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Tuesday, August 23, 2005

Forbes asks, 'What's Wrong With Digital Cinema?'

Lisa DiCarlo of Forbes presents a laundry list of problems facing the digital cinema roll-out... some familiar and on target, others wrong and inadequately reported.

- It costs $100K to upgrade each screen, she writes. Yeah, that's a good ballpark. But she says that "nobody really knows" who's gonna pay. That's not true. There are several groups of financiers putting together deals that would bankroll large d cinema installations, and then charge the studios a "virtual print fee" of around $2000 each time a new movie plays on that equipment. Why not talk to them?

- "...[M]ost moviegoers couldn't distinguish a digital film from its 35- or 70-millimeter celluloid predecessor." Maybe this is true, in the same way most people can't tell Coke from Pepsi, or a pricey imported beer from Budweiser. But people still have preferences... and it's likely that digital cinema can be successfully marketed as a premium experience. Also, you can tell the difference when you're shown digital side-by-side with celluloid - which is a demo that no theater owner would ever do, unless they'd converted all their screens to digital. (Don't want to make the unconverted screens look bad.)

- "Independent theaters that can't afford digital equipment and won't be upgraded by the movie studios will be left out of the party," DiCarlo writes. How do you explain that some of the earliest experiments with digital have been at art house and non-chain theaters, like Landmark Theatres, Hallett Cinemas, the Ritz Theater in Big Spring Texas, and Emerging Cinemas. Independent theaters and independent film distributors, I think, have at least as much motivation to switch to digital as the big chains. Maybe more.

- "Technology being what it is, you can expect glitches in new digital cinema systems." Yeah, but probably fewer glitches than celluloid. A projector bulb can burn out with either system, sure - but with celluloid, the film can melt, or be spliced together wrong, or be brutally scratched - all problems that go away with digital. Admittedly, with digital you'll have the occasional hard drive failure - but only if equipment isn't properly maintained.

- DiCarlo writes, "New digital cinema standards do nothing to stop the guy in the back row from filming a new movie with his digital camcorder, a low-tech system that accounts for the bulk of movie piracy." Well, that's true today, but the digital cinema standards create a path for 'watermarking' technology that will at least make it easier to find out where those camcorder guys are plying their trade - in which theaters, at which time. And eventually, technology to prevent camcorders from capturing a usable image could evolve.

In the same issue of Forbes, DiCarlo also has another piece about theater owners who are looking to alternative entertainment content to bolster their business. She scores some good points here, noting that digital projections of Phish, Prince, and Kiss concerts have done well.

    Sporting events are a different animal. Major sports like football and baseball are nearly impossible to show because broadcast rights are cost-prohibitive. So National CineMedia has focused on niche "sports" like drum corps competitions and specific legs of the Tour de France.

    "We have to focus on events where there isn't a lot of distribution in other mechanisms," says [Kurt] Hall, [president of National CineMedia]. "We're competing on the experience, not the content."

    The real question, says Hall, is how to get people into the theaters for non-movie events. The marketing cost to promote events and reach fans is borne primarily by CineMedia and content providers. Theater owners, who possibly stand to gain the most, invest the least, with lobby advertisements and preshow ads to attract fans.

But then, DiCarlo wanders into a hazy area, describing the studios as footing a "big chunk of the bill for digital cinema," which would give them total control over what plays on their projectors. "It's a valid question whether they should or would authorize the use of their equipment to generate revenue for other companies, especially theater owners," she writes. But if the equipment is financed by a third party (as I believe it will be) which charges these $2000 virtual print fees each time a new film runs on it, then why wouldn't alternative content be able to gain access to that same digital cinema gear for the same $2000 "usage" fee?

There is a question, of course, about whether the $2000 fee would favor deep-pocketed studios, and serve as a barrier to some niche alternative content (like drum corps competitions) that wouldn't attract big audiences.


  • Hey Scott -

    nice deconstruction of Forbes' article, I like your attention to detail on this stuff.

    A few extra things to throw in:

    In the DCI related conferences held at NAB this year, and in conversations I had with folks there at the conferences from the companies into this stuff, I was told that the digital rollout tests that have been done to date have always had problems - new tech, new challenges, as they say. Case in point - for the digital projection in various theaters of the new Star Wars movies last time around (before Episode 3), one contact said they always had at least one dark screen - a show that was late to start or cancelled due to technical difficulties. They never, ever had that problem at any of their traditional celluloid presentations.

    While film is prone to bulb failure, bad splices, etc. as you pointed out, it's a mature, stable tech that generally works in practice after nearly a century of deployment. Digital projection is still pretty new, and to date the implementations haven't been NEARLY as complicated as the studios want to make it. As we've both been covering with all the severe DRM going on with HD DVD and Blu Ray, it's even more hard core with the theatrical run gear. With all of the required communication to go back and forth between movie theater and studio Grand Central DRM Control, the risk of dark screens is much, much higher.

    I'm a HUGE fan of digital moviemaking, my HD For Indies blog is all about it, but digital is much more likely (for the next several years) to be more error prone than celluloid. Eventually it'll get more stable, but for the moment there is a LOT more to go wrong.

    Last I heard, the plan was to distribute the movies in an encrypted format, only decrypting within the projector itself (never a decompressed HD-SDI or DVI signal that might be recorded), each playback is logged and/or has to be authorized, each digital print (a computer file, distributed however) will be authorized to ONLY play on a particular playback server, as in Unit # 4 at So-And-So Theater, identifiable by serial number. If playback records aren't sent back to the studios within a time limit, it won't play future screenings. Also, forensic watermarks are generated on the fly during playback. So many, MANY things to go wrong.

    Right now, the studios are just glopping on all kinds of technical fixes to limit the ability for a dedicated (and we mean REALLY dedicated) thief to end up with a high quality copy of the movie. I think the industry will quickly realize that they are simply making more trouble for themselves than they need to - how many bootlegs need to be prevented to offset audience dissatisfaction for late starting movies, or screenings that get cancelled, or movies that stop halfway through? If it happened to me more than twice, I'd make a point of hitting only the "reliable" analog theaters.

    Just a few thoughts.

    Oh, and as for the issue of $2000 "usage" fees for digital prints - that's in the same ballpark of what a film print & shippingcosts - so why go to all the trouble if the point was to pre-empt the cost of film prints and shipping costs? Unless it is known that the fees would end after amortization of the original gear....assuming that gear was "good enough" indefinitely, which pretty much doesn't happen in the ever evolving digital tools marketplace.


    Mike Curtis
    HD For Indies - Hi Def Filmmaking & Post for Independent Filmmakers

    By Blogger Mike Curtis, at 2:07 AM  

  • By Anonymous Anonymous, at 7:46 AM  

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