Cineworld's change to digital will cost £40m

CINEMA chain Cineworld will spend £30 million converting all of its screens to digital projectors in the next three years, the company announced yesterday.

The investment comes on top of 10m already pumped into the conversion scheme in 2009 and the first half of this year.

Cineworld said it had signed a deal with technology provider Arts Alliance Media (AAM) to complete the roll-out.

As well as offering high-quality pictures on its 790 screens, the deal will allow the chain to show more films in 3D, such as summer blockbusters Shrek Forever After and Toy Story 3.

Under the agreement, Cineworld will buy, install and operate digital projectors across the remainder of its entire cinema chain. AAM said the majority of the total cost will be recouped through a "virtual print fee" (VPF) deal, which AAM will collect from film distributors on behalf of Cineworld.

The chain expects that, over a seven-to-ten year period, the VPF arrangement will cover a substantial proportion of the 40m total conversion cost.

AAM has been working with film studio 20th Century Fox to move cinemas from analogue 35mm prints to digital.

Julian Levin, executive vice-president of distribution at Fox, said: "The security, digital image quality and 3D revenue opportunities offer a tremendous boost to the cinema industry.

"AAM's deal with Cineworld represents a major step forward in Europe's digital transition."