28 CFR Parts 35 and 36, Nondiscrimination on the Basis of Disability by Public Accommodations - Movie Theaters; Movie Captioning and Audio Description (NPRM)

3. Conversion to Digital Cinema

Despite the economic downturn over the last few years, the movie theater industry is rapidly increasing the number of screens that have converted to digital cinema since publication of the 2008 NPRM.  In May 2013, an industry representative testified to Congress that as of that date, 88 percent of indoor movie screens in the United States had converted to digital cinema.  See Testimony of John Fithian, President and CEO of the National Association of Theater Owners, Before the U.S. Senate Committee on Health, Education, Labor and Pension (May 14, 2013), available at http://natoonline.org/wp-content/uploads/2013/08/Harkin-Hearing-Testimony-May-2013.pdf  (last visited July 14, 2014).

Starting in the late 2000’s, a number of major movie studios entered into agreements to help defray the cost of conversion by paying a consortium of movie theater chains a “virtual print fee” of $800 to $1000 per film, per screen until the digital equipment is paid off.  See Dawn C. Chmielewski, Major Studios Agree to Back Switch to Digital Projection, Los Angeles Times (Oct. 2, 2008), available at http://articles.latimes.com/2008/oct/02/business/fi-studios2 (last visited July 14, 2014).  The Department understands that nearly all of these programs have stopped enrolling new members, although the deals continue to be active for those who have already signed up.  According to an industry commenter, these digital cinema systems are SMPTE-compliant, which means that all of the captioning and audio-description products on the market—and in development—will be compatible with, and easily integrated into, whatever digital cinema systems are in use by the various movie theaters.  In addition, it has recently been reported that between the conversion to digital and the projected loss of the two major suppliers of film print stock, it is unlikely that any first run films will be available in analog within the next few years, thus furthering the pressure on smaller theaters to convert to digital.  See e.g., Gendy Alimurung, Movie Studios Are Forcing Hollywood to Abandon 35mm Film. But the Consequences of Going Digital Are Vast, and Troubling, LA Weekly (Apr. 12, 2012), available at http://www.laweekly.com/2012-04-12/film-tv/35-mm-film-digital-Hollywood (last visited July 14, 2014); Dawn McCarty & Beth Jinks, Kodak Files for Bankruptcy as Digital Era Spells End to Film, Bloomberg (Jan. 19, 2012), available at http://www.bloomberg.com/news/print/2012-01-19/kodak-photography-pioneer-files-for-bankruptcy-protection-1-.html (last visited July 14, 2014);  see also Tim O’Reiley, Theater Official Optimistic Despite Attendance Slump, Las Vegas Review-Journal (March 29, 2011) (quoting new MPAA head, former Sen. Christopher Dodd, as predicting that “films on film will disappear in less than three years”), available at http://www.reviewjournal.com/business/theater-official-optimistic-despite-attendance-slump (last visited July 14, 2014).