Breaking News: Quanta DGT Recovers Part of Their Stolen Digital Cinema Equipment

A truck seized in Belo Horizonte, Brazil was filled with digital cinema equipment stolen from Quanta DGT

A truck seized in Belo Horizonte, Brazil was filled with digital cinema equipment stolen from Quanta DGT

The thieves who made off with more than 120 screens worth of digital cinema equipment from Quanta DGT could run, but they couldn’t hide. Actually scratch that. Apparently they could run, but they couldn’t hide all of the digital cinema devices they stole from the Latin American integrator earlier this month.

When police in Belo Horizonte, Brazil stopped a semi-truck on Wednesday for further examination they discovered at least 40 digital cinema projectors and servers inside. Police pulled the truck over to inspect the lock on its 11 meter (40 foot) trailer, but when they stepped away to check the driver’s documentation, he managed to run away, leaving his cargo behind. Naturally the police wanted to investigate the contents of the trailer and upon opening it they discovered it was packed with Barco, Dolby and Doremi cinema equipment, all of it stolen from Quanta DGT.

The original theft took place from Quanta DGT’s warehouse in Rio de Janeiro, Brazil where the digital cinema kits were prepped, packaged and loaded onto trucks for delivery to exhibitors beginning on February 2nd. On or about February 1st the equipment was offloaded by thieves who used their own transport to haul the stolen goods away. Since then the crime has been under investigation by Brazilian law enforcement, including the Delegacia de Roubos e Furtos de Carga (Department of Robbery and Theft of Cargo).

Authorities are now tracing ownership of the seized truck whose original owner in Rio de Janeiro sold it to someone in Belo Horizonte, the sixth largest city in Brazil some five hours away by car. Law enforcement will continue to investigate the heist in hopes of recovering the remaining stolen equipment. Quanta DGT is offering a generous reward for any reports, anonymous or otherwise, leading to the location of the stolen devices. (And by generous, we mean enough to actually outfit a cinema auditorium of your own).

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Kodak Finalizes Deal With Studios To Save Film

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In news that is sure to make the likes of Christopher Nolan and Quentin Tarantino rather happy, Kodak announced earlier today that they have finalized a deal to continue supplying film stock to all six major Hollywood studios; 20th Century Fox, Walt Disney Company, Warner Bros., NBC Universal, Paramount Pictures and Sony Pictures.

The agreement was reached after roughly six months of negotiations, beginning last summer after studios guaranteed the purchase of set quantities of film stock over the course of several years. The way it was reported at the time, even by us, it seemed as if it was a done deal. Apparently, contractual terms still needed to be worked out, and today’s press release is merely the culmination of those discussions.

The pact will enable Kodak to keep its motion picture film manufacturing facility open for business. As recently as the middle of last year it looked as if Kodak might have to shutter the plant, which the company says costs a minimum of USD $50 million per year to run. Sales of the company’s motion picture film have dropped 96% over the last 10 years due to the rise of high-end digital technologies for production, distribution, exhibition and storage. The demand for film stock dramatically decreased during the last several years as most movie theatres around the world fully adopted digital projection.

Kodak is now the industry’s only remaining film manufacturer. Likewise, Fotokem is the sole motion picture lab in Los Angeles capable of processing film stock.

Kodak CEO Jeff Clarke told the Wall Street Journal the company was “very close to the difficult decision of having to stop manufacturing film”. However, as his press release statement explains:

“With the support of the studios, we will continue to provide motion picture film, with its unparalleled richness and unique textures, to enable filmmakers to tell their stories and demonstrate their art.”

Indeed, besides Nolan and Tarantino, directors such as J.J. Abrams, Judd Apatow and Martin Scorsese were among those who pledged to continue shooting their movies on film for as long as it was possible. They publicly urged studios to reach an agreement with Kodak to ensure the survival of the medium.

Meanwhile, Kodak has set out to increase demand and awareness of its motion picture film stock through a new marketing effort dubbed #FilmWorthy. The campaign is meant to highlight what movies are being shot on film, why directors are choosing the format to tell their stories and to Kodak’s “commitment to not only preserving the medium, but helping it thrive.”

Quanta DGT Suffers Major Digital Cinema Equipment Heist

Quanta DGT

More than 120 screens worth of digital cinema equipment was stolen from at least one, possibly two, warehouses in Rio de Janeiro, Brazil over the weekend, delivering a setback to the country’s ongoing digital conversion. The incident highlights the precautions taken by the motion picture industry took when adopting digital projection technology to safeguard against devices falling into the wrong hands.

Quanta DGT, a leading Latin American integrator in the midst of deploying the equipment, estimates its value at BRL R$24.54 million (USD $9 million). [Full Disclosure: I have had a past, though not current, professional relationship with Telem, a partner in Quanta DGT.] News of the heist began to circulate on Monday afternoon, with initial reports being published (naturally) in Portuguese. Details have been sketchy and thus some of what we have to pass along is purely speculative.

The stolen equipment had been prepped for installation and loaded onto trucks for transport to cinemas beginning this week. This only managed to make it easier for thieves to make off with the kit, since each auditoriums devices had been packaged together on palettes. The stolen equipment includes, though is not limited to, Barco projectors with their pedestals and lenses, Doremi servers, Dolby CP750 audio processors, automation systems, universal power supplies, Multivac hoods and even theatre management systems.

It is unclear how many facilities were involved in the burglary. One report has thieves striking a single warehouse and another has them hitting two warehouses on opposite sides of the city. The perpetrators manage to disable and/or stole the on-site security equipment. Adding insult to injury, they probably used the facility’s own forklifts to move equipment into their own getaway vehicles.

Obviously, walking off with such a large amount of heavy digital cinema equipment could not be done easily, quickly or without a modicum of planning. Because the investigation is ongoing, Rio de Janeiro police aren’t naming potential suspects or divulging any leads. One thought is that whoever pulled off the heist had to know about the existence of the equipment and what was required to haul it away, not to mention have access to such resources. The customs expediters and logistics transport service provider comes to mind. Again, this is speculation.

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Suggestions For Preventing Mobile Phone Distractions At Film Festivals

Cell Phones In Cinemas

If reader reaction to Celluloid Junkie posts is any indication of broad public sentiment, then a majority of moviegoers are infuriated by fellow audience members using their mobile phones in the middle of screenings.

Raising the topic in conversation or in posts like the ones we’ve published on CJ evokes impassioned arguments about why such behavior is selfish, disrespectful, rude, arrogant, impolite… pick whatever contemptuous adjective you’d like and it won’t be hard to find someone who agrees.

Those who feel that whipping out a mobile device during a movie is nothing to be ashamed of are significantly outnumbered. Actually answering a call and speaking on a cell phone mid-screening is unanimously despised for the most part, punishable by a long list of justifiably malevolent actions.

If exhibitors are struggling with mobile phones making unwelcome appearances in their cinemas during regularly scheduled showings, imagine how such behavior can be magnified in a film festival setting. This is especially true of special screenings held for the press and industry, where journalists must be accessible to receive last minute requests from demanding editors and acquisitions execs may need to counter offers from a sales rep or producer.

The unbridled use of mobile phones during festival screenings is so widespread that one journalist attending the 2013 Toronto International Film Festival infamously called the police to arrest offenders for possibly pirating the movie being shown.

Those who have similarly strong opinions about mobile phones being pulled out during film festival screenings are beginning to speak up – literally and figuratively. Gary Meyer, publisher of EatDrinkFilms and the recently departed longtime programmer of the Telluride Film Festival, is a self-described fascist when it comes to cell phones in cinemas.

At this year’s Sundance Film Festival, which concludes today in Park City, Utah, Meyer often preemptively warned audiences to put away their cell phones during the movie. This was in addition to the announcement made by a festival volunteer before each screening requesting that all mobile phones be silenced (not turned off) and their screens dimmed, should they need to be used during the movie.

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Sundance Provides A Perfect Environment For Industrial Eavesdropping

Sundance Film Festival 2015

One unique aspect of the Sundance Film Festival is the broad spectrum of industry professionals that attend each year’s event. Producers, directors, editors, screenwriters, craft people, acquisitions executives, journalists, distributor reps, sales agents, talent agents, and exhibitors are just some of those who turn up in Park City, Utah by the thousands hoping to find the next big indie hit.

Like many film festivals, one may spend as much time waiting in lines at Sundance as they do watching actual movies. Because Sundance holds special screenings for accredited press and industry attendees, the odds of standing in line with a contemporary, competitor, client or partner is highly likely.

At Sundance this usually means distributors of all sorts rubbing shoulders, often literally, with the very exhibitors and theatre owners they hope eventually play their movies. This creates an environment which flushes out certain trade activity rarely seen in public; distributors pitching exhibitors on current or upcoming releases and film buyers having to make programming decisions on-the-fly, and worse, face-to-face.

A typical scenario played out on Friday evening in the line for a hastily added industry screening of “The Witch“, a period horror film which has been receiving a lot of attention here at Sundance.

Queuing in the tent outside the Holiday Theatre Gary Palmucci, Vice President of Theatrical Distribution for Kino Lorber, spotted a film buyer for an exhibitor who regularly books his company’s films. Standing on opposite sides of the cattle gates used by the festival to stack audiences in Disneyland-like fashion, Palmucci asked the programmer (who we’ll keep anonymous) about his decision not to book “Goodbye To Language 3D“. The title, being distributed by Kino Lorber, is the latest film from French auteur Jean Luc Godard and is shot in 3D, a format he openly despises.

With the stage set and our characters defined, here is how the scene played out:

Gary Palmucci: Why didn’t you play Godard?

Exhibitor: (Stunned silence with a facial expression that clearly shows he is looking for a valid, non-offensive response).

GP: It’s selling out all its playdates. BAM did 1,400 in two screenings. [Brooklyn Academy of Music is usually a legit theatre]. We did really great there.

Exhibitor: Yeah I heard about that. (Looks to a colleague for assistance on what to say).

GP: Well you should have played it then. I never heard back from you and had to give it to [name of competitive art house] on the other side of town. You probably would have done better with it.

Exhibitor: Really?! [Art house competitor] is going to play the Godard? (Shoots an uncomfortable look to colleague who seems just as surprised at the news).

GP: You really should book it.

Exhibitor: Well by the time [art house competitor] is done with their run… it’s not really worth us playing it then, but maybe.

GP: Well yeah, it will already have played, but it will still get an audience.

Exhibitor: (Feeling trapped). It’s definitely something we can reconsider in a couple months, but not right after [competitor's] run.

Before the conversation (or negotiation) could come to a natural conclusion, festival volunteers began ushering audience members into the screening, the line began to snake forward, pulling Palmucci and the exhibitor apart.

Such exchanges are quite normal when distributors are pitching theatre owners on upcoming titles. However, when conducted in person, tense body language and averted eye contact can quickly make them uncomfortable. In this instance both parties were playing out their respective jobs admirably. Palmucci was pushing his company’s movie and the exhibitor was making (or defending) a valid programming decision.

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Daily Cinema Digest – Saturday 24 January 2015

Art House Convergence

Since 2008, just before the Sundance Film Festival begins in mid-January, art house cinema operators from around North America (and beyond) have been gathering for Art House Convergence. The conference is held over four days in Midway, Utah, not far from Park City where Sundance takes place.

A record 500 attendees showed up for this year’s event, representing independent theatre operators, non-profit cultural centers, distributors, and the many companies that support and work with art houses (think Vista Entertainment Solutions, NEC, Ymagis, Sonic Equipment, etc.). There was more information and news coming out of Art House Convergence this week than we can possibly cover here in the digest, so we’ll be following up on many of the leads gathered there over the coming weeks. Instead, we’d like to focus on two corporate announcements that got those at the confab buzzing.

First up was Tugg, the on-demand-movie service that allows audiences to request screenings of titles at a given movie theatre on a specific date. If enough audience members sign-up ahead of time, the film is booked and played. The three year old start-up is now partnering with New Balloon, which is being described in the media as a cross-platform media venture whose purpose is “advancing innovative storytelling technologies”. If that sounds rather subjective, or confusing, then you’ll likely be thrown by how Anne Thompson of Indiewire describes the initiative the two companies are teaming up on:

They will form a multi-million dollar Event Cinema Fund. Through the fund, both companies will provide high-impact investment capital, expertise, and other resources toward marketing and distributing culturally significant films.

Our suggestion is to read Thompson’s piece on the announcement. It’s filled with the usual buzz phrases found in such announcements like “enhance traditional release strategies”. This is no fault of Thompson, as companies often struggle to convey these types of hybrid, experimental efforts when talking to the media and thus often fall into the trap of using such language.

Thompson, who was one of the keynote speakers at this year’s Art House Convergence (and deservedly so), also reported on a more straightforward bit of news about content distributor Emerging Pictures, which was acquired by 20 Years Media Corp., a digital media company based in Vancouver.

I ran into Ira Deutchman, co-founder of Emerging Pictures as well as chairman of the film program at Columbia University School of the Arts, on the first day of Sundance. He explained the deal was meant to give Emerging Pictures the deep pockets required to take the company to its logical next level. Having helped overcome the many digital distribution hurdles alternative content and niche films often face, the next obstacle Deutchman believes will be marketing.

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Why North American Movie Ticket Prices Rose In 2014

Movie Tickets In Popcorn

A week after the investment firm PricewaterhouseCooper released a survey in which found 53% of its 1,000 respondents felt movie tickets cost too much, the National Association of Theatre Owners (NATO) reports that the average cost of a movie ticket in 2014 rose to USD $8.17.

That figure is a 0.50% increase from the USD $8.13 average cost of a movie ticket in 2013. Movie ticket prices roller-coastered in 2014 from quarter-to-quarter but generally stayed above the USD $8 mark. The second quarter saw price levels topping out at USD $8.33 before declining to USD $8.08 during the third quarter before rising once again to USD $8.30 for the last three months of the year. Fourth quarter prices were actually down year-over-year from USD $8.33 in 2013.

We have found these numbers, taken without considering any context or analysis, can be a bit misleading. For instance, many industry-watchers might assume the cost of a movie ticket declined in the fourth quarter of 2014 because exhibitors were lowering prices to attract audiences during a down year in attendance and box office. While that may account for a portion of the decline, it’s also helpful to look at the releases in theatres during the fourth quarter of both years.

In 2013, “Gravity” was doing blockbuster business on its way to Academy Award nominations and Oscar wins. Because the film was shot in 3D and with IMAX in mind, many moviegoers chose to see it in those formats, both of which come with premium ticket prices. On the other hand, in 2014, we had “Interstellar” on its way to doing decent business, which though popular on IMAX was not released in 3D, and “The Hobbit: The Battle of the Five Armies” which performed weaker than expected.

This of course is assuming that the average ticket price is calculated by dividing the period’s box office by its admissions. Historically however, NATO has conducted a survey of its members to determine the average ticket price for a quarter or year.

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Amazon Enters Movie Business With Two Wise First Steps

Ted Hope

Ted Hope was hired as Head of Production for Amazon Original Movies

In a twist of the old adage “give them an inch and they’ll take a mile”, just a week after winning a Golden Globe for television series, musical or comedy for their show “Transparent”, web giant Amazon has announced its intentions to enter the movie business by producing theatrical releases. To show just how serious they are about the new venture, the company has hired indie film veteran Ted Hope as Head of Production for Amazon Original Movies.

Amazon already produces television shows for subscribers of its Amazon Prime program. Now in a strategy that mirrors Netflix, its streaming rival, Amazon is aiming to release roughly 12 movies per year in cinemas starting in late 2015. In a window shrinking move, Amazon will premiere each title on Amazon Prime Instant Video (at least in the United States) only four to eight weeks after their theatrical release.

The tight release window may sound like a deal breaker for theatre owners, and probably is for certain exhibitors, but keep in mind the type of films Amazon intends to distribute. “The movies in this program will be ‘indie’ movies,” Amazon Studios Vice President Roy Price told media outlets in an email. “We will be looking for visionary creators who want to make original, unforgettable movies. We expect budgets to be between $5 million and $25 million.”

As Price hinted at in Amazon’s press release announcing the news, independent films have increasingly been experimenting with day-and-date releases in various forms in hopes of augmenting even the most modest of theatrical releases:

“Not only will we bring Prime Instant Video customers exciting, unique, and exclusive films soon after a movie’s theatrical run, but we hope this program will also benefit filmmakers, who too often struggle to mount fresh and daring stories that deserve an audience.”

It doesn’t take an industry expert to read between the lines and understand Price is saying if it wasn’t for Amazon coming along, some of these movies might not even get made, let alone wind up in theatres. If indie films is their goal, then the company has certainly picked the right guy to head up the effort.

Hope is a well-known, highly experienced and savvy producer with deep ties to the independent film world. If his name sounds familiar, it should. He’s produced dozens of well known movies, many of them through Good Machine, which he co-founded and ran with screenwriter and the former head of Focus Features, James Schamus. During his tenure as a producer he’s made multiple films with Edward Burns, Hal Hartley, Todd Solondz and Ang Lee, as well as “21 Grams” with Alejandro González Iñárritu. More recently he spent a year running the San Francisco Film Society and until earlier this month was the head of Fandor, an online subscription streaming service that specializes in indie movies.

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Movie Theatres Face An Inevitable Netflix Effect

Diffusion of Netflix

As we begin the new year, I strongly believe we are entering a period of great danger and even greater uncertainty. Events are unfolding within and without the movie industry that are extremely threatening to our studio.

This is how Jeffrey Katzenberg began his now infamous 1991 memo which criticized the Walt Disney Studios, of which he was then chairman, and the overall state of the film business at the time. It’s hard to believe those words were written more than 20-years ago since they are so easily applicable to the current motion picture business.

Katzenberg penned his prophetic memo in 1990 during a rainy Christmas vacation in Hawaii. The end-of-year holidays are often a time of increased introspection on a multitude of subjects that range from personal to professional, from political to religious. A few consecutive days with a couple of extra unoccupied hours and and we all turn into armchair Nietsches. Like Katzenberg, I also came to a bit of a realization during our recent holiday season about the industry we all passionately toil away in.

Actually, if recent introspective pieces by Nick Dager at Digital Cinema Report and Luke Edwards at Pocket Lint are any indication, I’m not the only one who spent the holidays ruminating about the present and future of our business. These constructive assessments present qualitative research to diagnose the recent downturn in moviegoing attendance, attributing the cause to a number of factors, including the emergence of subscription streaming media services. To these treatises I would like to add some academic theorems that can be useful in helping us determine where theatrical exhibition falls on the curve of a typical market’s lifecycle as well as models that are useful in forecasting future market conditions.

Collecting Anecdotal Evidence
Because the mathematics and theories underlying diffusion theory can be dry and didactic, translating them to existing or real-world markets can at times seem confusing. Thus, I will attempt an explanation through an anecdote which initially coaxed my mind down the path of such market musings in the first place.

During the holiday break I witnessed innovation diffusion theory in action through the promulgation and/or unfamiliarity of over-the-top streaming services such as Netflix among extended family members and acquaintances. By applying simplified diffusion theories to this qualitative research I was able to discern the current market complexities and the far-reaching consequences motion picture exhibitors and distributors will undoubtedly face due to growing consumer adoption of online video streaming services.

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