D Cinema Finger-Pointing

What's this all about?

Warner Bros. is accusing theater owners of dragging their feet in the deployment of digital cinema equipment. (True - the biggest chains, including Regal and AMC, have yet to get serious about installing digital projectors.)

And the National Association of Theater Owners is accusing Warner Bros. of being slow to commit to the financial terms that will support future digital cinema roll-outs. (Probably also true... studios are notoriously stingy about how much they will pay for a film print, or how much their will pay as a "virtual print fee," which is essentially a toll for sending a digital movie to a digital projector, which helps pay for the cost of the equipment.)

Earlier this year, Jeffrey Katzenberg had also accused theaters of being slow in their shift to digital. DreamWorks, of course, is getting ready to introduce its first 3-D movie in 2009, 'Monsters vs. Aliens.' (Warner Bros. is the distributor for this month's 'Journey to the Center of the Earth.')

The studios, I suspect, are now feeling the complexity of releasing movies in both film and digital formats -- and probably won't start seeing real cost savings until digital distribution hits a certain volume level. That's why they're negotiating so hard on what they'll pay as a virtual print fee for this second wave of d cinema installations.

A Few Monday Reads: Piracy, Cameron, Blockbuster, and Digital Cinema Fees

- The NY Times has an interesting piece today that suggests that piracy is moving from NYC street corners to the Internet. (This may be in part due to a big enforcement initiative by NYC Mayor Michael Bloomberg.) Eric Taub writes:

Since December 2003, when Mayor Michael R. Bloomberg started an initiative to stem the trade in bootlegged and counterfeit goods, [NYC enforcement agent Shari] Hyman has “seen a huge decrease in illegal DVDs being sold in buildings.” In a February sweep, the organization checked out three buildings and 32 storefronts for bootlegged DVDs, and found none.

But New York may not be the best barometer of piracy. Worldwide and on the Internet, video piracy remains rampant. The movie industry has devised new ways to fight piracy, and has pushed for antipiracy laws and run ads to discourage pirates.

Besides pirated DVD copies of first-run films, copies are also available online for illegal downloading, mainly through peer-to-peer file-sharing networks. High-definition camcorders, some not much bigger than a cellphone, can copy films from a movie screen with little loss of detail.

- James Cameron shares a lot about what he's learned about shooting in 3-D in this e-mail interview with Variety's David S. Cohen. It's full of juicy observations, advice, and opinions. A snippet:

COHEN: Right now, 3-D is pretty much being used for films that have some spectacle in them, whether it's "Journey to the Center of the Earth" or "U2 3D"; nobody's talking about using it for domestic dramas. But there are people wondering whether it will actually enhance the impact of character-driven stories. What are your thoughts on how 3-D changes the experience of watching actors act?

CAMERON: I plan to shoot a small dramatic film in 3-D, just to prove this point, after "Avatar." In "Avatar," there are a number of scenes that are straight dramatic scenes, no action, no effects. They play very well, and in fact seem to be enhanced by the stereo viewing experience. So I think this can work for the full length of a dramatic feature. However, filmmakers and studios will have to weigh the added cost of shooting in 3-D against the increased marketing value for that type of film.

- Blockbuster wants to buy Circuit City for more than $1 billion, according to the Wall Street Journal. Why? Blockbuster's CEO wants to create a company that can sell digital and physical media, and also the devices you need to play it on ... "an $18 billion global retail enterprise uniquely positioned to capitalize on the growing convergence of media content and electronic devices," CEO Jim Keyes wrote in a letter.

- Studios and cinema owners are wrangling over the fees studios will pay each time they deliver a digital file to a theater. (Known as the "virtual print fee," this helps theater owners --or a third-party that installed the digital projector and server -- defray the cost of the digital equipment.)

H'Wood Reporter prediction: Digital screens surpass film by 2010

Carolyn Giardana writes in the Hollywood Reporter that according to their tally, more than 20,000 digital cinema installations have been proposed in the US and Canada by 2010. That'd mean more digital screens than film within four years. From the piece:

Currently, there are about 3,000 digital screens installed domestically out of a total screen count estimated at about 37,000. Most of those are part of the Christie/AIX program, which aims to deploy 4,000 digital screens. The AccessIT unit already has completed the rollout of about 2,800 screens with such exhibitors as Marquee Cinemas, Neighborhood Cinema Group, Celebration Cinema, Cinema West, Cinetopia, Emagine, UltraStar, Galaxy, Rave, Carmike Cinemas and AccessIT's Pavilion Digital Showcase Cinema. Deployment of the 4,000 screens is expected to be completed by November.

NATO chief John Fithian is still cautious, saying, "(Digital cinema) is the biggest technological transition in our industry since the advent of sound, and it is much more complicated. This rollout will take somewhere between five to 10 years."

ShoWest opens in Vegas ... Eisner dips into Web content production ... What's happening at ClickStar?

- Gregg Kilday of the Hollywood Reporter is blogging from ShoWest in Las Vegas, the annual conclave that brings together theater owners, studio execs, and lots of vendors. The Reporter also has a few ShoWest stories: Dolby's new 3-D system will compete with the system made by Real D. (Here's Dolby's press release.) A satellite services company called Microspace will be beaming the feature 'Disturbia' to ShoWest for a Tuesday screening. And finally, NATO head John Fithian admits he was wrong about the revenue potential of digital 3-D:

"I'm willing to accept the fact that I was wrong because I did not believe that 3-D would be as big of a catalyst as it is now," John Fithian, president of the National Association of Theatre Owners, said in The Hollywood Reporter's ShoWest roundtable. "3-D is becoming a much bigger value add than I originally thought. 'Chicken Little' and 'Nightmare Before Christmas' blew the socks off all our members. When you can take a product that's been around for a while and bring it out and make $9 million, that's impressive."

- Michael Eisner is launching a digital content development studio called Vuguru, according to The Wall Street Journal. (The LA Times also has coverage. From the Journal's piece:

"Vuguru's goal is to be the leader in producing high-quality, story-driven content for the Internet that up until now could only be found in movie theaters or on television," Tornante said. [Tornante is Eisner's private investment company.]

"In the past few years, the development of exciting and innovative digital media platforms and technologies has outpaced the creation of truly great content," Mr. Eisner said. "Vuguru will produce and showcase original and third party content in all genres and formats to meet the new demands of the evolving media landscape."

Here's a look at their first project, Prom Queen, which will consist of 80 episodes, each 90 seconds long. It'll show up on Veoh ( a video site Eisner has invested in ), as well as YouTube and other sites. Pretty cool experiment, but one question: how will Vuguru place advertising on the clips it posts to YouTube?

- ClickStar, the site that is a joint venture of Intel and Morgan Freeman's production company, Revelations Entertainment, has split with its interim CEO, James Ackerman, according to Variety. Lori McCreary, Freeman's co-producer at Revelations, will take over as CEO. (ClickStar's original CEO, Nizar Alibhoy, left last January.) Ben Fritz of Variety writes about the next Internet feature ClickStar will release:

Company hopes to get a second boost from "Lonely Hearts," an indie pic that will be available for download at ClickStar on April 27, two weeks after it hits theaters. True-crime story, which Roadside Attractions and Samuel Goldwyn Films are releasing, is written and directed by Todd Robinson and stars John Travolta and Salma Hayek.