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Topic: Three Studios Join Technicolor in D-Cinema Plan
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Bevan Wright
Expert Film Handler
Posts: 176
From: Fountain Valley, CA, USA
Registered: Sep 2003
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posted 04-12-2005 07:21 AM
Three Studios Join Technicolor in D-Cinema Plan
Long link LOS ANGELES (Hollywood Reporter) - Marking a big step forward in the rollout of digital cinema, Walt Disney Studios, Warner Bros. Pictures and Sony Pictures have teamed up with Thomson's Technicolor Digital Cinema unit to guide their transition away from celluloid film. Joe Berchtold, president of Technicolor Electronic Content Distribution Services, will manage the d-cinema process for the studios.
Berchtold and Technicolor declined comment, and none of the studios would confirm the development, but according to multiple sources, Technicolor is set to play the role of third-party integrator and will develop a proposed economic model into a full-fledged business plan.
The plan is expected to include specifics about financing, usage and equipment, among other details.
Just as significantly, the deal would allow the technology company to approach other studios that have not yet signed up -- chief among them Universal Pictures and 20th Century Fox -- to encourage them to join the three studios. All the studios have avoided dealing directly with each other out of concern of running afoul of antitrust regulations.
The deal marks an important advance toward the rollout of digital cinema -- a process that has stalled in recent months as financing parties have pitched business models to the studios.
Digital cinema had been progressing during the past few years once the seven major studios banded together to form DCI -- the consortium designed to develop technical specifications for digital cinema.
With that process nearly completed, it was clear that a smaller group of studios had to move forward to develop financing plans, because the seven studios were worried about antitrust concerns, among other issues.
While the specifics of Technicolor's plan have not been released, the three-studio coalition initially solicited financing plans for a rollout of 15,000 screens. The request for proposals went to Technicolor, among other parties, including one group led by former Sony Pictures executive Alan Levine.
The initial deployment, according to one source, will cover the installation of 3,000 theaters nationwide and could start by year's end. The systems installed would be DCI-compliant.
According to another source familiar with the deal, a 3,000-screen rollout would cost about $200 million in total financing. The money will likely come from a combination of equity financing from the participating studios and debt financing from banks.
A studio source confirmed that each studio is contributing a significant amount of money to get the rollout going, and the studios would offset that investment with the savings from eliminating print costs.
The studios want to develop a complete and detailed plan before officially announcing it and presenting it to both the exhibition community and the Department of Justice.
Technicolor's deal with the three studios does not preclude the distributors from entertaining other financing plans. According to sources, the Technicolor deal is nonexclusive, and some believe several competing rollout initiatives would benefit the parties involved.
Technology vendor Christie, a maker of 2K digital projectors, has floated an aggressive financing plan and is looking to bring in other partners. According to one source, a few studios have shown interest in that plan.
Christie could not be reached for comment at press time.
Technicolor tried its hand at digital cinema installation a few years ago. In a partnership with chipmaker Qualcomm launched in 2000, the company had intended to provide a proprietary integration system for digital cinema. That partnership was disbanded in 2003 after the studios formed DCI to create a standard for the new technology.
Regardless of who finances the rollout of digital cinema, most observers agree that the majority of the costs will be handled by the studios. Exhibitors have been reluctant to shoulder any of the costs because most of the savings will be realized by the studios. [ 04-12-2005, 08:48 AM: Message edited by: Adam Martin ]
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