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Digital on the docket…again

Is the future finally here?

The long, hard path to reach the starting gate is just about over. But as this year’s ShoWest is demonstrating, the battle over who will succeed in the nascent digital cinema market has just begun.

For nearly a decade, ShoWest attendees have heard endless talk from studio reps and techies about the coming revolution in d-cinema. But with the Digital Cinema Initiative — the multistudio joint venture set up to create a common technology standard — having finished its work last year and integrators Christie/AIX and Technicolor already starting to roll out systems, everyone agrees that 2006 marks a sea change in the industry.

“This is the first year we’re saying it is finally happening,” boasted National Assn. of Theater Owners prexy John Fithian. “It’s the biggest technological revolution in this business since the advent of sound.”

But with digital cinema ready to go, there are new questions to consider:

  • Should exhibs go with the Texas Instruments-powered 2K projectors, which are tested and proven, or Sony’s not-yet-deployed but higher-quality 4K projectors?

  • Should they sign up with Technicolor or Christie/AIX to install d-cinema systems, or put together a plan on their own, as AMC, Cinemark, Regal and others are doing?

  • Which of the many companies selling servers — which store digital movie files at theaters — should they pick?

On panels, in elaborate floor displays and in fancy suites, companies are putting the hard sell on the exhib community to start signing up. And they have all come to ShoWest with announcements they hope will make them stand out. AccessIT is raising $51 million more to fund the rollout plan of Christie/AIX, its joint venture with Christie; NEC and Barco have both been selected to provide projectors for Technicolor’s beta test of digital cinema systems; Dolby is beta testing its servers at a handful of theaters along with ones it already installed as part of Disney’s 3-D projection of “Chicken Little”; and Sony has finally unveiled a complete d-cinema system to work with its 4K projectors.

But beneath the hype, insiders admit there’s still plenty of reason for caution. While DCI finished its work in August, some technical details are still being finalized. Most notably, a content protection standard called Cinelink 2 was just completed, and TI has to make new chips for projectors that can decode it. Those aren’t expected to be ready for a month.

Also still to be finalized: which security system will be used on digital prints to prevent pirates from using camcorders and other means to get copies onto the Internet and bootlegged DVDs within hours of screenings.

Many in the industry are waiting to find out just what equipment will be considered up to snuff by the major studios. DCI in February contracted with the Fraunhofer Institute out of Germany to produce a certification test plan. But the org hasn’t even announced how it will test equipment, let alone started to certify anything.

“Right now we are searching for things to point to (to) prove we are DCI compliant,” said Tim Partridge, senior veep of Dolby’s digital cinema group.

So for now, studios are simply agreeing to provide their films for certain systems based on their own individual evaluations. Every studio, except Paramount and New Line, has signed deals with Technicolor and/or Christie/AIX to provide their films in digital format. Par is expected to do so soon since Jim Tharp, studio’s new domestic distribution topper, made a deal with Christie while at DreamWorks.

In addition, with technology ever changing, equipment from multiple companies in the same theater still doesn’t always play nice together.

“We’re continuing to have interoperability issues,” noted Joe Berchtold, prexy of Technicolor’s d- cinema unit, which is starting a beta test in May. “We’re not motivated to move fastest. We’re motivated to do it right and show we’re the best.”

That’s a subtle dig at the one company already moving ahead with deployment: Christie/AIX. It has around 200 systems in the market and is aiming to get over 2,000 by the end of the 2007, primarily through an agreement to digitize all of Carmike Cinemas’ 2,300 screens.

“The naysayers out there are just not ready,” said Christie prexy Jack Kline. “The hardware and software may need to be upgraded over the next two years, but we have got a path to DCI compliance.”

Assertion is part of an ongoing war of words between Christie/AIX and its primary competitor, Technicolor.

A third integrator looking to oversee mass deployment, AMC, Cinemark and Regal’s National Cinemedia joint venture, is still developing its business plan and didn’t have a major ShoWest presence.

Of course, public spats between competitors show just how much has changed. The one thing insiders agree on is that the main business now is selling. And that’s a welcome shift.

“Things feel very different now that we are out there competing,” said Kurt Schwenk, general manager of NEC’s d-cinema division. “It has been a long, long time coming.”