains and movie studios.

To date there are only 2,700 3-D screens in North America, limiting the potential returns that studios can reap from the higher ticket prices from 3-D releases (moviegoers typically must pay an extra $3 to see 3-D films). With the new financing, that number is expected to grow by 4,000 by the of the year, or nearly 10% of all screens in North America.

Dan Huerta, vice president of technology and systems for AMC, said he was ‘thrilled’ by the news, citing high returns generated from 3-D viewings of movies like Lionsgate’s ‘My Bloody Valentine’ and ‘Monsters vs. Aliens’ from DreamWorks Animation SKG.

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‘With attendance flat or on the decline, 3-D has been just a boon for us,’’ he said.

Still, some were skeptical about how soon the promised financing would actually kick in.
‘I have a lot of scars waiting for this to happen, so I’ll believe it when I see it,’’ Lars Munson, a partner in the hedge fund Manatuck Hill Partners (an investor in giant-size movie screen company Imax), quipped during a panel discussion.

-- Richard Verrier

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