Faster than you can say “change reels,” numerous exhibition and distribution executives were quick to express skepticism over Pacific Bell’s announcement Monday that it would test a system to deliver movies over high-speed phone lines at close to a dozen L.A.-area theaters later this year.
The Baby Bell formally unveiled its joint venture with Alcatel, which manufactures data and image transmission equipment, to test the transmitting of movies and live events in digital form over high-speed optic networks directly to movie theaters.
While Pac Bell’s prepared announcement was quick to trumpet the system’s supposed advantages, which include lower costs and the ability to transmit different versions of a film, some execs insisted that the savings figures calculated by Pac Bell were not accurate.
For instance, many execs noted that Pac Bell made no mention of what the actual transfer costs will be once the systems were in place. The telecommunications giant estimated the cost of converting a theater to the new high-definition system to be roughly $ 100,000 per screen.
Questions of cost
“They are going to have an awful job convincing exhibitors to pay $ 100,000 per screen,” said Barry Reardon, president of Warner Bros. distributing. “Also, how much is it going to cost to receive a print for each screen? There are still an awful lot of unanswered questions.”
“We have not heard anything about the additional costs,” said one Los Angeles-based exhibitor. “There are a lot of things that haven’t been explained. The other problem is that a lot of theaters have invested money in upgrading their equipment and now, it’s out the window.”
Another studio distribution executive also noted that with roughly 25,000 screens throughout the country that would need updating, the total cost for such a job would be $ 2.5 billion, which is about equal to the exhibitors’ share of last year’s record-breaking $ 5 billion year.
In making the announcement, Pac Bell also said that the system would save 25% of the $ 500 million that studios and distributors pay for making prints, warehousing film and shipping, which translates to about $ 375 million. But numerous execs said the $ 500 million estimated by Pac Bell was too high.
“The cost of doing that for the entire industry is between $ 300 million and $ 450 million, more like $ 375 million,” said a studio exec. “If their system is going to cost 75% of $ 375 million, then there is no savings. That’s a big problem. There’s something wrong with their numbers.”
Execs also noted that Pac Bell seemed to be forgetting about the role studio distribution departments play in a film’s release.
“They seem to feel that distribution doesn’t exist,” said one exhibitor. “It gives you the impression that the theaters will just dial up and get what they want. But there are many other things that come into play. For instance, two movie theaters that are across from each other can’t play the same kind of picture.”
And, of course, most are convinced that the quality of the films, which will be broadcast through a high-definition system, will not be as good as those projected on 35mm film.
“We had seen the presentation at ShoWest. We felt that the presentation has a ways to go,” said Pacific Theatres VP Milt Moritz. “We weren’t thrilled with the clarity. It didn’t have the sharpness of film.”