The time before, during and after any motion picture industry trade show is one filled with an endless stream of press releases. Any journalist covering the space receives dozens, if not hundreds, of emails from marketing departments and publicists during these periods filled with press releases. At some point, it becomes easy to read between the lines of such press releases, to determine which ones are truly important. But if one were to take a step back, it can also be easy to spot industry trends through the releases certain companies publish.

This was certainly the case at CinemaCon this past March, especially when it came to press releases distributed by Cinedigm. In the weeks leading up to the conference, the digital cinema deployment entity announced agreements with such exhibitors as Cinemaworld and B&B Theatres. AMC Theatres chose the company’s exhibition management system to help run their North American venues.

Then, during CinemaCon, announcements came that Goodrich Quality Theatres, Guzzo Cinemas, and Wehrenberg Theatres were all entering into deployment agreements with Cinedigm. This was interspersed with news about deals with Sonic Equipment Company and content distribution in Latin America. Shortly after the convention Cinedigm reported they had also signed Clearview Cinemas up to a deployment agreement.

Earlier this week Cinedigm thankfully aggregated much of the news about their deployment agreements into a single press release so that folks like me could keep all the information straight. It turns out I had good reason to take notice of how busy Cinedigm’s PR department has been lately – during the last quarter they signed deployment agreements with 32 exhibitors accounting for 1,402 screens at 142 sites. This is the largest number of exhibitors and screens signed during any quarter of the company’s history.

Meanwhile, Cinedigm installed digital cinema equipment on 1,885 screens over their last fiscal year – more than in any other year of the company’s Phase 2 rollout which began in March of 2008.

The release was kind enough to tally up a few Cinedigm facts and figures in a tidy bullet pointed list:

• Signed 7,657 screens overall at 750 sites
• Installed 5,919 digital screens
• Signed 59 Cinema Buying Group exhibitors, representing close to 1,450 screens
• Signed exhibitor buyer deals representing close to 3,100 screens
• Signed Cinedigm financed deals, with Phase 2 representing close to 1,000 screens

So what does all this mean? Well, I’ll go back my original point; that by taking a step back, one might be able to guage digital cinema’s adoption and deployment rate within the North American market.

For argument’s sake, let’s discount all the Cinedigm press releases about equipment deals and content distribution as nothing more than corporate boasting. Let’s also throw out the last last three bullet points from their most recent release. What we are left with is a sudden surge in mid-size North American exhibition chains signing deployment agreements with one of the market’s largest integrators. The company has contracted 1,738 more screens than it has deployed, and based on their current rate of installation these screens should be fully converted during the next fiscal year as more theatre owners are likely to sign deployment agreements with various integrators.

In other words, on a macro level, this information helps answer any lingering questions concerning the speed of the digital cinema rollout in North America, or any doubts over the adoption of the technology. It seems as if, after a global financial crisis and a shortage of projection equipment, the digital cinema rollout has truly begun in earnest. Rather than converting one or two screens in a complex for 3D in advance of a blockbuster release like “Avatar”, mid-size theatre owners are converting entire circuits.

Of course, this is based only off the news coming out of one company in a single territory. I may also be stating the obvious or the current popular belief about the region’s d-cinema rollout, rather than divining any new-found wisdom from a batch of press releases. After all, industry leaders, such as John Fithian of the National Association of Theatre Owners, have expressed similar sentiments publicly over the last several months.

So, what do you think; is it possible to use Cinedigm, or similar companies in the space, as industry bellwethers? Let us know your thoughts in the comments section below.

Cinema Digitaal, the organization overseeing the rollout of digital cinema in the Netherlands, has selected Arts Alliance Media to as their integrator to convert more than 500 screens throughout the country to digital.

Under the exclusive arrangement AAM will install and maintain digital cinema equipment and technology in a wide range of cinemas encompassing large exhibition chains and smaller art house venues. Circuits not participating in the rollout include Pathe, Euroscoop and Utopolis, as they will be handling their own conversions.

AAM will also provide their VPF deals with five Hollywood studios and is in the process of finalizing similar deals with the 14 local distributors that make up the NVF.

Cinema Digitaal was founded by the Dutch Association of Cinema Operators (Nederlandse Vereniging van Bioscoopexploitanten, NVB), the Dutch Film Distributors’ Association (Nederlandse Vereniging van Filmdistributeurs, NVF) and the EYE Film Institute. The Dutch government is funding 14 percent of the project with additional funds coming from the Netherlands Film Fund (Nederlands Fonds voor de Film) and bank financing.

With no VPF deals of their own, Cinema Digitaal needed to partner with an entity that had such agreements covering the Netherlands. Thus, it was really a choice between AAM, XDC and Ymagis.

The unique relationships that make up the Cinema Digtaal cooperative was highlighted by Giovanni Dolci, Arts Alliance Media’s Strategy & Business Development Executive, in his press release statement:

“It’s very exciting to see distributors and exhibitors cooperating to achieve a joint solution, which will allow the whole country to benefit from digital cinema. The NVB and NVF have both worked hard to reach this agreement and we’re thrilled that they have chosen AAM to implement the rollout. This will be a great real-life example of how the VPF model can be viable for many different exhibitors.”

AAM will commence the rollout this spring.

At the outset of CinemaCon this past Monday Steve Perrin gave an interesting presentation titled “Harnessing The Power of the VPF”. As the Chief Executive of Digital Funding Partnership (DFP) Perrin is in a position to know a thing or two about virtual print fees. He’ll have some help in this department now that DFP has entered into an agreement with XDC for the deployment of digital cinema in theatres throughout the United Kingdom.

The Cinema Exhibitors’ Association created DFP in 2009 to help small and mid-sized theatre owners in the UK secure funding for digital cinema conversions. The group is a legal entity consisting of approximately 400 screens at 130 mainstream and specialized cinemas operated by more than 100 theatre owners.

Perrin spent more than a year studying the country’s booking patterns, box office receipts and endless market data in an attempt to determine whether VPF deals would work for independent cinemas in the UK. In doing so he confirmed that VPFs work best for large theatre circuits which play mostly mainstream content. Smaller cinemas showing less mainstream content at varying turn rates are not as attractive to local or international distributors, making it difficult, if not impossible, for theatre owners to gain access to VPF deals.

DFP’s solution combines independent and smaller cinemas into a strategic group whose average turn rate (digital releases per year) is high enough to garner VPF deals comparable to those offered to larger circuits. It also helps interest third-party integrators.

The organization’s model is based on sharing the turn rate across all of DFP’s participating theatres. Integrators will finance upwards of 75% of the rollout, with exhibitors contributing the remaining 25% of the bill. Based on average turn rates, the cost of digital cinema equipment should be recouped in about 8 years. DFP will not be receiving any government subsidies for their rollout, which allows for theatre owners in the group to maintain their autonomy in regards to content programming. While this model will work in the UK, Perrin is uncertain whether it can be exported to other territories or countries.

When speaking to CinemaCon attendees, Perrin reported that DFP’s financing is in place and that the group’s 12 to 18 month rollout should begin in the second quarter of this year. By the end of the conference it was revealed XDC had been selected as the third-party integrator tasked with implementing the rollout. In the press release announcing the agreement, Perrin stated:

“XDC offered us an extremely competitive VPF financing solution and were very receptive to the individual needs of our members, offering them the widest possible choice of systems and complete freedom of choice of local integrator. Now the priority is to start the deployment as soon as possible, and we have agreed an aggressive schedule of 100 systems in the first 6 months.”

Besides providing d-cinema expertise and the VPF, XDC will deploy a content delivery network enabling distributors to deliver films and live content to each cinema. The company will support and monitor DFP’s digital cinema installations through their network operations centre.

Kodak Laser Projection System

Kodak’s plans to create a light engine for digital cinema projectors that can compete with Texas Instruments DLP chip reached a crucial milestone earlier this week. The Food and Drug Administration (FDA) approved the variance application clearing the way for the commercialization of Kodak Laser Projection Systems which feature Kodak Laser Projection Technology.

Maybe, like me, you’re wondering what the FDA has to do with regulating anything that isn’t a food or a drug. Don’t they have eggs to inspect and clinical trials to oversee? Well yes, they do, however they also oversee any manufactured device that emits radiation. For the most part that means lots of medical equipment and x-ray machines, though laser light displays also fall into this category.

Much in the way pilots and drivers need licenses, a federal license demonstrating basic laser knowledge and safety is required to operate high powered laser systems. For instance, night clubs with laser light shows need to obtain variances for their lighting equipment. I’m not sure exactly what kind of variance Kodak applied for, but according to Les Moore, Kodak’s chief operating officer for Digital Cinema:

“The FDA variance serves as a template to be followed by manufacturers that we license to incorporate this new laser technology.”

In other words, any OEM choosing to manufacture a projector using Kodak Laser Projection Technology will have to file an application for their own variance. Kodak announced plans for a laser projection system last September and now hopes projectors with its technology will be brought to market over the next two years.

The company’s press release and marketing material boast state that Kodak Laser Projector Systems offer motion picture exhibitors a “higher dynamic range”, “wider color gamut” and “brighter 3D viewing”. Kodak’s light engine was designed to be on par with Xenon projection systems, but at a much lower operating cost. Moore told the Hollywood Reporter:

“We expect that the projectors based on our technology will be very cost effective compared to today’s digital cinema projectors. Exhibitors can expect to replace a Xenon bulb every 500-1,000 hours, whereas we expect these laser sources to last over 30,000 hours before they need to be replaced.”

While there’s no word on how much those laser sources will cost, Kodak is touting the low cost of its laser projection solution. The company is also well aware that such announcements might have a “ripple effect throughout the cinema world”.

Projectors using DLP technology have only recently become compliant with DCI’s specification and the industry was just beginning to feel comfortable with existing d-cinema products. Kodak is introducing another, potentially less expensive, solution in the midst of a long awaited digital cinema rollout and the fear is such moves could hold up the conversion plans of undecided theatre owners.

Less than a year after the formation of The Foundation for Digitizing Dutch Cinema (Stitchting Digitalisering Nederandse Cinema), the group has found some of the financing required to convert Netherlands’ cinemas to digital. The organization was formed in July of this year by the Dutch Association of Cinema Operators (Nederlandse Vereniging van Bioscoopexploitanten, NVB), the Dutch Film Distributors’ Association (Nederlandse Vereniging van Filmdistributeurs, NVF) and the EYE Film Institute, which is the Netherlands new film center.

In July the three groups announced a €38 million (USD $50.6 million or GBP £32 million) plan to rollout digital cinema in 520 of the Netherlands’ 755 screens (243 venues) by the middle of 2012. The largest Dutch theatre chain, Pathé, is not participating in the plan because their French parent company, EuroPalaces, is handling its own conversion.

The foundation has established CinemaDigitaal, a new organization to oversee and supervise the rollout. The Dutch government will fund 14 percent of the project with the remainder coming from an undisclosed contribution from the Netherlands Film Fund (Nederlands Fonds voor de Film) and bank financing which CinemaDigitaal is in the process of securing.

Though there has been some debate in the industry over whether national funding will be allowed by the European Union, the Dutch Ministry of Education, Culture and Science has had ongoing discussions with EU officials regarding the proposed model. The Dutch government’s participation falls below the de-minimus limit for state aid and is being made possible through an ongoing national information technology initiative (Programma Implementatie Agenda ICT-Beleid, PRIMA). As well, the government’s support is earmarked for non-commercial theatres.

Like most other digital cinema deployment financing schemes, the model created by the foundation employs virtual print fees (VPFs). Cinemadigitaal will partner with an established deployment entity that already has VPFs in place with studios. They are currently in the midst of a bidding process to select an appropriate partner. Independent and Dutch distributors, no matter how large or small, will sign up with the selected deployment entity to contribute VPFs.

CinemaDigitaal will be responsible for the financing and will effectively act as a buying group for participating theatres. By consolidating the procurement of equipment purchases and support services the organization should be able to negotiate better prices and terms with vendors. CinemaDigitaal will purchase and own the d-cinema equipment and exhibitors will make monthly payments until its cost is fully recouped. The VPF will account for 64 percent of recoupment, exhibitors will contribute 22 percent and the remaining 14 percent will come from the Dutch government. Ultimately, ownership of the equipment be turned over to individual exhibitors.

In an unusual moment of industry solidarity, Dutch exhibitors and distributors spent over a year working together on a solid solution for the conversion which would suit cinemas of all sizes. To help avoid the legal obstacles that killed a similar plan devised by the Centre National de la Cinématographie (CNC) in France last year, the foundation has been consulting with specialists in competition law. The Dutch Competition Authority has already conducted a preliminary review of the proposed plan and their initial assessment found no obvious concerns or threats to competition.

This should allow CinemaDigitaal to commence with a rollout in January of next year as expected.

Digital Screen Penetration of Total Screen Base

There is no question that the IBC conference, held annually in Amsterdam, is primarily aimed at broadcasters and those that supply or service them. After all, the B in IBC stands for broadcasters. However, the conference has always managed to find room for the motion picture industry in some form. Over the past decade that has mostly meant dedicating a day’s worth of seminars to digital cinema or stereoscopic production.

For IBC2010, the conference turned to David Monk, the the CEO of the European Digital Cinema Forum (EDCF), who put together a three hour panel titled “State Of Play: Developments In Digital Cinema”. (Full disclosure: I was a member of the panel). Monk chose David Hancock to start off the proceedings in an effort to provide some context for the many speakers that were to follow. As a senior analyst for Screen Digest, there are few who know the world of digital cinema as well as Hancock and so I wanted to relay some of the key points of his presentation.

Hancock’s presentation, titled “Digital Cinema: The Tipping Point Is Coming”, was filled with valuable numbers, statistics and informative graphics. He began with the following:

• There are 109,000 modern cinema screens worldwide. Of these, 22,000 have been converted to digital. This means the industry is 21% of the way through the digitization of the world’s cinema screens.

According to Hancock’s research, digital cinema growth began in earnest in 2005 after recommendations for standards were released. Initially it was the United States that took the lead in rolling out digital as the rest of the world only tested the waters with the new technology. Digital roll outs in Europe began in earnest during 2008. ” Over the past 18 months the number in the territory has nearly tripled.

As Hancock has stated previously in reports and presentations, what has been driving the growth is 3D content. “3D really took off at a moment when the financial markets were threatening to halt the wider roll out of 2D digital cinema,” said Hancock, who predicts there is still another six to twelve months of 3D roll out still to come, with 2D conversions beginning to pick up a little as well.

In Western Europe 70% of digital screens are equipped for 3D. In fact, the growth of 2D installations has pretty much stalled. Meanwhile, the number of 3D releases worldwide will climb to 35 this year and over 50 in 2011.

In regards to digital cinema in Europe, Hancock provided the following details:

• 6,234 – the number of digital screens in Europe, which accounts for 21% of the total screens in the territory.
• France and the United Kingdom have been the stand out territories in converting to digital. France has 1,300 digital cinema screens, the U.K. has just over 1,000. Of these screens, 70% are 3D capable.

Hancock believes a more important figure to look at is the penetration of the screen base in each country. In France and the U.K. the penetration is roughly 27%, but in most European countries it falls under 20%.

A slide detailing third party integrators showed that of the 32,000 screens in Europe there are 26,000 covered by virtual print fees and only 8,000 screens have been committed to VPF rollouts. The fact that only 75% of European screens are covered by VPFs is something Hancock has dubbed the “Digital Shortfall”. Nearly EUR €460 million (USD $636.4 million) needs to be found for 6,000 screens, many of them small or independent theatres.

Hancock reviewed several programs which are helping find some of these funds including a commercial model in the U.K. which could convert upwards of 500 screens, the Europa Cinema’s MEDIA support fund and a tax credit in Italy which has yet to be approved. Most of the public sector funds are aimed at screens that would struggle to convert to digital cinema.

The title of Hancock’s presentation referred to the point when the number of digital cinema screens will outnumber 35mm screens, which he pegs at somewhere near the end of 2011. However, Hancock stated, “The actual tipping point for me is further back. It’s the point at which everyone has decided, it’s a mental process, it’s a decision by an exhibitor to digitize.”

It is Hancock’s belief that decision has already been made by most exhibitors.

Europe's Digital Shortfall (Courtesy Screen Digest)

On June 21st, just in time for Cinema Expo, Screen Digest published a report titled “Digital Cinema Moves Into The Mainstream“. Twelve pages in length and with 10 tables and charts, the report uncovered a significant “digital shortfall” in the amount of financing required to convert all of Europe’s screens to digital. David Hancock, a senior analyst at Screen Digest, authored the report and we asked him to shed some light on its key findings. (The interview appears after the jump).

Details From The Report
Not counting Russia there are roughly 32,600 screens throughout Europe for which a digital rollout will cost EUR €2.1 billion (or USD $2.65 billion). Of those screens 23,800 are covered for digital conversion through virtual print fees offered by Hollywood studios. Upwards of 5,000 screens will be handled directly by theatre owners themselves. Theoretically that means there is funding of EUR €1.65 billion (or USD $2.1 billion) for d-cinema conversions, leaving a gap of EUR €450 million (or USD $568.4 million) to cover all Europe’s screens.

And who is being left out of the funding equation? Well, it’s mostly art houses, seasonal theatres, repertory venues and mobile cinemas.

The United Kingdom and The Netherlands have set up special funding groups to help solve this problem. Support funds have also been established in such countries as the Czech Republic, Finalnd, France, Germany, and Sweden. On region in Poland plans to pull money out of a tourism fund and Italy is giving tax credits to any theatre which converts. The European Union is offering assistance through its MEDIA Programme.

Driven mostly by 3D content, the number of European screens equipped for d-cinema at the end of the first quarter in 2010 had risen 16% over 2009 to 5,333, or a full 15% of the region’s screens. Presently 75% of all digital screens in Europe are 3D capabe. Thanks to competition among France’s largest exhibitors, the country leads the 3D screen count with more than 700. The U.K. and Germany are second and third hovering around the 500 screen mark.

A Conversation With David Hancock

Celluloid Junkie: How did you come up with the EUR €450 million? Was it simply adding the number of each integrator’s VPFs (by screen) and the amount of those VPFs? Are you guessing at the amount of the VPFs as it is often hard to find the exact dollar or euro amount of a VPF?

David Hancock: I did not have to come up with a VPF figure, as I did this the other way round. I took the number of screens that are targeted by a VPF programme, added the screens that will DIY (like Odeon), and subtracted the cumulative figure from 32,600 screens (EUR total). This leaves the number of screens that do not fit into an announced model, and then I applied a EUR figure for conversion (EUR €75,000) to those remaining screens. That is the shortfall.

CJ: Do you think the shortfall might have something to do with the VPF recoupment amount being different with each integrator?

DH: No, that is already factored in. I am not saying that these screens are doomed. The point is that for this shortfall, people are needing to be creative to find solutions. And they already are. Look at the UK Digital Funding Partnership (DFP), the funding group in the Netherlands, the French support scheme. All these initiatives are filling this shortfall.

CJ: There are five main integrators in Europe right now (AAM, Digital Finance Limited, Sony, XDC, Ymagis). Do you see any additional integrators springing up to help with the digital rollout?

DH: No, I don’t see any more of this type springing up, but I do see more targeted outfits appearing, with a specific group of screens in mind, such as maybe for local municipality screens in Poland. We already have the UK and Dutch groups, that are effectively acting as third-parties to organise a group of screens together.

CJ: At the Cannes Film Festival the Société des réalisateurs de films, the French Director’s Guild, warned that d-cinema is going to dilute French culture and will force a higher turnover of films. Is this a broad fear generating a lot of discussion? There was some talk that the E.U. might get involved or investigate. How likely is that?

DH: Has been for years, and still is a concern. The European Commission has been looking at this for two years or so and is developing a support fund to help some screens. European Cinemas also has a grant system in place for digital cinema. So, the EU is involved at that level, it is also investigating various aspects of digital cinema, such as the support funds being proposed by individual countries (e.g. Italian tax credit).

European D-Cinema Growth - Q1 2010 (Courtesy Screen Digest)

CJ: The growth in digital cinema seems to be mostly in Western Europe. What about Eastern Europe? Is there any movement there or signs of an
increased rate of conversion?

DH: Yes, things are moving amongst the multiplex screens, specifically for 3D. Over 90 per cent of digital screens are 3D in Central and Eastern Europe. However, there are still many municipal (local authority) owned single screens in many Central and Eastern European countries, and these will prove more difficult to digitize.

CJ: What kind of impact is alternative content having in the E.U.? Is significant revenue being earned?

DH: In revenue terms it not yet significant. However, many exhibitors are doing it, the number is growing as the digital base (and satellite base) grows, and I believe it will keep growing in coming years. We are currently looking at a contribution of less than 1% of box office and this will probably grow to around 2% to 2.5% by 2014.

Click here to view the embedded video.

Last night I had the privilege of attending the opening night of the Director’s Fortnight at the Cannes Film Festival. The film being shown was “Benda Bilili” a fantastic documentary about a Congolese band made up of homeless parapelgics who go on to win international acclaim. Before the lights dimmed however the audience was addressed by the head of the Société des réalisateurs de films, the French Director’s Guild which organizes the Cannes sidebar.

After handing filmmaker Agnès Varda a lifetime achievement award, Malik Chibane (at least I believe it was him) turned to the audience with a serious word of caution. He was speaking in French and between what I understood and what was translated by the person standing next to Chibane I figured it was worth repeating here.

Keeping in mind, I’m paraphrasing, Chibane told the audience that “Benda Bilili” was being shown in 35mm and a film projector, which is how films had been shown for the past 100 years. However, this won’t always be the case. Very soon cinemas throughout France will undergo a digital conversion and films will be delivered on hard drives. He warned that such technology will actually decrease the diversity of films being shown in theatres, especially for French films. He stated that small theatres wouldn’t be able to convert to digital cinema, just those showing big blockbuster films.

Then as the film started a short 20 second promo put together by the SFR was shown. Again it was in French so I’m paraphrasing, but effectively the message of the animated spot was that a lack of diversity undermines the movies and that digital cinema threatened French culture. The trailer is embedded at the head of this post.

This lead me to do a little research into Chibane’s statements and the creation of the trailer. It’s not news that certain European territories such as France believe smaller cinemas will be shut out of the digital cinema conversion since they do not show big Hollywood movies. In fact, SFR made three different trailers “dealing with the consequences of the current policy of digitization of cinemas” all of which can be seen on YouTube.

The themes of the other two trailers roughly translate to “the rapid turnover of film prints seriously affects the cinema” and “the hour is grave for the cinema”. The SFR’s statement on the subject both on their website and YouTube channel reads:

Digital cinema prevents the circulation of films and thus their distribution in the long term: it must be paid for by the distributor of a movie and third-party investors. Each screen (or theatre) will choose one or the other of these third-party investors. A distributor that wants to place his film into the national network of cinemas for an extended period of time will be forced to pay several digital cinema fees – one to each of the third-party investors.

Of course, the third-party investors being referred to are integrators such as Arts Alliance or XDC which operate in Europe and the distributors are most likely small, regional distributors. On Sunday afternoon the European Audiovisual Observatory will hold a conference in Cannes titled Digital Cinema Tango to discuss the issue.

There is a slight irony here in that “Benda Bilili” was actually shot on digital video cameras and was transfered to 35mm. That aside, what do you think of Chibane’s comments and what are your thoughts on the matter of digital cinema decreasing the diversity of content being shown in certain territories?

Both at ShoWest and in the weeks leading up to the conference, I was able to speak with some of the folks over at Texas Instruments working on the company’s digital cinema offerings. They were happy to report that development of their 4K chip was right on schedule and some of the first 4K DLP projectors should be available for purchase in the first part of 2011, if not a little sooner.

For those who are just tuning into our industry, TI is the group that has been making DLP chips for cinemas since 1999.   Each DLP chip is an array of 2.2 million microscopic mirrors that move and rotate at high speeds to reflect the appropriate light and provide 2K image. Projectors based on the company’s DLP digital micromirror device (DMD) have been installed on over 19,000 movie theatre screens worldwide, giving them at least 90% of the digital cinema install base.

However, last year for the first time TI’s dominance in the market was threatened when two of the world’s largest cinema chains, AMC Theatres and Regal Cinemas, announced they would be installing Sony’s 4K digital cinema projectors. While the DCI spec may only call for 2K, the marketing advantage of 4K was hard to overcome with exhibitors who were looking for a future-proof solution. So in June of last year TI announced they would be developing a 4K DLP chip for their OEM manufacturers, which include Barco, Christie and NEC. No development timeline or release date for the new chip was given. 

TI execs are still as leery of giving out specific dates as they are about being quoted on the record when it comes to 4K, but more recently they have begun talking more openly about their development schedule. The good news is that TI is meeting their internal deadlines for 4K development. The company is looking to the early summer time frame for having the first DMDs completed for testing with OEMs. There may even be a unit or two ready for demoing at IBC, though TI is realistically aiming to go into production on the new chips in the late part of this year. Of course, that is if there are no issues with raw materials, manufacturing and testing goes according to plan.

The 4K DLP chip will be 1.38″ with 4096 x 2160 pixels and will have an equivalent life-expectancy the same as the 2K chip, which is well over 10 years. I confirmed that the entire surface area of the chip, every single pixel, will be used for both 2K and 4K imaging, meaning the talk about TI only using a portion of the pixel area was incorrect. Theatre owners who have already installed 2K Series 2 DLP projectors may be able to upgrade to 4K on-site by replacing the light engine. Initial thinking is that the same lenses used for 2K can be used when projecting 4K content.

When TI hasn’t been working on their 4K chip they’ve been developing boards for Series 2 projectors. Production on Series 1 chips ended in December of 2009 and, as anyone who has tried to buy a digital cinema projector recently knows, OEMs are quickly running out of inventory on those units. Presently one OEM is up and running with Series 2 projectors and the other two should be online in the next few months. This is also about the time that all the manufacturers will be finishing their DCI compliance testing.

In addition, TI has a split development team working on subtitles for DLP projectors; one team works on SMPTE subtitles for Series 1 projectors and the other is completing CineCanvas subtitles for Series 2. CineCanvas subtitles should be ready for Series 2 projectors in the middle of this year and SMPTE subtitles will follow before the year is out.

Is it just me, or has anyone else noticed that SmartJog has been on a roll lately when it comes to partnerships? After announcing an agreement with Ymagis in February, they formed a partnership with XDC just before ShoWest and earlier this week entered into a deal with Twentieth Century Fox to deliver digital cinema content.

The agreement with XDC mirrors the one SmartJog signed with Ymagis in that XDC will deploy SmartJog’s technology in theatres it has contracted with. Specifically, each cinema will receive a SmartJog Gateway server which will act as a central library storage device that receives the content. The two companies will integrate their solutions to better automate the delivery of digital cinema content. What wasn’t clear from the press release was whether XDC would eventually integrate SmartJog’s technology directly into their own theatre management system (TMS).

SmartJog’s solution will enable XDC, which operates primarily in Europe, to deliver digital content into its theatres directly from their mastering facility in Liège, Belgium. Additionally, XDC will also be able to deliver content to any of the more than 160 cinema complexes in SmartJog’s digital cinema network throughout Europe. Commenting on the agreement, Fabrice Testa, XDC’s Vice President Sales and Business Development was quoted in the release:

“After an initial phase of testing, we have decided to broaden our service offering to include the SmartJog solution. Our cinema customers will have the possibility to receive digital cinema content via SmartJog and our XDC Digital Content Lab will also offer to theatrical distributors a digital delivery service to all cinemas connected to the SmartJog network.”

Then this past Tuesday, SmartJog continued to expand its digital delivery empire by pacting with Fox to distribute the studio’s digital cinema content to their European network via satellite. The 160 theatre sites presently in the network consist of more than 800 screens and the company is planning to double its size to 300 cinemas by the end of the year. SmartJog’s solution allows for large digital cinema files to be transfered to theatres at an optimal speed (i.e. really fast) through satellite or terrestrial means. Julian Levin, Fox’s Executive Vice President, Digital Exhibition and Non-Theatrical Sales and Distribution, explained the studio’s reason for entering into the new relationship in the press release:

“With the rapidly increasing footprint of digital projection systems, 2D and 3D, coupled with emerging electronic distribution platforms, SmartJog has taken a leadership role toward providing a more efficient electronic delivery methodology which we believe will ultimately dominate the means by which movies are delivered to theatres worldwide.”

SmartJog began delivering digital cinema content through its network in early 2009. Since then they have distributed more than 70 feature titles as well as trailers and preshow advertising content. Since their distribution agreement with Fox is non-exclusive, the studio will presumably continue to work with Deluxe to deliver digital cinema content outside of SmartJog’s network.