I was thinking about this, so I googled it, and this is an excerpt from an article. What was I thinking? Why aren't movie theaters digital?? How many times has a projector broken, or you sit at a movie theater and say "wtf - I have better than this at home". Now, with HD formats, HD projectors and 7.1 surround sound should start being implimented in these theaters.
(From http://money.cnn.com/2006/05/19/magazines/fortune/theater_futureof_fortune/index.htm)
Digital improvement
The full optimization of theaters will come, experts say, when the business converts from celluloid to digital. The new format will allow not only for instant and dirt-cheap distribution of films but also for targeted distribution of independent films, distinct versions for unique audiences, subtitles, and dubbing, never mind beamed-in rock concerts or kids' shows.
"Digital is a very big deal," says Dan Fellman, president of domestic distribution at Warner Bros. "It's going to take some time, but it could save our industry billions of dollars."
The only problem: The cost savings that Fellman refers to - print and shipping expenses, which would be unnecessary in a digital world in which a film is simply downloaded - fall to distributors. Yet exhibitors have to shell out for the digital projectors, which cost more than $100,000 per screen.
Wall Street financier Ronald Perelman, for one, who owns the film-equipment company Panavision, is betting the transition to digital will go slowly. In January he bought film-service company Deluxe for $750 million.
"Deluxe can transition to digital services along with the rest of the business," says Perelman. "When that happens, I don't have a clue. Right now it's not even clear what the savings would be if you really drill down."
Seven years ago FORTUNE ran a piece about the movie business going digital: "Both studios and exhibitors say they expect that digital distribution should begin in three to five years and that it will be widespread by next decade's end." In that year, 1999, there were ten digital screens in the U.S.; today there are only 192 (vs. some 38,000 analog screens).
Adoption is going somewhat better with online ticketing, which Redstone says now accounts for up to 8 percent of her theaters' seats. Such ticketing is dominated by two players: Movietickets.com (owned by a group of media companies and theater chains, including National Amusements, Marcus, and AMC) and the larger Fandango (founded by a rival group of theater owners, including Regal and Carmike, and a couple of venture capital firms).
What about a merger between Fandango and Movietickets, so moviegoers have a one-stop shop?
"My guess is that something would happen eventually," says AOL chief Jon Miller. (Movietickets is the back-end processor for AOL's Moviefone.) "[Consumers] would know where to get movie tickets," Miller goes on, "and that would help adoption in online ticketing happen faster."
Redstone says that there have been discussions between the two e-ticketers, but that "cultural" differences remain.
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