DTS Digital Cinema Back From The Not-Quite-Dead With Qube Deal

By Patrick von Sychowski | March 29, 2009 11:45 pm PDT

DTS Digital Cinema has been going through a bumpy ride in the past year, but appears to be seeing a light at the end of the tunnel.  One year ago DTS Inc. spun off its two non-licence division.  DTS Digital Images reverted to being Lowry Digital under the new ownership of Reliance/Adlabs.  DTS Digital Cinema had a question mark over it until it was eventually acquired by the United Kingdom’s Beaufort International Group.  Almost immediately the company closed down its server manufacturing arm and people in the industry started speculating – as we are prone to do – whether the company would survive.  [Full disclosure: the co-editor of Celluloid Junkie, J. Sperling Reich works for DTS DC, but we take care not to mix paying day jobs with non-paying blogging, so he kept a stoic silence about how the company was doing any time we talked.]

DTS Digital Cinema has now staged something of a small comeback through a smart deal with Real Image Media Technologies, the Indian makers of the Qube server. Here are the key bits from the press release:

DTS Digital Cinema and Qube Cinema have announced a co-branding strategic alliance to develop and market numerous digital cinema products including a digital cinema server, a theatre management system, an enhanced digital cinema mastering solution and other allied products. The alliance will bring together the best of both companies’ strengths to form a strong commercial and technology presence in the digital cinema marketplace.  Qube will bring to the relationship, their experience of having developed cutting edge digital cinema products such as the Qube XP-D digital cinema server, QubeMaster Pro encoding suite and the QubeCast media delivery system. Besides providing sales and marketing presence and expertise in many regions around the world, DTS Digital Cinema will lend the partnership experience in developing motion picture technology, such as 5.1 digital surround sound, as well as the content management software knowledge that helped develop their Theatre Management System, Satellite Delivery System and Digital Booking System. Together the two companies will develop numerous digital cinema products, starting with the DTS Digital Cinema DC-20 powered by Qube, a digital cinema server that meets DCI specifications and will be on display at ShoWest 2009.

And skipping past the fluffy quotes we extract:

DTS Digital Cinema will rely on their vast dealer network and sales offices to market and deploy the co-branded digital cinema products.  The DTS DC-20 digital cinema server, powered by Qube, will be available for purchase in April 2009.

As well as:

A formal management structure with members from both companies has been put into place to oversee the strategic alliance on an ongoing basis. Additional co-branded product offerings to be developed under the partnership agreement are expected to be released by the second quarter of 2009.

This deal does seem to tap into those illusive synergies that the industry is so fond of chasing.  DTS no longer has a cinema mass product (the booking system and key management doesn’t really qualify), but they have lots of dealers and service engineers.  RIMT/Qube has a product for every cinema, but they lack the infrastructure in places like North America to take on the likes of Dolby and Doremi.  This brings these two things together.

This is what DTS DC’s CEO Chris Thomas had to say to me about the announcement on the eve of its release:

“To paraphrase a famous Mark Twain quote, the rumors of DTS Digital Cinema’s demise are greatly exaggerated.  We’ve had a few hiccups along the way but have stayed below the parapit as we  reorganized.  Now is the time to emerge as a much stronger and more focused company.  Driven by the exhibition markets commitment to the digital cinema rollout, we’ll be expanding the role of DTS Digital Cinema to include additional support and consultation services.”

He was also honest enough to acknowledge the problems that faces all the cinema supply (hardware or services) companies facing the analogue-to-digital switch:

“The challenge for the company is to develop effective strategies and business models that allow for a transition away from 35mm toward digital cinema.  Of course this will happen over many years as we continue to support our film business.”

What many people might not know is that RIMT and DTS have a shared history, in that Real Image is the supplier of DTS Digital Audio products in India, which is why DTS Audio is the dominant format in the southern Tamil and Telugu film industries. This is a step in the right direction for both companies, but they still have a long trek ahead of them, as does the rest of the industry.

Patrick von Sychowski
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