...it's coming (part II)

Gary Handman (ghandman@library.berkeley.edu)
Thu, 8 Mar 2001 10:28:25 -0800 (PST)

>To: namacsalons@topica.com
>From: dladely1@unl.edu
>Date: Thu, 08 Mar 2001 08:57:38 -0800
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>Another interesting digital development update from today's Variety.Com.
>Danny Lee Ladely/Director
>Mary Riepma Ross Film Theater/Great Plains Film Festival
>Hixson-Lied College of Fine & Performing Arts/University of Nebraska-Lincoln
>P.O. Box 880302; Lincoln, NE 68588-0302; Tel: (402) 472-9100; Fax: (402)
>472-2576; Cell: (402) 540-9161; Web Site: http://www.rossfilmtheater.org/
>Updated: 3/8/01
>Exhibs would make monetary contributions, distribs would cut costs
> Fithian
>LAS VEGAS -- Despite exhib skepticism so palpable you could stick a fork in
>it, two major technology vendors served up a proposal Wednesday to cover
>costs of digital theater conversions by diverting a few cents of each box
>office dollar to cover those costs.
>Lab giant Technicolor and fiber optics networker Qualcomm, who together hope
>to electronically distribute pics to theaters, announced their financing
>proposal to the press after a luncheon on electronic cinema at the ShoWest
>exhib trade show here.
>The Technicolor-Qualcomm joint venture, Technicolor Digital Cinema, proposes
>to finance and execute the conversion of a selected 1,000 theaters
>nationwide to digital projection. Under the plan, participating exhibs would
>make a monetary contribution of 12.5 per patron, and distribs would help by
>cutting the costs of circuits' acquisitions.
>Though the scheme would still be a money-losing one for Technicolor Digital,
>joint venture prexy Dave Elliott said he hopes the plan will "kick-start"
>enthusiasm for electronic cinema and ultimately prove profitable for the
>Execs said the National Assn. of Theater Owners likely will assist in
>selecting 1,000 exhibs willing to participate in the plan. Though details of
>qualifying for participation have yet to be worked out entirely, execs
>suggested exhibs of all size could potentially participate.
>The plan, which would begin to make the first digital installations in
>September, offers competitive bidding procedures to various digital
>projector vendors, execs said. Unspecified studio reps and filmmakers have
>been consulting with Technicolor Digital to review various systems for
>quality control, officials added.
>Competing plan
>Another digital-distrib wannabe, Boeing Digital Cinema, in low-key meetings
>with circuit execs has also been floating some ideas about how exhibs can
>pay for converting theaters to digital projection. Boeing Digital, a unit of
>the giant airplane maker, wants to use its satellites to beam movies into
>theaters and suggests circuits can cover costs of acquiring digital
>projectors through leasing plans offered by Boeing Capital.
>Boeing Digital co-director David Baker stressed its satellite-delivery
>scheme is "standard agnostic" and could work with any digital projection
>Digital choices
>There are also competing proposals for digital projection.
>To date, projection systems using a high-powered Texas Instruments chip have
>gotten the highest marks. Those include projectors marketed by Barco,
>Christie and Imax unit DPI.
>There are 31 prototype T.I. systems in place worldwide, and 14 in the United
>States. The prototypes use DVDs to deliver digital images to projectors, but
>it's widely expected fiber-optic and satellite delivery eventually will
>supplant disk-based arrangements to allow for greater cost efficiencies.
>Sony, using a chip from JVC, is the standard-bearer for a rival digital
>projection system that's clearly not out of the running just yet. Kodak,
>which has been interested in electronic cinema for some time, may throw in
>with the JVC chip crowd as well.
>In fact, the film giant announced at ShoWest that it's testing a new
>prototype system at the Kodak Imaging Technology Center in Los Angeles,
>where demonstrations will begin in the next several weeks, officials said.
>Electronic ennui
>Meanwhile, there's muted interest in digital cinema at best among exhibs,
>who are going through an industrywide financial crunch of historic
>proportions. Further, exhibs see the studios as the main beneficiaries of
>electronic film distribution.
>And studios, who would save considerable money in film print costs by going
>to electronic distribution, so far have resisted a Disney-led proposal to
>kick in some collective cash for theater conversions.
>Still, there's a sense among all parties that digital cinema will become a
>reality. So any specific scheme for dealing with conversion
>costs --estimated at $100,000-$150,000 per screen -- could prove notable.
>As a commitment of capital, the Technicolor Digital proposal represents a
>total expenditure of up to $150 million to convert only those first 1,000
>screens. But digital proponents reason that though upfront costs for
>converting theaters to digital are high, exhibs will also save in the long
>run, largely because projectionists aren't needed to run electronic systems.
>Boeing Digital's Baker estimates that exhibs' per-screen cost to show pics
>drops to about $500 per run with digital from the usual $2,000-$3,000.
>Imax co-CEO Richard Gelfond says he senses an incremental increase in exhib
>interest in digital this year, their money woes notwithstanding.
>"I think there was a seed planted previously, and this year's show will
>sprinkle some water on it," Gelfond said. "Of course, it may take some time
>before a forest sprouts."
>Indeed, John Fithian, president of NATO, knocked the notion that broad
>conversion to digital exhibition could happen anytime soon.
>"Anyone who thinks exhibs can pay for these systems in their current state
>is not doing the math," he said.
>Fithian also cautioned against viewing the Technicolor plan or any other
>specific financing plan as a catalyst for the digital rollout. He said other
>obstacles remain, including exhib sentiment that buying into digital
>projection systems too soon could mean getting saddled with equipment that
>quickly becomes obsolete when refinements are made in the young technology.
>Concerns also abound about security issues, with studios seeking absolute
>assurance that digital distribution won't heighten the threat of pic piracy.
>Electronic cinema proponents hope such concerns will be offset by the allure
>of big savings on print costs, which Technicolor Digital estimates at $14
>million a year per major studio for the distribution of movies and trailers
>to theaters.
>"Digital is going to happen eventually," observed Pat Knieff, who runs a
>small theater chain in Mt. Pleasant, Texas. "But for now, there are just too
>many things to work out."
>There's also a creative piece to the electronic cinema puzzle. In addition
>to movies that would be converted to digital for electronic distribution,
>some filmmakers, including George Lucas, have begun shooting directly in
>digital video.
>Madstone Films, a Gotham-based production house, aims to release modestly
>budgeted specialty pics shot in digital. Then, if it can acquire some
>theaters --the company has a bid on the ailing Silver circuit at present --
>Madstone wants to show the films on screens converted to digital projection.
>Such a business model, known as a "private cinema network" arrangement, is
>also being pushed by aspiring digital circuit InTheater Entertainment.
>Essentially, Madstone and InTheater would complete the digital paradigm by
>first converting a bunch of screens and then programming them with
>proprietary content. Both companies envision supplementing movie fare with
>videos of live sporting events and concerts, and business-oriented video
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Gary Handman
Media Resources Center
Moffitt Library
UC Berkeley, CA 94720-6000

"You are looking into the mind of home video. It is innocent, it is aimless,
it is determined, it is real" --Don DeLillo, Underworld