Satellite network to deliver content to theaters

For long, Hollywood has touted the promise of digital delivery of movies to theaters as a way to dramatically cut costs — a promise that has largely gone unfulfilled.

But an agreement between two major players is likely to give digital delivery the major boost many have waited for.

Lab giant Deluxe and satellite company EchoStar have formed a joint venture to deliver digital content to theaters in the U.S. and Canada.

One of the lures of digital projection has been digital delivery — the ability to send movies to theaters as data, rather than as physical objects that must be sent as freight. Most theaters still receive movies on hard disks.

The combination of EchoStar’s robust satellite network and Deluxe’s deep ties to studios is likely to be a major step forward in digitizing the exhibition business.

The immediate effect would be to cut duplication and shipping costs for distributors and exhibitors.

But the Deluxe-EchoStar satellite network is gearing up to go beyond simply the delivery of feature films. Network is set to handle live events, digital signage and more, said Vern Smith, senior VP of EchoStar Satellite Services.

“We can deliver multiple live signals, multiple movies in current release,” Smith said. “We don’t know what kind of products will be delivered going forward, but we want to be able to deliver any of them.”

Rick O’Hare, managing director of Deluxe Digital Cinema, said the network should be an upgrade over the hard-disk approach.

“Obviously, we hope to be able to reduce the costs of distributing content,” he said.

“Delivery via satellite is clean, efficient. It should be far more cost effective for the exhibitors,” O’Hare said, adding that because the Deluxe-EchoStar receiver would link directly to a digital cinema’s library management system.

“The theater owner is relieved from the handling of the content,” he said.

The network will be available for a fee to any company looking to distribute content to theaters.

Support for gaming, which requires a two-way link, is still under discussion.

The joint venture has been in the works for almost a year, as R&D progressed on the hardware and software for the network. Papers were officially signed last week.

Most content will be beamed to satellites from Gilbert, Ariz., from the same 24/7 uplink DISH Network uses to deliver its video.

To join the network, theaters must install two dish antennas and a Deluxe-EchoStar receiver. Network will own the hardware.

About 20 beta sites are already running. Network is in talks with exhibitors to install its receivers at theaters. Deluxe will begin using the network to deliver movies as soon as receivers are installed.

Partners are “analyzing the rest of the world, but have no immediate plans” to expand the reach of the network, O’Hare said.

U.K. provider Arqiva provides a similar service in Blighty.

Satellite has become the most popular technology for digital distribution to theaters. Hard-wired broadband connections to theatres have so far proved mostly impractical due to the difficulty and expense of running high-speed lines from the telecom network to multiplex.

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