Monday, March 10, 2008

NATO Releases Digital Cinema System Requirements v2.0

http://www.natoonline.org/pdfs/NATO%20D-cinema%20requirements%20v2%20press%20release.pdf

 

March 4, 2008

 

Provides important direction for areas not covered in DCI specifications Washington, D.C.– The National Association of Theatre Owners (NATO) issued today a revised Digital Cinema System Requirements document (version 2.0). The requirements are a product of a group of committed NATO member company volunteers, working in conjunction with NATO's Digital Cinema Consultant Michael Karagosian. The first revision to the now 2-year-old NATO Digital Cinema System Requirements, version 2.0 is targeted to standards committees, product manufacturers, and service providers in the digital cinema supply chain.

 

NATO's System Requirements provides important direction for areas not covered in the DCI (Digital Cinema Initiative) spec. These include:

- Operational requirements

- Maintenance operations

- Workflow requirements

- System requirements for support of the blind, deaf, and hard-of-hearing.

 

A fresh review of the entire document was conducted, deleting some requirements no longer needed, and expanding or creating new section topics. Among the highlights,

1) Exhibitor-driven universal theatre identification scheme introduced.

2) Establishes the requirement for a commodity digital cinema server.

3) New requirement for closed caption support.

4) Workflow automation requirements introduced.

5) TMS (Theater Management System) described in terms of 3 service functions, with

detailed roles for each service.

6) New requirements for exhibitor network security.

 

According to NATO digital cinema consultant, Michael Karagosian, “The document describes new areas where additional standards work is needed. Completion and implementation of in-theatre

standards are important next steps in the development of digital cinema, and NATO will continue to actively pursue these goals.”

 

NATO President & CEO John Fithian added, "I applaud the dedication of these men and women to sensible digital cinema operations, and I encourage theater owners to make appropriate use of

these requirements in their equipment purchasing policies.”

 

The Digital Cinema System Requirements v2.0 are available at www.natoonline.org/digital.htm

 

About NATO

The National Association of Theatre Owners is the largest exhibition trade organization in the world, representing more than 29,000 movie screens in all 50 states, and additional cinemas in more than 40 countries worldwide.

###

For more information, contact:

Michael Karagosian

Digital Cinema Consultant

NATO

818-225-8030

 

Jane Durment

Chief Information Officer

The Marcus Corporation

414-905-1142

 

Kirk Griffin

Director of Engineering

Harkins Theatres

480-627-7777

 

Cliff DeYoung

Chief Technology Officer

Regal Entertainment Group

865-922-1123

IMAX Signs Exclusive Thirty-Five Theatre Deal for South and Central America

http://phx.corporate-ir.net/phoenix.zhtml?c=118725&p=irol-newsArticle_print&ID=1116710&highlight=

 

    Largest International Deal and Second Largest Theatre Deal in IMAX's

    40-Year History

 

    Highly Regarded Development Partner to Expand IMAX Footprint Over Next

    Six Years

 

TORONTO, March 10 /PRNewswire-FirstCall/ - March 10, 2008 - IMAX Corporation (NASDAQ: IMAX; TSX: IMX) today announced an agreement with Giencourt Investments S.A., a member of the RACIMEC International Group (RACIMEC) to purchase and install 35 IMAX(R) Digital projection systems in Central and South America and the Caribbean over the next six years. The agreement marks the largest international theatre deal, and second largest overall theatre deal, in IMAX's history, following on the heels of AMC's 100-theatre North America deal announced in December.

 

Under the terms of the agreement, RACIMEC will provide an initial down payment and a firm commitment to install a minimum of 35 IMAX theatres with fixed payment dates and opening dates. RACIMEC plans to contribute the IMAX theatre systems to its partners - developers, exhibitors and other entertainment operators - for negotiated economic terms and work with them to identify the best locations based on market demographics and cultural trends, ultimately building a substantial network of IMAX(R) theatres throughout the region.

 

"This important partnership with RACIMEC will result in a robust network of IMAX theatres in South and Central America," said IMAX Co-CEOs and Co-Chairmen Richard L. Gelfond and Bradley J. Wechsler. "RACIMEC is a well-respected business innovator, and we are thrilled to expand our relationship with them at this level. As the industry moves toward digital and developers as well as exhibitors seek new ways to attract moviegoers, we are confident that RACIMEC's experience and expertise are an ideal match for increasing IMAX's presence in this critical market."

 

"Based on the growing network of successful IMAX theatres and the introduction of IMAX's digital projection system, we believe this is a perfect time to aggressively develop the South and Central American and Caribbean markets, said Miguel Sfeir, President of RACIMEC International Group. "We want to capitalize on the momentum IMAX has with its pending digital projection system and its robust array of Hollywood content to bring the ultimate movie-going experience to consumers in this part of the world."

 

In 2005, RACIMEC signed a deal to install three IMAX theatre systems into new entertainment retail developments in Chile and Venezuela. Two IMAX theatres are being built and developed in Santiago, Chile, in addition to one in Caracas, Venezuela, and all are expected to open by mid-2009.

 

The highly anticipated IMAX Digital projection system will further enhance The IMAX Experience(R) and help to drive profitability for studios, exhibitors and IMAX theatres by virtually eliminating the need for film prints, increasing program flexibility and ultimately increasing the number of movies shown on IMAX screens.

 

IMAX has already secured important parts of its film slate for 2008, 2009 and 2010 through agreements with major Hollywood studios including: The Spiderwick Chronicles (in theatres now), Shine A Light (April 4, 2008), Speed Racer (May 9, 2008), Kung Fu Panda (June 6, 2008), The Dark Knight (July 19, 2008), Under the Sea 3D (February 2009), Monsters vs. Aliens 3D (March 2009), Hubble 3D (working title, February 2010), How to Train Your Dragon 3D (March 2010), and Shrek Goes Forth 3D (May 2010).

 

About RACIMEC International Group

 

---------------------------------

 

Founded in Rio de Janeiro, Brazil, in August 1966, as one of the most prominent entertainment and public gaming companies in the world, developing gaming applications such as Lotto and Soccer Lottery, for various Latin American countries including Brazil, Chile, Argentina, Venezuela, Colombia and Paraguay. The RACIMEC International Group has reached outstanding success in various countries with its starring game KINO, a pre-printed ticket game with a real time live TV show, crossing over the 4 billion dollar barrier during the last decade. RACIMEC has been identified by the Lottery market as the creator of new standards in Game operation and safety in the different countries where it operates.

 

About IMAX Corporation

 

IMAX Corporation is one of the world's leading digital entertainment and technology companies. The worldwide IMAX network is among the most important and successful theatrical distribution platforms for major event Hollywood films around the globe, with IMAX theatres delivering the world's best cinematic presentations using proprietary IMAX, IMAX(R) 3D, and IMAX DMR technology. IMAX DMR is the Company's groundbreaking digital remastering technology that allows it to digitally transform virtually any conventional motion picture into the unparalleled image and sound quality of The IMAX Experience. IMAX's renowned projectors and new digital systems display crystal-clear images on the world's biggest screens. The IMAX brand is recognized throughout the world for extraordinary and immersive entertainment experiences for consumers. As of September 30, 2007, there were 296 IMAX theatres operating in 40 countries.

 

 

Imax focuses on DLP chips

http://www.hollywoodreporter.com/hr/content_display/news/e3i9b4549028bac41baa223d566af60e95e

Giant screens headed to South America

By Carolyn Giardina and Gregg Kilday

March 10, 2008

Imax, which is on the verge of entering the digital era, is in negotiations with Texas Instruments to use TI's Digital Light Processing technology as part of Imax's proprietary system.

Although neither company would comment on the discussions, if the deal closed it would mark a significant step forward in Imax's determination to roll out its digital projection system later this year.

Imax's digital commitment also has led to a new pact it is set to announce Monday that will bring 35 Imax theaters to Central and South America over the next six years.

Under an agreement with Giencourt Investments, a member of the Brazil-based RACIMEC International Group, RACIMEC will provide the initial down payment to purchase and install Imax systems, partnering with local exhibitors and developers to build a network of Imax theaters in the region.

Valued at more than $40 million, it's the largest international deal in Imax's history and its second-largest overall theater deal, eclipsed only by its recent pact with AMC to place 100 Imax theaters in that North American chain.


Imax, which is sponsoring today's International Day Luncheon at ShoWest in Las Vegas, has since its inception 40 years ago used 70mm film to distribute and exhibit movies. By converting to digital, it will dramatically change its business model as digital distribution removes print costs -- about $22,000 for a 2-D print and $45,000 for a 3-D print -- from the equation.

Imax's move to TI is a blow to Sony because Imax had been developing a digital system that employed two Sony 4K projectors and proprietary technology.

TI licenses its DLP Cinema technology to 2K projector makers Barco, Christie and NEC, but it is not known which suppliers Imax will use.

DLP technology has been in theaters for nearly a decade. Digital cinema dates back to 1999, when such films as "An Ideal Husband" and "Star Wars: Episode I -- The Phantom Menace" had a limited digital release.

DLP technology is now in about 5,500 digital-cinema projection installations worldwide, including the majority of the estimated 4,754 digital-cinema screens used in the U.S.

Currently, there are 296 Imax theaters operating in 40 countries, but there are just 10 either operating or scheduled to open in South America.

"We've built a fairly sizable Imax network in North America, and the results have been quite attractive. But in some international territories, it has taken longer because there hasn't been the capital behind it," Imax co-chairman and co-CEO Richard Gelfond said.The coming of digital cinema, Gelfond said, has eliminated exhibitors' worries about the cost and delivery of physical prints. With distributors making more and more films available digitally, exhibitors also are ensured of a steady stream of movies.

Imax first began working with RACIMEC in 2005, when RACIMEC signed a deal to install three Imax theater systems in Chile and Venezuela.

While Imax typically forms joint ventures with theater chains in North America, Gelfond said, "South America is a territory we are not that familiar with. Since we did not want to form our own joint ventures there, it would have required a series of lease deals over a long period of time."

Instead, RACIMEC will determine the right locations for Imax theaters and work with local developers and exhibitors to begin opening theaters under the deal by 2010.

 

Live events coming to theaters - Next wave of 3-D business so close you can touch it

http://www.hollywoodreporter.com/hr/content_display/business/news/e3i9b4549028bac41ba0d024004f287434d

By Carolyn Giardina

March 10, 2008

Get ready for a radical change in thinking about theatrical entertainment.

Alternative content is not a new concept, but the next new thing to enter the dialogue are events broadcast live to theaters in 3-D. That could mean fans will head to their local theaters for a group 3-D viewing of the NBA Finals or the Super Bowl, stadium concerts and the like.

And it is closer than many realize.

"I think the public can expect to see a live 3-D broadcast in a theater in 2008," said Vince Pace, founder of 3-D production innovator Pace in Burbank. "(It is) possible today with existing technology."

Pace and others are encouraged to see stakeholders getting involved in these discussions.


"About 12 live events are being discussed; which ones will actually make it is hard to say," Real D president Joshua Greer said.

The issues that need to be overcome include a variety of business and deployment factors.

"It's not the technology that is holding up a live broadcast to the theaters. It's rights and business case -- putting together something that make sense from a financial point of view," 3ality Digital founder and CEO Steve Schklair said. "If you were to do a live sports broadcast, you would want it to be an event of some stature because that is what would bring people to theaters. (But) rights to any events of stature -- the Super Bowl, World Cup -- are pretty well sewn up by the broadcasters. That has to be dealt with."

Schklair added that from a financial standpoint, a 3-D broadcast would involve production and theater costs "and in the middle, two rights-holders -- the league and the broadcasters -- that already have the rights."

Still, Marty Schindler, principal in consulting firm the Schindler Perspective, said, "There are deals to be had, but it requires a lot of effort on a lot of people's parts."

Mike Rokosa, the NBA's vp engineering, brings a different perspective to the discussion. "I don't think rights would be the holdup as much as, right now, the volume (of theaters) that have the connectivity to receive a live signal, which is quite limited," he said. "If there were a fair number of venues that were able to take a live feed, then we'd have something that we could at least start to talk about."

Greer had similar thoughts.

"We still haven't sent the large-scale rollout of satellite technology, so while (live broadcasts) can be done, the question is, where can you put it? ... Over the next six months you will see a multitude of tests with all different types of content. But if you are going to rent satellite time, you want to have thousands of theaters, and that is still going to take a little time."

From a technical standpoint, if a theater already is equipped with a digital-cinema system and 3-D capabilities, a satellite dish or some sort of bandwidth connection and a decoder also would be required. Rokosa said they are not an enormous additional expense, but there is a Catch-22: "If they are going to invest a couple grand to do this, where is the content?" he said. "It is a little bit of a quandary."

Said Greer, "To me, the much bigger issue is who is going to pay for the satellite transmission and the production."

Such companies as Pace and 3ality have been developing 3-D production and post techniques for the challenging shoots. Pace is one of a small number of companies that developed a 3-D broadcast news van.



Working with Pace, the NBA began testing in this arena a year ago, when the league and the 3-D innovator teamed to present invite-only live 3-D HD viewing parties at the Mandalay Bay Hotel in Las Vegas of the NBA's All-Star Saturday Night and the 56th All-Star Game. Additionally, the Cleveland Cavaliers and the NBA, along with Pace, offered a live 3-D HD screening in Cleveland of the NBA Finals from San Antonio. An estimated 14,000 turned out for the event.

A timely concert also could be a big attraction, as Disney proved last month when it opened "Hannah Montana and Miley Cyrus: Best of Both Worlds Concert" in digital 3-D on 683 screens. The feature opened No. 1 at the boxoffice and went on to earn a whopping $63 million.

The concert film opened Feb. 1, the day after the live tour wrapped (and after a breakneck 11-week postproduction schedule).

"Material that reaches the theater and has some time sensitivity to it is part of the draw," said Pace, who was an executive producer on "Hannah Montana." "I think that's where alternative content and films of that nature are going to head."

He said a driving force was to produce "Hannah Montana" quickly enough "to take advantage of the fact that this is something that people are aware of and were interested in. I think this was a complement to the concert rather than a byproduct."

The movement toward 2-D broadcasts have already started. Last month, for example, Walt Disney Studios, ESPN and digital-cinema provider Access Integrated Technologies delivered a live HD broadcast of college basketball -- the University of Texas vs. Texas A&M -- live on 15 digital-cinema screens in Texas. It marked the first event at which AccessIT's CineLive technology, which enables live 2-D and 3-D streaming of content to theaters, was employed for a major sports event since the technology was announced last fall.

Broadcasting live 2-D content is more manageable. "The challenge with 3-D is we need twice as much bandwidth to deliver the same amount of content," Greer said.

A final factor is the possibility of broadcasting live 3-D content to the home. The first 3-D-ready TV sets have been unveiled, but delivery standards (viewed as a critical issue), content availability, set penetration and a quantifiable audience are just a few of the challenges that must be addressed.

Some also believe that autostereo technology (enabling the viewing of 3-D without the use of special glasses) is needed for in-home 3-D to really happen. And again, a sort chicken-and-egg scenario will exist because there is no real installed base of viewers yet, nor is there a steady stream of content.

Meanwhile, broadcasters are focused on the analog shut-off, now less than a year away.

"I also think the quality of 3-D entertainment as it translates to the home is still one to two years away," Pace said. "That doesn't mean you'll not start to see material being presented prior to that."

ArcLight glows with d-cinema

http://www.hollywoodreporter.com/hr/content_display/film/news/e3ib0b6925e640336e730cefe7089fc7289

 

By Carolyn Giardina

March 7, 2008

Technicolor Digital Cinema signed an agreement with Hollywood's ArcLight Cinemas to provide digital projection systems at its complex. The deal encompasses ArcLight's Cinerama Dome, where Technicolor has previously been testing its systems.

Each installation -- seven theaters at the ArcLight and plus the Cinerama Dome -- includes the networked system, a satellite system for content delivery and the Technicolor Theatre Management System. The systems will be supported by Technicolor's maintenance services with 24/7 remote monitoring to ensure system health.

Other Technicolor installations include Mann's Village and Bruin in Westwood, Grauman's Chinese in Hollywood, and Criterion in Santa Monica; as well as National Amusements' the Bridge Cinema De Lux in West Los Angeles.

 

Friday, March 7, 2008

MPAA claims record domestic, international numbers for 2007

http://www.screendaily.com/ScreenDailyArticle.aspx?intStoryID=37650

 

Len Klady in Los Angeles

06 Mar 2008 06:02

 

The Motion Picture Association of America announced a record box office of $9.63bn for the calendar year 2007 in the domestic marketplace. Additionally it cited international box office of $17.09bn for a global revenue tally of $26.72bn that represented a 4.7% increase from 2006.

 

MPAA president Daniel Glickman presided over a press conference call yesterday detailing industry statistics with particular emphasis on member company activity. “I think it’s fair to say that the overall picture confirms the growing interest in film,” he said.

 

The number of tickets sold in the United States and Canada flickered upward by 0.3% to an estimated 1.4 billon while neither Glickman nor other association reps felt confident in assessing international sales.

 

He stated that while downward fluctuation in the worth of the American dollar may have swallowed up a portion of the 9% boost of member companies in the international marketplace, it was not the entire picture.

 

It was also announced that the MPAA had signed on with Nielsen EDI to collect box office data in an effort to have more comprehensive information going forward.

 

As a result domestic data now officially incorporates Canadian box office. Queries regarding the relative value of that currency on both admissions and box office could not be answered and though it was stated adjustments had been made to reflect Canada; historic box office data in the report was unaltered.

 

The average cost to produce and market movies produced by the Hollywood majors rose 6% to $106.6 million while MPAA designated affiliates (including New Line and Fox Searchlight) saw those comparable expenses balloon by 54% to $74.8 million.

 

However, it was stressed that the amounts cited only reflect direct costs to member companies and do not include outside investment such as that of Relativity Media or promotional and advertising partnerships from the likes of McDonalds.

 

“It’s a fair question to ask what the difference is between member costs and total costs,” said Glickman. “We’ve talked about a more comprehensive way of looking at this area and hope to be able to present it (in future).”

 

The overall presentation came off as anecdotal rather than specific. The scattergun approach incorporated such facts as a rise in Internet advertising, a correlation between theatre attendance and home theatre systems, a consistent number of theatrical releases from 2006 and a rise in on-line activity to garner film information. Curiously the issue of piracy was absent from both the report and discussion.

 

Questions regarding audience composition and demographics were either directed to the National Association of Theater Owners (NATO) or put on hold until the release of an MPAA study later in the year. When asked for a brief synopsis of the latter, no one present was able to reply.

 

Curse of the Legacy

http://www.ishindler.com/articles/TSP_Curse_of_the_Legacy.htm

By Marty Shindler


It happens a lot this time of year.  Companies that prepared their calendar year budgets are now implementing those budgets and many are finding that when they squeezed out their capital expenditure (capex) budgets late last year, attempting to manage their bottom line, that they were a bit short sighted in realizing how much capital expenditures they really needed.

 

It can be especially exasperating as often these budgets were revised over and over until finally approved.  You have seen that and so have I.

 

Individual departmental or divisional budgets may initially seem to be in line.  However, when the overall picture for the entire company is put together, the grand total may be more (or less, depending on your perspective) than the senior execs and/or the board will approve.

 

Sometimes it is due to the requests for additional headcount, other times it may be due to various overhead items.  Often though it is due to operations departments requesting more for their capital expenditures than will be approved.  

 

While some managers may have excessive requests, too often they make reasonable requests, but are caught by the curse of the legacy

 

What is this?  Legacy equipment is equipment that the company has had for some time, but for a variety of reasons does not want to replace, even though replacement is overdue.  “It runs, right?” is the frequent response to the request.

 

It is the recurring challenge companies large and small face as they attempt to replace and upgrade equipment.  It happens in a lot of companies, but most often in companies in relatively low margin businesses. 

 

Often companies buy a significant amount of equipment during their start up days and then add to it regularly as the company grows, spending for expansion based on new projects that have come in, thus increasing capacity.  But, when the company stabilizes, finding the additional capital to replace old equipment becomes a challenge. 

 

The reasons for this are many. We have heard (and at times provided) the explanations or the rationalizations.  Sometimes the equipment is so busy that it just cannot be taken out of service.  Sometimes, management decides that it is just better to continue to fix it rather than to replace it.  That is commendable, but at times, the cost of incessant repairs, including the hidden cost of employee morale is greater than the cost to replace.

 

And even though many companies do not upgrade and replace equipment as often as may be necessary due to financial pressures, when the company is sold, the new owners often undertake the upgrade and expansion process to put their stamp on the facility.  Often the cost to do so is part of their financial analysis upon which their bid price is based.

 

So, what is the solution?  It is not easy, especially when there is always something more pressing to spend on.  We have all encountered that.

 

However, it is vital that the companies have a set system to consistently examine their equipment usage, purchase dates, repair and maintenance records and the upgrades that are available in the marketplace.  This is, of course, dependent on their ability to maintain adequate records.

 

In our discussions with various production and post production organizations, for example, some see the current standard definition to high definition transition as a time when it is opportune to drastically upgrade or be forced out of business.  While this has been a process that has been ongoing for several years, in the next year more channels will be HD and thus the supporting infrastructure will be required.  They can’t be caught by the curse of the legacy.

 

Other facilities, with the ongoing switchover to file based systems are re-inventing their pipelines to accommodate more efficient methodologies at all points in their processes. 

 

DirectTV has been working on a major upgrade with many added HD channels and the cable systems will need to follow suit.  The telco systems, namely FiOS and U-verse appear to have HD at the heart of their systems. 

 

In the final analysis, to be sure not to be caught by the curse of the legacy, companies will need to put more thought and effort into their financial planning processes.  This should include a master capital expenditure plan to examine the needs for the next three to five years and it will need to be reviewed and updated on a regular basis. 

 

A more formal approach than what is present in many organizations can help to stave off the curse.

 

Thursday, March 6, 2008

XDC Participates in Europe's Finest 'Cinema-on-Demand' Digitisation Project

http://www.dcinematoday.com/dc/pr.aspx?newsID=1028

 

Cologne 2008—Mar 5, 2008

 

XDC will digitise circa 35-40 European films in the Fall of 2008, focusing on film classics

 

reelport GmbH in Cologne will pilot Europe’s Finest 'Cinema-on-Demand' digitisation project funded by the EU MEDIA program in cooperation with the Digital Content Lab of XDC, which has been selected for the digitisation of circa 35-40 European films in the Fall of 2008, focusing on film classics. The films will be digitised – with the primary source material being mainly 35mm copies -- into a JPEG 2000 DCI interoperable format in order to enable screening in theatres throughout Europe that are equipped with 2K DLP Cinema systems.  Other digital file formats will be taken into consideration on a case by case basis.

 

“We intend to establish a digitisation pool for some of Europe’s best films in order to provide cinemas in the future with the opportunity to screen such classics in the highest quality, with more flexibility for programming and at less cost. We are keen to work with a partner like XDC, which is one of the leading digital cinema service companies in Europe,” said Tilman Scheel, Managing Director of reelport GmbH.  “XDC Digital Content Lab has been chosen because of its great expertise, its high quality service and its successful track record of over 300 films and thousands of digital copies.”

 

Serge Plasch, CEO of XDC pointed out:” XDC is very proud to be part of Europe’s Finest innovative project.  It is a pleasure to collaborate with the dynamic and creative team of reelport.  For sure, this project will offer cinemas the chance for more all-encompassing programming.”

UFO moviez revolutionizes digital cinema with over 1000 theatre installation

http://www.agencyfaqs.com/perl/news/company_briefs/index.html?id=30990

Company Brief
Mumbai, March 03, 2008

With its constant endeavor and commitment to revolutionize the entertainment industry, UFO Moviez, the leaders in digital cinema technology, has successfully completed installation in more that 1000 cinemas across country. UFO Moviez, the first mover in digital space has released over 600 movies in 17 languages in within a short span of 2 years. Apart from its existing strong foothold in India, UFO International has also completed successful installations in 21 screens across Nepal, Sri Lanka and Mauritius within a span of 2 months.

Enthralled with the development, Mr. Rajesh Mishra, CEO, UFO Moviez, says "When we started the project of digitization, we had nothing but complete faith in our endeavor and the next demand of entertainment industry in India. Today after completing two years and 1000 cinemas installation, I am proud of our dream which has not only changed the cinema viewing experience but has given manifold dimensions to the film industry on the whole. In less than two years, UFO Moviez has become the world’s largest satellite based digital cinema chain with over 1000 theatres receiving all movies First Day, First Show. I want to thank each member of UFO family, including industry torchbearers and viewers, who accepted us with open arms. Crossing 1000 cinema installation is just the beginning of the revolution to come.”

UFO Moviez has made a significant contribution to the growing film industry by providing Indian consumers flexible programming and high-quality viewing experience. Treading the path of revolution, UFO Moviez has been able to change the way entertainment industry was always looked upon. Bringing a 360 degree change in the business spectrum, in the year 2007 alone UFO technology has helped theatre owners and producers save a huge amount of money on the print cost. After bringing in the radical change in the Indian entertainment industry, UFO Moviez is now marching towards making its mark in Hollywood movies with first release being Rambo IV in breakthrough 98 theatres.

Digital Cinema heralds a new era for the cinema industry. According to a PriceWater Cooper report, the Indian film entertainment industry is poised to grow from the present size of Rs 9600 crore to Rs 17,500 crore by 2011, implying a 16% cumulative annual growth over the next five years. The advanced technology that UFO Moviez brings with it is helping the Indian film industry in all the spheres including film production, film exhibition and marketing.

The advent of digital technology is playing a pivotal role in Bollywood’s boom with operators like UFO Moviez bringing the delivery of films straight to the theatre via digital satellite delivery. In view of the significant impact that the technology will have on the cinema industry and the significant growth potential, UFO Moviez is therefore taking the lead to develop the Digital Cinema industry and to stake its position as an early-mover in the digital space.


For further information please contact:
Luna Biswas
Mob: +09920038219
e-mail: luna@hanmerpr.com

 

Wednesday, March 5, 2008

21st century cinema: Movie theaters move into the future

http://www.detnews.com/apps/pbcs.dll/article?AID=/20080301/ENT02/803010338

 

Saturday, March 1, 2008

 

Tom Long / Detroit News Film Critic

 

Hannah Montana is onstage, singing and dancing up a storm in front of a crowded house of rapt tweenage girls rocking out in their seats.

 

Except this Hannah Montana is the size of a house and all the tweenage girls are wearing 3-D spectacles, the better to see giant Hannah reach out to them at the Emagine Novi.

 

And in the theater next door, a monster is destroying New York City.

 

Advertisement

 

 Welcome to the new world of movie theaters, where seismic shifts in technology and content are helping to keep the threat of home entertainment at bay. The screens can be gigantic, the effects can be startling, cocktails may be served, and anything from a rock concert to a ballet to a video game battle may be showing. Or, of course, a movie.

 

"It's like any other business: To keep people's attention you've got to be cutting edge, you've got to be with the latest," said Jack Schick, executive director of the Michigan chapter of the National Association of Theater Owners (NATO).

 

"They want stadium seating, they want surround sound, they want more of an experience than they've ever had before, and they want it now," Schick said. "We've got to look to whatever's out there that's going to grab the public's eye."

 

February's eye-grabber was "Hannah Montana & Miley Cyrus: Best of Both Worlds Concert," a 3-D flick that set box offices afire. The 74-minute film -- a perfect storm of alternative entertainment, mind-boggling effects and pop hysteria -- has pulled in more than $61 million, even though it only opened in 683 theaters (mainstream films usually open in 3-4 times that many venues).

 

When "Hannah" finally moves on, many of the same theaters will begin showing "U2 in 3-D." What used to be unusual for movie theaters is becoming the norm.

 

"We've long thought of our venues as entertainment venues as opposed to pure movie houses," said Paul Glantz, owner-operator of Emagine Theaters. "That's the vision of the future."

 

And that future is now. Consider some of the changes in Michigan movie theaters:

 

• There are more than 35 movie houses set up for the improved sound and picture quality of digital projection, with theaters in Livonia, Novi, Canton, Waterford, Southgate, Sterling Heights and more having 3-D capabilities. That's more digital movie screens than existed worldwide in 2000; now there are more than 5,000 globally, with some 10,000 expected by 2008.

 

• The once-rare giant IMAX screens are also proliferating, with seven in Michigan and five in the Detroit area.

 

• Conveniences and comforts such as online ticket purchases, valet parking and stadium seating are commonplace. Emagine Theaters in Novi and Canton serve cocktails, and the Novi location features an ultra-comfy upscale theater where a ticket includes popcorn, a drink, enhanced sound and an usher who stays in the theater at all times to deal with any disturbances.

 

The upgrade revolution is everywhere. National Amusement's Showcase Ann Arbor in Ypsilanti includes an IMAX theater and an elaborate videogame arcade, as well as a food court. And the Birmingham Palladium commonly hosts prescreening banquets as well as offering weekend dining in its plush premium theater 8, which features Tempur-Pedic seats.

 

Meanwhile, the offerings on-screen at theaters keep expanding, and not just with 3-D rock concerts.

 

Live broadcasts of the Metropolitan Opera, ballets, sporting events, televised specials and even video game tournaments are all playing out on the big screen in the name of capturing wider audiences.

 

Does it work? Well, it did for Jason Nummer, 30, a Warren media advertiser who went to see November's "Beowulf" in 3-D, and then went back again to see it at an IMAX theater.

 

"Certain movies I just have to see on the big screen," said Nummer, who has also made his way to a movie theater for a Phish concert.

 

All the improvements and innovations are in direct response to the threat of other entertainment options. Movie attendance in the U.S. was down about a half-million tickets last year, although higher ticket prices pushed the box office to a record-breaking $9.6 billion.

 

But videogame sales topped $17 billion last year, according to the NDP Group. And DVD sales and rentals were more than $23 billion. Factor in the time spent on the Internet, movies available through On Demand video and hundreds of cable TV channels and theaters have more competition than ever before.

 

In many ways Paul Serilla, 30, an ad man from Harper Woods, is a movie theater owner's worst nightmare. Considering all his options, making it to the movies is just too much trouble most of the time.

 

"I probably (went out and) saw maybe three or four movies all of last year. I used to see a lot more," he said.

 

"It's so much easier to see things at home now. The window of time between a theatrical release and a DVD release is down to a couple of months."

 

Looking back over 2007, Serilla could think of only three movies he left home to see. One was a promotion at a bar and the second was at a dollar discount movie theater. Only one -- last March -- was at a regular movie theater.

 

"In the 21st century (movie theaters) are competing to provide an experience that will get you out of the house rather than just waiting for the red Netflix envelope to show up," said Scott Kirsner, the Boston-based proprietor of the Web site Cinematech, whose book, "Inventing the Movies: The Secret Technological History of Hollywood," is due out in March.

 

But then theater owners are used to doing battle with other forms of entertainment.

 

"The movies have been under assault from new technology really ever since radio," Kirsner said. The advent of television, videotapes, DVDs and the Internet all supposedly spelled doom for movie theaters, but there are more movie screens in America right now -- some 40,000 -- than ever before.

 

That's because movies still offer something audiences can't get at home, according to Wade Holden, a movie analyst with media research firm SNL Kagen.

 

"They've been around this long and they continue to make more money each year, because it's ultimately a shared experience with other people," Holden said. "It's that big screen, and it's a giant dark room, and there's other people around you, and you get to hear them react.

 

"As good as the home technology gets, is it ever really going to be comparable to that theater experience?"

 

You can reach Tom Long at (313) 222-8879 or tlong@detnews.com.

Tuesday, March 4, 2008

Speed Racer to be simultaneously released as IMAX(R) film in May 2008

http://www.imax.com/corporate/content/investor/intro.jsp

http://media.corporate-ir.net/media_files/irol/global_images/spacer.gif

Next Action/Adventure From the Makers of The Matrix Trilogy To Be

Digitally Enhanced For IMAX's Larger-Than-Life Format

LOS ANGELES, March 4 /PRNewswire-FirstCall/ - IMAX Corporation and Warner Bros. Pictures announced today that Speed Racer, the action-packed adventure from the creators of 'The Matrix' trilogy, will be simultaneously released to IMAX(R) and conventional theatres on May 9, 2008. Speed Racer, based on the hit anime series created by Tatsuo Yoshida, is written and directed by The Wachowski Brothers. The film will be digitally re-mastered into the unparalleled image and sound quality of The IMAX Experience(R) with IMAX DMR(R) (Digital Re-mastering) technology. Warner Bros. Pictures will be the exclusive distributor of the film to IMAX theatres worldwide.

"Speed Racer combines riveting action with stunning special effects, making it an ideal choice for IMAX's format," said Dan Fellman, President of Domestic Distribution at Warner Bros. Pictures. "We are delighted to release the film to IMAX theatres, where audiences can experience the next best thing to actually sitting in the driver's seat during this high speed adventure."

"Speed Racer is a fantastic addition to our 2008 film slate, and we are very pleased to welcome The Wachowski Brothers back to the world of IMAX," said IMAX Co-Chairmen and Co-CEOs Richard L. Gelfond and Bradley J. Wechsler. "The unique vision of these talented filmmakers has always been well suited to IMAX's format, and we're more than excited to be a part of this release."

"Speed Racer has all the elements for a powerful IMAX experience, with its broad appeal and spectacular effects," said Veronika Kwan-Rubinek, President of International Distribution, Warner Bros. Pictures. "We are excited to be exhibiting the film internationally in this unique format."

"Audiences will experience an incredible thrill ride when they see Speed Racer in IMAX theatres this May," added Greg Foster, Chairman and President of IMAX Filmed Entertainment. "Warner Bros Pictures, The Wachowski Brothers and Joel Silver are masters at telling stories specifically for the big IMAX screen, and with up to 14,000 watts of digital surround sound combined with crystal-clear, larger than life images, this movie and IMAX are made for each other."

Hurtling down the track, careening around, over and through the competition, Speed Racer is a natural behind the wheel. Born to race cars, Speed is aggressive, instinctive and, most of all, fearless. His only real competition is the memory of the brother he idolized-the legendary Rex Racer - whose death in a race has left behind a legacy that Speed is driven to fulfill. Speed is loyal to the family racing business, led by his father, Pops Racer, the designer of Speed's thundering Mach 5. When Speed turns down a lucrative and tempting offer from Royalton Industries, he not only infuriates the company's maniacal owner but uncovers a terrible secret-some of the biggest races are being fixed by a handful of ruthless moguls who manipulate the top drivers to boost profits. If Speed won't drive for Royalton, Royalton will see to it that the Mach 5 never crosses another finish line. The only way for Speed to save his family's business and the sport he loves is to beat Royalton at his own game. With the support of his family and his loyal girlfriend, Trixie, Speed teams with his one-time rival-the mysterious Racer X - to win the race that had taken his brother's life: the death-defying, cross-country rally known as The Crucible.

 

Kinepolis net profit up in '07

http://www.hollywoodreporter.com/hr/content_display/news/e3ib65f3d86442bd4f018f6583b65296aa3

 

By Leo Cendrowicz

 

March 1, 2008

 

BRUSSELS -- European cinema group Kinepolis on Friday posted a net profit of 14.7 million euros ($22.3 million) for 2007 on sales of 212.3 million euros (322 million).

 

The figures represented a 0.6% increase in net profit from 2006's 14.6 million euros ($22.2 million) and a 0.5% rise in revenue from 211.2 million euros ($320.5 million).

 

The figures come despite a 3.4% drop in overall audience numbers, from 22.8 million in 2006 to 22.0 million last year.

 

The rise in margins came as higher ticket prices and a stronger advertising income helped offset the lower visitor numbers, which Kinepolis blamed on the sunny spring weather and the poor range of blockbusters. Revenue also was boosted by strong food and drink sales combined with a 25% jump in income from the company's real estate arm.

 

The company -- which has 23 multiplexes in France, Belgium, Spain, Switzerland and Poland -- also pointed to its own Kinepolis Film Distribution division, which enjoyed successes with Flemish titles ("Man zkt Vrouw," "Ben X," "Vermist") and the Belgian distribution of "The Golden Compass."

 

 

Looking ahead, Kinepolis said there appears to be a better spread of hit films this year compared with 2007's concentrated May-August blockbuster season.

 

It predicted a strong 2008, with "Asterix and Obelix at the Olympic Games," "10,000 BC," "Indiana Jones and the Kingdom of the Crystal Skull," "Chronicles of Narnia: Prince Caspian," "The Mummy 3," Bond film "Quantum of Solace" and "Harry Potter and the Half-Blood Prince."

 

 

Monday, March 3, 2008

ShoWest 2008: The Preview

http://digitalcinemareport.com/showest2008.html

 

3D will dominate what Promises to be a Lively Event

 

When the exhibition industry gathers in Las Vegas later this month for ShoWest 2008, 3D will likely be one of the most widely discussed topics. But there will be a lot more including the business and technology issues associated with the ongoing digital cinema rollout, continuing concerns about movie theft, and the boost the home theatre market is certain to get now that Blu-ray has won the high definition DVD competition.

 

In that regard, one of the highlights of the show could be the fact that Jeffrey Katzenberg, CEO of DreamWorks Animation SKG, is scheduled to speak at the opening day ceremonies. Katzenberg will speak about the developments in 3D, opportunities for the exhibition community and DreamWorks Animation’s plans to utilize 3D technology for all of the company’s animated releases starting in 2009.

 

DreamWorks Animation will release Monsters vs. Aliens, its first-ever film produced in “Ultimate 3D” technology next year.

 

“I am thrilled to have the opportunity to address this important audience at the ShoWest opening day ceremony,” says Katzenberg. “Starting with DreamWorks Animation’s 2009 release ofMonsters vs. Aliens, audiences will see and feel first-hand how the latest advancements in 3D animation technology can fully immerse them into a brand new kind of movie-going experience.”

 

Of the many sessions scheduled for the event two by Michael Karagosian are of particular interest to anyone interested in digital cinema. Karagosian is technology adviser to NATO.

 

“The two presentations are an overview of NATO's Digital Cinema System Requirements 2.0, which isn't released yet, but hopefully will be by ShoWest and a ShoWest University seminar on digital cinema geared towards independent theatre owners,” he says.

 

“For the system requirements overview I'll start with "why" a revision. Over the coming year, vendors will strive to meet DCI's specification with their products, a significant effort and a significant milestone. DCI's spec brings uniformity to two important areas: distribution and security. But it doesn't bring uniformity and interoperability to the processes that govern key management, it doesn't introduce uniformity to theatre operations, and it doesn't bring interoperability to the digital cinema server.”

 

“On that last point,” Karagosian continues, “if an exhibitor buys a server from vendor A, and attempts to replace it with one from vendor B, the chances are that the software infrastructure that moves movies, keys, play lists, schedules, and logs around will no longer function without rework.”

 

“NATO's system requirements were created to promote the specific needs of exhibition that are not addressed, or not addressed adequately, in the DCI spec. It is not a specification, but a list of requirements designed to guide standards committees, service providers, and equipment manufacturers.”

 

“Unlike the DCI spec, which studios have set a timeline to meet and vendors are striving to comply with, NATO will not set a timeline for compliance. However, some theatre owners may choose to set dates. NATO will, however, work closely with the vendor and standards community to create standards that will fulfill these requirements, setting the stage for future compliance in an organic manner. Now is the time to take such action.”

 

“As you have noted many times,” he says, “now is a time unlike any other in the cinema industry. Today we have new technology experts who are tuned in to the needs of theatre owners, and we have a productive standards committee whose makeup reaches across the industry with people who have demonstrated a strong willingness to work together. This is indeed a rare time, and NATO intends to take advantage of it.”

 

“It is anticipated that digital cinema equipment will require replacement every 10 years, and digital cinema servers may require more frequent replacement. The frequent replacement cycle sets the stage for the introduction of compliant equipment as demand requires. The ShoWest University seminar will cover a wide range of topics in digital cinema.”

 

“I'll review the current marketplace status, and will review my recent analysis addressing the cost of ownership under different financial conditions. I'll review the basics of the technology to bring familiarity to the concepts and terminology that a theatre owner will encounter, including key management. I'll review the current issues with interoperability and the issues in the supply chain. I'll review how 3D works. And I'll review in a little more detail the requirements in NATO's v2.0 document to give it context in the overall picture,” Karagosian says.

 

New technology is always a highlight of ShoWest. This is what we knew going into the show.

 

In the very near term, Kodak is expected to announce a continuing series of sales and to make other announcements as the company continues to broaden its participation in the worldwide digital cinema marketplace. Kodak currently has its digital feature systems deployed on more than 200 screens with 38 circuits in 14 countries.

 

Doremi will highlight that its DCP-2000 cinema server provided 3D playback on 80 percent of the screens for Disney's record breaking 3D film; Hannah Montana & Miley Cyrus: Best of Both Worlds Concert.

 

Michael Archer, vice president of sales at Doremi, says, "The complexity of 3D film production and playback has been simplified with digital cinema. Digital technology has heralded the start of a new era for 3D cinema with Doremi's servers and mastering stations helping to lead the way. From the start, we have ensured that all our installed cinema servers are 3D capable."

 

GDC Technology will unveil the True 3D Digital Cinema Server, which it claims is the first and only server in the market that brings what it calls “a true 3D digital cinema experience” to moviegoers.

 

And, as is tradition, ShoWest will honor several people and companies for their achievements. What follows is a list of some of the winners that will be announced at the show:

 

International Exhibitor of the Year

The Greater Union Organization, Australia’s largest and oldest film exhibitor

 

Producer of the Year

Charles Roven, Atlas Entertainment

 

International Achievement in Filmmaking

Sergei Bodrov

 

Female Star of the Year

Anne Hathaway

 

Male Star of the Year

Robert Downey, Jr.

 

Female Star of Tomorrow

Abigail Breslin

 

Distinguished Decade of Achievement in Film

Brendan Fraser

 

Groundbreaking Filmmaker of 2008

Alan Ball

The Ongoing Threat of Movie Theft

http://digitalcinemareport.com/thebigpicture_122.html

By Nick Dager
March 1, 2008 | Issue #122

The ShoWest convention held each March in Las Vegas is the biggest gathering each year of the National Association of Theatre Owners. This year promises to be the best-attended ShoWest ever and I asked NATO president John Fithian what to expect. He said one of the main topics would be movie theft, which Fithian says, “Remains a serious challenge to the industry.”

Digital Cinema Report: At ShoWest a year ago you said you considered piracy and shrinking theatrical release windows to be the two challenges facing the exhibition industry. What, if anything, has been done to improve things in those two areas?

John Fithian: Over the past year the theatrical release window has stabilized, and even grown a bit. We will discuss the numbers at ShoWest. We are pleased that our partners in distribution have recognized and respected the need for a reasonable theatrical release window.

On movie theft (“piracy”) NATO and the MPAA have expanded our programs effectively in a number of areas including education, enforcement, and legislation. We will discuss these efforts at some length at ShoWest. Though we have made progress, the problem of movie theft remains a serious challenge to the industry.

DCR: How has Hollywood responded to your call for the year-round release of more potential box office hits?

JF: So-so. In 2007 we had many significant commercial pictures during the summer. But we left April off the table, and the fall was weak. Though the studios produced many commercially viable movies that excited audiences, the release schedule was not optimal. We had too many popcorn titles in the summer, released very little in April, and crammed too many art/serious/war movies into the fall. We need diverse genre movies that appeal to diverse demographics spread throughout the 12 months. Looking at 2008 and 2009, I notice some improvements.

DCR: What else do you see as big challenges confronting exhibition?

JF: The big three remain (1) movie theft, (2) theatrical release window, and (3) a proper conversion to digital cinema. Nothing else comes close to these three issues.

DCR: The digital cinema rollout is well underway. Have you seen improvement in the number of digital releases coming out of Hollywood?

JF: I don’t think we have any problem with the number of digital releases. The remaining big issue is simply translating integration business models into actual deals.

DCR: Many of the small independent exhibitors I’ve talked to say that, while the cost of digital cinema is still a critical issue for them, they won’t even consider it until and unless the industry gets a better handle on piracy. I assume you hear the same things. How does NATO respond and what can NATO do to help them?

JF: I have not heard many independent exhibitors link digital cinema and movie theft the way you have. Digital cinema actually provides some improvements in the war on movie theft. And even though movie theft costs the American theatrical business roughly $600 million per year in lost ticket sales, we still have a $9 billion plus ticket sale business. The issue for independent exhibitors vis-à-vis digital cinema is the business model, period. That’s why NATO helped form a buying group for smaller exhibitors

 

Kodak Chosen for Santikos Theatres' Digital Transition

http://digitalcinemareport.com/news/kodakchosen.html

Kodak has been selected to power the digital transition of the Santikos Theatres chain in Texas. Full Kodak Digital Cinema systems will be installed on all screens of the newly-constructed Silverado 19 in Houston and on nine screens in current Palladium theatre in San Antonio. All installations will be done by Kodak and include several models of Barco Premiere projectors, depending on screen size and requirements.

“Kodak brought the right package to us,” says Richard Cieplechowicz, director of business development for the circuit. “Our people had seen their systems in a working environment and knew they were reliable, but the depth of their technology appealed to us also. Our company is growing; we’re always refreshing our operations in San Antonio and now we also are bringing the Santikos brand to movie-goers elsewhere. The Kodak system is designed to grow with us.”

“The strongest partnerships come when brands complement each other,” says Chris Simpson, Kodak Digital Cinema director of sales for North America. “Santikos Theatres knows how to provide a quality cinema experience to their guests. Kodak offers the right system to deliver that. This is a relationship where we’ll each do what we do best – and the movie-goers will benefit.”

“The central management of all cinema content is a new concept for everyone,” says Simpson. “Kodak has extensive experience doing that consistently and creatively with our pre-show installations and we’re applying that to our digital feature systems. This new capability has the potential to make a huge difference in our customer’s operational flexibility and workflow efficiencies in the future.”

In addition to the central Theatre Management Systems, a Kodak Content Player JMN3000 will be installed on each screen. The player handles a full range of feature content, in 2D or 3D, from local language movies to major studio releases, and from documentaries to work by independent filmmakers.
In addition to providing installation, Kodak is handling all training and support, including remote monitoring of systems and on-site maintenance as required. “What Kodak is really selling,” says Simpson, “is peace of mind.”

“Since Luis Santikos, the father of our current owner, built one of the first nickelodeons in Texas almost a century ago, we’ve established a strong reputation in cinema entertainment,” says Cieplechowicz. “But through all that time, Kodak’s been a leader, also. Their film has been in our booths since the beginning; now it’s time to take the next step together -- into the digital world.”

With 114 screens in 8 sites, Santikos is now expanding into other major cities in Texas.

Why Does Popcorn Cost So Much at the Movies?

Source: University of California, Santa Cruz 

 

Moviegoers aren't being gouged when they pay big bucks for popcorn, says economist Ricard Gil.

 

Movie theaters are notorious for charging consumers top dollar for concession items such as popcorn, soda, and candy. Are moviegoers just being gouged? 

 

New research from Stanford and the University of California, Santa Cruz suggests that there is a method to theaters' madness--and one that in fact benefits the viewing public. By charging high prices on concessions, exhibition houses are able to keep ticket prices lower, which allows more people to enjoy the silver-screen experience.

 

The findings empirically answer the age-old question of whether it’s better to charge more for a primary product (in this case, the movie ticket) or a secondary product (the popcorn). Putting the premium on the "frill" items, it turns out, indeed opens up the possibility for price-sensitive people to see films. That means more customers coming to theaters in general, and a nice profit from those who are willing to fork it over for the Gummy Bears.

 

Indeed, movie exhibition houses rely on concession sales to keep their businesses viable. Although concessions account for only about 20 percent of gross revenues, they represent some 40 percent of theaters' profits. That's because while ticket revenues must be shared with movie distributors, 100 percent of concessions go straight into an exhibitor’s coffers.

 

Looking at detailed revenue data for a chain of movie theaters in Spain, Wesley Hartmann, associate professor of marketing at the Graduate School of Business, and Ricard Gil, assistant professor in economics at University of California, Santa Cruz, proved that pricing concessions on the high side in relation to admission tickets makes sense.

 

They compared concession purchases in weeks with low and high movie attendance.

 

The fact that concession sales were proportionately higher during low-attendance periods suggested the presence of "die-hard" moviegoers willing to see any kind of film, good or bad--and willing to purchase high-priced popcorn to boot. "The logic is that if they’re willing to pay, say, $10 for a bad movie, they would be willing to pay even more for a good movie," said Hartmann. "This is underscored by the fact that they do pay more, even for a bad movie, as is seen in their concession buying. So for the times they’re in the theater seeing good or popular movies, they’re actually getting more quality than they would have needed to show up. That means that, essentially, you could have charged them a higher price for the ticket."

 

Should theaters flirt with raising their ticket prices then? No, says Hartmann. The die-hard group does not represent the average movie viewer. While the film-o-philes might be willing to pay, say, $15 for a movie ticket, a theater that tried such a pricing tactic would soon find itself closing its doors.

 

"The fact that the people who show up only for good or popular movies consume a lot less popcorn means that the total they pay is substantially less than that of people who will come to see anything. If you want to bring more consumers into the market, you need to keep ticket prices lower to attract them." Theaters wisely make up the margin, he says, by transferring it to the person willing to buy the $5 popcorn bucket.

 

The work of Hartmann and Gil substantiates what movie exhibitors have intuited all along. "The argument that pricing secondary goods higher than primary goods can benefit consumers has been circulating for decades, but until now, no one has looked at hard data to see whether it’s true or not," says Hartmann.

 

In another study examining Spanish theaters, the researchers discovered: Moviegoers who purchase their tickets over the internet also tend to buy more concession items than those who purchase them at the door, by phone, at kiosks, or at ATMs (the latter option has not yet hit the United States). More research is needed to figure out why, but for now this suggests that theaters may want to be sure to partner with an internet service to make such ticketing available--or even take the function in-house.

 

People who come to the movies in groups also tend to buy more popcorn, soda, and candy, Hartmann and Gil found. While this, too, merits more investigation, it may be that such groups comprise families or teenagers. "If that turns out to be the case, it may be that theaters will want to run more family- or adolescent-oriented movies to attract a more concession-buying crowd," Hartmann says.

 

Analyzing data along the lines suggested by Hartmann and Gil can also support other pricing schemes for businesses that sell concessions, such as baseball parks. Taking the kids to a ball game can be a pricey proposition for many families, once you take into account all the hotdogs and memorabilia. "If we found the current pricing scheme turns away such a group, theory suggests that the firm might want to throw in a free baseball cap or bat," Hartmann says. "That raises the quality of the experience and provides an incentive for families to show up."

 

Friday, February 29, 2008

Ballantyne of Omaha - Digital Divide

Written by John Zorabedian   

Saturday, 01 March 2008

CEO John Wilmers explains how this analog film projector manufacturer is making the transition to digital cinema.

 

The advent of digital projection and 3D should rejuvenate the cinema industry,  converting more than 30,000 US movie screens to digital over the next few years. But thus far it has not been a smooth transition from film, and for the largest manufacturer of film projectors, Ballantyne of Omaha, the transition has been both a challenge and an opportunity.

John Wilmers, CEO

Ballantyne has manufactured and supplied film projectors since the 1930s, servicing more than 50,000 screens worldwide. Transitioning to digital projection has meant the company had to find a partner—NEC of Japan—that produces digital equipment, which Ballantyne will distribute to its network of cinema chains. The biggest snag for the cinema industry, however, has been financing the changeover—cinema chains don’t want to pay for the new projectors themselves.

“When we went public in 1995, everyone said we were in a buggy-whip business with our film projectors, because the change to digital was going to happen,” said John Wilmers, president and CEO of Ballantyne. “But since that time, we’ve sold thousands of film projectors. Even in early 2008, there is still healthy demand for traditional film projectors and parts as the transition to digital technology starts to pick up some momentum.”

To finance the transition to digital format, the cinema industry is relying on third-party groups to pay for the purchase of the projectors. The movie studios then pay the third-party groups via virtual print fees, a per-screen fee paid for each film exhibited in digital format. So far, Wilmers estimates, more than 3,000 of the nation’s 37,000 screens have made the transition this way.

During this time, Ballantyne has positioned itself to become a distributor of projectors for its clients through a partnership with Japanese electronics giant NEC. To prepare for expected demand for digital cinema services, in July 2007, Ballantyne purchased a projector service company that will install and maintain the projectors.

“We’re basically in the last phase of the transition,” Wilmers said. “What we’re waiting on is the funding plans that are the vehicles to fund the changeover to digital cinema.” In the meantime, Ballantyne continues to manufacture and sell film projectors and parts. “The people who said we weren’t going to sell any more film projectors have been proven way off the mark,” he said.

Re-focus
This is not the first time the cinema industry—and by extension, Ballantyne—has faced a major transition in its business. In the period from 1999 to 2003, many of the large cinema chains built too many cinemas with too many screens. During this period, the concept of the multiplex was trumped by the even larger megaplexes, and several companies entered bankruptcy to unload some of these properties.

Ballantyne had its best year in 1999, grossing revenues of $86 million. The following year, Ballantyne’s revenues shrank to just $46 million. As the company fought back to profitability, Wilmers said, it strengthened its financial and strategic position. “We worked our way back from a challenging environment, so we’re conditioned to the challenges we’re facing today,” he said, such as strict controls on costs and active management of inventories.

The company’s profitability has taken somewhat of a hit during the transition because of the slow timing, as Ballantyne has staffed up its digital service operation. “If we continue to build our service business, and we don’t see the digital transformation is thing rolling, we will have loaded up on a lot of expense without a lot of return,” Wilmers said.  “But we are confident the demand is coming, and there just aren’t many companies out there with the expertise and personnel to get the job done.”

Ballantyne’s position remains strong due to its impressive industry connections: the company has long-standing relationships with leading exhibitors, including two of the partnerships to distribute digital projectors to three largest of the major national cinema chains (Regal Cinemas, AMC, and Cine-mark), representing 165,000 of the country’s 37,000 screens.

“We’ve provided and installed several machines for our prime customer, Regal Cinemas, and we have a joint venture we formed with RealD, one of the leading 3D providers,” Wilmers said. “The popularity of 3D has been a catalyst in jumpstarting the rollout of digital cinema, as the 3D process requires a digital projector.” Some 500 to 600 screens have 3D-capable machines, which have proved popular for 3D movies and for carrying alternative content such as concert movies like “U2 3D” and Disney’s “Hannah Montana and Miley Cyrus.”

Intermission
Ballantyne continues to manufacture some film projectors at its production facility in Omaha, Neb. And although the cinema companies would like to have the transition to digital complete this year, that will probably not be logistically possible, Wilmers said. The wide transition window means Ballantyne can continue to manufacture, refurbish, and supply parts for the old projectors.

“We do about $7 million to $8 million a year in the replacement parts business,” he said. “That’s at a margin of more than 40%, so it’s been a very important part of our business each year. It will decline when the rollout really begins in earnest, but that’s a ways away. I don’t think that business is going to go away for the next three years anyway, particularly when you consider international markets and demand.”

The manufacturing facility in Omaha also provides the company with a solid base of operations for the rollout of digital projectors when the distribution business finally picks up. With 150 employees, assembly and repair shops, and storage capacity, the facility is a strong asset for the company.

“We’re going to leverage that facility even though we’re not making many film projectors anymore,” Wilmers said. “We’re using the space and the people we have to integrate the components of digital cinema systems prior to shipping them to theaters. This capability allows us to prepare in advance of orders, enabling us to continue to deliver to our customers what they asked for and when they asked for it.”

Wilmers noted that quality, customer service, and responsiveness are the factors on which the company has built its reputation, and the way it expects to succeed in digital. “We’ve got a great workforce, and we’re using them to make this transition in a way where we’re going to be successful at it.”