Centennial, CO -- National CineMedia, Inc.'s (NASDAQ: NCMI) operating subsidiary National CineMedia, LLC (NCM), and its founding member theater circuits AMC Entertainment Inc., Cinemark Holdings, Inc. (NYSE: CNK) and Regal Entertainment Group (NYSE: RGC), have agreed to an amendment of its existing long-term Exhibitor Services Agreements (ESAs) to allow for the connection of NCM's national advertising and Fathom Events networks to the founding members' new, higher quality digital cinema projection systems.
These new systems will not only provide higher quality 2-D images, they will also expand NCM's capability to provide 3-D advertising and 3-D live and pre-recorded events. It is expected that over the next 36 months the vast majority of NCM's 15,230 founding member screens will be equipped with the new digital cinema equipment. These founding member installations, combined with the digital cinema installations of NCM's network affiliates, are expected to provide an enhanced digital cinema presentation for approximately 90% of NCM's approximately 700 million annual theater attendance.
"This new digital cinema agreement with our three founding member theater circuits is the next evolution of our cinema network, once again raising the industry standard for pre-feature advertising and entertainment programming in cinemas," said Kurt Hall, NCM's chairman and CEO. "This new technology will provide a better experience for theater patrons, a unique and more impactful marketing platform for our advertising clients and a more effective distribution network for NCM Fathom content owners."
Mr. Hall concluded, "While the theater access fees that are paid to NCM's founding member circuits will increase over time as our cinema network is connected to their new digital cinema equipment, this increased cost is expected to be more than offset by the benefits associated with the improved presentation, including the ability to more broadly distribute 3-D advertising and alternative content."