Industry News :: Disney says it will help finance digital cinema

Go to Original

Walt Disney Co. on Thursday agreed to be the first movie studio to help finance the digital distribution of its movies, jump-starting a decadelong effort to usher the nation's theaters into the electronic age and phase out the treasured but expensive tradition of film.

The agreement -- between Disney's Buena Vista Pictures Distribution, camera maker Christie Digital Systems and software company Access Integrated Technologies Inc. -- calls for 150 digital movie screens to be up by the end of the year and up to 4,000 by the end of 2007.

Although that's just a fraction of the 36,000 screens in the United States, proponents call it a significant step toward a day when most, if not all, movies will be viewed digitally in theaters. Fewer than 110 screens use digital equipment today.

"We're talking about 10 percent of the screens in the United States becoming digital," said Chuck Viane, president of Buena Vista Pictures Distribution. "This makes it a very sizable toe in the water."

For viewers, digital projection offers crisp pictures that don't fade or scratch, no matter how many times they are shown. Some studio executives and theater owners hope that digital movies might draw moviegoers back after a yearlong slump in box-office receipts.

"Film is wonderful, but it degrades with each showing," said Bill Mead, publisher of DCinemaToday.com, a Web site that tracks digital exhibition. "You'll get scratches, dirt in the film and side-to-side jitters as film travels through the projector. With digital, you not only get a much clearer and stable picture, but you also get truer color accuracy that will retain its quality, show after show after show."

For movie studios, digital distribution promises savings of up to $1 billion a year in the cost of printing and distributing bulky and delicate film prints.

Digital cinema has been talked about for years as a less costly and more efficient way of getting movies to theaters. But initial skepticism from movie studios, the absence of a single standard for distributing and projecting digital movies and the lack of a clear business model to finance the rollout of costly equipment stalled the initiative.

That's starting to change, entertainment executives said.

"What's significant is that a major studio is finally getting on board," said Ken Suddleson, entertainment attorney in Century City. "We've watched this process for eight, nine years. We've seen the studios first doubting the technology, to setting technical standards this year, to finally someone saying, 'Yes, it's worth pursuing.' I think that's exciting."

Disney is the first Hollywood studio to officially support one specific system. Virtually all of its rivals, including Sony Pictures, Universal Pictures, Warner Bros. and 20th Century Fox, are also engaged in talks with other financiers such as Technicolor.

In addition to the cost savings, digital distribution allows studios to release movies simultaneously worldwide via satellite transmission, a method they hope will cut down global piracy by feeding international demand for newly released movies.

"As a practical matter, this is a technology that studios cannot resist at the end of the day," Suddleson said. "It's just a matter of time before they're all on board with digital cinema."