CinemaCon 2012: Fox Will Stop U.S. 35mm Film Distribution Within Two Years

National Association of Theatre Owners president-CEO John Fithian -- during his joint state-of-the-industry address at CinemaCon with Motion Picture Association of America chairman-CEO Chris Dodd -- said the digital promise is being fulfilled.

Twentieth Century Fox has become the first major Hollywood studio to officially notify theater owners that it will distribute all of its films domestically in a digital format within the next year or two, bringing an end to 35mm film prints.

National Association of Theatre Owners president and CEO John Fithian, addressing CinemaCon in Las Vegas on Tuesday, revealed that Fox sent a letter to exhibitors in late 2011. Overseas, Fox already has ceased distributing 35mm prints in Hong Kong, effective Jan. 1.

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"Last year, I stood on this stage and predicted that domestic distribution of movies in the format of celluloid film could cease by the end of 2013. That prediction is becoming a reality," Fithian said. "As a letter from our friends at Fox confirms, no one should rely on the distribution of film prints much longer.

"And we know that most other distributors share that belief," he added. "Given this reality, the entire industry continues our efforts to bring the promise of digital cinema to all exhibitors."

Fithian said 27,000 U.S. screens have been converted to digital, more than two-thirds of the total, and promised that efforts to help smaller cinema operators convert to digital continue in earnest. The movement to digital is designed to cut down dramatically on print fees and projection costs.

Other hot topics addressed by Fithian and Motion Picture Association of America chairman and CEO Chris Dodd in their joint state-of-the-industry address included premium VOD and the resurgence of the domestic box office.

Also, in a press briefing following their speeches, Dodd suggested that the rift between Hollywood and Silicon Valley over recent online piracy legislation could solve itself without congressional input if the sides can come to an understanding.

"SOPA is dead," he said in reference to the Stop Online Piracy Act, which lost support on Capitol Hill in January in a major defeat for Dodd and the MPAA.

Dodd said entertainment companies and technology firms could sign a memo of understanding whereby piracy sites are identified by certain means, but he didn't rule out another round of legislation that could be supported by both sides. He also conceded the consumer was left out of the discussion by the MPAA during the SOPA battle.

On the subject of premium VOD, both speakers said studios and exhibitors no longer are feuding over the topic and are working to find an acceptable compromise.

"We are not just improving and reimagining our product," Dodd said. "We are also evolving our business model, experimenting with new offerings that will allow consumers to purchase the content they want to see and view on the platforms they want to use, at a price that's right for them.

"That in no way changes the simple fact that the best way to see our movies is in your theaters, in the dark, on the big screen," he added. "I believe that very passionately, but more importantly, the studios I represent do as well."

Fithian and Dodd applauded the resurgence of the domestic box office, with first-quarter 2012 revenue up 23 percent year-over-year and attendance up 22 percent. Last year, domestic box-office revenue fell by 4 percent, accompanied by a steep 16 percent decline in attendance.

"Doomsday reporters drafted industry epitaphs, while 25-year-old Wall Street analysts questioned the continuing viability of the exhibition industry -- what a difference a year makes," Fithian said. "With diverse fare appealing across different demographics and the biggest March movie opening in the history of the business, the movies have come back to our screens, and the patrons have returned to our seats."

In the separate briefing with reporters, Dodd also addressed the recent dust-up over the R-rating assigned to Lee Hirsch's documentary Bullly for language. Dodd defended the ratings system, but said the system could be more "transparent" in terms letting the public know how decisions are made.