Category Archives: Integrators

Breaking News: Police Find More Stolen Digital Cinema Equipment Belonging To Quanta DGT

Ana Cláudia Medina of DECO

Ana Cláudia Medina of DECO at the warehouse where the stolen digital cinema equipment was discovered.

It may be proving easier to steal 121 auditoriums worth of digital cinema equipment than it is to actually hide or fence the stolen devices.  Early Monday morning Brazilian law enforcement discovered a warehouse in Campo Grande, Brazil filled with some of the digital cinema equipment stolen from Quanta DGT in early February.

The Delegacia Especializada de Combate ao Crime Organizado (DECO) or Special Delegation to Combat Organized Crime, had been investigating the crime since February 19th when the goods would have entered the state of Mato Grosso Do Sul. According to Ana Claudia Medina, the DECO delegate in charge of the investigation, suspicion centered on the warehouse located at 4466 Rua Filomena Segundo Nascimento, the main street in Jardim Itamaracá a section of Campo Grande, the state’s capitol.

Search and arrest warrants were issued, before DECO moved in to search out the stolen goods, though no arrests were made. The owner of the warehouse where the equipment was found was unaware his facility was being used for criminal activity, having only recently signed a lease agreement with the alleged perpetrators. “He has testified and was discarded as a member of the gang,” said Medina of the warehouse owner. “Arrest warrants have already been ordered,” she added, though would not provide further details as the investigation is ongoing.

Authorities counted up to 31 Barco projectors in the warehouse and are awaiting “experts”, presumably from Quanta DGT to arrive and examine the equipment before tallying up the number of devices that had been located. Medina said, “There is at least BRL R$5 million (USD $1.71 million) in merchandise. Witnesses said they saw at least three trucks doing the downloading. I believe that the other equipment must be in another state.”

Medina’s theory is likely correct. In mid-February, roughly 44 screens worth of digital cinema equipment turned up in the back of a semi-truck near Morro do Papagaio in Belo Horizonte, the capital of Minas Gerais, one of Brazil’s 26 states. In that particular instance the discovery of the stolen devices occurred by happenstance after police pulled the truck over during a routine traffic stop. The driver of the truck managed to elude captivity.

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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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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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CJ@IBC EDCF Global Update

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The EDCF annual IBC gathering is a smorgasbord of information about the latest developments in the digital cinema industry. More speakers than time, so without further ado, Dave Monk kicks it off handing over to the first speaker.

David Hancock (IHS) – “9 1/2 years I’ve been doing this slide,” Hancock said, “and in 12-18 months there won’t be the grey bar any more because analogue will be gone.” There are still a handful of territores where there is analogue (Turkey, Baltic States, Latin America). “Technlogy is now the currency driving cinema,” and that’s what he is focusing on today. Hard drives dominate still, even though some territories like Fance it only accounts for 1/3. But that’s all set to change. Most of the focus for DCP delivery today is on broadband, but that and satellite co-exist.

Ymagis takeovers of dcinex and Smartjog has created one major entity. That’s the biggest change in the last year. “The market is concentrating down to a few players,” such as Deluxe, Unique and Ymagis. “But as an exhibitor, how many suppliers do you want i your site?” Some countries have just one supplier for all sites.

Laser projection – some consumers cite lack of brightness as reason for not going to see 3D. It has not been proven to work, “but what we have now is the first generaton and not what it will be shipped to cinemas.” IHS predicts 100-200 this year and 400-500 in 2015, but mainly smaller projectors. “Laser is inectricably linked to the replacemnt [cycle] of the first generation of digital cinea projector.” Business model is needed for replacement machinery – there is no VPF for laser replacement, Hancock highlights.

Audio – “Recently the sector has re-discovered competition after a decade of lack of competition.” 1,500 screens equipped with Atmos or Auro by the end of 2014. But there is now focus on the home evironment, as well as markets such as automotive (cars). Where does it all lead, ancock asks. Premium cinema, particularly large format, is the answere Hancock notes. “Technology pushes the premium experience,” he observes. 1.,401 PLF screens 1h 2014 with IMAX capturing 45%. Conclusion: may you live in interesting times.

There is a tension between technology and cinema. “The cycle of technology does not match the technology of cinema.” Last observation particularly interesting: “physical decline [DVD etc.] ups cinema in Europe: the value chain increasingly underpinned by cinema.”

John Hurst (Cinecert) – First slide asks ‘Is Ten Years Too Long’ but his topic is the state of [digital cinema] equipment in the field. It looks like cinemas here in Europe are better maintained than cinemas in US in temrs of receiving SMPTE DCPs. You have to keep your software up to daye in your digital cinema server to take advantage of all new features – not just bells-and-whistles ad-ons.

He then calls Rich Philips from Arts Alliance (AAM) up to stage. AAM have spun off most of their digital cinema business, but they still have the digital cinema software technology. The message from Richard is that verisoning is not too bad in Eurpe, but that education is an issue, with most exhibitors clueless that there is another hurdle that needs to be jumped through. “That’s all I have to sya really.”

Chris Witham (Disney) is then called to stage by Hurst. He jams through it in two minutes. “For people to keep coming back to cinemas, we have to offer the best experience possible.” He then discusses Disney’s transition plan to SMPE DCPs with 2015 the target date.

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Hollywood unites on satellite movie delivery – but is it too late already?

With the overwhelming majority of multiplexes in the US converted to digital, the largest cinema chains have now reached agreement with the majority of Hollywood studios for the satellite delivery of DCPs. The Digital Cinema Distribution Coalition (DCDC) has added Walt Disney, Paramount Pictures and Lionsgate to co-founding studios Warner Bros and Universal Pictures. DCDC was formed in 2012 between DCIP (the digital cinema arm of the three largest US exhibitors AMC, Cinemark and Regal), Warners and Universal, with Deluxe/EchoStar handling the integration, in what was crucially billed as a “not-for-profit” venture. “Our goal is to drive the cost of distribution as low as we can get it,” DCDC spokesman Randolph Blotky tells The Hollywood Reporter. “We’d like to drive it to zero over the course of time.”

Satellite has long been seen as the most obvious way for distributing DCPs to multiplexes, at least for North America with its large geography and homogenous film distribution schedules. Several ventures had earlier promoted this concept, most notably Boeing Digital Cinema, but faced resistance from Hollywood studios that did not want a gate keeper or for a third-party operator to set up a business where previously only a strip of film separated them from the exhibitors. By being a joint studio-exhibitor operation that is non-profit, as well as run by the established service provider Deluxe, the DCDC arrangement seems the most palatable to all parties involved. Yet closer scrutiny of the deal raises several questions.

While THR’s headline states that ‘Five Studios Sign on for Satellite Movie Delivery’, it is in fact just two new studios (Paramount and Disney) joining the existing pair, with Lionsgate still only a mini-major. Absent are both 20th Century Fox and Sony Pictures, who also happen to be Deluxe’s two largest studio clients. Fox has an on/off relation to satellite delivery, having ruled it out in the early days, but allowed for tests with the likes of Boeing.  While these two may come on board later, it is notable that even a not-for-profit satellite solution could not persuade all studios to join in. One could even ask whether satellite delivery of DCPs is an idea whose time has passed.

DCDC’s origin was a proposal from Joe Fabiano, then with Pathfire, which was in bed with Warner Bros (Television) at the time. Six to seven years ago satellite made sense over hard drives, but hard drive *hardware* costs have dropped faster than satellite bandwidth costs, which are fairly static. The only costs associated with HDD that have not gone down are logistics and handling. This means that exhibitors have more to gain than studios, since it removes the need to ingest and handle hard drives. At the same time, fibre optic and even wireless bandwidth capacity has increased while costs have fallen, which is why in territories such as Europe and parts of Asia, these channels are looking more compelling than satellite. It may also be that the two holdout studios simply do not want to commit themselves to one fulfilment technology. While satellite delivery makes sense for smaller sized DCPs (animation – hence Disney), it would take something like two days to deliver ‘The Hobbit’ in HFR 3D with Dolby Atmos over satellite. Satellite may be coming, but HDDs are not going away. The real winner from this will be NCM, DCIP’s sister company for cinema advertising, which needs a better fulfilment vehicle with the transition from small MPEG to J2K DCPs. Sending hundreds of ads over satellite still makes more sense than sending half a dozen feature films DCPs.

Arts Alliance Rethinks Its Alternative Content Strategy

Arts Alliance MediaHow hard is it to find success with alternative content? The answer is; very. So many variables have to fall perfectly in place to find success, much less profit. No matter whether it’s sports, concerts or cultural events, there are rights clearances to obtain, theaters to secure and screenings to promote. None of this is easy, though there are a number of companies that have managed to make a name for themselves in alt. content by routinely producing high profile events including, Arts Alliance Media (AAM), Cinedigm and Fathom Events.

So imagine my surprise when in late November I started to receive emails and phone calls informing me that AAM was getting out of the alt. content business. How could this possibly be? After all, I had just interviewed Elizabeth Draper, who heads up AAM’s alt. content efforts, for a story on marketing such events in Boxoffice Magazine.

Rather than contribute to the rumor mill by posting such news with third party confirmation, I figured it would be best to go straight to the source by getting in touch with Howard Kiedaisch, AAM’s CEO. His email response sums up rather nicely not only AAM’s approach to alt. content, but also the company as a whole:

“Over the last three years AAM have released over 60 alternative content titles. Some have been very successful for our content and exhibition partners but in many cases have left little net contribution for AAM. Meanwhile, AAM’s VPF rollout business continues to grow nicely while our software has become a tremendous success with our recent deals. In looking at what to do going forward on the AC side, we have been reviewing our business model including both the revenue opportunity and the overhead requirements. Through that review we found it necessary to reduce the permanent staffing of the AC department at this time.

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Is Cinedigm A Digital Cinema Bellwether?

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.

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Chris McGurk Says Cinedigm’s Future Is In Software And Content

Chris McGurk

Cinedigm's Chris McGurk

Not sure if you noticed, but over the past week Cinedigm’s stock price jumped over 33% from USD $1.50 to USD $2.00. It closed Friday out at USD $1.88. The sudden price increase in Cinedigm’s stock is likely due to a number of factors, rather than a single reason.

It has been a busy year so far for North America’s largest digital cinema deployment entity. In January industry veteran Chris McGurk (formerly with Overture Films and MGM) joined Cinedigm as it’s new chairman and CEO. In February the company announced improved financial results for the third quarter for fiscal 2011, hired back David Gajda as the chairman of their software division and signed Southern Theatres to a d-cinema deployment contract.

Last week AMC, the second largest U.S. theatre chain, selected Cinedigm’s Exhibition Management Solution to handle such head office tasks as film rental and revenue auditing. This was a day after the third annual Gabelli & Company Movie Industry Conference, where Cinedigm was represented by McGurk, whose presentation on maintaining theatrical film windows was reportedly well received.

In the following conversation, which took place on the eve of the first annual CinemaCon convention in Las Vegas, McGurk openly discusses the company’s stock price, digital Cinema, and most importantly, Cinedgim’s future business direction.

Celluloid Junkie: So, as someone who has attended ShoWest in the past as a studio executive, how does it feel to be heading to Las Vegas for CinemaCon as the head of a digital cinema deployment entity?

Chris McGurk: There’s a little bit of a difference but I think it’s kind of great because we’re positioned right in the middle. We’re not on the studio side and we’re not on the exhibition side, but we’re basically a facilitator for what both sides are trying to do and right now that’s a great position to be in. I was just at the Gabelli Conference last week in New York where we presented and listened to everyone talk for six hours. It seems the level of tension that exists between studios and exhibitors right now is higher than it’s ever been, primarily because of windowing. But I think a company like Cinedigm, a digital services provider, a provider of alternative content and software solutions, I think we’re in kind of a unique position to sort of get in the middle of all that and help find some solutions to make things work.

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Omnilab Media Lands Its First VPF Deal While Fighting Legal Dispute

Christopher Mapp of Omnilab Media

Omnilab's Christopher Mapp

Do you ever have days where you’re sorry curiosity got the better of you? Back on February 1st Omnilab Media Cinema Services announced that it had signed a virtual print fee agreement with Paramount Pictures. I decided not to post anything about it at the time believing that news of deals with additional studios would shortly follow.

It is highly unusual for a deployment entity to make public announcements about VPF deals unless they include three or four studios. In fact, some studios won’t allow press releases to be published unless an integrator has signed agreements with minimum number of studios. There are several reasons for this, not the least of which is that financing for most third-party rollouts can not be accessed until deals with several studios have been completed.

Apparently, I wasn’t alone in thinking we’d quickly be hearing about Omnilab’s additional VPF deals. The company’s managing director, Christopher Mapp, stated:

“The negotiation process with distributors for VPF contracts has been long and complex, however, with the excellent cooperation of the major distributors we are set to sign several more agreements imminently. We are in the final stages of our negotiations with other major studios and are also intending to contract with many Australian independent distributors.”

This last bit is a given since any distributor wishing to play content on equipment deployed by Omnilab under a VPF agreement would be need to pay a VPF as per the the studio’s strict contracts. The issue of independent distributors probably relates more to Omnilab being selected last September as the preferred digital cinema integrator by the Independent Cinema Association of Australia (ICAA).

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Why Cinedigm Hired Chris McGurk As CEO

Chris McGurk

Chris McGurk

Okay, I admit that the headline of this post is pure click bait. But did you really want to read another story headlined “Chris McGurk Named Cinedigm CEO”? Truth is I wasn’t in Cinedigm’s board room when they offered Chris McGurk their Chairman and CEO positions, and thus I have no “inside” information. However, from the moment Cinedigm announced McGurk as their new CEO earlier this week my inbox has been flooded with emails from those asking about my own thoughts on the news.

Rather than take the usual Internet approach of writing up an analytical post before the ink was dry on Cinedigm’s press release, I chose gather my thoughts about the news for a couple of days. While it may seem at first that McGurk is an odd choice to head a digital cinema deployment entity, upon reflection one can see the benefits Cinedigm gains with the hire.

As the press release trumpeting the hire so diligently pointed out, McGurk has a ton of film industry experience. Every story reporting McGurk’s new role at Cinedigm recounted his lengthy professional history. Still I feel compelled to do it here. I first became aware of McGurk in the early 1990′s while working as an intern at Walt Disney Studios. At the time McGurk was President of the Walt Disney Motion Picture Group and it was hard to find anyone who had a bad word to say about him. Quite the opposite in fact. McGurk’s tenure at Disney from 1988 to 1996 included a stint as Chief Financial Officer on the studio side, among several other roles. He held similar senior titles (President and Chief Operating Officer) during his three year stay at Universal Pictures from 1996 to 1999.

McGurk is probably most associated with his last two companies Metro-Goldwyn-Mayer, where he was Vice Chairman and COO from 1999 to 2005, as well as Overture Films, where he served as founder and Chief Executive Officer from 2006 to 2010. This may have more to do with the current state of those companies than McGurk’s actual achievements, but more on that later.

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