Hong Kong-based GDC Technology has reached an agreement with Shochiku to provide digital cinema equipment to the studio’s exhibition subsidiary.

In conjunction with light manufacturer Ushio, GDC will deploy servers and Christie projectors to 22 sites (226 screens) of Shochiku’s wholly-owned exhibition subsidiary Shochiku Multiplex Theaters (SMT), operated under the Movix name.

GDC is currently the leading supplier of cinema servers in Asia and second largest globally. Holding virtual print fee (VPF) agreements with the major Hollywood studios, GDC acts as a third-party digital cinema system provider.

“We were excited to learn that GDC and Ushio were jointly offering this new VPF program,” said Atsushi Nakajima, CEO of SMT.

Although Sony subsidiary Sony Protechno Support launched a VPF initiative in late 2009 with a stated goal of 500 screens within four years, the business model had been slow to take hold in Japan. The GDC-Shochiku deal represents the largest single VPF deal in the territory.

“We are glad that more exhibitors are recognizing the benefits of GDC’s VPF program and are delighted to provide a digital cinema solution to Shochiku,” said GDC founder and CEO Chong Man-nang.

Japan’s screen count currently stands at 3,412 screens. Of those, 983 (28.8%) are digital with 763 3D capable. High costs and lack of government subsidization have slowed conversion.

However, unlike the US where anti-monopoly legislation is stricter, major Japanese studios can produce, distribute and exhibit films, making the VPF business model easier to implement and keeping equipment ownership within the company.

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