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Report: Universal and Disney may help U.S. theaters go digital

High cost of refitting movie theaters with digital projectors and other tech has hobbled efforts, but support from two more major studios should guarantee film houses will modernize.

Universal Pictures and Walt Disney are close to finalizing a deal that would all but guarantee the digitizing of the nation's movie theaters, sources told CNET News.

Universal and Disney have agreed in principle to join a consortium of theater chains and motion picture studios that will finance the cost of modernizing movie houses, the sources said.

The sources were commenting on news of the deal, first reported by The Wall Street Journal.

For years, the high costs of outfitting theaters with digital projectors, servers, and other technology stymied modernization efforts. It was always believed that it would take the backing of four major studios to get a deal done.

News Corp., parent company of 20th Century Fox, and Viacom's Paramount Pictures have already signed on. The addition of Universal and Disney will help the consortium, called Digital Cinema Implementation Partners, reach its goal, according to the sources.

The Journal reported that only 5,000 of the 40,000 screens in the U.S. and Canada are outfitted with digital technology. It will take several years after Universal and Disney sign on, which could happen as early as this week, for the transition to be complete, the sources said.