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.

The final entry in our series of posts presenting the comments of industry participants on last month’s Cinema Expo provides us with some valuable information.

David Hancock’s name will sound familiar to anyone having worked in motion picture exhibition or digital cinema over the past decade. He is the head of film and cinema at Screen Digest where he works as a senior analyst publishing numerous research reports on the industry.

Hancock moderated a panel discussion at Cinema Expo which reviewed the progress of digital cinema rollouts in Europe. Here are his impressions on last month’s conference:

David Hancock of Screen Digest

This was a very good Cine Expo. Thanks in great part to the efforts of Phil Clapp, the Chief Executive of UK Cinema Exhibitor Association, and Ad Weststrate, President of UNIC, who brought a strong European flavour to the seminar programming, there was much to be learned in both these formal events, as well as the more informal surroundings of the bars.

For me, there were two things that stood out at this year’s Cine Expo. The first was alternative content, which is now clearly on the map and was on most people’s lips. From almost a pariah subject a few years back, there is now strong interest from exhibitors in tracking down new content. The call for content is matched by the need for a central information point where exhibitors can view what is out there. Some exhibitors and content providers have been working in this area for many years, and it is good to finally see the rest of the market catch up with them. Their skills and experience will be in demand in the next few years. There were two panels on this, one on Monday and one on Thursday.

The second is that digital cinema is finally a mainstream movement. Left and right, people were taking deals, with integrators, projector companies, banks etc. In fact, there appears to be a projector shortage now and people are on waiting lists. It is rather strange, having spent so long talking about the future is coming, to talk about this in the present tense. It is even weirder that we are talking about projector shortages when in the past, the opposite was the case.

By June 2010, there will be close to 6,000 d-screens around Europe, close to 16 per cent of the continent’s screens and 19,500 d-screens worldwide. However, following a 3D-driven installation phase, we have seen a group of major circuits unveil their wider 2D digital conversion plans, creating a momentum for the mainstream market that is hard to resist. However, what the mainstream momentum does highlight again is the lack of solutions for non-mainstream screens. There are solutions and it requires creativity and I wanted my panel to highlight this fact.

One other thing happened at Cine Expo that may have gone unnoticed. At the EDCF meeting on Monday (I am a Board member), Peter Buckingham (Head of Distribution and Exhibition at UK Film Council) presented the results of a project he has been working on with David Dawson Pick (DDP) and more peripherally myself, sorting data presenting all film screenings in all UK cinemas and other venues over a three year period, with a variety of categories. The data has been sliced in such a way that we can analyze the suitability of a VPF mechanism on a particular cinema. The data can also be looked at in other ways and is being made freely available to all academics, researchers, companies and cinemas in Europe and elsewhere so that more detailed study can be done. One interesting finding is that there are over 2,000 venues showing films in that time period, even though there only 760 cinema sites in the UK.

I will also mention in passing that there was not enough provision for watching the football, although Barco did have the foresight to put on a drinks and footie evening on the Monday.

Frank de Neeve of Cineserver

Here is another entry in our series presenting the comments of industry participants on last month’s Cinema Expo.

Frank de Neeve is not only an experienced projectionist working in The Netherlands, but he also runs the digital cinema news website Cineserver.nl. For those whose Dutch might be a little rusty, the site can be translated by clicking on the U.K. flag in the upper right hand side of the navigation bar.

Without further ado, here is de Neeve’s thorough accounting of Cinema Expo:

Naturally this year’s Cinema Expo was the first one that was a joint production between UNIC – the European exhibitors Association and the Sunshines. I think the cooperation can work well; UNIC might not be able to manage on their own as NATO will do next year. Last year there were two conflicting shows: Cinema Expo and the week before that the European Cinema Summit in Brussels.

The European Cinema Summit was by far the worst show I have ever been to: it was badly organized, panels were boring and went on for too long, there were too many people that liked to hear themselves talk etc. No refreshments, hardly any companies on the trade show (Doremi even left after the first afternoon!). However, the topics they wanted to cover in discussions were good.

For years – although people flocked to Cinema Expo – Europeans have also been critical of the show:

• It was too American, with only blockbusters, Coca Cola sponsored seminars, etc.

• The trade show only being open a few hours a day as otherwise people might miss ‘important’ Hollywood films

• There was not enough room for discussion that reflected the cultural diversity of Europe, with traditional discussion points like piracy and windows always popping up.

You could this year already see a shift in the panels:

• Many were presented by Phil Clapp of the UK exhibitors association

• There were even two instances where headphones were handed out, as one of the panelists was speaking in French. I think this has only happened once before.

On Monday there was a session about alternative content. I thought that that session was okay, but vendors like Arqiva and in particular Smartjog, cannot really do ‘non commercial’ presentations as required. Also, the Smartjog presentation only presented their system about delivering DCP’s and did not focus on alternative content.

Like last year there was then a quiz about trends and opinions in the market. There were two panels of industry experts on stage, opinions were presented on screen and the audience then had to pick their view with a personal remote control. That was quite good.

What was really good was a meeting of the European Digital Cinema Forum where Peter Buckingham presented something that they’re doing at the UK Film Council. Basically they have gathered film data from 2007-2010 of all screenings in the UK – not only in cinema but also festivals etc. They will make that available on-line from early July onwards. What they say that you can then do is test out VPF deals with real data – although nobody can guarantee that in digital programming will be similar to 35mm. The URL is http://ukfilmcouncil.org.uk/audiencedev

The panel about piracy was quite good. Paramount gave a presentation that showed how the piracy world has evolved since peer to peer. The presentation discussed Cyber Lockers and showed how pirate sites mimic commercial sites so consumers have no idea that they’re actually accessing illegal content. The presenter also had one really eye popping demo where in just six clicks you could access illegal streaming films – current releases, starting with a simple Google query.

The seminar on the digital cinema roll out in Europe on Tuesday started with David Hancock doing a great overview – as always. The panel afterwards focused on different ways of how European countries and regions are financing the digital roll out and how the European Union can step in to help. It was a good example of how with the input of European exhibitors in the program of Cinema Expo, the show can be better tailored towards the questions that face Europeans in the industry.

At the same time there were also disappointing panels, like the totally unnecessary 3D panel on Thursday; I walked out like most other people halfway as there hadn’t been a single original thought.

The trade show was smaller than before, even though Bob Sunshine had said on Monday that figures were up. I hear that one European integrator paid over EUR €10,000 for a small booth, which is almost EUR €1000 for every hour that the trade show is open. I think this is terrible.

I like the media block that USL is developing, although it’s not ready yet. And Christie had a striking booth: no projector visible, only an entrance to a small auditorium where they were screening content. The message seemed to be: you have seen our projectors, but it’s all about the content.

Another product that I like is Doremi‘s new but long announced StreamIt. With this product you can distribute 2D or 3D satellite signals via fiber within the cinema to up to 4 screens and play out via the Doremi server. These kind of products can ease the introduction of ‘alternative content’ in cinemas, make screenings more reliable and ensure that the quality of presentation remains high.

The one real new product that was on the show was the Panavision 3D system.

I thought their presentation was very poor. John Galt and Eric Rodli from Panavision just let the product speak for itself. They did of course mention that it can also work with white screens, but they never tried to convince us why it was, for instance, better than Dolby. It was not a commercial presentation. Reactions were mixed. I heard one exhibitor who was really enthusiastic and said that the quality was good and the product cheap. But I overheard one other major exhibitor from Europe who thought that the quality was lousy.

Panavision never talked about light efficiency in relation to other systems, but did mention in the end that they used two Barco projectors, which on the big screen in the RAI is also quite logical.

We continue our series of posts featuring the comments of leading industry members about last month’s Cinema Expo with a robust entry from C.J. Flynn of DCinemaTools.com.

Theatre owners thinking about converting to digital cinema (or even those who already have) should swing by Flynn’s website for detailed information about long-term operation and maintenance of d-cinema equipment.

In the meantime, here’s what Flynn had to say about Cinema Expo:

C.J. Flynn of DCinemaTools.com

As usual, the most interesting parts for me at this year’s Cinema Expo were the the sporadic 15 minutes of hanging out with people of similar ilk, trying to stretch nuance and rumors thin enough to see a bit of truth through them. Reviewing them in my head, they seem to mostly to have centered on big-company finance and politics.

From a helicopter view, projectors and servers continue their momentum into being commodity items. This leaves some breathing room for other portions of the infrastructure. Audio systems have made inroads into the “Enhanced Experience” cinemas, which is a good sign, and hopefully one that will continue.

Unfortunately, it isn’t a “Build It and They Will Come” issue for the new Audio Processor offerings of QSC, Datasat and DMS Cinema. But it is good to see that they are incorporating fresh ideas like the Trinnov (DMS), Dirac (Datasat) and the systemic approach of QSC (plus Meyer, though their system is post AP.) I guess the common theme is getting feedback from the speakers to the processor… good feedback, that is, bringing quality assurance to those who care.

Dolby, to their credit, was casually elegant about the whole matter; they presented their 12.1 system with a work-in-process/got-any-ideas-for-us motif, letting the 7.1 take on the luster of a future standard-in-the-making that only costs $300 if you upgrade now (and politely reminding about the $700 amplifier that might need to be added to the system).

Personally, I didn’t get any emphasis from the pitch that their new 7.1 will play with all APs, or really that it gives special advantage to the larger rooms which don’t get the fill from the 5.1 array. But it did sound very good in the small room.

Doremi showed the Qalif, a traveling case filled with a complete package of tools — a great step forward for set-up personnel who have to do all the projector setup steps after laying the projector on the pedestal. But Doremi must market this smartly or else they will get killed before getting out of the box. The standards are very clear that a qualified system is set up using a spectroradiometer. If one looks at their offering, it appears to be an anodized box barely larger than the prominent Canon lens. One immediately (and mistakenly) thinks that they have stripped the consumer stuff from an EOS and put in measurement specific, hot-rod firmware like the Magic Lantern group does.

In fact, it is a completely different set of kit, an astrological-science based chip, a great lens, and firmware that has nothing to do with moving pictures, or pictures of any kind, really. Very clever. They have had some other feedback from the show that they say will be translated into other time-saving steps for a projector set-up. If they are really, really clever, they will figure out how to use multiple positions to divine a method for calibrating auditoriums with silver screens, and especially for 3D setups.

The price was a little surprising at 15K, but I suppose they realize that most of their sales will be to distributors who will be getting the discount anyway.

The Panavision demo, at least from where I sat, was horrid. They set up in the big auditorium, at 3:30PM on Thursday. They blocked off the under-the balcony seats with white cloth strips that, if anything, did a poor job of blocking any exit door lights from the rear, and reflected any light from the front. I was sitting 5 rows from the rear, and the reflection in the glasses was painful, especially because the interior of the glass lens is highly reflective, and not only ambient light reflecting to a viewer’s eyes, but that extraneous light then bounces back from skin surfaces into the lens. A complete mess that makes all sorts of odd spots looking through the glasses. By holding a magazine behind my head, I was able to block some of this problem light out.

I wasted a lot of time before the show smoothing out the mold line of the glasses plastic that cut into the ear. If I had kept them on my ear I would have appreciated my work, but I found that lifting the earpieces gave me a much better picture, even better than the magazine technique. But not good enough to actually use ‘good’ in the same sentence. It was miserable. Four bits of black, whites that were a greenish-yellow, and everything was dark. Even the bright cartoon characters were muted.

Both film and digital suffered. During the film and digital changeover, John Galt gave a presentation that was markedly like a poorly done version of the professionally done Dolby presentation that Dave Schnuelle gave a few years ago at NAB/SMPTE Digital Days. How they can continue to give such a bad presentation and say that the system is unique I don’t know. Maybe it was better from the center seats, but the reaction after was very muted.

Did I mention that RealD had little presence at the show. As usual, they didn’t have a booth, but they only had one mention of being used at the first day’s screening. After that, it was all MasterImage and Dolby. It doesn’t look like they sponsored anything. This might be because they have to be careful during the quiet period before their pending IPO.

All in all, it was great talking to actual design engineers, who were there in force. I even enjoyed learning how the LED sign makers channel the light so smoothly. So, from a geek perspective it was great.

Last week I mentioned that we would be running a series of posts featuring comments about last month’s Cinema Expo conference from leading members of the industry.

Today we’ll continue with Manel Carreras, Sales and Business Development Director at Ymagis, as well as Michael Karagosian of MKPE Consulting. Full disclosure: I used to work with Manel Carreras at DTS Digital Cinema and I presently work with Michael Karagosian on certain consulting projects.

First up is Mr. Carreras:

Manel Carreras of Ymagis

Although the trade show part of Cinema Expo International was much “smaller” with short hours, even shorter “effective” hours and wider corridors and more empty spaces than ever before, the high quality of attendees meant no time wasting, and this was good. We were busy during trade show hours and before and after these.

CEI is always a good opportunity to catch up with colleagues and check the pulse of the industry across Europe. This year the lack of important press releases during the show, was perhaps a reflection of the problems exhibitors experience with financing their systems and poor projector deliveries: one manufacturer didn’t even have a unit at the show!

Technology wise I am not sure there was that much to excite anyone. I was disappointed, as expected, with the new 3D system. I guess its still a prototype. This show was full of promises and declarations of intentions, now we have to see these delivered.

I did not manage to attend any seminars and only half a projection, but I heard very good feedback from some of the exhibitors about the movies coming up.

Finally digitization is really happening (in Europe), going well beyond the first 3D installs and starting to incorporate d-cinema as a 35mm replacement.

The second half of this year will be very important to establish how long the process will take, and 2011 will (should) be a clear turning point where the weight of d-cinema will spread across EU markets.

There were rumors the exhibition will move (to Milan, this time) in 2011, this is not a new thing and it seems it may finally be time to move on and reinvent CEI, keeping on concentrating activities and even shorten the show. Apart from glorious sunshine, I am not sure the RAI in Amsterdam offers the best possible deal anymore.

Michael Karagosian

Next up is Mr. Karagosian:

I’d say the show was getting back to it’s mid-90′s size. Overall, the most notable discussion at the show was how to creatively construct a rollout plan involving government financial support that might receive approval from the EU.

Not being able to attend Cinema Expo last week was very disappointing since it is one of my favorite conferences each year. The annual trade show held in Amsterdam is always a great opportunity to catch up with exhibitors and distributors from all over the world, especially Europe.

Rather than try to cover Cinema Expo from a desk in Los Angeles, I turned to some of the leading players working in the space today, all of whom were in attendance at the show in Amsterdam. Over the next week I’ll be posting their thoughts for everyone to read in comment on.

Today, we’ll start with Howard Kiedaisch of Arts Alliance Media:

Howard Kiedasch of Arts Alliance Media

For AAM, this year’s CinemaExpo marked a significant change in our business.

The tide started to change at Showest and was flowing in our direction at Cannes but it was Cinema Expo where we really felt the current, heavily pushing digital cinema. The added benefit of a robust cinema market (in no small part due to digital), helps drive the digital cinema conversion even faster.

It has become clear that every exhibitor of any size (50+ screens) will have found a solution to full digital rollout before the end of the year. Though in the past there were concerns about the technology, the business model or the financing, the latest (and really only remaining) issue on everyone’s lips at Cinema Expo was the availability of machines. With the dramatic increase in demand, manufacturers are unable to deliver all the supply the market wants.

Fortunately, we ordered over 1,000 machines three months ago and have ample product for our customers’ needs. The number of deals in the pipeline also took a huge leap forward at Cinema Expo causing us to order nearly 2,000 projectors for 2011 before the end of the show. After 5 years of hard labor, it’s tremendously exciting to see an industry hit an inflection point and to be part of the transition. Clearly there are some exciting times ahead.

Click here to view the embedded video.

The Academy Award winning documentary “The Cove” was a big winner at the 11th Annual Golden Trailer Awards last night. The documentary, which details the dolphin slaughters taking place in Taiji, Japan, picked up the prize for Best Documentary and also won Best In Show, the events top award. It marks the first time a documentary has won the award.

The Golden Trailer Awards were created to honor the art of short movie previews. The event nominates trailers and television spots in categories as wide ranging as Summer 2010 Blockbuster and Best Video Game Trailer. Prizes are given to the companies and craft people who produce the trailers. In the case of “The Cove” that would be AV Squad.

Other winners at this year’s ceremony included “Sherlock Holmes” for Best Action (produced by Mojo), “Shrek Forever After” for Best Animiation & Family (produced by Aspect Ratio), “Brothers” for Best Drama (produced by Seismic Productions), “Antichrist” for Best Horror (produced by Kinetic Trailers), Best Romance went to “The Young Victoria” (produced by Mojo), the Independent Trailer Award went to “A Serious Man” (produced by Mark Woollen & Associates).

A complete list of winners is available on the Golden Trailer Award’s website.

Unlike in previous years when the ceremony was held in a movie theatre setting, yesterday evenings event was put on at the El Rey Theatre in Los Angeles, a venue primarily known for music concerts. The small tables and chairs provided for attendees gave off a dinner theatre vibe and often the proceedings onstage seemed to be competing with the continuous buzz of conversation.

Still, there were a few moments in which the audience seemed to be in sync with the ceremony. The award for Trashiest Trailer had people cheering and laughing when Kinetic Trailers won for “The Human Centipede“. The Golden Fleece award, awarded annually to the best trailer that prods moviegoers into seeing a horrible film, was another crowd favorite. This year’s prize went to “Bad Lieutenant: Port of Call New Orleans ” produced by Mob Scene.

Ironically, the award for Most Original Trailer went to Empire Design for “Cemetery Junction“, a teaser trailer for the Ricky Gervais film that had no actual footage from the film.

Selecting this year’s winners from those nominated in each category was a panel of judges made up of industry professionals such as filmmakers Edgar Wright (“Shaun of the Dead”) and Marc Webb (“500 Days of Summer”), comedian Andy Samberg and former studio executive Ruth Vitale.

When it comes to handing out prizes and trophies to the year’s top movies there is no end to the number of awards shows waiting in line to applaud worthy efforts. But have you ever asked yourself whether the trailers created to promote those movies are ever recognized with any awards? If so, then have no fear.  That’s why the Golden Trailer Awards were created.

For the past ten years Evelyn Brady-Watters and Monica Brady have been producing the Golden Trailer Awards which nominates and honors the best movie promo reels from the past year. The year’s event (the 11th annual) will be held in Los Angeles on June 20th at the El Rey Theatre. Winners for 16 of the 61 categories will be announced during the ceremony, which will be hosted by comedian Dean Edwards.

Vying for prizes this year are trailers for huge Hollywood hits such as “Sherlock Holmes” (Best Action) as well as smaller independent films like “Precious: Based on the novel ‘Push’ by Sapphire” (Best Drama). And while James Cameron’s “Avatar” may have run away with a majority of the box office this past year, it’s unlikely the film’s trailer will walk off with an armload of Golden Trailer Awards since it is only nominated for Best Action.

Even trailers for a number of films that have yet to hit theatres have been nominated. Films like “Get Him To The Greek” (Best Comedy), “The Karate Kid” (Best Animation & Family) and “The Last Airbender” (Best Summer Blockbuster TV Spot) have all received nods. Presumably that’s because while the movies themselves haven’t made their way to your local cinema their trailers have. A complete list of nominees for the 11th Annual Golden Trailer Awards can be found on the event’s website.

A group of industry professionals will judge all the entries to select the winners in each category. This year’s jury includes filmmakers Edgar Wright (“Shaun of the Dead”) and Marc Webb (“500 Days of Summer”) as well as Saturday Night Live star Andy Samberg to name just a few.

Unlike say, the Oscars, the Golden Trailer Awards are open to the public, though tickets are presently sold out. However, if you’re in Los Angeles and want to attend, email info@goldentrailer.com to be added to the waiting list.

Dan Glickman and John Fithian at ShoWest

The National Association of Theatre Owners president, John Fithian, and the outgoing chairman of the Motion Picture Assn. of America, Dan Glickman, trumpeted 2009′s record breaking box office grosses as well as advances in piracy protection during their annual “State of the Industry” address at ShoWest on Tuesday. What seemed more important to everyone in attendance however was that the speech marked the last appearance by Glickman as the head of the MPAA.

Not that Glickman plans on disappearing entirely. As he put it moments before walking onstage to deliver his remarks, “It may not be my last time at ShoWest, hopefully it is not. John has promised to invite me every year, but it’s my last time in this job.” Glickman is leaving his post April 1st to take over as head of the non-profit organization Refugees International.

Of course, technically this will be the last time Glickman attends ShoWest since NATO will be taking the show over next year and changing its name to CinemaCon. Glickman may not have to worry about getting an invite though, for Fithian had nothing but kind words to say about him. “He really has contributed an amazing amount of leadership and support to this industry over the last six years, from intellectual property to the ratings system to opening up new markets oversees,” Fithian said of Glickman. He’s been just a terrific partner. . . he will be sorely missed by those of us in the movie business.”

Speaking of the movie business, it’s apparently doing quite well, at least theatrically. Fithian highlighted the USD $30 billion international box office gross earned in 2009 with USD $10.6 billion coming from North American, an increase of more than 10%. The NATO exec credits the ongoing theatrical success to advances in technology which have allowed for better presentations at modern luxury cinemas and the ease of purchasing tickets on mobile devices or online. Studios were also major contributors by spreading out their releases according to Fithian:

“Significantly, the distribution patterns of commercial product have continued to migrate across all 12 months in the year, and not just in summer and holiday periods. The release of a picture like ‘Alice In Wonderland’”

Upwards of 11% of the North American box office was derived from 3D releases such as “Alice In Wonderland” yet only 10% of the screens in the territory are capable of showing 3D content (7% globally). With Digital Cinema Implementation Partners receiving USD $660 million in financing earlier this month, Fithian believes the number of 3D screens could increase by as much as 2,500 this year alone. Internationally, 3D conversion may be even greater.

Meanwhile, camcorder piracy in the United States and Canada dropped 30% in 2009 and interdictions rose by 50%. To highlight just how successful both the MPAA and NATO have been in working on piracy, Fithian reported, “Since 2004 the joint MPAA-NATO Take Action reward program has handed out over USD $100,000 to theatre employees who have thwarted acts of movie recording in their cinemas.”

As expected, Fithian also spoke about theatrical release windows, wanting to make it clear that an exclusive window for cinemas to show movies in theatres was crucial to the health of the entire industry. For the last five years the theatrical release window has not shifted more than eight days, holding fairly steady last year at 4 months and 11 days. Even so, Fithian acknowledged that studios are suffering due to poor DVD sales, which were bested by North American theatrical box office by USD $1 billion in 2009. This type of theatrical success is not something for exhibitors to gloat over said Fithian:

“As long as release windows remain strong, robust ancillary markets help exhibition by returning revenues to studios and ensuring continued strong production.”

He seemed dismayed that recent conversations between large exhibitors and studios regarding release windows have been misinterpreted in public forums, such as the press, or among industry partners. To set the record straight and point out some of the benefits of shorter release windows on certain titles Fithian summarized these negotiations as follows:

“Individual distribution and exhibition executives have discussed some additional flexibility on a very limited number of movies where theatrical sales and home video sales can both benefit through particular seasonal scheduling. Cinema operators seek big movie releases throughout the year. Distributors may need slightly different release windows on a limited number of individual films to accommodate a strong twelve-month release cycle.”

Glickman at ShoWest

For his part, Glickman agreed that exhibition and distribution are “joined at the hip” and to hammer his point home he quoted the popular Frank Sinatra song, “Love and Marriage”. The most important new piece of business Glickman announced was the relaunch of the MPAA’s rating’s website at www.filmratings.com. He urged the industry to make certain the ratings system keep up with societal shifts:

“Moving forward, it’s critical that we remain open to change. Our kids are smarter, more tech-savvy and sophisticated than we were a generation or two ago. Our ratings and advertising programs need to keep up. And, we should continue to examine ways to keep the system relevant and contemporary.”

Mostly, Glickman stuck to speaking about his own history and tenure as the head of the MPAA. In explaining why the job was so important to him he said:

“Some folks may have done a double-take when I got the job. Joe Hollywood, I’m not. I’m just a guy from Kansas who has loved the movies, and specifically going to the movies, since I was a kid. Someone who has a genuine affection for this art form and real appreciation for what movies do for this country, and I truly believe, for the world. . . I didn’t come from the industry. But I leave it believing quite strongly that this community is not something separate and apart from America, but something inextricably tied up in what America means to the world.”

With statements like that, it’s easy to see why after heading the organization for decades the late Jack Valenti hand picked Glickman to succeed him. Concluding his address, Glickman delivered his most poignant, if not personal, line:

“I won’t say ‘goodbye’, just ‘see you at the movies’.”

Michael Lynton at ShoWest 2010

The 2010 edition of ShoWest, the annual gathering of theatre owners and distributors, kicked off in Las Vegas earlier today with a keynote address from Michael Lynton. The Chairman and Chief Executive Officer of Sony Pictures Entertainment had both junk and theatrical release windows on his mind, and not necessarily in that order.

After opening his remarks with some cheerleading over 2009′s record breaking box office returns, Lynton detailed why he believed the industry was doing so well in the midst of a deep recession:

“People battered by the recession see in movies reasonably priced escapism. It is the most affordable way to take a break, get out of the house, take the kids or get away from them and be transported to another world.”

Lynton pointed to the industry’s willingness and ability to change as being one of the prime factors for increased theatrical revenue over the past year. Despite economic, social and technologic challenges, he praised both exhibition and distribution’s willingness to find new ways to overcome challenges and prosper.

But Lynton wasn’t all smiles. He highlighted the increasing economic difficulties faced by studios this past year. At the height of the DVD boom in 2005 and 2006 57% of Sony’s revenues came from DVD rentals and another 43% came from DVD sell-through, but today, thanks in large part to the recession, that split is nearing a 75% – 25% split. Unlike sell-through where studios can earn USD $14 to USD $18 per disc, they only earn roughly USD $1 to USD $4 in rentals. The bottom line, according to Lynton, is a much narrower bottom line for the studios, which Sony has already begun adapting to:

“[We are] Being more targeted in our production and marketing spend and more fiscally responsible in our talent contracts and all the studios have had to make the difficult decision to lay off workers. We are reducing our work force by hundreds of positions this year alone. And that’s not just our problem, it’s your problem too, precisely because our fates are intertwined. You need our movies as much as we need your theatres. If our revenues keep going down than we can’t make as many movies.”

This naturally led into one of Lynton’s main talking points, the touch subject of theatrical release windows. While acknowledging that the most important release window for Sony is the theatrical window and reiterating that the studio makes movies to be seen in theatres, not on television, iPods or cell phones, Lynton explained that people want to see movies whenever and wherever is convenient for them. With that in mind, he told theatre owners in attendance:

“It is clear from the changing economic model of our industry that we are going to have to reevaluate the way in which the current window structure operates. And we need to do so, as in the case of digital cinema, by being candid and cooperative with each other so we can find a solution that works for everyone. . . we’ve all got to be open to experimenting with new and different windows, taking advantage of new and different technologies. As we do that we don’t want to open a new window in a way that closes yours. I believe there are responsible and responsive ways to provide audiences with entertainment that preserves the prominence and preeminence of the theatrical experience while allowing us to create an economic model that will allow your business and ours to prosper together. I believe we can and should work collaboratively to do just that as partners.”

Citing the growing epidemic of childhood obesity as, Lynton wrapped up his speech by urging exhibitors to add healthier snack options to their concession stands. He wasn’t suggesting items such as spinach, broccoli or, as he put it, a 40 ounce cup of prune juice, but rather fresh fruit, veggies with dip, trail mix and granola. After showing the audience a video taped message from Dr. Mehmet Oz, Lynton said:

“By bringing healthier snacks into your concession stands you would be helping our country meet an urgent public health need. Taking this step is also great audiences and for your business because people want to see healthier foods in theatres and when they do, they’ll buy them.”

However, just an hour or so later during a panel discussion which included five exhibitors from around the world, Lynton’s plea was countered with anecdotal evidence. During a panel titled Exhibition Speaks Out: New Challenges and Best Practices, theatre owners claimed moviegoers weren’t interested in healthy snacks when going to the movies. Tony Kerasotes of Kerasotes Theatres was the most blunt and humorous in speaking about the topic:

“Every two years the center for the study of no fun comes out with their popcorn report and then there’s a flurry of newspaper stories that one paper picks up after another and then it’s over and everybody goes back to the way they were. It’s just a bunchy of hooey. People want their fat content however they get it.”

Tom Stephenson of Rave Motion Pictures echoed Kerasotes’ sentiment, providing the following explanation:

“I think people give themselves a pass to come to the movies to eat exactly what they want, to drink exactly what they want and we should satisfy that demand.”