Recently in Digital Distribution Category
Registration for the subscription only online analysis and research service, Cable U, opens today for those who want to know everything that pertains to 24 hour US cable networks: "the constants of nearly every deal, including: budgets, co-productions, distribution, international sales, legal, pitching, press & publicity and pricing."
Servicing networks hungry for content with the explosion of world wide cable as well as less vertically integrated organizations or professional looking for centralized information, this site is another example of what I have referred to elsewhere on The Second Sight as efficiency measures arising organically alongside the creative economy, manifested to solve the endemic vagueness around creative financials. (See Hedgefunds for Hollywood).
The first original series to move from a mobile platform to linear broadcast is coming to Comedy Central. Launched as five minute shorts on Amp'd Mobile, Lil' Bush: Resident of the United States is an animated satire that puts President Bush and a few colleagues including Lil' Cheney and Lil' Condi back in the schoolyard in elementary school. Comedy Central has ordered six episodes.
Excerpts:
"Fears of fueling the rampant movie piracy business in places like China and Hong Kong likely prevents Apple from offering movie downloads in most of Asia."
"Licensing agreements also have caused problems for Apple, as recording labels in Japan have shunned iTunes in favor of other outlets. A weak presence in the rapidly expanding Asian Internet market keeps Apple from profiting from that userbase."
"'We cannot comment on the specifics but it is true that iTunes is not available in Asia,' Tony Li, Apple's marketing director for Asia, said Wednesday. 'That goes for music and movies.'"
"Without iTunes in Asia, there is little motivation for consumers there to purchase an iPod. China's Internet userbase has been estimated at over 100 million people. It's hard to believe there aren't enough of those users willing to try iTunes and buy an iPod to make it profitable for Apple."
Apple rules out iPod movies for Asia - Yahoo! News
Excerpts:
"The California company launched the latest addition to its hugely successful Music Store online download service in the United States this week, offering scores of movies old and new owned by the Disney corporation."
"In the Asia-Pacific region, iTunes is available only in Australia and Japan, the world's second largest consumer of music after the United States. Even in Japan, some labels have refused to allow their songs onto the service."
"The new movie download service will allow US users to buy current movies for 12.99 dollars in the first week of release and 14.99 dollars after through the iTunes programme. Archived movies will sell for 9.99 dollars."
"So far only movies from Disney -- including films from Pixar, Touchstone, and Miramax studios -- are available but other companies are in negotiation to provide content."
"Through iTunes, Apple has about 70 percent of the music download market."
Business Week writer Catherine Holahan elucidated the pitfalls of brands like Viacom's MTV in a digital age with its lower barriers to market entry. The big question is if and how MTV will maintain its hegemony over the younger demographic, especially with increasing competition from the likes of online content distributors like YouTube and MySpace.
Excerpts and Highlights:
Major Internet players—from search engine Yahoo! (YHOO) to startup video site YouTube—are striking deals to broadcast music videos over broadband. Their hope: The same strategy that won Viacom's (VIA) MTV Networks cult-like control of the 12- to 34-year-old audience two decades ago will prove just as successful today on the Web.
"Look I think we have to pay attention to the extreme drop off in box office. It’s real," says Megan Wolpert, executive VP of Spyglass Television when I interviewed her in January this year: "People can say it's because of the content. People can say it's because of the options. People can say it’s because of piracy. Regardless, it’s real."
Digital cinema according to most industry spokesmen just might save the theatrical box office. 3D is especially promising for the younger demographic who have been raised with the hyperrealism of entertainment software. “I believe we are back," National Association of Theatre Owners president and CEO John Fithian said as he proclaimed the long-awaited arrival of the digital-cinema age at ShoWest this year: "We stand now at the dawn of the biggest technological revolution since the advent of sound. Digital cinema starts right now, in the year 2006, and it couldn't come at a more important time."
Bob Gibbons, Director of Marketing and Communications at Kodak Digital Cinema remarked when I interviewed him in April. "The other thing is that you have got to use digital in a way that lets you enhance the entertainment experience, or changes the entertainment experience, or ad an incremental entertainment experience, or do something that you can't do with film; because some of us are convinced that if you simply put a sign on your door that says, 'I am going to show you this movie digitally, and by the way I want you to pay more for it.' People in essence won't pay more for it. If you are just reinventing the wheel and calling it fire, that is a little foolish." Gibbons sums it up: "So the point is that you have got to be able to do more with a digital system than you can do with an analogue system, and in fact you can. You can do a lot more. One of the ways you can do that is by having a network, so you can now not only get content, you can in fact manage you business."
Gibbons continues, “It's being done though over in Europe on a per capita, per person basis. When you walk into the door the exhibitor makes some money from you, and the money they make from you is partially from ticket price, it's partly from what you spend on concessions, it's a little bit if you play games, and stuff like that. If you are an exhibitor and you have a slide show, and a lot of them still do, they are probably making seven cents from you when you walk through the door. Over in Europe, when you walk through the door they are making up to ninety-four cents from you. Why? Because the have targeted stuff, they have sold it differently, they are showing you stuff you absolutely can't see on television; it's just different and they can sell it for a lot more money. It's the same thing."
The question is: would advertising ruin the movie experience? According to John Horn in the Hollywood Reporter: “Los Angeles moviegoer Leonard Kolod recently spent $9.50 for a Beverly Center showing of new Line’s “A History of Violence,” only to be bombarded by nearly a dozen advertisements and previews preceding the film. Kolod complained to Loews Cineplex, but rather than placate its customers, “Loews admonished Kolod in an email that ads 'have been part of the cinema experience for many years,' and are necessary to offset costs as 'screen actors are now receiving upwards [of] twenty million dollar salaries per movie and the films themselves are costing over one hundred million dollars to produce.' To which the Leonard Kolod's of the world will say, 'next time, I’ll wait for the DVD'” (Horn, The Los Angeles Times, “Hollywood should rewrite own script” December 26, 2005).
Then again maybe they won't. Maybe they will wait for the Blu-ray, but in actuality I think developments like the one elucidated below will offer theater owners more flexibility to deal with the challenges.
Kodak developing digital theater software | CNET News.com
Excerpts:
Kodak Digital Cinema and National CineMedia, a partnership of the three top U.S. movie theater chains, on Wednesday said they are developing theater management software to automate digital cinema systems now being installed at movie theaters worldwide.
Advertising Age - CBS to Stream Prime-time Shows Through Innertube
Excerpts:
Just weeks after ABC touted the success of its online rebroadcasts of first-run shows, CBS has followed suit and will offer several of its top prime-time shows online, through the network's broadband channel, Innertube. The network will offer up "CSI," "CSI: Miami," "CSI: NY," "NCIS," "Survivor" and "Numb3rs," along with newcomer "Jericho."
One of the main challenges for media firms in the Creative Economy is market retention. "The media content provider resembles a hunter gatherer in that for the creator of the media you start from scratch and need to capture or kill your prey each time, if you wish to prosper," says William Drury, Senior Marketing Consultant formerly with IBM EMEA, "You are only as good as your last effort. Quality, measured as you wish, is primary."
A thousand options fragment the audience for mainstream broadcaster and advertiser alike. What this means for mainstream broadcasters is that marketing television shows that appeal to broad audiences has also becomes more expensive. One of the growing trends in prime time television today is how TV shows with a broad demographic are marketed more like films. "The Premier means everything, says Megan Wolpert, executive VP of Spyglass Television, "just like it does in the film and the music industry. Today, television is starting to put much more stake into the premier of a show. So where it use to be the box office weekend would make or break how many screens you stay in over the next couple weeks in order to see if you can make more money. Today the same phenomenon is happening with television."
What this means for advertisers is that they are paying more to reach those broad audiences, while their effect is less potent. Companies that continue to capitalize on customer relations and experiential marketing are the real winners in this scenario. Market retention is the key to deriving sustainability in the disposable and immediate age of rapid product turnover and new media. Brand awareness or identity alone are no longer enough.
Advertising Age - McKinsey Study Predicts Continuing Decline in TV Selling Power
Excerpt:
"Should everybody shift 30% of their dollars to the web?" asked Amy Guggenheim Shenkan, senior practice knowledge specialist in McKinsey's San Francisco office. "No. There wouldn't be room today if everybody wanted to shift online. Last year [online media] was $12.5 billion, by end of 2007 digital advertising will be $18 to $25 billion. ... So we're seeing a lot of growth, but if you want to match up share of attention and share of dollars it couldn't happen for that reason." The TV ad industry is a $68 billion one.
Reality television is a result evolving market forces. Certainly, the rising cost of production and the demand for content with the worldwide proliferation of cable is one obvious driver. Reality television especially of the type that is integrated with the Internet or with direct viewer response is also part of the evolving trend towards interactive media with the younger demographic. Interactivity is also part of the gaming generation's fascination with role-playing. Sims in the world of traditional television content is found in the form of reality television. According to John C. Beck and Mitchell Wade, in their study of the gaming generation's attitudes towards business, entertainment software has trained this generation to expect a heightened relationship based on immediate rewards or consequences with media and the world at large. I believe this ethos towards role-playing and interactivity is seen in the form of reality-based shows like "American Idol" and the "Apprentice".
With advertising in turmoil on broadcast TV, reality shows - like American Idol or even Tommy Hilfiger's less successful "The Cut" - take product placement well beyond a can of Coke enjoyed by our favorite television show's character. "Idol was simply a marketing tool for me to sell records," says Simon Cowell on "Larry King Live." "The show was one thing but it was actually my record label, which was the most important thing. So, my background is I run a record label, and I still run a record label and that's really my passion.
The real winner of "American Idol" is Cingular Wireless. Cingular has an exclusive deal with the show's producers that let customers text their votes instead of trying to call in on busy lines. In Season Four last year, 41.5-million text votes were sent in; Cingular charges between $19.99 per month for a text package with 2,500 messages included and 10 cents per message on a pay-as-you-go plan, meaning the company raked in as much as $4.15-million in text messaging fees from American Idol votes alone last year. When the Apprentice was at its peak, Ad Age writes, Yahoo's product placement was a solid success, "After the ice cream challenge during the second season, viewers were told to go search Yahoo, and “Within three hours of the end of the show, the term ‘Apprentice Ice Cream’ was the third-most-searched term on Yahoo that day. By 5 o’clock the next afternoon, the ice cream was sold out,” says Yahoo VP Jim Moloshok. And the results kept coming. After the Levis challenge, “[f]our days after that episode ran, viewers were still searching Yahoo avidly for ‘Apprentice Jeans’ to get a copy of the catalog. And "Apprentice Jeans" was still ranked No. 1 among Yahoo Web searches,” AdAge reports. Using secret tracking devices, Yahoo discovered that “The core demographic for the ice cream was 21 to 34 years old. For the jeans, it was 35 to 44.” Yahoo VP Moloshok says, “If you can complete the loop, product placements like Mark Burnett is doing are one of the most effective ways to get people engaged with a product.”
Now CNN like MTV Flux are taking "reality" one-step further implementing an infrastructure for user-based content.
Advertising Age - MediaWorks - Dell to Sponsor CNN's 'Citizen Journalism'
NEW YORK (AdAge.com) -- At a time when much of the digital media world's focus is on how to monetize user-generated content, CNN has signed Dell as a major sponsor of its foray into citizen journalism -- iReports and the CNN Exchange program.
Guardian Unlimited Business | | MTV hooks up with Google
MTV is to supply segments of its programmes to the thousands of websites and blogs affiliated with search giant Google.
MySpace a launch pad for next-gen media biz
Excerpts:
It's too soon to know the future of paid content downloads on MySpace, having recently launched its first offering: $1.99 downloads of the Fox series "24," sponsored by Burger King. However, paid search represents a considerable revenue-generating opportunity for MySpace and a search partner.
News Corp. sculpting bold plan for growth
Excerpts:
News Corp. in the past 12 months has been forging media's future by buying and riding the likes of social networking leader MySpace.com and video gamer IGN to meteoric heights while also enjoying record performance levels at its core broadcast and cable television, film and print operations, even as they struggle to reinvent their business models.
FT.com / Companies / Media & internet - News Corp to sell films online
Excerpts:
News Corp’s internet properties, including MySpace.com, are to start selling Fox films and television content on a download-to-own basis in an effort to create a foothold in this potentially huge new digital market.
News From broadcastbuyer.tv - GDC Technology Delivers Monster House In Digital 3D In Asia
GDC Technology says its proud to be the first to deliver Columbia Pictures’ Monster House in 3-D on its flagship SA1000 DSR Digital Film Server in Asia.
Dolby pushes 3D cinema scheme, News at CNET.co.uk
Dolby Laboratories, best known for its cinema surround-sound systems, on Monday said it has teamed up with German virtual-reality company Infitec to develop a three-dimensional projection system for cinemas.
CinemaTech: From AlwaysOn: `How Far Will Consumer-Generated Media Go?'
New York Times writer, Scott Kirsner, stopped in at the AlwaysOn conference at Stanford and posted a report about the panel 'How Far Will Consumer-Generated Media Go". The panel featured YouTube co-founder Chad Hurley, the CEO of MP3 Tunes, and execs from Yahoo and Sony Pictures Digital Entertainment.
While I do believe distribution becomes more fluid with the continued evolution of digital technology along all points of the media supply chain, I do not believe that digital technology will democratize film making. Multinational corporations and conglomerates have the scope and capital to market and distinguish their product from the glut of global competitors (whether that competition is created by Chinese manufacturing or American independent filmmakers). Certainly the segmentation or "narrow-casting" currently developing with the expansion of world-wide cable and the internet creates spaces for creative expression produced, say, less expensively with digital technology; however, outside of those exceptions eventually marketed to broader audiences, digital technology will not disturb media firms' control over the organs of distribution. The question ALWAYS remains: Who reaps the benefits of copyright? Is it the content creator or the media firm that owns the intellectual property that the content creator sold to the distributor for a profit?
Indeed, media firms may be held captive at choking points along the supply chain - a consequence of handing their brands over to stars or whomever - but media firms are more apt to forge strategic partnerships or acquire internet portals like Amazon et cetera, then wither away and die. In an economic environment starved for content, the power does shift to the content creator or more specifically, whoever owns the copyright, but corporations are the ones most likely to benefit from this paradigm; because they can exploit their natural economies of scale. The myth of democratizing filmmaking is techno-utopianism. The creative economy needs a mixture of small, medium, and large size creative industry firms.
Excerpts from CinemaTech:
Advertising Age - MediaWorks - MRI: DVRs Are on the Rise
Excerpts and Highlights:
CanMag- Box Office- Monster House 3D Box Office Exceeds
"3D in digital is much better than 3D in film. The technology in digital doesn't create the headaches that you have in 35 mm, because your mind doesn't have to adjust for imperfections in the speed of the film between the two projectors," said Joe Berchtold, president of Technicolor Electronic Distribution Services, when I interviewed him in February this year. A heightened entertainment experience, which includes, 3D, may be the only way that theaters can compete in the new age of digital multideliverables, video games, home theaters, and waning theatrical admissions.
The results of Chicken Little and now Monster House confirm this likelihood.
Read Excerpts:
Digital Media Asia: News - NEC launches Starus NC2500S digital cinema projector
Excerpts:
NEC Corporation of America, a Subsidiary of NEC Japan, has the premiered its NEC Starus NC2500S Digital Cinema projector with DLP Cinema technology from Texas Instruments.
The Starus NC2500S is claimed to be the world's brightest DLP Cinema projector for large-sized screens - 49ft wide or larger. Delivering 2K resolution and high contrast ratios (2000:1), the Starus NC2500S digital cinema projector is easy to operate and requires minimal maintenance, NEC said.
The company believes the Starus Digital Cinema solution will enable theatres to deliver enhanced digital images to screens of all sizes and simplify theatre management, while reducing costs with the up to 99.999 per cent continuous uptime with fault tolerant multiplex/hub servers. The Starus Digital Cinema solution also allows theatre operators to manage playlists, upload features and perform playbacks from anywhere in the multiplex, it was noted.
The complete family of Starus Digital Cinema projectors also includes the Starus NC1500C for medium-sized movie screens, and the Starus NC800C for small theatres, screening rooms and post-production facilities.
"Advertising is in turmoil because of new technology," says Dave Morgan, CEO of Litton Entertainment when I interviewed the leading independent distributor in February this year. More than fragmenting audiences new media allow viewers to bypass advertising altogether.
Excerpts from "Amazon Readies Launch of Ad-Free Video Download Service":
A year in the works, the e-tailer's digital-video-download service is set for a mid-August launch and will feature a subscription service and a la carte movies and TV shows. Yes, folks, that's more ad-free TV for sale.
The service, which is referred to as Amazon Digital Video -- or Amazon "DV" -- has evolved over the past year from a music-themed offering to a video-centric one, according to production-studio and TV-network executives briefed on the plans. The reason? Apple, these executives said, already commands such a large share of digital-music sales that Amazon felt it would be too difficult to break into the market.
Amazon's reputation for ease of use could help it capture the video-download market, much as iTunes did with its simplicity in the music market. If that happens, it's sure to speed up consumers' comfort level with paying for ad-free TV content -- at a time when networks are trying to launch their own ad-supported video-on-demand plays. ABC, for example, has offered online versions of its shows that allow the advertisers to ride along and has plans for a more sophisticated offering in October.
Revenue from licensed digital-music distribution doubled in 2005 to $653 million, according to PricewaterhouseCoopers, which estimates that by 2010, digital music will be a $20.7 billion market. In contrast, the firm said consumers spent only $1.1 billion on online movie-rental subscriptions and $1 million on digital-streaming movies in 2005. Digital-streaming services are expected to outpace online rentals, by 2010 generating $400 billion in annual spending while online rentals will be a $3.2 billion business.
Amazon owns IMDb.com, the database of Hollywood information, and has been trying to get into the content creation business. Its first foray is a promotional program called "Fishbowl," a series of Bill Maher-hosted interviews, sponsored by UPS and Cingular. Mr. Maher's guests include moviemakers, actors and authors -- all of whose products can be bought on Amazon.
New York Times published a piece today "Studios Shift to Digital Movies, but Not Without Resistance" by Scott Kirsner:
The product market for digital cinematography has established first entrants like Panavision and Thomson Grass Valley ( and Arriflex), but writes Scott Kirsner:
"[M]any new cameras are on the way, from established companies like the ARRI Group of Germany and a start-up, Red Digital Cinema."
Also cited:
“We’ve reached what may be looked at, five years from now, as a tipping point in the use of digital cameras,” said Curtis Clark, a cinematographer who is chairman of the American Society of Cinematographers’ technology committee."
Aside from technological advances in image quality vis-à-vis 35mm, I would add that digital acquisition is reaching critical mass as the gaming generation of below and above-the-line creators and technicians enter their "journeyman" or productive years. Unlike their predecessors, this generation does not have the residue of the long-standing infrastructural culture war between film and "video".
The cost savings of newer technology are often emphasized by OEM's, and certainly the viability of digital technologies arises primarily from the growing emphasis on solving the endemic vagueness and inefficiency in Hollywood financials. This trend is ultimately a result of the emerging Creative Economy. The engine of economic growth in the developed world is sustained creativity and the production of high-value intellectual property whether pharmaceuticals, video games, or movies.
In the shift to digital, infrastructure is often overlooked by commentators; while emphasis is frequently placed on the efficiency and aesthetics benefits of newer technologies. As the gaming generation matures, the industry will continue to develop a culture of technicians with dramatically different training cycles and models then its traditional and waning culture of apprenticeship. OEM's, however, are not in a rush to push out traditional acquisition technologies, unless they rely solely on digital for revenue streams. In fact, revenue streams inform the marketing strategies and angle of manufacturers when it comes to their positioning on newer digital technologies. Are they still making money from traditional technology? Then why disparage film. Are they a diversified? Then why not emphasize their choice. Common wisdom in business is that the most profitable years in a technological lifespan are the last years when there is less money invested R&D. Then, it's pure profit.
Here is a summary of upcoming pieces in my four part series on digital technology and emergent media trends for 2006:
The second installment will focus on the changing nature of our industry’s below-the-line labor market vis-à-vis digital acquisition and post, and how newer technologies are transforming our industry’s culture and training cycle. I will illustrate how our industry is moving from a culture of apprenticeship to a culture of technicians, and how this development fits into the larger context of globalization and the creative economy.
The third piece will focus on growing demand for greater clarity and efficiency in the way that Hollywood and other creative industries do business. I see the viability of digital technology as part of an emerging trend in Hollywood towards solving the endemic vagueness around creative financials that are symptomatic of our outmoded ideas about creativity.
The fourth piece will focus on emerging markets and the changing nature of content that is resulting from these newer technologies and other generational and economic trends.
Cheers,
Alexa D. O'Brien
In February of this year, I interviewed Joe Berchtold, president of Technicolor Electronic Distribution Services about his company's digital cinema roll out plan. Technicolor is the only digital cinema provider that offers Sony's 4K digital projectors.
John P. Robinson and Geoffrey Godbey have already noted how we are shifting from the “consumption of goods” to “the consumption of experiences.” Video games and 3 D Digital Cinema are a continuation of the trend towards interactivity and heightened experience that have evolve with the Creative Economy and, more specifically, the emerging ethos of the gaming generation of letters X, Y, and thereafter.
The economic reality of interactivity and heightened experience is punctuated by the fact that "Chicken Little did two and half times the box office per screen in 3D versus what it did in 2D," says Joe Berchtold, "3D in digital is much better than 3D in film. The technology in digital doesn't create the headaches that you have in 35 mm, because your mind doesn't have to adjust for imperfections in the speed of the film between the two projectors." A heightened entertainment experience, which includes, 3D, may be the only way that theaters can compete in the new age of digital multideliverables, video games, home theaters, and waning theatrical admissions.
On May 4, 2006, Sony issued a White Paper on 4K Digital Projection System that can be downloaded at DCinemaToday.Com
Every Oscar for Best Picture since the first Academy Awards in 1928 has honored a motion picture recorded on film from the Eastman Kodak Company. Since the dawn of the motion picture industry, Kodak has served as a driving force in filmmaking science and technology, providing negative, print, and sound film, digital intermediate post-production work, and digital cinema products and services. In a November 2005 Lehman Brothers Equity Research Report, analysts Sabbagha and Talbott, estimated that Eastman Kodak earnings from entertainment film revenues were $1 billon annually, forty percent from their origination stock and sixty percent from their print stock. I wanted to learn more about how Kodak intended to protect is legacy brand in the midst of the emerging digital motion picture marketplace. Last month, I spoke with Bob Gibbons, Director of Marketing and Communications at Kodak Digital Cinema.
Alexa O'Brien
How has Kodak been preparing for the digital marketplace in regards to motion picture film?
Bob Gibbons
Let me just give you my view of digital cinema, because I have been involved with it since the beginning at Kodak. Around 1980, probably around the time of Disney's TRON, postproduction started going digital. The problem with computers in 1980 was that you needed a lot of power. You needed silicone graphics. Even if you had big computers, the quality of the postproduction, the special effects and so forth, was far less than film quality. So we said, why don't we come out with some sophisticated scanners and recorders to help maintain the quality of the product? So, we came out with a brand called Cineon. We also opened up a laboratory so we could improve those products and that was Cinesite, an effects company. As it turns out, other people started to come out with products. Pretty soon, there was a lot of good quality capability out there. Prices came down and there were more competitors in the marketplace.
Then we said, maybe we don't need to be in the product side of things. Maybe we ought to be in the service side of things, and continue to do effects. So we have two digital service companies: one in Hollywood called, LaserPacific, and one in London called, Cinesite that has done effects for Harry Potter and Narnia.
Excerpts:
Beginning on Tuesday, March 21 in Las Vegas, the Motion Picture Association of America, Inc. (MPAA) will host a technology booth at TelecomNEXT, featuring several companies who will display some of the latest online distribution platforms and filtering tools which could assist the telecommunications industry and play an important role in the emerging legitimate digital content distribution markets. This is the first time that the MPAA has had a presence at this event which is important in bringing business and technology of communications and entertainment together.
Representatives from Audible Magic, BitTorrent Inc., CacheLogic, Peer Impact, Red Swoosh and Thomson Content Security will be on hand to demonstrate methods their companies have developed to facilitate legal online movie distribution and to protect copyrights in a digital environment.
Since its inception as catalyst for cinema’s transformation from black and white to color, Technicolor’s history now spans ninety years in the motion picture industry. Even as parent, Thomson, leverages the rainbow’s magic brand to advance its digital cinema venture, Technicolor still processes over five billion feet of motion picture film a year. DreamWorks, Sony Pictures, Universal Pictures, Warner Brothers, and Twentieth Century Fox have all signed agreements to use digital projection systems from Technicolor Digital Cinema on five thousand screens in the United States and Canada; and under the terms of a strategic understanding with Century Theatres, Technicolor will begin to install digital projection equipment with a beta-test deployment of ninety to hundred-and-twenty screens, in the first quarter of 2006. With an initial rollout plan for complete digital projection systems on up to five thousand DCI-compliant screens over the next three to four years, Thomson intends to deploy at least fifteen-thousand digitally-equipped screens in the United States and Canada over the next ten years.
As president of Technicolor Electronic Distribution Services, Joe Berchtold is responsible for the strategic development, growth, and operations of the Thomson Services division worldwide, including all aspects of Technicolor’s digital cinema initiatives, on-demand content, and IPTV distribution services. Since joining Thomson in 2003, Berchtold has been co-head of strategy and acquisitions, leading key initiatives that include the acquisition of DirecTV’s set-top box business; the company’s investment in Content Guard with Time Warner and Microsoft, where he now sits on the board of directors; and the forging of an agreement with VeriSign to jointly develop an online content authentication and authorization service bureau to support secure delivery of electronic entertainment content over digital networks.
Alexa O’Brien
Do you think digital cinema will reverse the declining box office trend?
Joe Berchtold
Well, I think that the hope of that is what has driven a lot of the energy behind digital cinema over the past year. I think people have come to realize that the savings from digital cinema on the cost side are some ways out, and the real opportunity here is the top line. It's getting customers back. If you think about a movie theater as a retail business, it’s among the most constrained retail businesses you can imagine from a merchandising standpoint; because as a physical reel of film is tied to a physical room, there’s just no flexibility. Digital inherently creates a lot more flexibility. People are talking about some of the things. You can add more screens. You can move screens. All of which will help on the margin. But, we also think, and I’m not creative enough, but we also think that five years from now, what are some of the most creative people in the world going to have figured out to be able to take advantage of this technology?
According to Sharon Waxman's piece, "Movie Slump Stirs tensions in Hollywood" in the New York Times:
The decline at the box office has been the subject of debate all summer. Attendance has been down even more than revenue, a dip of 12 percent from last summer, according to Exhibitor Relations, which tracks box- office data.
John Fithian, president of the National Association of Theater Owners, accused chairman of the Walt Disney Company, Robert A. Iger, of leveling a "death threat" against his industry. He was responding to a statement by Mr. Iger to Wall Street analysts this month that movie studios need to accommodate changing consumer demand by releasing films simultaneously in theaters and on DVD.
Why?
It would substantially weaken the marketing potential of the theatrical release for the ancillary markets," [Fithian] added, "and it would devalue Hollywood movies.
Fithian attributed box-office drop to poor product, not a growing consumer preference for at home viewing.
