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Exec Has Positive Outlook for Digital Movie Delivery

January 16, 2006|Julie Tamaki | Times Staff Writer

Most moviegoers just want to know what films are playing. Michael Joe wants to know what's playing the films.

As the Universal Pictures executive in charge of its digital cinema initiatives, Joe is more interested in the projection booth most theater patrons never see.

Digital cinema backers say the transition from expensive 35-millimeter film reels would change the movie business in subtle but profound ways. It would be cheaper in the long run and offer sharper pictures.

But digital distribution also would allow more flexibility in tailoring movies to different audiences and offer greater protections against piracy.

In July, Hollywood's major studios hammered out technical standards for digital movies.

Technicolor Inc. and a competing coalition led by Access Integrated Technologies Inc., or AccessIT, and Christie Digital Systems Inc., have been inking deals with studios to help cover the $85,000 cost of installing the systems at theaters nationwide.

Universal has signed agreements with both vendors and anticipates distributing some movies digitally by the middle of this year. Joe, Universal's executive vice president of Business Development and Strategic Planning, discussed the transition.

Question: How do you see digital cinema fitting into Universal's plans?

Answer: We believe digital cinema is -- over the medium to long-term -- the future of the exhibition business in the way our films will be seen in movie theaters. It's very important to us in terms of making sure the presentation is of the best quality possible and that the system that's designed and ultimately installed in theaters makes sense for our business from an operational standpoint.

Q: Universal has signed agreements with each of the competing vendors. What are the key differences, if any, between the systems being offered by Technicolor and by Christie and AccessIT?

A: From a technology standpoint in terms of what consumers will ultimately see on the screen, they won't be all that different. Both companies will be building systems that meet the Digital Cinema Initiatives' technical specifications that were created for digital cinema.

Q: Do you think the roll-out of digital cinema can work with multiple vendors or will it make the process too complicated?

A: I think it will work with multiple vendors. That was really one of the main reasons we as the studios collectively spent so much time working on the specifications for digital cinema. We know all the equipment being built for digital cinema will work in a certain way so that we're creating only one format for digital cinema exhibition and not creating lots of different formats that will end up being very inefficient and costly for us.

Q: How long do you predict it will take for a nationwide roll-out of digital cinema?

A: I think you'll start seeing meaningful installations in 2006. By the end of 2006, there will be somewhere between 500 and 1,000 digital cinema systems in the marketplace. There are 35,000 theater screens in America. We're probably looking at somewhere in the five- to 10-year timeframe before you'll see the vast majority of those screens converting to digital.

Q: What do you view as the biggest obstacle to conversion?

A: It's a complicated process in that to lay out a digital system and make the economic model work, you have to have arrangements with the studios, you have to have arrangements with exhibitors, you have to buy equipment from lots of different manufacturers. And then [there's] the process of actually going into the theater and installing the systems. It's complicated and I think that complication has been part of what has caused it to take as long as it has to get going, but I think we're at a point ... where a lot of those problems have been solved.

Q: Do you think digital cinema is compelling enough to reverse the box-office slump?

A: I think digital cinema will make the moviegoing experience more compelling for consumers. The image they will see on screen will be of a higher quality and a more consistent quality. One of the great things about digital cinema is that the image looks as good the 500th time as it does the first time. I think we all know with film print there is a general sort of erosion or degradation of the quality of the prints over time.

Q: So you think it will be compelling enough that folks will say, "Hey, I really want to go see movies again."

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