Half of US cinemascreens will be Digital Cinema Initiative-compliant by 2011, according to a newreport from industry analysts Dodona Research.

"The publication ofthe DCI Digital Cinema Systems specification haskickstarted the transition to digital in the United States," Dodona said. "The cost of digital cinema systemsis falling and leading circuits are committing to conversion, or are in theprocess of formulating their strategy for conversion. In addition, the Hollywood studios are moving towards making all theirmajor releases available in a DCI-compliantpackage."

Dodona's Digital Cinema report warns that Europe's fragmented and more complex industry willhave slower progress. The company predicts that 20% of European screens will beconverted to digital by 2011. That average includes territories such as Belgium, Ireland and Luxembourg with more than half of screens converted andother territories where few conversions will have been done.

The forecast for Asia is similar, with only 10% of screensoverall becoming DCI-compliantby 2011, while countries such as Singapore and South Korea will have more than half of screensdigitised.

Despite progressmade so far, Dodona noted that "digital cinema is still very much in a transitional phaseand the true benefits of digital are still some way in the future."

The analysts wanred that the US virtual print fee model backed by thestudios is very rigid. "The cinema industry appears to be lagging behindcompared to the enormous changes taking place in other areas of the media andentertainment industry," author KatharineWright said. "A new mindset may be needed before the real advantages of digitalcinema can be reaped."

In the short term, Dodona predicts that the industry will work with studioprojects on one end and developing niche audiences on the other. But eventuallythose distinctions will fade. Wright said: "We think that in the long rundigital will lead to cinemas being programmed more flexibly and appropriatelyfor potential audiences, at whatever time of day, and that this alone, justusing existing capacity better, is capable of expanding theatrical business by perhaps10%."

Dodona found that the leader in US conversion is Carmine Cinemas, with morethan 250 screens converted. In Europe, Belgium's Kinepolis is the largest private investorin digital cinema with its entire 132-screen chain set to be digitised by theend of the year. The UK Film Council's Digital Screen Network is an earlyleader, with 71 screens converted as of June 2006.