Three months after floating a proposal that would pay for movie houses’ jump to digital projection, Technicolor Digital Cinema LLC is waiting for theaters and studios to commit.
Waiting, too, is San Diego-based Qualcomm Inc., which holds a 20 percent stake in the movie venture.
At their most ambitious, digital cinema systems could deliver films to the neighborhood multiplex via satellite, and beam “alternative” entertainment like concerts into movie houses.
Other companies, such as Boeing, are working on their own digital cinema systems or components. Topeka, Kan.-based QuVis, Inc. says it has one of its digital recorders in use at the AMC Mission Valley 20.
For now, the Technicolor-Qualcomm joint venture is discussing fine points of equipment contracts with studios and theaters , two entities that have a stormy relationship. Industry observers say it will cost roughly $150,000 per auditorium to install digital projection systems.
Who will pay for the electronics is a “raging debate in the industry,” said Gary W. Garland, vice president and general manager of Qualcomm Digital Media.
Joint Proposal
Technicolor and Qualcomm, which house their joint venture in Studio City, unveiled a proposal at a March trade show that would put the first 1,000 of its systems in theaters.
Under the deal, studios would pay 75 percent of what they now pay to distribute a film print.
Theater owners would get a trade-off. Technicolor and Qualcomm have offered to install and maintain 1,000 projectors and their associated computers for 12- & #733; cents per movie ticket. The service would include bulb changes.
Garland said exhibitors, or theater owners, have greeted the proposal with everything from “Where do I sign?” to “Why is exhibition paying for any of this, because distribution is the one that benefits?”
The movie house industry, according to published reports, is facing some severe financial problems. Digital cinema vendors are talking up their systems’ potential for generating even more revenue, since they could convey alternative programming like concerts or sporting events.
But nothing will happen until movie distributors , or studios , sign on as well. And according to Garland, studio executives have their own questions, like when their 25 percent savings can go up to 50 percent or 75 percent, Garland said.
December Target
“I think when Warner Bros., or Disney, or Sony makes a commitment to put content through the systems that we would put in place, we will roll out commercially,” he said earlier this month.
Garland added he would be “very disappointed” if 50 to 150 Technicolor digital cinema systems are not in theaters by the Christmas holiday.
The company originally set October as its target, but Garland indicated negotiations were holding up the roll-out.
“Our first phase system is done essentially; it’s going through test and integration,” he said. “And we’re finishing up the conditional access piece.”
Qualcomm sees a couple of possible revenue streams from the digital cinema project, Garland said.
On top of equity in the joint venture, he said, there are equipment sales. Qualcomm has developed an encoding and decoding system that keeps a digital movie scrambled until it reaches the inside of a projector.
Garland said the compression technology, called Adaptive Block Size Discrete Cosine Transform, works more efficiently than the more-familiar MPEG standards. MPEG stands for Moving Pictures Experts Group.
Greater Detail
One trick the Qualcomm technology uses is that it breaks detailed visual areas , like an actresses’ hair , into blocks of 2-by-2 pixels, while it breaks uniform areas , like solid blue sky , into 16-by-16 pixel blocks.
He said a comparable MPEG technology breaks all areas of a screen into uniform, 8-by-8 pixel blocks.
Qualcomm has been investigating the possibilities of digital cinema since 1992 and working seriously on the project since 1998, Garland said. Like many other commercial technologies, this grew out of Defense Advanced Research Projects Agency research.
Qualcomm would also gain license and royalty fees if its standard becomes the movie industry’s standard, Garland confirmed.
At the outset, encrypted digital movies would be distributed on DVDs , ones very similar to those used in home systems, Garland said. They would be stored as electronic files on a theater computer.
Satellite distribution of movies would only become economical when about 1,500 theaters had digital cinema systems, Garland said.
And after the industry gave its blessing, he added.
