Exhibs undaunted by digital deployment details

Bizzers struggle with technical, financial issues

Bigger attendance and smaller release windows notwithstanding, as the theatrical exhibition community gathers at ShowEast, deployment of digital projection remains the topic of the day.

“There are no targets,” says NATO president John Fithian, setting the tone. “We just want to get it right.”

Exhibitors, distributors, financiers and manufactures “are all working very hard to make digital cinema a reality today,” concurs Dolby’s Tim Partridge (168 digital cinema installations worldwide). “However, this is a process that is going to take time.”

Technical and financial issues remain to be worked out, maybe even some political points, mostly in international markets. The uniform-systems standard based on the seven-studio-led DCI specifications, and the equipment certification that goes with it, are still being refined.

“There are billions of dollars involved,” says Andrew Stucker of Sony Electronics’ digital cinema division. “The growth in number of screens is not as great as originally predicted for this point on the calendar.”

While this may seem to be a problem, Stucker finds, “In reality, it’s not. This is a technology sea change on a scale never before experienced. Steady, deliberate growth is an intelligent direction.”

Although no one wants to venture as to where digital penetration should be right now, Texas Instruments can say where the process stands, with its million micro-mirrored chip that ignites the nondegrading digital picture.

According to TI business manager Nancy Fares, more than 2,100 DLP Cinema projectors are installed in movie theaters, screening rooms and post-production houses (1,353 in the Americas, 437 in Europe and 369 throughout Asia).

About 10 years ago, deployment initiatives began to emerge simultaneously across the globe. Over the last three years, the U.S. “has led the way” in good part due to the DCI specifications.

“A single nonproprietary, high-quality and highly secured digital projection system has been replacing the inefficiencies of those early systems that were clearly experimental and/or prototype,” says Julian Levin, 20th Century Fox’s digital exhibition guru.

Around the same time, many already expected the industry to go “all digital by Tuesday, at the latest,” deadpans Bob Gibbons of Kodak Digital Cinema (23 installations in the U.S. and Canada). “Predictions for digital conversions have been largely driven by hype and hope,” he continues. “Digital is looking to replace a business that is healthy, fix a system that most believe is not broken and provide a solution where the benefits are still being defined by everyone involved.”

Three major initiatives and others beg to differ.

Having reached its first 1,000 installations, system integrator AccessIT and projector manufacturer Christie will have 500 more by the end of this year.

“Our initial 4,000 screens are on target to be completed by the end of 2007,” foresees group president Chuck Goldwater. Christie/AIX wants to “reach 10,000 screens domestically and thousands more around the world.”

Adding some 12,000 screens represented by National CineMedia (the cinema advertising arm and dedicated buying initiative for its exhibitor shareholders AMC Entertainment, Cinemark USA and Regal Cinemas) to the mix and 15,000 from Technicolor makes 27,000 of the 35,000 domestic screens digitally spoken for. A buying group led by J. Wayne Anderson of R/C Theaters has signed up another 3,000 independent screens at least.

Any large-scale installation will be “preceded first by a 250- to 300-screen beta test in North America,” insists Joe Berchtold on behalf of Technicolor. Thereby the executive in charge of both Theatrical Distribution Services and Digital Cinema wants “to ensure that the technology works properly in real-world commercial environments.”

“We are still at the early-adopters stage,” Fithian concludes. “Over the next year we will see progress in beta markets and then a more substantial rollout.”

At that time, Fithian feels the industry will have a better grasp on whether digital theaters see a jump in attendance. Beyond anecdotal evidence to the contrary, “It’s too early to assess,” he advises. “We need to move carefully to a point of greater penetration before we aggressively market the improved technologies. At that stage, we will see attendance benefits.”