Techies pass d-cinema torch to money men

Tech execs from every studio were congratulating each other Wednesday on the news that after three years of work, digital cinema isn’t their problem anymore.

Insiders shook hands at a press conference at the Academy of Motion Pictures Arts & Sciences HQ in Beverly Hills, where they announced that Digital Cinema Initiative — the intrastudio consortium founded in March 2002 to create a single standard for quality and security of digitally projected pics — has completed its work.

News means that the onus for making d-cinema a reality now falls squarely on the shoulders of those putting together a $3 billion plan to fund its rollout. That will involve those who put together money deals for the studios and possibly Wall Street partners.

Thus far, despite years of talk about the technology, there are only about 80 d-cinema test screens in the U.S. and another 300 internationally.

The conclusion of DCI’s work marks an important step in the evolution of d-cinema as it means that for the first time since the rollout of the DVD, studios have worked together on a new technology to avoid the costly rollout of multiple formats.

According to financial filings of member companies, DCI’s work through September will have cost $8.4 million, or $1.2 million for each of the big seven studios (including former biggie MGM).

But for those companies in the trenches of d-cinema, particularly manufacturers creating the servers and projectors that deploy it, little has changed.

“The guys creating the hardware have essentially known what will be in this spec for months,” noted Jerry Pierce, senior veep for technology at Universal Pictures.

Numerous plans have been floated to pay for the deployment of digital cinema systems to the nation’s 36,000 screens, primarily by manufacturers like Christie, Kodak and Technicolor. All involve a multibillion-dollar investment by outside funders, expected to be Wall Street investment banks, who would be paid back with the savings in distribution costs.

Insiders noted that most of DCI’s work was completed by late 2003. The past year and a half has been spent primarily in intense negotiations to complete the antipiracy elements of the technology so that studios can be assured that as files move throughout post-production and to theaters, they can’t be decoded and put on the Internet.

“Security issues have taken up most of our time for the past year,” observed Walt Ordway, chief technology officer of DCI. “Nothing has really changed in terms of the image or audio.”

With a technical specification completed, manufacturers can now create digital cinema technology with assurance they will work with studios’ future digital releases, unlike the systems that have thus far been deployed and will mostly end up being scrapped.

But beyond one-off tests, execs don’t expect a major rollout of trial systems until a funding plan is in place. That means even if a funding plan comes together quickly, a testing phase couldn’t take place until next year at the earliest, with final rollout to all of the nation’s screens not likely to start until at least 2007.

“There needs to be a significant test of what’s on paper in the real world that will be supported by studios and theater owners,” said John Fithian, prexy of the National Assn. of Theater Owners, which has been involved in creating the DCI spec along with studios.

Also yet to be determined is the future of DCI itself. Org scaled back in September, when topper Chuck Goldwater left, and it stopped working on funding plans to focus exclusively on finalizing the technology. Studio execs acknowledge they’ll need some org to verify that new products meet the DCI spec, but it’s not clear yet whether they’ll continue to fund DCI for that purpose or authorize a different entity.

If it’s not given a new role, DCI will cease to exist as of September.

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