Market Insight

GDC signs deal with major Hollywood studios for digital deployment in Latin America

July 17, 2013

Xin Zhang Xin Zhang Senior Research Analyst, Cinema, IHS Markit
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GDC Digital Cinema Network, a subsidiary of GDC Technology, has signed separate non-exclusive digital cinema deployment agreements with each of the six Hollywood studios (Walt Disney, Fox, Sony, Paramount, Warner Bros. and Universal) to deploy DCI-compliant digital cinema equipment to cinemas in Latin America. Studios will provide financial support in the form of Virtual Print Fees (VPF) when supplying digital films to GDC's exhibitors in the region. Countries covered in the deal include Argentina, Brazil, Chile, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru, and Ecuador.

Latin America has a digital penetration of 56 per cent at the first half of 2013, while the figure for Europe, North America and Asia are 77.4 per cent, 89.4 per cent and 67.7 per cent respectively (higher if Indian e-cinema screens are included). The deal between GDC and the Hollywood studios is significant for the region since it has been lagging behind in digital cinema conversion compared to other regions. Situation has improved since 2012 with digital penetration rising from 22.6 per cent in 2011 to 40.8 per cent in 2012, due to the digitisation of a number of larger circuit and wider digital roll out is already underway. The GDC deal will speed up the digital deployment in the Latin American region.

Arts Alliance Media (AAM) is GDC's main competitor in the region. AAM has also signed digital deployment agreement with the major Hollywood studios at end of 2012 and already has a strong presence in the region, both as a third party and in supplying software to exhibitors. To date, AAM has signed digital roll-out deals with Cine Colombia in Colombia, SuperCines in Ecuador and Cinemex in Mexico. With GDC entering the market and competing with AAM, Latin American exhibitors will benefit from more options.

 

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