Feeling the heat: Latin America sees rapid growth of digital screens
Latin America has approximately 6% of the 2K DLP digital screens in the world. Almost 500 of these screens are situated in 19 territories. Nevertheless, just one year ago this region had only 0.7% of the digital screens in the world, with 50 2K digital projectors installed in just seven countries.
Currently, Latin America has experienced the fastest growth in the number of digital screens worldwide; the number increased almost 900% in the last year alone. Since the mid-2000s to December 2007, the total of digital screens in the region stayed stable at around 20. By September 2008, the number had increased to 50. Then, in just half a year, the growth rate reached 250%, starting a boom that does not seem to have a visible end.
Today, Latin America has digitized around 5% of all its screens—an average comparable to that of the European Union (5.3%) and the rest of the world (5.9%). Mexico and Brazil are the locomotives of this train: Together they account for three-quarters of the digital screens in Latin America. (Mexico alone has 57% of the 2K projectors.) In addition, almost all the digital screens in Latin America exhibit films in stereoscopic 3D.
Like other regions in the world, Latin America is seeing a decrease in its participation in the global digital screen market, in comparison with its global participation in the 35mm projector market. There are currently around 9,000 digital screens globally, with the U.S. dominant (almost 63%) while other American participation in the 35mm screen market is just 27%.
In 2005, the USA had only 30% of the digital screens worldwide. Between 2005 and 2009, it increased its participation in the digital screens market more than 3000% (double the world average increase in this period). Latin America has had remarkable growth as well (more than 2700%), but in absolute numbers its percentage of the digital-cinema market has little global relevance (500 digital screens in comparison with 5,500 in the USA).
Trends in Latin America
The digital screen market in Latin America is very concentrated. At this time, it is a copy of the 35mm exhibition market: fragmented and concentrated in very wealthy regions (states, provinces, cities, neighborhoods).
It is important to highlight that the American company Cinemark is the only chain that has digital screens spread throughout Latin America (in 13 countries). The Mexican firm Cinépolis also has a remarkable presence, not only in its home country but also in Colombia and in Central America. Meanwhile, Hoyts has a significant presence in the digital screen market in the Southern Cone: Argentina, Chile, Brazil and Uruguay (with major activity in the two first countries). The initiative undertaken by national exhibitors throughout the region to install digital screens should also be noted.
The rollout in Latin America could be bigger. However, for the time being, the investment in digital conversion relies mainly on the exhibition companies’ own resources. There are many obstacles to a stronger rollout—e.g., very high costs, huge import taxes, a lack of state support, minimal financial and credit access, and no VPF model, in addition to the minimal attractiveness of the small Latin American cinema market (except for Mexico, and maybe Brazil) for multinational corporations.
In Latin America, each digital screen (including projector, server, software, peripherals and 3D equipment) costs between US$200,000 and US$300,000. In this region, the costs are four or more times that of the United States and Europe. The theatres that are going digital base their decision on the high impact of 3D.
As for the 3D system chosen in each region, RealD and Dolby shares constitute almost 50% of the market each, with the exception of Mexico, where 80% of digital screens market have adopted RealD (and Dolby has no presence). XpanD has only a considerable activity in Mexico (20%) and a small presence in Brazil.
Dolby, with 100-plus 3D systems in Latin America, reports agreements for 36 new 3D systems in Argentina, Brazil, Chile, Ecuador, Mexico, Puerto Rico, Uruguay and Venezuela.
At this time, digital screens in Latin America have no alternative content (sports, music, opera, etc.). As is the case in Mexico, there are some initiatives in this field (above all, with respect to popular sports like soccer or American football), but the repercussions have yet to become significant.
The oldest digital screen of Latin America was opened in July 2000 in Mexico City: the Cinemex Mundo “E” (still functioning).
Mexico has approximately 300 digital screens (almost 60% of all 2K projectors in Latin America).
Contrary to the rest of the region, Mexico’s capital city has just a quarter of its digital screens. The rest are spread throughout the country: the states of Nuevo León (especially Monterrey), Puebla and Jalisco (above all, Guadalajara). Nevertheless, there is a great concentration related to the ownership of the digital screens: Cinépolis (a national chain, the fifth-largest in the world) has 69% of the market; together with Cinemark and national Cinemex, the three companies represents 91% of digital screens in Mexico.
In 1998 Brazil saw its first professional exhibition in a theatre of Rio de Janeiro, produced by the American company UCI. In December 2001, this firm opened the first two digital screens in the country: one in Rio de Janeiro and the other in São Paulo.
As in Brazil’s 35mm exhibition market, Brazilian digital screens are concentrated in the strongest markets in its south: São Paulo has 42% of this digital market; with Rio de Janeiro, the percentage grows to 55%. Adding the states of Rio Grande do Sul, Santa Catarina and Paraná, the rich south possesses three-quarters of the digital screens of Brazil. However, 16 of 27 territories in the country have 2K projectors (in the poorer states, their presence is minor).
In turn, more than a dozen companies share the digital screen market in Brazil (with 3D exhibition in almost 100% of these projectors). 57% are national firms, but Cinemark has made the biggest investment in this field: 32 digital screens (43% of the national total).
Last August, an important directive of BNDES (the Brazilian national development band) said that Christie and “a local partner” are looking for financial support to install a projector factory in Brazil, based on the VPF model.
Argentina has had digital screens since September 2008. Only five of 24 territories have digital cinema. Approximately 22 digital 3D projectors are installed in Buenos Aires (the capital city), its suburbs, and in a few wealthier cities in the pampas (La Plata, Córdoba and Rosario). Just two screens are outside this region: Mendoza and Tucumán. This map is similar to that of the 35mm cinema market in Argentina. Cinemark, Hoyts and Showcase own 60% of the digital screens in the country.
Chile had its first digital screen in November 2007 in Santiago (the capital city). Nowadays, two-thirds of its 15 digital projectors are concentrated in this city. Hoyts is the company with most digital screens: eight. Cinemark has four and the national firm Movieland has three. All possess a 3D system.
In May 2007, Colombia saw its first digital screen in its capital: Bogotá (which has nine of its current 13 digital projectors). Cinemark and the national company CineColombia (the biggest in the country, part of powerful Caracol TV) have six screens each; the other is the property of the Mexican firm Cinépolis.
Peru has had digital cinema since mid 2008. Today, this country has 11 digital screens (all with 3D exhibition). The national firm UVK has five, as does CinePlanet (a Chilean company). Cinemark owns the other six. All these screens are in and around the capital, Lima.
Ecuador was one of the first Latin American countries with a 2K projector: The national firm SuperCines installed the first one in Quito in May 2005. Now there are 11 digital screens in the country: nine in Quito and Guayaquil (the wealthiest Ecuadorian cities). SuperCines has seven and Cinemark four.
In Uruguay, five of six digital 3D projectors (all installed between late 2008 and early 2009) are in its capital, Montevideo. The sixth is in an international tourism center, Punta del Este.
Venezuela, Bolivia, and Paraguay have a similar situation: very few 2K 3D projectors, installed very recently by a local exhibitor, all placed in their capital cities.
Central America and the Caribbean contain 20 sovereign states. Nine of these have 50 digital screens (with a remarkable presence by Cinemark and Cinépolis in this region). Aruba-Curaçao (with local firm E. de Veer Theaters dominant), Puerto Rico and Costa Rica have 73% of digital projectors installed in this tropical area.
E-cinema in Latin America
Digital projection technology encompasses much more than just the expensive standards (DCI, Afnor or whatnot). In Latin America, there are literally thousands of formal and informal digital projection venues with e-cinema (from Panasonic HD projectors—like the 200 installed by the Brazilian firm Rain throughout Brazil over the past five years—to cabinets with DVD reproduction technology).
The many attempts at formulating public policy have had good intentions but bad planning, lacking coordination between sectors and serious research to support future decision-making.
Some of those attempts were related to e-cinema—e.g., Espacios Incaa in Argentina (a state network of screens, based on remodeled old theatres in cities with no current cinemas); pontos de difusion (diffusion centers) in Brazil spread throughout small villages; communal theatres in Venezuela, and thousands of communal centers in Cuba with TV sets functioning via solar energy. In mid-2009, Recam (Mercosur`s official cinema organization) signed an agreement with the European Union to install a few e-cinema screens in Paraguay, Argentina, Uruguay and Brazil in 2010.
In addition, there are many third-sector organizations, such as the “microcines” of Grupo Chasqui in Peru; film clubs; cinematecas; and cultural-educational centers of universities, unions or churches, among others institutions, as well as the popular informal exhibition phenomenon such as Bolivia’s “cines-api” (fast-food places with rooms containing plasma TVs and DVD players to watch all kind of movies) that project films all over the vast territories of Latin America (above all, in places “invisible” to mainstream distribution and exhibition) as they have for decades, starting in the ’80s, with the boom of VHS.
Roque González is a research analyst for Fundación Nuevo Cine Latinoamericano and a PhD candidate at Universidad Nacional de La Plata. He was regional research coordinator for Cine latinoamericano y nuevas tecnologías (Latin American Cinema and New Technologies), Fundación Nuevo Cine Latinoamericano, La Habana, 2009.
Digital screens (2K DLP platform projectors):
487 (almost 100% with 3D systems) in 18 countries
(rising 900% in the last year, much more than any region of the world)
Three-quarters of Latin American digital screens are in just two countries:
57% in Mexico
16% in Brazil
Latin American digital screens are:
5.6% of the world digital-cinema market
5% of the Latin American 35mm cinema market (similar proportion of Europe and the world average).