posted 12-15-2005 01:32 PM                    

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Dec. 15, 2005

Top exhibitors roll out blueprint for d-cinema

By Nicole Sperling

In a move that constitutes the largest exhibitor commitment yet to digital cinema, Regal Entertainment Group, AMC Entertainment Inc. and Cinemark USA have partnered to work on the development of a digital cinema business plan. National CineMedia, the joint venture owned by the three companies that was founded to create a national digital preshow advertising network, will manage the process under the guidance of NCM chairman and CEO Kurt Hall.

The plan will be open to all industry exhibitors as well as NCM's founding partners with the goal of driving down digital cinema costs from the sheer size of NCM's network of theaters.

"NCM's primary objective is to work with manufacturers to reduce the cost of digital cinema equipment through volume purchasing for NCM partners' 13,000 screens and other participating exhibitor screens," Hall said. "NCM will also seek to develop an efficient financing structure for the purchase of the digital cinema equipment that will be open to all capital sources and that will provide a transparent, cost-effective arrangement for exhibitors, distribution partners, capital providers and all other key constituents."

Hall added, "Once the financing model and equipment volume pricing has been established, our founding partners and other exhibitors who participate will have ultimate responsibility for deployment of digital cinema systems."


The business plan, while not fully developed, is expected to be based on a virtual print fee model, under which the studios bear the brunt of the costs for each digital print in theaters. The plan is similar to those being proposed by other financing vehicles hoping to roll out digital cinema, such as AccessIT's subsidiary Christie/AIX and Technicolor Digital Cinema. Hall said NCM's plan is an "open-book financing plan," whereby all parties can see how the contributed funds are being allocated.

AccessIT and Technicolor have signed content deals with the majority of the studios. When asked whether the NCM effort would bypass those being put forth by AccessIT and Technicolor, Hall said that he would be happy to talk to either of the parties regarding financing but has not. In-depth talks with the studios also have not taken place.

"The studios have done a great job with digital cinema through (the Digital Cinema Initiative). Now with this approach, the exhibitors are coming to the table. It's a natural point for this to happen given all the work distribution has done," AMC chairman and CEO Peter Brown said.

"This could be a win-win plan for the exhibitor members of NCM and the studios," Regal Cinemas CEO Mike Campbell said. "It could potentially give us some additional efficiencies in regards to the purchase of digital equipment and could give the studios additional cost savings. The studios have already committed to paying virtual print fees to the digital cinema initiatives already announced. We believe we can present something to the studios that's even more efficient if we can aggregate the NCM screens."

It is not clear how the studios will respond to such a plan, but theater owners are optimistic that a common goal should allow them to work with the studios.

Said Cinemark vp marketing and communications Terrell Falk: "We all want the same thing -- high-quality presentation on our screens at a reasonable cost with few technical issues. If we work together, we can come up with a positive end result."

Hall's company has spent the past three years operating a national Digital Content Network that deploys digital preshows and other live and prerecorded digital content. The company, first owned by Regal, partnered with AMC in March to form National CineMedia; Cinemark joined in July. Once deployment of the DCN is complete, its network will comprise 11,000 digitally equipped screens nationwide.

The network is not DCI-compliant at this time, but Hall said that it has the capability to become so by plugging into higher-end equipment.

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posted 12-15-2005 05:37 PM                    

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with few technical issues

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posted 12-19-2005 05:56 PM                    

quote: Steve Guttag

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If you do your research properly...it has cost TI upwards of $100 million for EACH revision of the DLP. The home market is where all the real dough is for them.

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