Digital Hollywood

October 1, 2008 - Three movie exhibitors (Regal, Cinemark, AMC) announced that they have obtained the backing of five Hollywood studios (Lion's Gate, Paramount, Twentieth Century Fox, Universal Pictures and Disney)  to help finance the rollout of digital cinema equipment, giving it the critical mass it needs to make products like 3-D cinema widely available.

Under the agreement, the studios will help defray the $1 billion it will cost to install the expensive digital projection equipment. With this arrangement, the three big chains will be able to outfit several thousand of their combined 15,000 screens (est. cost $70,000/screen) next year with the technology, with a goal of converting almost all in three to four years.

Digital projection would cut millions of dollars in annual costs for the studios by eliminating the need for film prints. It would give theater owners more flexibility to move films on and off the screens they operate. Digital projectors are also crucial to the rollout of equipment needed for 3-D movies, which Hollywood is increasingly planning to produce.

The financing package ($1 billion) will be led by J.P. Morgan Chase and Blackstone and paid for over eight to 10 years.

Competing against this consortium is Sony who is also trying to get theaters to adopt its own digital technology. Sony has previously announced its own agreement with Sony Pictures, Twentieth Century Fox and Paramount, to provide exhibitors with Sony's own digital projector system.

That group plans to roll out Sony "4K SXRD" projectors in theaters in North America, Asia and Europe. Sony's projectors have more than 4000 pixels per horizontal line whereas most digital projectors on the market display 2000 pixels per horizontal line.

September 12, 2008 - A consortium of studios and consumer-electronics companies is trying to kickstart the market for digital movies and other content by making it more convenient for consumers to use.

The initiative, tentatively called the Digital Entertainment Content Ecosystem, will allow consumers to use their online entertainment files much like email -- buy it once and access it anywhere. The goal is to also ensure that digital-entertainment files play on any device.

The group plans to create digital rights "lockers" on the Web that will let consumers tap into their libraries of entertainment wherever they go. Consumers also will get the right to make digital copies of movies or other entertainment files for an unlimited number of household devices such as computers and video players, as long as the machines are registered to that consumer. They also will be able to burn onto DVDs copies of movies they buy.

Studios participating include Warner Bros; Paramount; Universal and Sony. Other companies on board include Comcast, HP, Intel, Microsoft and Toshiba. Walt Disney and Apple have decided not to participate.

The consortium declined to say when it will introduce its first products to consumers, but it plans to disclose more details in January at the Consumer Electronics Show in Las Vegas.