From across the pond: "Digital is the big picture"

This piece about the UK Film Council's digital cinema crusade appeared yesterday in the Guardian, written by two fellows from the Film Industry Research Group at the University of Hertfordshire. (Yes, I'm just hearing about the existence of that for the first time, too.)

Salient bit:

"In Hollywood relatively slow progress has been made in introducing the new technology. Of the current worldwide total of 517 digital screens, the US has 198 but it has recently been overtaken by Korea and China. China will have digitised 400 cinemas by next year."

I'm not sure where those numbers are from.. and it would be nice to know which country - Korea or China - has already superceded the US, as they suggest.

The future of flat screens in the home

The Boston Globe's Hiawatha Bray writes today about the next wave of flat screen TV technology - especially efforts to lower the price of plasma and LCD sets.

The phrase that caught my attention was "...consumers are going into hock for costly flat-panel TVs that are thin enough to hang on a wall and wide enough to simulate the look of a movie theater."

Once you've got your 60-inch high-definition plasma screen hanging in the living room, you want to go to the neighborhood multiplex why? Yes, teens will go because they enjoy navigating crowded parking lots in their new cars; they regard popcorn and nachos as haute cuisine; and they relish the social experience of going to the movies with friends or a date. But what about other people?

Hollywood's going to have to figure out the answer to that question, or figure out how to make more money delivering content to that 60-inch plasma screen.

The Theater Owners Strike Back

Some reaction to Mark Cuban and Todd Wagner's plan to release six new Steven Soderbergh movies in theaters, on DVD, and on cable simultaneously...

The biggest U.S. theater chain, Regal Entertainment, says they just won't show the movies the Cuban and Wagner are producing:

- "Our policy will continue to be that we don't exhibit films that are already in the market on DVD or pay-per-view," said Mike Campbell, president and CEO of Regal Entertainment Group, the largest U.S. theater chain. "We believe the plan is ill-conceived and won't receive much support from the traditional exhibition or distribution community."

Said Tony Karasotes, chairman and CEO of Chicago-based Karasotes Showplace Theatres: "I just think it's a wrong-headed approach. The way to properly distribute film is to use the traditional sequential pattern set up by the studios. (2929's plan) is ass-backwards, and I don't want to encourage that kind of approach because I own motion picture theaters."

- Shari Redstone, president of Boston-based National Amusements Inc.: "It's a short-sighted approach -- not just for exhibition but for the people making these decisions. It will diminish the total revenue that can be generated by any one product. People do want to see movies in different venues: You see it in a theater, you buy it, you rent it, you watch it on TV. When you start to merge these windows, the total revenue starts to go away. You may get a big hit on the opening weekend, but it doesn't go further.

"You also reduce the 'wow factor' of seeing a movie in a theater," she added. "If it's just seen in the home, you decrease the excitement and energy for entertainment and the movies."

My take: movies that people want to watch multiple times, they'll still watch multiple times. Movies they want to own on DVD, they'll still buy. Simultaneously release across several platforms (such as theaters, DVD, video-on-demand, portable devices) will make it more convenient to see movies, and I think will help movies steal time from other forms of entertainment, like the Internet, videogames, and TV. How come Hollywood is so bad at recognizing opportunity when it knocks?

What's with the slump?

A front page piece in today's New York Times observes that "With Popcorn, DVD's and TiVo, Moviegoers Are Staying Home."

The total number of people going to the movies dropped 4 percent in 2003, 2 percent in 2004, and 8 percent so far in 2005. Meanwhile, time spent online has been skyrocketing (76.6 percent), and time spent playing videogames has been growing pretty fast, too (20.3 percent).

The article wonders whether movie attendance is down because -- Thesis #1 -- people are spending more times with other kinds of entertainment, or because of a dearth in quality flicks -- Thesis #2. (Might the answer be "both"?)

The bulk of the story supports Thesis #1. Amy Pascal, chairwoman of Sony Pictures Entertainment's motion picture group, is the only backer of Thesis #2 cited. She says, "We can give ourselves every excuse for people not showing up...but people just want good movies."

I'd add an important "and" to that. And they want to watch those good movies at a time, in a venue, and on a device that's convenient to them.

(Some evidence in support of that: the amount of time Americans spend watching DVDs has jumped 53 percent since 2000, according to a study by the Motion Picture Association of America. DVDs are insanely convenient, rentable at Blockbuster or NetFlix.com, and available for purchase at the neighborhood drugstore; and they can be watched on a laptop, a home DVD player, or a portable DVD player. What's not to like?)

Fill 'er up

Next month, a company called DVD Station will start selling movie downloads at its network of 14 kiosks, for consumers with PlayStation Portables, iRiver Portable Media Center devices, and the next generation of Palm handhelds. This'd be like a gas station for your video iPod - a place to fill it up with content; no details yet on pricing, or whether you are renting or purchasing the movie.

We'll have to see how eager consumers are to watch movies on portable devices. I think there will be significant demand in the 30-and-under demographic; but Hollywood doesn't like the idea of anyone watching its product on a screen the size of a domino, and so the industry tends to understimate consumer demand.

Also, as an aside - who on earth can build a business around a chain of just 14 kiosks? Have you seen one of these?

Open source animation

Using free software tools, a group in the Netherlands is planning to produce a 3D animated short. The project, called "Orange: The Open Movie Project," will be based in Amsterdam but will incorporate work from animators and software developers around the world (not to mention sponsors who'll donate money and equipment.)

No word yet on what the short will be about - or who gets to make the final decisions on story and art.

But this is an experiment well worth watching. Do movies, either animated or live action, need to be produced by a crew that's together in the same place? (Or could we imagine a world where there's no "first unit" and "second unit," but a dozen different units all filming different pieces in parallel?) How will far-flung contributors be able to collaborate? Will the energy involved in coordinating a project like this be more trouble than it's worth?

More info here.

In USA Today: "Digital film revolution poised to start rolling"

Key word here is "poised."

"This is the first year when all the elements are coming together," says Julian Levin at 20th Century Fox.

But as all techies know, "the year of digital cinema" will likely have a lot in common with "the year of the LAN," "the year of voice-over-Internet telephony," "the year of knowledge management," "the year speech recognition finally gets accepted," etc. Those years take a few years to truly arrive, and sometimes longer.

In the piece, John Fithian of the National Association of Theater Owners says the transition to digital will be "substantial" by late 2006.

But then later, Fithian is quoted saying that digital projectors can cost more than $100,000, and may not last as long as a standard 35-millimeter projector. "You're giving us something akin to the first generation of a cell phone or a laptop," he says.

Then, toward the end of the piece, Levin predicts that a full national roll-out of digital cinema will take seven to eight years.

Yikes. That's 2012 or 2013.

Three things could accelerate that pace. One is an agreement on the part of the studios to help finance digital projectors, and ease the cost of upgrading equipment every five or ten years. (Equipment leasing might be an answer here.) Second is for studios and directors who truly believe in digital to start producing pictures that can only been seen in digital theaters (or will only be shown digital for the first two or three weeks of the run). Third is better messaging to consumers about how and why digital projection is better. They need to see side-by-side comparisons of celluloid (especially well-worn celluloid) and digital, and make their own call. I suspect many would then seek out digital showings whenever possible.

Your ideas?

'Nothing more fun than blowing up tired traditions'

The New York Times today gives some ink to Mark Cuban and Todd Wagner's crusade against release windows.

"There is nothing more fun than blowing up tired traditions to create better business models and better customer experiences," Cuban tells columnist David Carr in an e-mail interview. (This guy really *is* all digital.)

Carr observes that Cuban and Wagner "have prospered by ignoring convention at every turn," and mentions their recent deal with Steven Soderbergh for six movies, shot digitally. The plan is to release each of these pictures in every possible format on the same day - ignoring the custom of maintaining sequential and distinct release windows (theatrical, in-flight, home video, etc). After all, if consumers want to see a movie, why not let them choose where they see it, and in which format, when they're really excited about seeing it?

(An aside: at a brunch yesterday, I talked with a twenty-something fellow who mentioned that his home PC was downloading the new "Star Wars" movie from the Internet, illegally, while we sipped coffee. Maybe I'm a Pollanna, but I like to believe that that sort of casual piracy will be curtailed, and consumers will gladly pay for content, if they can get their hands on first-run movies and watch them in a way that's convenient for them.)

There's a wonderfully telling quote toward the end of the Times piece from the president of the National Association of Theater Owners, who says that the Cuban/Wagner initiative "does not establish any serious precedent for the rest of the industry because the pictures are small artistic projects with minimal commercial potential."

So many things are wrong with that comment. Among them:

- Since when are theater owners (or movie producers, or actors, or critics, for that matter) accurate judges of a film's commercial potential?

- No revolution ever happened without a great deal of experimentation beforehand - some of which leads to dead ends. But it's important to pay attention to the experiments if you hope to survive and succeed.

- And since when does change in an industry require a 'serious precedent'?

Two new books

May is the pub date for two new books about digits and Hollywood, at least one of which I'll be adding to my Amazon "wish list."

- First is "Darknet: Hollywood's War Against the Digital Generation." The author, JD Lasica, also has a blog where he's posting passages from the book, along with other entries. The opening chapter recounts the story of three teenage best friends from Mississippi who, over the course of seven years, produced a shot-for-shot camcorder remake of "Raiders of the Lost Ark." But the film hasn't been seen widely, and can't be sold on DVD, because of those pesky copyright laws.

I'm not sure there really is a "war against the digital generation" going on. Rather, Hollywood is now and has always been concerned about protecting its product, the same way a convenience store owner is concerned with protecting his inventory from shoplifters. Yes, that limits the flexibility of those who want to remix and remake movies...and it'd be great to see more studios adopt more flexible, lower-cost licensing strategies. But does playing good legal defense constitute war? I'm eager to read the book to form a more informed opinion.

- Second is a more hands-on book from McGraw-Hill, Digital Cinema: The Revolution in Cinematography, Postproduction and Distribution", by Brian McKernan.

Digital cinema directories

I'm still hunting for the definitive directory of digital cinema venues in the U.S. Here are three, none of which seems comprehensive (but I've tried to list them in order of thoroughness):

- The official list from DLP, part of Texas Instruments (they make the "Digital Light Processing" chips inside many digital cinema projectors)

- DLP Movies directory

- Technicolor's list - a surprising number of screens with "no digital features playing at this time." Sad.

Digital Media Summit

Can't say I'm wowed by the keynote speakers at next month's Digital Media Summit in LA, but some of the panelists should be worth hearing. Among them:

- the CTO of the Motion Picture Association of America, talking about piracy
- the head of Google's new video initiative
- Josh Goldman, CEO of Akimbo, which sells a nifty new set-top box for delivery of non-mainstream content, including films
- the digital gurus from NASCAR, the NFL, and MLB

Portable shorts

Sony and AtomFilms are trying to encourage owners of Sony's PlayStation Portable to use it not just for gaming, but for movie-viewing. Atom's making three short films available, for free, to help Sony promote its brand-spanking-new $250 device.

What this means:

- Sony is at least mildly interested in training consumers to use the PSP for films. But they're also worried about muddying their marketing messages: is this a gaming device, or a video iPod? Witness the high initial prices for studio releases (roughly $20) that are available for the PlayStation Portable. And when I demo'ed the PSP earlier this year, the company didn't seem too focused on promoting its movie-playing abilities, even though the screen is pretty darn crisp, and it has a film-friendly 16:9 aspect ratio (aka "widescreen").

- But I'm not crazy about the two media formats consumers can use to watch movies on their PSPs. Both are proprietary Sony formats: Memory Stick for shorter films, like those Atom is supplying, and UMD (Universal Media Disc) for full-length features. The latter is anything from "universal," and it remains seen who (aside from Sony) will issue films on UMDs, which look like the Shrinky Dink version of a CD. Check out this interesting discussion about UMD on Engadget, and this PC World article.

Sony, of course, is the company that brought you Betamax. How quickly they forget that open standards - like VHS videotapes that you can actually record on - prevail over closed ones.

Will Sony's PSP become the video iPod? It's possible -- Apple, after all, distributes music in a proprietary version of the AAC audio format which can't be played on any device but the iPod. But Sony will have to sell a lot of PSPs to get there.

Death to release windows

Mark Cuban and Todd Wagner (of 2929 Entertainment, HDNet Films, Landmark Theatres, etc) signed Steven Soderbergh to a six-film deal at the recent Tribeca Film Festival. Soderberg, of course, is the incredible director/producer behind "Sex, Lies & Videotape," "Traffic," "Erin Brockovich," and "Oceans 11 & 12."

The key point of the deal is this: 2929 will release the films simultaneously to theatres, home video, and their HDNet high-definition cable/satellite channels. Clearly, they don't feel like release windows matter anymore - and I think they're right.

We're already living in an era where consumer choice is the dominant factor - not the producer's will. (Here, I'm using 'producer' in a broader way, not to mean 'film producer.') Consumers will choose the way they want to see a first-run film: at home, or in the theatre, or while traveling, on a laptop or mobile device. Cuban and Wagner want to prove this can make economic sense - perhaps by driving up consumer demand for their HDNet channels, or through pay-per-view. Another way that simultaneous release helps is by consolidating marketing costs into a shorter time frame, rather than stringing them out to support multiple release windows.

But studios like release windows, and they won't let go easily. For two reasons. One, they're comfortable with understanding the range of revenues that a given film will generate in each window (theatrical, home video, in-flight, etc); mashing things into a simultaneous release is scary and experimental. Two, they've got different business groups to support each window - and those guys don't always play nice together.

But if 2929 can prove that simultaneous release - I actually prefer the term 'synchronized distribution' - makes business sense, and consumers start demanding it, change will happen.

A strategic shift for Lucasfilm

The NY Times today asks Is There Life After 'Star Wars' For Lucasfilm?

And the answer is, yes, obviously - but movies won't be at the center of things. Life beyond 'Revenge of the Sith' involves producing more television programming and videogames (not to mention running two of the industry's top special effects and sound production houses).

Two impressions from the piece:

- It's great to be a privately-held company, like Lucasfilm, that doesn't have to answer to Wall Street like other studios. Who else could make this sort of strategic shift away from producing films (at least temporarily)?

- Don't take the name of Lucasfilm's big new campus at the Presidio lightly. It's called the Letterman Digital Arts Center. This is a company that intends to be all digital, all the time. And that'll enable them to operate with more flexibility, lower costs, and much more speed than competitors. (The name, incidentally, has nothing to do with David Letterman; the 23-acre site was once known as the Letterman Army Medical Center.)