Fortune on Pixar and Anime; Google snags an entertainment exec

Fortune has a great set of stories (you'll have to be a subscriber) about new media and entertainment ideas, including a piece headlined Anime Explosion and another about Ed Catmull, the founder and president of Pixar, whom Steve Jobs calls "our quiet Beatle."

And Google has added Ann Mather to its board of directors, according to this piece from MediaPost. Mather has been an exec at Pixar, Village Roadshow Pictures, and Disney. Wendy Davis writes:

Could her appointment signal that Google's serious about forging alliances with the entertainment world? When it comes to expanding beyond search, Google has many options, but one that has surfaced repeatedly in recent months has been the possibility of distributing video.

CBS, in talks with Google about possible distribution deals, already made streams of the UPN show "Everybody Hates Chris" available through Google. The search giant also expressed interest in acquiring a piece of AOL, which has a trove of video content at the ready.

While Google has done well for itself with search ads, many industry observers are waiting to see what the company will do for a second act. Given Mather's appointment, a move into broadband video now seems like one of the likelier possibilities.

LA Times: Thanksgiving Weekend, `A Losing Race'

The LA Times says the last few days may go down in the books as the second-best Thanksgiving weekend ever at the box office. The Times also surveys a cross-section of consumers about how they watch movies, and why they go to the theater.

Another Times piece, from last week, suggests that "the era of moviegoing as a mass audience ritual is slowly but inexorably drawing to a close, eroded by many of the same forces that have eviscerated the music industry, decimated network TV and, yes, are clobbering the newspaper business. Put simply, an explosion of new technology — the Internet, DVDs, video games, downloading, cellphones and iPods — now offers more compelling diversion than 90% of the movies in theaters, the exceptions being "Harry Potter"-style must-see events or the occasional youth-oriented comedy or thriller."

The headline of Patrick Goldstein's column: "In a losing race with the zeitgeist."

Wrong answer: Make fewer movies

Sorry for the long break... lots of work travel, plus Thanksgiving.

Variety reports that movie studios see one clear way to control costs: make fewer movies. As I've written here before, that seems to be exactly the wrong answer. But since no one in Hollywood seems able to make more movies with lower individual budgets, that seems to be the only possible choice.

In talking recently with a friend who works at Disney, I suggested that if Walt were alive, he'd probably have set up a standalone mini-studio to make inexpensive short films and serials for the Web, cell phones, and video iPods. (Disney's one experiment in this area is developing a spin-off of "Lost" for mobile phones, which won't begin until next year.) My friend thought about it for a minute - then agreed.

Variety quotes analyst Hal Vogel on this topic:

"If you're going to do programming on an iPod, you need to build a staff. You need space for them. You need to market it so people will know what you are doing. And you still have all the old guys there," says longtime media analyst Hal Vogel. "We have this transition period, it could take 10 years. You're incurring costs for both."

Studios already know how to make and market expensive, big-budget projects. But what about the $10 million feature film - or the $100,000 video series for cell phones?

Weekend reading: Glickman stumbles, Cisco acquires, Consumers splurge

Glickman stumbles

The LA Times reports on MPAA chief Dan Glickman's visit to UCLA as part of a whistle-stop tour intended to send the message to college students that piracy is wrong. Unfortunately, the students were cracking jokes. Claire Hoffman writes:

...the outbreak of pirate jokes Wednesday night underscored the challenge that Glickman faced as he toured college campuses lecturing on the need to protect movies from Internet thieves. UCLA was his fifth stop and his first in California.

Although downloading pirated films from the Internet is not nearly as rampant on college campuses as online copying of music, studios are alarmed that the numbers are growing. Research shows that young males are at the vanguard in downloading technology, and that pirating of movies tends to take place overwhelmingly on computers in college dorms.

One med school student, Mike Chen, may be indicative of how college students think about piracy. He asked, "Are there perhaps some benefits to piracy because more people now have access to the movies?" Uh, yeah, benefits to college students. Not really to movie makers. Later, Chen told the Times that Glickman's agenda "doesn't benefit the public, just the rich." Seems like Glickman's message may need some tinkering.

Cisco acquires

The NY Times reports on Cisco Systems' $7 billion purchase of Scientific Atlanta, a company that makes millions of set-top boxes. This lets Cisco, traditionally a data networking company, control an important gateway through which entertainment will enter the home.

Consumers splurge

This NY Times piece reports that "the average American spends more on entertainment than on gasoline, household furnishings and clothing and nearly the same amount as spent on dining out, according to the Bureau of Labor Statistics. Among the affluent, the 20 percent of households with more than $77,000 a year in pretax income, more money is spent on entertainment - $4,516 a year - than on health care, utilities, clothing or food eaten at home." Writer Damon Darlin continues:

Over the last 10 years, outlays for entertainment outpaced overall expenditures. Spending on health care and education, which almost doubled in that period, grew faster.

Another Disney 3-D flick on the way; ILM retrospective

Disney will release its next computer-generated animated film, "Meet the Robinsons," in 3-D following on the success of "Chicken Little," Reuters reports. (The 3-D version of that movie has been making more than twice as much money per theater as the 2-D version.)

Here's the especially interesting bit from the story: Disney expects there to be lots of digital cinemas capable of playing its next 3-D movie - between 750 to 1000, compared to less than 100 today - by next December, when "Robinsons" is released.

Variety also has the story.

Industrial Light + Magic helped create the 3-D version of "Chicken Little," and that company is celebrating its 30th year in business. There's a package of stories from the Hollywood Reporter marking the occasion. Paula Parisi writes:

Would the digital revolution have occurred had ILM not been born? Surely, the answer is yes: Other firms were dabbling in computer-generated imaging at the time. By the early 1980s, Pacific Data Images, Kleiser/Walczak Construction Co. and R/Greenberg had broken ground in the making of commercials, and one of those companies inevitably would have migrated its magic to film.

The question, though, is when would that have taken place, and how quickly? Without the drive of a director possessed, such changes tend to languish -- merely ideas waiting to happen. [George] Lucas dropped the dime.

In 1975, Lucas wasn't out to change the world.

"I basically just wanted to make a movie," he says. [That movie, of course, was `Star Wars.'] "But in order to make the movie, I knew I had to build a company because there wasn't anybody out there at the time who could do the kind of special effects I wanted."

The package also has an appreciation of ILM by James Cameron. He writes:

"...as an adult, that jaw-dropping, amazed sense of wonder had been missing until I saw `Star Wars' in a packed movie theater in 1977. The kineticism of the film was what struck me the most -- a futuristic, highly technical vision of space that was incredibly dynamic. The world had never seen anything like it."

In a Q&A with Lucas, Parisi asks him whether he thinks theaters will disappear in a world where everything is available as video-on-demand. Lucas answers:

I don't think the theatrical exhibition business will go away because I think people will always want to go to the movies, just as they go to the opera, they go to the ballet, and they go to football games. Football is a perfect example, where you can stay at home and watch it in the comfort of your own home and see a much better presentation, but people still sit out in the cold and cheer on (their teams) ... and you can't see anything because it's all distant. And now they have giant screens so you can watch it on television right there -- but they still fill up 100,000-seat (stadiums). We'll end up with fewer theaters with bigger screens and better presentations, and the theater owners will work very hard to make the whole thing an event.

Pirates of the Pacific Rim

Arnold Schwarzenegger and Jackie Chan are teaming up in a new anti-piracy ad that starts airing in China this week, write San Francisco Chronicle columnists Phillip Matier and Andrew Ross. It coincides with the Governator's current trade mission to China. They write:

It's estimated that pirating costs U.S. companies hundreds of millions annually in lost revenue, and it's a top priority for some of the heavy hitters who make up Schwarzenegger's traveling delegation -- including executives of Fox, Universal Studios and Disney.

The ad, which looks like a clip from a movie, features the two actors clad in black leather and about to take on some menacing pirates.

The duo urges viewers to look for genuine quality goods -- and warn of the health danger from phony medicines.

The spot was directed by Jonathan Mostow, who also helmed `Terminator 3.'

Technicolor vs. Christie/AIX

Things are heating up in the rivalry between Christie/AIX and Technicolor. Both are vying to convert as many theaters as possible to digital projection, financing the necessary equipment and then collecting a fee from studios every time a new digital movie is shown.

Technicolor announced today that it'll be using some of Sony's high-res 4K projectors when it starts its digital cinema beta test in 2006. Here's a snippet from the press release:

"The goal of digital cinema is to offer an entertainment experience that can't be had at home, even with the best of home theater systems," said Joe Berchtold, president of Technicolor Electronic Distribution Services. "Sony's 4K SXRD projector is a device that can deliver on this promise, and will provide theatergoers a more satisfying and dynamic cinema experience. That's why we're including the Sony projector in our beta test next year and eventually expect to deploy a meaningful number of them in the marketplace."

Last week, Technicolor announced that four studios were committed to providing it with digital versions of their movies: DreamWorks, Warner Brothers, Sony Pictures, and Universal Studios.

Meanwhile, Christie/AIX hasn't announced any plans to deploy 4K projectors; they're going to be using 2K projectors, which are less expensive and more proven, but offer lower resolution.

Here's a podcast of an interview between Bud Mayo, the CEO of AccessIT (half of the Christie/AIX joint venture) and Laurie Sullivan of TechWeb. He talks about the DCI standard, and the value proposition digital cinema offers to theater owners and studios.

Sullivan also wrote this piece, `Digital Cinema Lighting Up Megaplexes.' She writes:

Plans call for a 36,000-screen deployment during the next five years. That's how many commercial movie screens there are in the United States and Canada.

I think that's probably a mistake. But it got me thinking: could we really see all 36,000 screens in the U.S. convert to digital by 2010?

`Has Apple switched sides?'

Here's a piece I wrote in today's SF Chronicle op-ed page, about how Apple treats independent audio and video producers differently than big media, by forcing them to give away their products for free on its iTunes Music Store. Here's the gist:

Apple has decided, essentially, that major media companies should be allowed to charge for what they produce, but individuals ought to give their work away for free. That's a big deal for solo creative types who want to make a buck: By Apple's account, its storefront controls 70 percent of the market for legally downloaded music, and customers have bought...more than a million videos for $1.99 each.

Your thoughts?

Some CinemaTech 'greatest hits'

If it's your first time here, welcome. I usually post one item every day that pertains to the ways technology is changing the entertainment industry - and how that affects the people who make and enjoy movies, TV, videogames, etc. You can subscribe via RSS feed or e-mail at right.

Here are some of the postings that have generated the most traffic over the past few months:

• Some headlines and commentary from the day Apple introduced its video iPod
  
• A conversation will Barry Diller, former TV and movie bigwig, about the value of user-generated content on the Web
  
• My visit to the projection booth as a Dolby technician was preparing a theater in Dublin, CA to show "Chicken Little" in 3-D
  
• A Q&A with Mark Cuban, owner of the Dallas Mavericks, Landmark Theatres, HDNet, and several movie production companies
  
• A dispatch from George Lucas' keynote at the Siggraph computer graphics conference, from August 2005
  
• My report from a recent demo of Sony's 4K, ultra-high-resolution digital cinema projector
  
• A conversation with Bob Greene of Starz about digital distribution and movies on portable devices
  
• Reed Hastings of Netflix reacts to the Supreme Court's Grokster decision, and talks about the future of Internet movie downloads
  
• And finally, if you're into audio, here's a link to a radio piece from Boston's NPR affiliate that talks about the digital cinema transition
  

If you'd like to get in touch, drop me a note...

Three links: Pocket projectors, viral video, free editing software

- Michael Kanellos has this fun story on News.com about an LED projector being developed in Finland that might one day be built into cell phones, allowing you to show movies or PowerPoint presentations in just about any darkened room. (Or perhaps while locked in the trunk of a car.) Bonus: here's an earlier CinemaTech report on pocket-sized projectors.

- The Digital Media and Entertainment Club at Berkeley has compiled a lengthy list of sites that serve up original and viral videos.

- DV Guru brings you this info on Avid's new, free video-editing software for Macs and PCs.

`Agents of Change': Mark Cuban, Gary Winick, Dennis Muren, James Cameron

I was really flattered to be asked by The Hollywood Reporter to write a piece about innovation in the movie industry for their annual special issue on leadership, which just came out this week. They headlined it Agents of Change, and the subhead is, "'New' is a word that takes some getting used to in Hollywood, but it's the risk-takers who are ensuring the future of the business."

I had a chance to speak with a bunch of great people for this story, from Gary Winick (who's directing `Charlotte's Web') to Dennis Muren of Industrial LIght & Magic to Mark Cuban to Randall Kleiser, who directed one of my favorite movies of all time, `Grease.' Also Dick Cook, the chairman of Walt Disney Studios, and Robert Greenwald, who directed the new documentary `Wal-Mart: The High Cost of Low Price.'

I'll try to post some additional background info here in the next couple days, but here's the gist of the piece:

Whether they're directors, technology merchants, producers, effects experts or studio executives, this group of forward-thinkers believes in an alternative sort of screen test. In an industry that can be averse to change, they're testing new technologies and novel approaches to making movies, trying to convince the establishment that perpetual experimentation is what leads to the creative and business breakthroughs that keep the industry growing and audiences coming back.

"People are afraid to change," says Mark Cuban, co-owner of 2929 Entertainment, the privately held holding company that owns Landmark Theatres and HDNet Films. "The underlying issue is (that the studios) are all public companies, and they all have quarterly numbers to hit. There's not a reward for taking a risk."

But die-hard risk-takers do exist, outside -- and even within -- the studio universe. They're advocating digital cinematography, making and distributing movies in 3-D, using the Internet as a tool for collaboration, creating never-before-seen visuals and agitating to offer consumers more choices of how they can view a movie while it is still in theaters.

That's Gary Winick at right, in the snazzy orange shirt.

Culture clash at Yahoo

My friend (and former Boston Globe colleague) Chris Gaither has this piece in the LA Times today, headlined `Can Yahoo Sign On to Hollywood?'

The piece opens with a great anecdote:

The difference between Hollywood's glitzy sensibilities and the smarty-pants culture of Silicon Valley was distilled in a 20-word e-mail to workers in Yahoo Inc.'s Santa Monica office.

Sent this year on behalf of a Yahoo executive recently recruited from Fox Broadcasting Co., the e-mail noted that "SOMEONE" had parked in his space. For some who received it, the all-capitals dispatch read like a scream: "PLEASE MOVE OR YOU WILL BE TOWED."

After all, Yahoo prides itself on being the kind of place where the billionaire founders shun private offices. At Yahoo's Sunnyvale, Calif., headquarters, top executives eat in the cafeteria with rank-and-file employees.

And no one has an assigned parking space.

But as Yahoo strives to enter the league of Walt Disney Co., Viacom Inc. and other media giants, success hinges on its ability to merge two inherently different cultures: the brash, flashy ethos of entertainment executives and the rumpled, brainiac realm of computer nerds.

Well worth a read.

And now, the stat you've been waiting for...

In today's LA Times, columnist Michael Hiltzik asks the question, `Has digital cinema finally found its killer app?' The article presents some solid evidence that 3-D could help push digital projection into hundreds or thousands of theaters.

First: The 3-D version `Chicken Little' has been more successful at filling theaters than the 2-D version:

The film grossed about $11,000 per screen at conventional theaters during its first weekend, but $25,000 per screen at more than 80 locations showing the 3-D version. The difference can't be accounted for by the extra $1 to $1.50 some 3-D theaters tacked onto admission prices, and if it held up this past weekend, the excitement in the digital-cinema community will be palpable.

The theater-owners' spokesman still isn't convinced that audiences will ever want anything new:

"It's nice value added," John Fithian, president of the National Assn. of Theatre Owners, told me, choosing his words carefully. He scoffs at the contention of some 3-D mavens that the digital process will turn 2-D movies into historical artifacts like silent pictures. 3-D waves have come and passed in Hollywood since the '30s, and no one knows whether this one will be any different. "As a technical proposition it is way cool," he says. "As an economic proposition it clearly doesn't work everywhere." Real D's system effectively adds as much as $50,000 to the per-screen cost of digital conversion.

And even tech companies were slow to realize that 3-D could be a selling point, observes In-Three founder Michael Kaye:

For years, [Kaye] says, 3-D's potential as a selling point for digital cinema eluded the studios and even Texas Instruments Inc., which manufactures the industry-leading digital cinema technology.

"We told TI that people didn't know their projectors could do 3-D," Kaye recalls. "And TI told us they didn't think 3-D would sell digital projectors."

Kaye's company is "dimensionalizing" films that were shot in 2-D, like the original "Star Wars" trilogy... and perhaps also Peter Jackson's forthcoming "King Kong," according to this piece in the Hollywood Reporter.

Sheigh Crabtree writes, "...the betting is...a 3-D `Kong' will appear in theaters several months into the movie's run." Cool.

The first 4 hours...video a la carte...and videogames

Three strong pieces from the NY Times this weekend...plus, you've got the entire issue of the Sunday Magazine dedicated to the movie biz.

1. Adam Leipzig writes today that a movie's success or failure in theatres is often determined in a four-hour window on the Friday it is released. This piece is a must-read. Leipzig observes that a movie's success as a DVD (where most of the profits are gleaned) hinges on whether that movie did well in theatres. And what generates boffo box office?

In most cases, nearly half of a movie's total audience turns out in the first week of release, which means there has been very little or no word of mouth motivating most of the audience. In other words, many people go to a movie without any real information about it - without even reading a review. Or, put most cynically: Most of the time, there is no relationship between how good a film is, and how many people turn out to see it.

So what makes people go to a movie? Generally, it is awareness - or now, in Hollywood parlance, "pre-awareness." Since studios cannot spend enough on advertising to buy awareness (there is so much advertising noise in the marketplace these days), there is a tendency to make movies with familiar titles, characters and stories: "The Dukes of Hazzard," "Spider-Man," "War of the Worlds," "Charlie and the Chocolate Factory." In the past decade, most box-office revenue has come from pre-aware titles, which includes sequels ("X-Men 3," set for a May 2006 release) and remakes ( "King Kong," Dec. 14).

Once a movie opens, word-of-mouth travels at lightning speed; teenagers will text message their friends during the first show on a Friday about whether a flick is worth seeing or not, Leipzig writes. (He's the president of National Geographic Feature Films, by the way.) "...The underlying business model of the motion-picture industry has not yet adjusted to the momentum of velocity of change," Leipzig writes. And when you factor in digital distribution and projection that'd allow studios to re-edit films after release, or distribute alternate versions to target different audiences? Forget about it.

This article is worth tracking down in print for the wonderful illustrations - a mini-comic book, really - by Peter Arkle. (I've included on at right.)

2. Richard Siklos writes about selling content a la carte. Two interesting aspects of the piece: people may be conditioned by today's pricing into thinking that an hour of digital entertainment (like an epsiode of `Lost' or `CSI') is worth about $1.99 or 99 cents; that may make it hard to charge more than, say, $4 or $5 for digital downloads of two-hour movies. Second, it's surprising what people will pay for. Siklos writes:

...the fact that any music videos have a retail monetary value is fairly remarkable. After all, music companies largely produce them as promotional vehicles in the hope that they will gain attention from MTV or its imitators. And there are already countless Web sites for viewing them free. Who knew?

Later, he refers to the recent deals between CBS and Comcast and NBC and DirecTV to offer hit shows via he systems' video-on-demand areas:

Everyone involved cautioned that these were just baby steps. But the bigger point is that it is now possible to envision a world not too far in the future where all imaginable types of programs, including the latest movies and top-rated network TV shows, are available through some kind of download or video-on-demand system.

3. Charles Herold reviews Lionhead's new simulation game, `The Movies,' which lets players run their own studio (or run it into the ground). Herold writes:

...I couldn't stop playing The Movies. It was fun as the years went by (the game begins in the 1920's) to gain access to new sets and film technologies. I liked figuring out how to increase an actor's star power by casting him in just the right film, and I studied the capsule reviews of each movie to see where I had gone wrong. I became so excited by the process that I tried to make two movies simultaneously, almost bankrupting the studio. It was thrilling to live on the edge, desperately trying to complete a film before the studio went broke.

The game costs $49.99 - much less than buying a studio of your own.

A 'Little' party at Disney

Disney's animators were celebrating the release of "Chicken Little" when I stopped by the studio this afternoon, with a big party in front of the Sorcerer's Apprentice hat. (That's Disney's Feature Animation building at right.) There were drinks, hors d'oeuvres, and a live band. Interesting snippet from the very last speech, overheard as I was going inside: "It feels like a dark cloud has lifted." I presume that means that Disney's drought - when it comes to hit animated movies - may be over. And that the studio has proven it can compete with the CG biggies, Pixar and DreamWorks (where I spent most of the day.)

Mike Curtis of HD for Indies has a great report on seeing "Chicken Little" in 3-D. He writes:

3D rendered movies projected in normal 2D theaters suddenly feels kind of pointless. 3D animated movies should be shown in 3D henceforth, no doubt about it - this is the New Thing as far as I'm concerned. Pixar should perk up and take notice...

I would bet money that the next pictures from Pixar and DreamWorks will have 3-D releases. Wouldn't you?

Someone might actually use Movielink...

...now that General Mills is tucking $5 coupons in boxes of cereal (good for a thirty-day 'rental' of one movie downloaded over the Net; $9 will buy you a movie from the service). Look for the coupons in boxes of Lucky Charms, Honey Nut Cheerios, Cinammon Toast Crunch, and Golden Grahams, through February of next year. (I do happen to think that's a smart marketing strategy, and I also happen to like Golden Grahams.)

One more sign that movie marketing spending is out of control, and not nearly as effective as it once was: Lions Gate Entertainment said it spent $35 million marketing "Lords of War" and "The Devil's Rejects," which led to a $26 million loss on those flicks. Lions Gate lost $14 million for the quarter.

Thomson's Technicolor division announced a plan to finance its own roll-out of digital cinema gear in as many as 15,000 screens in America (out of a total of 36,000) over the next 10 years. Now, Technicolor and AccessIT will be vying with one another to sign up theater-owners to participate in their roll-outs.

50 Greatest Indie Films

This list is pretty interesting...nothing (yet) shot on digital, though plenty of stuff made guerrilla-style, on a tight budget.

From News.com: IBM's 3-D television + MGM Supports Blu-ray

Michael Singer writes from San Francisco:

At the 22nd annual Flat Information Displays conference sponsored by iSuppli here, IBM's display laboratories demonstrated a low-cost way to get high-resolution 3D images from a large-screen television or home-cinema projector that's already on the market.

IBM expects that the technology could be built into a standard DLP television for less than $20.

It uses passive polarized glasses. There's a nice video on News.com as well that gives a sense of some of the potential applications for 3-D TV.

News.com also has this Reuters report on MGM's endorsement of Blu-ray as a format for high-definition DVDs. It's not too much of a shock that MGM is backing Sony's format:

MGM's move was not considered a surprise, as the studio behind the lucrative James Bond film franchise was bought in April by an investor group including private equity firms Providence Equity Partners and Texas Pacific Group, as well as Sony and Comcast.

A report: `Serenity' DCI-compliant screening

Laurie Sullivan has this report on Monday's first-ever screening of a digital film that complied with all of the Digital Cinema Initiative's rules and regulations.

'Serenity' was only the third film that Universal has released in digital format; the earlier two were 'Jurassic Park III' and `Van Helsing.' (And `Serenity' was only shown digitally for this single event Monday night, not the national release.) Sullivan writes:

The process still has kinks. Doremi's [technology director Camille] Rizko said it took three days to encode the movie to DCI specifications and deliver the file. That process proved about two days longer than expected because there were minor issues to solve around the JPEG 2000 compression standard. "Subtitles and additional audio are contained in the same package that shares the visuals," he said.

A Disney Double-Header: Mobile ESPN, Pixar

Further evidence that Disney really gets new technology, and has a desire to deliver its content in innovative new ways: the pending launch of Mobile ESPN, essentially a version of the sports channel scaled down for a cell phone. Key quote from Richard Sandomir's story in today's NY Times:

"Our mission is to be everywhere fans watch, talk, debate and enjoy sports," said Salil Mehta, executive vice president of ESPN Enterprises. "We don't believe in one screen. We believe in all three."

By all three, he means television (ESPN's cable channels), computers (ESPN.com), and cell phones. What if every TV channel and movie studio had the same mission?

And Pixar's stock hit an all-time high yesterday, after the company announced it had earned $27.4 million in profits for the third quarter, compared to $22.4 million in the same quarter last year. CEO Steve Jobs said that Pixar has sold 125,000 of its short films through Apple's iTunes Music Store in just under one month.

He also noted that he hasn't yet seen Disney's "Chicken Little," even as the two companies negotiate over renewing Disney's deal to distribute Pixar's movies. Jobs is angling for a bigger ownership stake in each movie... and I think he's got the stronger hand. "Little" simply may not be a big enough hit to give Disney a credible case for going it alone, producing CG-animated films "to infinity and beyond," as Buzz Lightyear would put it.

Rick Aristotle Murarriz of the Motley Fool observes:

...Yes, Chicken Little taking in $40.1 million over the weekend is a great start, but it's nowhere near as dominating as the $70.1 million that Pixar's The Incredibles took in during the exact same weekend slot last year. Chicken Little is likely to take in between $100 million to $120 million in its domestic theatrical run. It may duplicate that overseas. That falls well short of Pixar's global average of $533 million grossed on each of its six full-length features. So, no, Disney on its own is still nowhere near Pixar's league. It's a noble effort, though.

For more background on Disney/Pixar, read this great piece by Edward Jay Epstein, "Why Pixar can't leave Disney," published in Slate.

Morning news: Jail terms, Grokster, and 99 cent downloads

Some items from today's papers:

- Chen Nai-ming, a Hong Kong man, was sentenced to three months in jail for using BitTorrent file-sharing software to allow anyone to download three movies from his computer. The movies? "Daredevil," "Red Planet," and "Miss Congeniality." This revelation of Mr. Chen's taste in films is perhaps more embarrassing than the jail term. Mr. Chen will appeal the sentence, giving him enough time to see "Miss Congeniality 2."

- File-sharing service Grokster conceded yesterday in its fight with the studios and record labels. But Streamcast battles on. Of course, piracy is a hydra-headed beast, as the CEO of the analyst firm BigChampagne observes in today's NY Times story:

"I don't think, practically speaking, we're expecting to see much impact in the peer-to-peer landscape," said Eric Garland, BigChampagne's chief executive. "People moved on from tools like Grokster some time ago."

Garland says that an estimated 9.2 million people use peer-to-peer networks today, up from 8.8 million in June.

- NBC and CBS are working with DirecTV and Comcast to sell you TV shows you forgot to record with your DVR, like "Law and Order" and "CSI." (Disclosure: I have not seen either show, but am told they are quite appealing to people in the 50-and-over demographic.) The price: 99 cents.

This solves what strikes me as a minor problem: people who don't understand how to set their DVRs, or forget to do so. What strikes me as more appealing to consumers is the ability to put these shows on a laptop or portable device (which Dish Network and Apple's iPod video allow you to do); or to buy archival shows that aren't regularly broadcast. The only way I could see this NBC/CBS strategy working is if they start forbidding customers to use their DVRs to record shows for free, or start 'expiring' content off the DVR after a few days, so that they can then sell it to you for 99 cents. And I don't think consumers would take kindly to that.

What's Jim Cameron been up to since `Titanic'?

That's the central question of this London Times story from October 30th. Though Cameron has directed Imax movies like `Ghosts of the Abyss' and TV documentaries like `Expedition: Bismarck,' he hasn't made a Hollywood feature since `Titantic' came out in 1997, and quickly became the top-grossing film of all time.

Christopher Goodwin writes:

He’s finally returning to the Hollywood fray, with what may be an even greater challenge than Titanic. “I’m directing two movies back-to-back and I’ve got two more lined up after that,” he says. “Two movies using the same techniques, the same 3-D digital-camera system, the same virtual production studio. They’re big projects.” The first will come out in the summer of 2007, the second in the summer of 2009. One is called Battle Angel, an epic adaptation of a 12-part Japanese manga series about a 14-year-old amnesiac female cyborg on a quest to discover her identity while battling evil, set in the 26th century. The other, which he refuses to talk about at this stage, may be what is known in Cameron circles as Project 880. He will not be making Terminator 4, and he will not be making True Lies 2, as has been rumoured. The budgets for the two films — which will use the proprietary, high-definition 3-D digital technology he has developed — are likely to be huge. The combined budget could even top half-a-billion dollars, enough to give even the most sanguine studio head years of sleepless nights.

(I found the story courtesy of Anne Thompson's new Risky Biz Blog, which desperately needs an RSS feed.)

TiVo + Yahoo: What it means

The bottom line of this deal between TiVo and Yahoo, announced today, is that it'll be easier to program your TiVo box when you're not at home. Just go to Yahoo's TV listings site, check the shows you want to record, and the command will be sent to your TiVo at home. (The catch is that this can take up to 36 hours, if your TiVo, like mine, just connects to TiVo's servers via dial-up and isn't linked to a high-speed home network.) This isn't going to bring scads of new customers to TiVo - though I'm sure having the TiVo logo plastered around Yahoo's TV listings area isn't a bad thing.

Eventually, people will also be able to view pictures stored on Yahoo on their TV, and also get weather and traffic info.

But there's nothing in this deal to suggest Yahoo will be delivering video clips, movies, or TV shows to your TiVo. Saul Hansell writes in the NY Times:

Talk of linking the Internet to television sets has been growing again, not so much for Web browsing but to view the increasing range of video programming that is being offered online.

TiVo's CEO is bullish about that idea, but the cable and satellite companies he works with to sell boxes, notably Comcast and DirecTV, aren't so enthusiastic. Hansell writes:

One sign of the sensitivity is that DirecTV will not let customers who have received its TiVo boxes use the Yahoo scheduling or programming features, even though they do not involve video.

What a great way to keep customers happy: limit choice and put the kibosh on new features.

Machinima Festival / NYC

If you're in the tri-state area next Saturday, definitely check this out... the 2005 Machinima Film Festival, a day of panels, software demos, and screenings.

Machinima is animated film-making that uses video game engines to create the characters and virtual sets.

The shake-up at Warner Bros.

Warner Brothers Entertainment, though still profitable, just announced a lay-off of 6 percent of their staff of 4500 employees. Why would a company making money do something like that? Only if they doubt that the future will be brighter than the present.

Laura Holson's story in today's NY Times is an in-depth exploration of what's happening at Warner Brothers. They're trying to get stars like Brad Pitt to work for less money up front, and more on the back end. They're also trying to figure out how to spend more intelligently on marketing - and make every nickel work for them.

But WB is also making some worrisome moves. Jeff Robinov, the head of production, rightly observes that too many new releases feel similar to other movies. But he says that Warners is considering making fewer movies each year (one or two less than the 25 they've been making annually). I understand where they're coming from with this strategy - leverage the power of the studio to make fewer big-budget movies, and market them in a loud, unavoidable way. I just think they're wrong, that the future is about making more movies that take bigger chances, and create new characters and stories, rather than milking established franchises. The more expensive a film, and the more heavily a studio's financial results rest on an individual release, the less likely that movie is to be fresh or original. ("Miss Congeniality 2," anyone?)

Also, WB distribution chief Dan Fellman says that moviegoers aren't dissatisfied with today's theatrical experience. "The situation works just fine; it's really not broken," he says. (I hope to ask Mr. Fellman soon how many movies he sees each year outside of private screening rooms; I'll report back.)

Finally, Barry Meyer, the CEO of Warner Brothers, seems to be taking a wait-and-see posture about new delivery platforms like the video iPod. Holson writes:

...Warner, unlike Disney, is still skeptical about offering its movies and television shows for the video iPod or other portable devices. One concern is that the content will be easier to copy and share, compounding the problems the studio is already experiencing with piracy.

"I don't know if we are ready to do that," Mr. Meyer said. "I want to see how the Disney experiment works, how it affects the television affiliates and video retailers. A lot of people are affected by it. We want to be responsive, but everything has the overlay that we don't want to put anything out that has a negative effect on how we manage our digital rights."

Cutting costs can make a lot of sense. But only if it's accompanied by a strategy for innovation and growth. What happened to the risk-taking Warner Brothers of old?

Public radio piece: Digital cinema, James Cameron, `Chicken Little'

Boston's NPR station ran this piece on digital cinema yesterday, `Coming to a Theater Near You.' Andrea Shea, the producer, sets up the story by observing that this year's box office is down eight percent compared to 2004, and that recent surveys have reported that people prefer watching movies on their couch at home. Could `Chicken Little' in digital 3-D, and later digital releases, turn that tide? (The story starts about 35 seconds into the RealAudio clip, after some news about George W. Bush.)

Andrea and I spoke on Tuesday, and I'm the story's first soundbite, followed immediately by James Cameron. Cameron says that digital will give audiences a more consistent, high-quality experience than celluloid, and he uses `Titanic' as an example. "The film outlived its technical medium. It played in theaters so long that the prints fell apart," he says. "They got scratched beyond recognition - all of the prints."

Shea visits the great Coolidge Corner Theater in Brookline, whose owner says he's planning to stick with celluloid - and his 1950s-era projectors. He worried about the reliability of digital equipment. "We've got reliable equipment that has little failure to it, so we're going to stay with it until we're forced to go in a different direction," says Joe Zina. But I wonder if digital distribution will give Zina a wider range of movies to choose from, within a year or two - and possibly also more flexibility to play more movies (not to mention alternative content like live events, lectures, and concerts) at various times during the week.

Michael Karagosian, a tech consultant to the National Association of Theater Owners, thinks that audiences aren't impressed by today's 2K digital projectors. "No one reports that audiences walk away enthralled with what they've seen, so it doesn't give a `wow' factor, unfortunately." He does think that could change as digital projection improves - but I'd underline Cameron's point about projection quality over time: almost no movie-goers have ever seen a 2K digital projection compared side-by-side with a celluloid print that has been playing for a month. That difference, my friends, is truly a wow factor.

Film conservator Julie Buck of the Harvard Film Archive, though, believes that seeing scratches, jiggle, and cue marks on the screen must be part of the movie-going experience. (Can you imagine her arguing that color was not intended to be part of movies?) "Digital is almost flawless to the point of being kind of freaky," she says. Digital lacks the nuance of celluloid, and the blacks and grays aren't quite right, she points out. Besides, she says, film is the medium the director shot his picture in. (Increasingly, not.)

I don't think anyone should force the Coolidge or the Harvard Film Archive to switch to digital - but I suspect they'll build up their digital capabilities pretty quickly over time. I do wish that the story had quoted a theater-owner who feels that digital can enhance his business - but I know there's only so much time in the world of radio, and this is already a pretty thorough piece.

Two quick corrections. In the intro, host Robin Young says there are 360,000 screens in the US. It's more like 36,000. And Shea says that audiences who go to see `Chicken Little' in 3-D will wear glasses like the ones they wore back in the 1950s. Actually, these ones have polarized lenses, rather than red-and-blue, which offer a much crisper picture.

Murch, Apple, and `Jarhead'

Renowned film editor Walter Murch talks about editing the new movie `Jarhead' in this promo piece on Apple's Web site. One interesting snip:

...[S]ince switching to digital nonlinear editing in the 90s, a process designed to make footage more easily accessible to editors, Murch had been struggling to see the eyes of the characters as clearly as he needed to. “Screen resolution has always been the weakest link in whatever digital system I was using,” he says. “So editing in high definition was something I was very eager to do.”

Murch also talks about sharing early versions of a sequence with Sam Mendes, the director:

As they assembled their edits, Murch and [associate editor Sean] Cullen regularly shared QuickTime files of their cuts with Mendes, who had moved on from Los Angeles to the Central Valley in California to shoot the bulk of the movie’s desert scenes.

“As we were going along we needed to get feedback from the director,” says Cullen. “So once a scene was cut we’d export a compressed version — still very high quality, better than SD but not full 720p — using a system called PIX [Product Information Exchange], an online hosted system for sharing information designed for the film industry. So we could simply upload a QuickTime movie to PIX and it would send an email to Sam saying he had a cut to look at. He could watch it on his PowerBook 20 minutes after we cut, whereas with tape it would have taken a day.”

Murch is the editor of a few pics you might've seen, such as `The Godfather Part II,' `Apocalypse Now,' and `The Talented Mr. Ripley.' (Thanks to DVGuru for the link.)

News from around the digital realm

Traveling this week (SF to Boston to NY to SF), so just a few news-y links:

- Access Integrated Technologies says they'll have 150 digital screens installed by the end of this year. Their ultimate goal has increased from 2500 screens to 4000. Disney, Twentieth Century Fox, and Universal have all agreed to supply movies. Here's Information Week's story on those plans.

- Sheigh Crabtree of The Hollywood Reporter says tomorrow's release of "Chicken Little" in "Disney Digital 3-D" will succeed or fail based on the successful installation, integration, and operation of three different technologies: Dolby's servers, Christie and Barco's projectors, and Real D's 3-D gear. She writes, "At stake this weekend is the viability of digital cinema, digital 3-D and the promise of a new out-of-home experience."

Joshua Greer of Real D tells Crabtree that more than 84 theatres wanted to show "Chicken Little" in 3-D. "We had in excess of 100 exhibitors interested, but we couldn't get the equipment. Digital projector suppliers are used to selling 5-10 units a month, and all of a sudden they had an order for 50."

I suspect Dolby will have technicians on hand at maaannny of those 84 theatres this weekend, keeping an eye on the equipment to make sure it works.

- Director Robert Greenwald, whose documentary on Wal-Mart screened in New York on Tuesday night, publicly accused a Wal-Mart consultant in the audience of trying to use his cell phone to pirate the movie. According to the New York Times:

Minutes into the premier of the film, "Wal-Mart: The High Cost of Low Price," the director, Robert Greenwald, said he spotted the consultant pointing his open cellphone toward the screen. A confrontation ensued in the lobby. "Get out of here," Mr. Greenwald yelled, according to the director and a Wal-Mart spokeswoman. "This is a disgrace."