Digital becomes highly charged exhib issue

While digital technology has allowed moviemakers to display dazzling effects on the bigscreen, the science of theatrical exhibition — a light bulb shining through a strip of celluloid onto a white rectangle — has remained largely unchanged since the days of Thomas Edison.

Now, however, it appears that the long-held dream of digitally transmitting motion pictures into theaters is moving toward reality. At the Natl. Assn. of Broadcasters confab, which gets under way in Las Vegas on Saturday, exhibitors will demonstrate prototypes of various pieces of electronic gear touted as being capable of high-end delivery.

There’s no consensus about an arrival date, but some industry insiders believe that within two years, high-quality electronic cinema systems could be operational. It’s anyone’s guess though, when one of the big exhibitors will sign on with one of these systems.

Electronic cinema could potentially save studios millions of dollars in print and shipping costs, while maximizing profits for theater owners by giving them new scheduling flexibility.

But costs of converting current theaters could prove prohibitive, and other issues remain troublesome question marks — including piracy, reliability, staffing and training.

In addition, electronic cinema is a highly charged issue. Not only is there potential to further strain the sometimes shaky relationship between distributors and exhibitors, but companies with longstanding studio relationships — such as Eastman Kodak — have a huge stake in the outcome.

However, equipment manufacturers are salivating at the prospect of selling transmission and projection gear to the world’s tens of thousands of auditoriums.

In the words of one studio exec, “It’s like sharks smelling blood.”

More hype

As with many new technologies (think: the Internet), the hype surrounding electronic cinema still outshines the images electronic systems currently can deliver. Video projection still lacks the brightness, contrast and clarity of 35mm film, especially in a large-screen setting.

“If anybody says electronic cinema is as good as film, they’re lying,” contends Glenn Berggren, a five-time technical Academy Award winner and partner at Sigma Design Group, which provides design and engineering services for motion picture projection rooms. Sigma has engineered numerous auditoriums for the AMC theater chain, among other clients.

But Alan Brawn, director of worldwide marketing for electronic projector manufacturer Hughes/ JVC, predicts that electronic cinemas capable of high-quality images will be operational within two years. Others, such as Gerald Nash, one of Berggren’s partners at Sigma Design, won’t hazard a guess as to when electronic images will equal or better film.

Sony, through its Sony Dynamic Digital Sound system, has already laid the groundwork for expanding into full-fledged electronic cinema systems. Its SDDS reps have cultivated relationships with exhibitors throughout the world.

Establishing those ties is a key move for any company hoping for a systemic approach to electronic cinema, rather than merely selling one product that’s part of the bigger package.

The idea behind electronic cinema is hardly new. One distribution veteran recalls, “Eighteen years ago, I was recommending theaters be built with the assumption that within 10 years, everything would be delivered through satellite or cable. I’m still waiting for it to happen.”

But given the shrinking profit margins in the motion picture industry, the possibility of saving up to $3 million per wide release — a potential annual saving of up to $75 million for the most prolific distributors — offers a big incentive.

Standing to gain

Exhibitors also would stand to gain, albeit on a smaller scale than distributors. Digital transmission could save exhibs the cost of shipping from regional depots to theaters and reduce projectionists’ salaries. However, they may face additional employee training costs and may even have to hire staff engineers.

Given their nightmare with three competing digital sound systems, exhibitors will probably move cautiously before embracing the much more costly video projection systems.

“The industry can’t even agree on the size of reels, so how are we going to agree on this?” quipped one distribution honcho.

Most distrib execs say that studios would probably be willing to provide incentives to help defray exhibitors’ initial equipment outlay.

“I think there would be enough money on the table for the whole industry that something could probably be worked out,” says Paramount distribution president Wayne Lewellen.

There is also disagreement over whether electronic cinema will increase or decrease piracy woes. While advances have been made in the science of signal encryption, some manufacturers worry that there is still no secure system for transmitting images via satellite. On the other hand, some point to the ability to encode spoiler signals, which make it more difficult for pirates to successfully videotape movies in theaters.

Doubts cast

But not everyone is satisfied that current exhibition technology is being put to its best use, casting doubts on exhibitors’ ability to make the shift to electronic projection. Said one source, “Most theaters can’t even light a screen correctly for motion picture projection; forget about lighting it for video,” which requires additional illumination.

“Let’s work on perfecting what we’ve got and let the technology people give us the new whenever they can at maximum perfection,” one distribution vet added.

Like other industry insiders, Berggren and Nash emphasized that electronic cinema must be developed as a cohesive system, rather than piecemeal. “There’s a projector-lens-screen-audience relationship,” Nash said.

To convert a room from film to video requires more than simply replacing a film projector with an electronic model. “The screen that makes electronic cinema look best is not the same as the screen in a movie theater,” Berggren explains. “For the higher gain screens, you have to design the auditorium differently.”

Berggren likens electronic projection to a television monitor, which should be viewed from a distance of five to eight screen heights. Any closer, the lines of the picture become apparent. In a motion picture theater, it’s possible to sit much closer to the screen before seeing lines. “Motion picture theaters aren’t designed for watching video from the right distance.”

Proving ground abroad

Most industry insiders are in agreement that the proving ground for these systems won’t be in North America.

“It will be accepted sooner overseas, especially in the Far East, than in the U.S.,” Brawn predicted. In developing nations, Brawn and others contend, small-town audiences are often too far from a movie theater to attend regularly. In those cases, videotaped movies are sometimes shipped to storefront theaters so local residents can view current fare. Such venues, which play specially encrypted VHS tapes, are operational in countries such as Poland and Uganda, and are expected to open soon in the Philippines, Brazil, Mexico, Venezuela and Colombia.

But those rough-and-ready hardtops are a far cry from the sophisticated venues that U.S. exhibitors would be aiming for. Said Nash, “Video theater is not electronic cinema — it’s videotape that’s no better than what you have at home.”

However, Nash is confident that exhibitors — even in the U.S. — will realize a multitude of new business opportunities with electronic systems.

“Look at all the dark time at theaters right now. If theater owners could tap into vast digitized libraries, they could show not just feature films, but other material. An English teacher could schedule a screening of ‘Hamlet’ at 8:30 a.m. on Tuesday, companies could have video conferences during the day, and distributors could look at different releasing patterns.”

United Artists Theatre Circuit has already experimented with video conferencing in its auditoriums.

If the electronic distribution and projection system were linked to a theater’s ticketing system, Nash added, “distributors would know instantly how many seats were sold and exactly how much of the film had screened. If there’s a line outside a mile long for that film, they could instantly put it on additional screens.”

Eastman Kodak — which stands to lose millions in revenue if release prints are supplanted by satellite transmission — has steadfastly maintained that electronic cinema remains unfeasible from a technological as well as financial standpoint.

Costs overlooked

Joerg Agin, president of Kodak’s Professional Motion Imaging unit, said proponents of electronic cinema have overlooked some of the costs associated with any transition from film. “How do you pay to convert a room that’s running half film and half video? And who’s going to pay for it?”

Furthermore, he contended, “It’s hard to imagine that anybody would save any money. Exhibitors would have to install satellite feeds and pay the transaction fees. You can defray the costs of prints, but you pick up additional costs. You’ll pay for broadcast and transponder times, then you’ll have to pay for bandwidth and store the data on something. What about equipment maintenance — the person who sells popcorn isn’t going to do that; you’ll need engineers. You may save money in one area, but you pay in another.”

Agin also dismissed the idea that electronic transmission will eliminate middle men in the distribution process. “If I’m a studio, which third party will I turn to for their expertise? AT&T? Microsoft? And can a third party even do this for a studio, which is used to having control over this process?”

Berggren concurred that there won’t be a cost savings realized by dispensing with intermediaries. “Of course there will be middle men, but they’ll be satellite and computer companies instead of truckers.”

But for the moment, Berggren said, the trend toward bigger screens and auditoriums is at cross-purposes with any move to electronic cinema. With current technologies, electronically outfitted rooms would have to be smaller than traditional theaters in order to achieve equal image quality.

“People who are planning theaters are running away from electronic cinema. It’s not a conscious effort, but they want to build theaters that sell the most tickets. But in building the bigger rooms and bigger screens, which is what customers want, they’re outgrowing the potential for electronic cinema,” Berggren says.

At least for now. In the fast-moving world of high technology, one day’s hurdles are the next day’s standard, and it may not be too many more years before current exhibition methods are as obsolete as the slide rule.

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