Film-Tech Forum ARCHIVE: Disney in agreement to help finance digital cinema

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Posted by Mike Blakesley (Member # 26) on 09-16-2005, 06:08 PM:

Disney Deal Backs Digital Distribution
The studio agrees to help pay for gear to deliver movies to theaters electronically, in a shift away from reels of film.

By Alex Pham, Claudia Eller and Julie Tamaki | L.A. Times Staff Writers
Posted September 16, 2005

Walt Disney Co. on Thursday agreed to be the first movie studio to help finance the digital distribution of its movies, jump-starting a decade-long effort to usher the nation's theaters into the electronic age and phase out the treasured — but expensive — tradition of film.

The agreement between Disney's Buena Vista Pictures Distribution, projector maker Christie Digital Systems Inc. and software company Access Integrated Technologies Inc., or AccessIT, calls for 150 new digital movie screens to be up by year's end and as many as 4,000 by the end of 2007.

Although that's just a fraction of the 36,000 screens in the United States, proponents call it a significant step toward a day when most, if not all, movies will be viewed digitally in theaters. Fewer than 110 screens use digital equipment today.

"We're talking about 10% of the screens in the United States becoming digital," said Chuck Viane, president of Buena Vista Pictures Distribution. "This makes it a very sizable toe in the water."

For viewers, digital projection offers crisp pictures that don't fade or scratch, no matter how many times they are shown. Some studio executives and theater owners hope that digital movies will draw moviegoers back after a yearlong slump in box-office receipts.

"Film is wonderful, but it degrades with each showing," said Bill Mead, publisher of DCinemaToday.com, a website that tracks digital exhibition. "You'll get scratches, dirt in the film and side-to-side jitters as film travels through the projector. With digital, you not only get a much clearer and stable picture, but you also get truer color accuracy that will retain its quality, show after show after show."

For movie studios, digital distribution promises savings of as much as $1 billion a year in the cost of making and distributing bulky and delicate film prints.

Digital cinema has been talked about for years as a less costly and more efficient way of getting movies to theaters. But initial skepticism from movie studios, the absence of a single standard for distributing and projecting digital movies and the lack of a clear business model to finance the rollout of expensive equipment stalled the initiative.

That's starting to change, entertainment executives said.

"What's significant is that a major studio is finally getting on board," said Ken Suddleson, entertainment attorney with Morrison & Foerster in Century City. "We've watched this process for eight, nine years. We've seen the studios first doubting the technology, to setting technical standards this year, to finally someone saying, yes, it's worth pursuing. I think that's exciting."

Disney is the first Hollywood studio to officially support one specific system. Virtually all of its rivals, including Sony Corp.'s Sony Pictures, General Electric Co.'s Universal Pictures, Time Warner Inc.'s Warner Bros. and News Corp.'s 20th Century Fox, are also engaged in talks with digital manufacturers such as Technicolor and Christie.

For instance, Bruce Snyder, Fox's president of domestic distribution, said the studio was "knee-deep in negotiations with Christie."

"We have been negotiating for several months," he said. "They're ongoing. I expect them to come to fruition shortly."

Entertainment executives say nearly all major movie studios will soon make the gradual conversion to digital. The only question, many say, is how they go about paying for the rollout of digital projection systems, which at around $85,000 per screen is about twice the cost of film projectors.

All of the various financing plans being considered by Hollywood ask the studios to invest much of the money they save by distributing digitally into a fund that finances new projectors. As more screens convert, studios will increase the number of movies they release digitally.

"The rollout is slowly starting to happen, but we have a long way to go," said Dan Fellman, president of domestic distribution for Warner Bros. "As the number of conventional theaters with digital projectors increase, so will the number of theaters we serve."

In addition to the cost savings, digital distribution allows studios to release movies simultaneously worldwide via satellite transmission, a method they hope will reduce piracy by feeding international demand for newly released movies. The current method of distributing physical film prints limits how widely studios can get their movies out at the same time.

"As a practical matter, this is a technology that studios cannot resist at the end of the day," Suddleson said. "It's just a matter of time before they're all on board with digital cinema."

Disney's deal calls for AccessIT to provide Christie projection systems to theater owners. In turn, Disney promised to pay AccessIT a fee for each digital copy of its movies. The fee is based on the difference between Disney's cost of distributing a film print and the cost of digital distribution. On average, film distribution costs $1,300 to $1,500 per print, whereas digital distribution via satellite broadcast or DVD costs about $200, AccessIT Chief Executive Bud Mayo said.

Disney also committed to distributing most, if not all, of its 16 to 18 new releases next year in both digital and film format, Viane said, helping boost the number of movies available to keep digital screens occupied and theater owners happy.

A spokesman for the National Assn. of Theater Owners declined to comment.

A top exhibition source said all studios would need to support digital cinema, not just one, for the conversion to work for the theaters. He said, however, that at least five major studios were actively considering the various plans for digitally distributing their movies.

One senior studio distribution chief said he believed that unless all of the major studios supported one central vendor, the business model for digital cinema wouldn't work, adding that the use of multiple vendors would make the business model too complex.

"Film will continue to be around for a long time," said Jack Kline, president of Christie. "How long will it take to get half of our theaters converted to digital? I think that is certainly a five-year plan, and it could be longer. This is the first major change in film projection technology in 100 years. It will take some time to change."

(This is from the LA Times, but I found it at the Orlando Sentinel.)

Orlando Sentinel link

Posted by Joseph L. Kleiman (Member # 3097) on 09-16-2005, 06:25 PM:

A couple of comments on this:

1. The original AIX/Christie deal called for 2500 systems. That number has been upped to 4000.

2. The original deadline for the deal was August 31. That was extended to September 30. According to the agreement, if they were unable to secure both one studio and one major exhibitor, either company (AccessIT or Christie) could walk away from the deal.

3. These are not the same systems that will be playing Chicken Little in 3D. That was a separate deal Disney did with Dolby and Christie. Most likely, these systems will open with Narnia.

4. We believe Universal and Fox are in the final stages of negotiation to supply content.

5. We also believe that AIX/Christie is in the final stages of negotiation with one or all of the three major circuits that own National CineMedia (which currently uses Christie LCD projectors) - Regal, AMC, and Cinemark.

Posted by Paul Linfesty (Member # 214) on 09-16-2005, 06:26 PM:

quote: Mike Blakesley
Disney's deal calls for AccessIT to provide Christie projection systems to theater owners. In turn, Disney promised to pay AccessIT a fee for each digital copy of its movies. The fee is based on the difference between Disney's cost of distributing a film print and the cost of digital distribution. On average, film distribution costs $1,300 to $1,500 per print, whereas digital distribution via satellite broadcast or DVD costs about $200, AccessIT Chief Executive Bud Mayo said.

So where is the cost savings for the studio?

Posted by Brad Miller (Member # 2) on 09-16-2005, 06:38 PM:

And the "fucking idiot of the year award" goes to........

quote: Mike Blakesley
"Film is wonderful, but it degrades with each showing," said Bill Mead, publisher of DCinemaToday.com, a website that tracks digital exhibition. "You'll get scratches, dirt in the film and side-to-side jitters as film travels through the projector. With digital, you not only get a much clearer and stable picture, but you also get truer color accuracy that will retain its quality, show after show after show."

Congratulations Bill Mead for having no clue as to what you are talking about!!! You are doing this industry a wonderful service.

Posted by Joseph L. Kleiman (Member # 3097) on 09-16-2005, 07:04 PM:

Paul:

The VPF is not a permanent thing - it's expected to decrease over time. It's the studios' way of paying for the systems to be installed. A similar deal is in place between Disney, WB, and SONY with Technicolor Digital. The idea is actually an old one. In 2000, back when they owned DPI, IMAX told the NY Times they had plans to replace all the IMAX projectors with digital systems within two years. Exhibitors would pay for the installs by paying the difference between a digital print and a 1570 print.

Brad:

I couldn't agree more. Even though my website covers digital cinema (as well as large format cinema), I would never give a straight up studio comment like that. If care is given to developing the film print, and maintaining quality of both the prints and projection equipment, film presentations easily rival digital. Just last weekend, I went to the Castro to see an archival print of Baby Eyes - a 1933 pre-code film. There's no way I would have enjoyed it as much digitally. Movies shot on film look best when projected on film in a quality environment. And who the heck is going to maintain the quality of the digital systems? I've seen digital presentations out of focus, with debris in the lensfield, and projected on torn or dirty screens. The problems are not going to go away just because you're changing technology.

Posted by Mark Gulbrandsen (Member # 72) on 09-16-2005, 07:07 PM:

Brad,

He's pretty dorky for sure but then I don't think you have to worry too much about D-Cinema at the moment as the conversion to Cyan had been talked about for almost a decade before it ever happened and it still hasn't completely fallen into place yet.... And that is one that actually SAVES the labs money..... The other one costs money.....

Jack Kline talks with a little more sense.... but only a little!!

quote: Mike Blakesley
"How long will it take to get half of our theaters converted to digital? I think that is certainly a five-year plan, and it could be longer. This is the first major change in film projection technology in 100 years. It will take some time to change."

Of course it will be ALOT longer than 5 years... they have to talk about it for a decade or so and then slowly implement it like Cyan tracks! Remember that any CEO will certainly try to make the near future look brighter to his board of directors.

Mark

Posted by Bobby Henderson (Member # 840) on 09-16-2005, 07:35 PM:

quote: Joseph L. Kleiman
In 2000, back when they owned DPI, IMAX told the NY Times they had plans to replace all the IMAX projectors with digital systems within two years. Exhibitors would pay for the installs by paying the difference between a digital print and a 1570 print.

Although HDTV quality video projection is a pretty stupid thing for commercial theaters to install, I couldn't imagine a more stupid move for a movie theater than replace a 15/70 giant format projection system with HDTV quality video projection. Freaking stupid!!! I guess I'm supposed to be enthralled by the mosaic pattern of ceiling tile sized pixels on a 7 storey tall screen. Um, I think I'll keep my dollars and stay away from that garbage, thank you very much.

Another thing I'm going to tersely avoid is any digital video based program blown up to IMAX. I like James Cameron's movies, and his previous policy of getting 70mm prints distributed to support them. However, I understand he expects digital video footage to fly on an IMAX screen. Sorry, but I'm not buying that. If I want video of that sort, I'll just wait to rent the DVD. When I buy a ticket for an IMAX show I want a friggin' 15/70 based ultra high resolution FILM based image.

Posted by Mark Gulbrandsen (Member # 72) on 09-16-2005, 08:15 PM:

quote: Bobby Henderson
However, I understand he expects digital video footage to fly on an IMAX screen. Sorry, but I'm not buying that. If I want video of that sort, I'll just wait to rent the DVD. When I buy a ticket for an IMAX show I want a friggin' 15/70 based ultra high resolution FILM based image.

Bobby,
Actually the use of video in films like "Ghosts Of The Abyss" was quite spectaculuar in an of itself. The added fact that it was 3D was all the better. How else are you going to see the Titanic life size and in 3D with todays technology? In places like a dive to the Titanic filming in anyting other than 35mm or video is just impractical and each dive so expensive that you could easily by a brand new Imax camera with the funds spent on each dive of 2 subs. Even for the movie version "Titanic" Cameron shot those scenes in 2 perf 35mm ith specially built cameras in order to have a long film run. Filming at that depth in Imax would certainly be possible were money available to construct a new camera and housing but overall very impractical and you'd have just three or four minuites of film to shoot on each dive.... and no 3D.

Mark

Posted by Joseph L. Kleiman (Member # 3097) on 09-16-2005, 11:36 PM:

Keep in mind that Cameron is determined to film all his movies in 3D. The choice of IMAX screens was not so much out of excitement over the format, as it was out of necessity. Large format systems are really the only high definition 3D theatrical systems permanantly installed. For Ghosts of the Abyss, in addition to the IMAX version, over-under 35mm projectors were installed in a number of markets. These projectors had quite a few problems, which is why Aliens of the Deep was exclusive to IMAX. Unfortunately, there's not enough 3D large format screens, and this lack of reliable high def 3D cinema screens is why Cameron was at ShoWest promoting the DLP 3D solution.

Mark: one word - Titanica

Posted by Mark Gulbrandsen (Member # 72) on 09-17-2005, 02:52 AM:

quote: Joseph L. Kleiman
Mark: one word - Titanica

Yes, a good film but filmed "through" the port windows of the sub. This left a very limited visual area that could be filmed or should we just say static shots for the most part. They were also shooting through the thickness of the port which is quite a bit of plastic, I believe in excess of 8". That thickness causes alot of diffraction of the light commng through the port and hence some magnification of what you're looking at. Maneuvering the entire sub instead of manuvering an outside mounted camera on the robotic controled arm in a housing leaves alot to be desired and that shows through to a large extent in that film as mostly static shots of the ship. Properly designed U/W housings have domed ports to greatly minimize the diffraction problem. The dome in some instances creates its own aerial image that the camera lens is then focused on. The dome can also take extreme pressures alot better than a flat port can.

I felt that the added ability to pan as you see in "Ghosts" literally made you feel like you were outside the sub!! Check out the video camera and housing used... they show it in the film.
Mark
P.S. There is also only so much room for spare magazines in the subs... they are pretty cramped in there even with out all the photographic stuff!!

Posted by Lyle Romer (Member # 1266) on 09-17-2005, 09:56 AM:

quote:
And the "fucking idiot of the year award" goes to........

quote: Mike Blakesley
--------------------------------------------------------------------------------
"Film is wonderful, but it degrades with each showing," said Bill Mead, publisher of DCinemaToday.com, a website that tracks digital exhibition. "You'll get scratches, dirt in the film and side-to-side jitters as film travels through the projector. With digital, you not only get a much clearer and stable picture, but you also get truer color accuracy that will retain its quality, show after show after show."
--------------------------------------------------------------------------------

Congratulations Bill Mead for having no clue as to what you are talking about!!! You are doing this industry a wonderful service.

Bill Mead is just predisposed to film wear issues from his time with Sony Cinema Products. I'm pretty sure he was a VP with SDDS.

I second Brad's nomination for the FIOTY Award. That acronym has a ring to it, maybe we can get some TV time to give it out.

Posted by Bruce Hansen (Member # 281) on 09-17-2005, 10:38 AM:

Same hype, different day.

Posted by Tim Reed (Member # 137) on 09-17-2005, 08:02 PM:

quote: "The Article"
150 new digital movie screens to be up by year's end and as many as 4,000 by the end of 2007.

Okay, boys, set your egg timers. Only 2 more years of film left... [Razz]

Posted by Mark Gulbrandsen (Member # 72) on 09-17-2005, 10:13 PM:

quote: Lyle Romer
Bill Mead is just predisposed to film wear issues from his time with Sony Cinema Products. I'm pretty sure he was a VP with SDDS.

Wasn't he with Dolby before his SDDS tenure???

Mark

Posted by Bobby Henderson (Member # 840) on 09-18-2005, 12:11 AM:

I thought he was with Optical Radiation Corp., the folks that gave us Cinema Digital Sound.

Posted by Jeffry L. Johnson (Member # 453) on 09-18-2005, 09:45 AM:

Many of the folks who worked on CDS moved on to develop SDDS when ORC closed.

[ 09-18-2005, 11:13 AM: Message edited by: Jeffry L. Johnson ]

Posted by Steve Guttag (Member # 268) on 09-18-2005, 01:16 PM:

Mark had it right...Bill Meade was indeed with Dolby prior to SDDS. There were people that migrated from CDS over to SDDS though. Bill was with Dolby when Dolby Digital came out and I recall him being with Dolby in the early 80s. Sam Chavez would know best around here.

As to the statement...certainly, at this point, his bread would be buttered more with DCinema.

However, in his defense, if one were to look at the Cinema industry as a WHOLE...prints degrade from the moment they are put in the can...most cinemas do not take care of their films and seemingly don't care how they are shown either.

Posted by Dustin Mitchell (Member # 372) on 09-18-2005, 01:58 PM:

While quality, upgrade, and maintenance cost issues are still out there its good to know the question of initial cost has been answered. An average studio release what, at least 20 wide release films a year? Given $1,000 savings per print each digital system could be paid for in 5 years or so.

Posted by Dominic Espinosa (Member # 2122) on 09-18-2005, 02:05 PM:

quote: Steve Guttag
However, in his defense, if one were to look at the Cinema industry as a WHOLE...prints degrade from the moment they are put in the can...most cinemas do not take care of their films and seemingly don't care how they are shown either.

Wouldn't it make more sense to bring the hammer down on exhibitors then and force them to handle film correctly?

Oh the cost of film boo hoo. How about releasing good product!
The only thing digital means for me is showing that many more movies that shouldn't have ever been made but somehow did because the price was right.

Posted by Lyle Romer (Member # 1266) on 09-18-2005, 04:10 PM:

One positive I just though of regarding Dcinema. If the studios are invested for billions of dollars in the equipment, it will be in their best interests to make sure theatrical grosses stay high to pay for it instead of shortening the DVD window more and more.

Posted by Paul Linfesty (Member # 214) on 09-18-2005, 06:13 PM:

quote: Dustin Mitchell
Given $1,000 savings per print each digital system could be paid for in 5 years or so.

Just in time to purchase all new upgraded projectors when the old ones had worn out or were rendered obsolete well within that 5 years.