LOS ANGELES (Hollywood Reporter) – “There’s something wrong here.”

Film

After four decades in the movie-theater business, Steve Wiener, the founder and CEO of the U.K.-based Cineworld Group chain, took a look at the grosses for the 2009 3D release “My Bloody Valentine” and knew something wasn’t quite right.

“I looked at the film buyer,” Wiener recalls, “and he said, ‘What’s wrong?’ I said, ‘How can the grosses be standard (in other words, the same box office day after day) at this one cinema?’ He looks at me and says, ‘Steve, when you have 100% sold out for the entire day, you’re going to get the same gross.’”

Weiner understood the implications immediately. “That’s when I sat up and said, ‘Wow!’” he says. “This is something special.”

From that moment on, the race toward full digital cinema conversion was on. Cineworld already had 74 digital projectors paid for by the U.K. Film Council in return for playing specialty and art movies. After “Bloody Valentine,” Wiener triggered the start of a complete transformation. Today his company has 252 digital screens out of 790 and is vying with Odeon UCI to see which will be the first in the U.K. to be all digital.

These companies aren’t alone. The digital transformation has accelerated worldwide during the past year. What has happened in Europe provides a sense of the pace: In 2009 there was a nearly 207% increase in digital screens in the region, according to the European Audiovisual Observatory, from 1,529 to 4,693 screens, with digital sites increasing from 815 to 2,374.

Most of that growth comes from the placement of one to five digital screens in each multiplex, primarily for 3D. “We made a concerted effort last year, knowing ‘Avatar’ and ‘Alice in Wonderland’ were coming,” says Drew Kaza, executive vp digital development at Odeon UCI Cinemas, which operates in the U.K., Germany, Italy, Portugal and elsewhere.

“‘Avatar’ was the wake-up call to everybody to show how big a 3D movie could be in the marketplace, and certainly exhibitors who did not have a good number of 3D screens have taken action,” adds Andrew Cripps, president of Paramount Pictures International, which also handles DreamWorks Animation releases.

Cripps notes that last year Paramount booked 1,300 locations for the 3D version of “Monsters & Aliens” (outside the U.S.). This year, for “How to Train Your Dragon,” it had 3,900 locations, and for this summer’s “Shrek” sequel he anticipates 6,500 locations. “In a year and a half, we’ve seen fivefold growth,” he says. “It’s now happening very quickly.”

“Interest in new theaters internationally has skyrocketed,” Imax CEO Rich Gelfond says. “‘Avatar’ not only drove 3D but also Imax growth.” Indeed, as new multiplexes with stadium seating, expanded concessions and other amenities have opened, Imax has become one of the crown jewels of international.

Imax has expanded rapidly in Europe, Asia and even Latin America, including Chile, Argentina and Brazil, where the first Imax site is now the highest-grossing theater in the country, Gelfond says. Things have moved slower in Mexico because of political and financial problems.

So, after several years that saw growth of digital to facilitate 3D, the push is now on to convert the entire cinema world to digital.

“3D has been a great catalyst for conversion,” says Bud Mayo, chairman and CEO of Cinedigm, which is facilitating conversions across North America, and providing software, management servers, exhibitor services and alternative content worldwide.

Mayo adds that the advantages of digital conversion are now abundantly obvious, including an increase in efficiency because this requires fewer, less highly trained employees, as well as an increase in flexibility that allows movies to be moved or added at the click of a mouse.

“A true digital cinema solution provides better image and sound quality that never degrades,” he says. “And most importantly, it can create new revenue streams from things like live events — sports, opera, concerts, business meetings — which can fill auditoriums, often in what would otherwise be quiet times for theaters.”