Latin America Experiencing an Uptick in Digital Cinema Distribution

Walter Capitani, VP of marketing, IDC. Photo: IDC

[Via Satellite 02-14-2014] The global transition to digital cinema technology is gaining more traction in Latin America, and increasing the role of satellite in movie theaters. International Datacasting Corporation’s (IDC) Latin American digital cinema partner, Grupo ChileFilms and their affiliate, Cinecolor SAT recently  closed a deal with Cinecolombia, one of Latin America’s larger movie theater chains, to provide SuperFlex Pro Cinema Cache Servers which enable the satellite transmission of movies and live events. Walter Capitani, VP of marketing at IDC, believes that after years of setbacks, renewed interest and financing is paving the way for electronic distribution.

“This is a follow on order for our Latin American network,” Capitani told Via Satellite. “This basically signals the growth of digital cinema in Latin America. Cinecolombia … they are joining on to a larger network that’s operating all throughout Latin America. This is part of a bigger effort where we are going to cover Latin America.”

The adoption of digital distribution technology varies by continent. Latin America and Asia are seen as markets where the desire to use electronic formats is high. Financing for the transition, however, is not always easy to come by.

“The North American market was set to convert in 2008, and then, with the financial crisis, the debt financing that had been put together to finance the purchase of all this equipment was put away,” said Capitani. “Because of that, the digital transition was delayed by three and a half years.”

The transition in Europe and America has been ahead of the rest of the world, with Europe leading the way. Theaters must complete the conversion before they can receive higher quality electronic content by satellite. Capitani estimates that 75 to 80 percent of theaters in Europe are equipped for electronic delivery. The U.S. is slightly behind this figure because of the presence of several small “mom and pop” theaters that often find it too expensive to convert.  The transition across Latin America has been much less uniform.

“Even though Latin America has been labeled as the last territory reaching digitalization, it varies from country to country, as each country has its own policies, duties, realities and structures,” Carlos Acero, general manager of Cinecolor Colombia told Via Satellite in an email. “But digitalization has been led by Mexico and Colombia. Countries like Bolivia and Argentina are the ones left behind.”

The key drivers for electronic distribution—especially by satellite—are the ability to host live events and to support higher quality viewing experiences like 3D and 4K. This, in turn, boosts the need for bandwidth.

“I would definitely say 4K is growing the fastest. All the new projectors being installed are basically 4K,” said Capitani. “Certainly in the Americas, the big deals are all in 4K and every manufacturer has a 4K offering.”

But if making the jump to digital is expensive, reaching further for 4K is even more. Not everyone agrees that 4K is the next big step.

“[The] next generation of 3D (HFR), and 2D (roll out) are the next drivers,” said Acero. “4K is not really positively affecting the digitalization, as costs are still higher compared to 2K, and honestly speaking, the customer does not see any value (cannot note the difference) between 2K and 4K; neither are the exhibitors willing to invest stronger.”

An agreed-upon motive with less debate than 4K is the ability to support alternative content such as live shows. Electronic distribution equipment is a necessity for this increasingly popular form of media, and it may be a way for satellite to keep an edge over fiber.

“The cinema experience is going beyond traditional exhibition of movies,” said Acero. “Alternative content has been seen as a content differentiation, and exhibitors are clamoring for new types of content.”

“There’s one thing fiber’s not as good at and that is live distribution,” added Capitani. “I think that for the foreseeable future, satellite is the way cinemas want to connect electronically because of its ability to deliver content to live events. Nothing does live like satellites.”