Cinepolis, the largest exhibitor in Latin America, will proceed to upgrade all screens to digital. Deal comprises an order of over 3,000 projectors from Barco, which will include conversion of remaining 35mm screens plus allowance for significant new screen construction. Cinepolis's largest screen base is in Mexico where it controls over 2,000 screens but it also has a wide footprint in other Latin America markets including Colombia, Brazil, El Salvador and Costa Rica among others as well as in India and also North America, where it recently launched a new luxury cinema chain. Cinepolis therefore has interests spanning several continents and is one of only a few international exhibitors to target the prime US market. Cinepolis currently has an aggressive strategy regarding both organic growth as well as acquisitions having recently acquired assets of Box Cines chain in Brazil, with a further 46 screens, bringing its total to over 100 in the Brazilian market.
As part of its wider roll-out, Cinepolis has also selected a range of technical partners to help facilitate its transition including TMS equipment from Arts Alliance Media, servers and IMBs from Doremi. It has already made significant investment in approximately 700 3D screens using RealD equipment. It more recently agreed to install 3D equipment from Masterimage.
Analysis
Cinepolis is the first major exhibitor to target full upgrade of screens in the Central and Latin American region. Its closest pan-regional competitor is US and International circuit Cinemark, which has also embarked on a 3D led roll-out with RealD equipment in the region. By setting a new benchmark, Cinepolis will no doubt serve as a catalyst for the wider region to target full digital conversion. There are also signs Cinepolis may move at a rapid pace to complete its upgrade with one local press report citing 2012 for completion. To date, any digital impetus in Latin American region has derived almost exclusively from 3D, which is purely based on the dearth of industry wide VPF deals through a third party facilitator. There is no public indication whether the Cinepolis deal is wholly or partially VPF based, but as the largest circuit in the region, and amongst the largest in the world, it would have been among the first to have spoken about the possibility of direct deals with Studios. The decision to go with a larger scale roll-out across its entire circuit suggests that the culmination of a working financial model or availability of finance may have been the final tipping point. There are discussions of VPF-backed integrator deals in Latin America but so far with no final agreement.
Nonetheless, there are signs that equipment providers may be focusing on the Latin American market. With close to 10,000 total screens across six key markets, digital penetration is still lagging in the 20 per cent range compared with 45 per cent for Europe and over 60 per cent in North America. As digital installation rates start to slowdown in these regions, the onus will quickly transfer to remaining 35mm screens around the world.
Find Out More > IHS Screen Digest Cinema Intelligence