The motion picture industry that we know today is beginning to undergo one of the biggest changes in it history. The old model of delivering content in an orderly fashion to movie theatres first is starting to erode. The new model is to give consumers more choice and greater ease of use when it comes to buying digital entertainment. It’s all about offering more convenience to the end user.

When we talk about digital entertainment, we are referring to the downloading and streaming of movies and television shows on computers, Internet-enabled televisions and mobile devices.

We are now entering the post-DVD era, and the movie studios are looking to shore up the profitability of their home-entertainment divisions. DVD purchases are increasingly being replaced by new delivery methods. Business models at the studios are shifting with declining DVD sales and they need to figure out digital distribution.
The Walt Disney Company is developing a system to track digital ownership so people won’t have to buy the same movie or TV show multiple times for different devices. Their system is called Keychest. It would allow consumers to buy permanent access to digital entertainment such as a feature film that can be watched on computers, cell-phones and cable on-demand services.

The technology for Keychest is based on cloud computing in which huge amounts of data are stored on remote servers so that users have access from any location. Movies would be streamed from the cloud and never actually downloaded, making them harder to steal.

Other studios have pursued a different strategy called the Digital Entertainment Content Ecosystem, or DECE, which involves agreeing on a common set of standards and formats. The goal again is to give the consumer more choice and greater ease of use when it comes to buying digital entertainment.

Sony Pictures is also looking for new ways to distribute movies now that DVD sales have declined. Sony is making its animated hit Cloudy with a Chance of Meatballs available to consumers directly through Internet-enabled televisions and Blu-ray players before the movie is released on DVD.

Sony, which is the only studio that is married to a hardware manufacturer, is in a unique position to experiment with selling movies directly to consumers through television sets, in this case their Bravia Internet-enabled sets. This will happen from Dec. 8 to Jan. 4, the day before the movie is released on DVD.

All of this is alarming to movie theatres and rightfully so. With their tremendous investment in brick and mortar, exhibitors are dependent on receiving movies first, and these new business models are going to erode the windows that theatres have always enjoyed. Additionally, the Motion Picture Association of America is seeking government approval of technology that would allow Hollywood studios to deliver first-run movies directly into American households on their televisions. What the MPAA is not saying is when they would be allowed to release directly and whether they would be doing so day-and-date with the release to movie theatres.

If this waiver is granted, studios would be free to pursue the new revenue stream without fear of piracy and offer consumers access to new titles. The National Association of Theatre Owners is obviously opposed to this request because of the windows issue.

With new management in place at Disney and Comcast looking to take a controlling interest in NBC Universal, we hope that clear minds will prevail and that a solution can be worked out that benefits everyone. Movies are made to be seen on big screens in a theatre with an audience. This must remain the only first option.

Digital Takes Root in Asia
The Asian film market is one of the fastest-growing in the world. As modern multiplexes spring up all over the region, box office continues to rise at a quick pace. And with these modern theatres, digital equipment is the norm, so the growth of the digital market in Asia is outpacing all other areas of the world.

This spurt in digital deployment also allows for the installation of 3D systems and there are now more 3D systems outside of the U.S. than in North America. Nowhere is this growth more prevalent than in China, Korea, Japan and India.

CineAsia, a convention for the Asia/Pacific region, stages in December in Hong Kong. After traveling the Asian continent from Singapore to Bangkok, Beijing and Macau, the show is returning to Hong Kong after a nine-year absence. Among other topics on the schedule, digital deployment will certainly take center stage.

Because of government-supported conversion programs, China has taken the lead in Asia and has installed thousands of units. All of the major manufacturers including Barco, Christie and NEC are forging partnerships and expect this to be the hotbed for now or until DCIP in the U.S. begins their big rollout plans.

In India, Scrabble Entertainment was formed to provide a 2K DCI-grade release platform to Indian and Hollywood studios. They are the first major integrator on the scene following a major rollout over the last several years of 1.3K digital projectors. The company has already contracted with India’s leading exhibitors, producers and distributors under a virtual-print-fee business model.

South Korea stands poised to become the first fully digitized country in the world. Digital Cinema of Korea, a joint venture of CJ CGV and Lotte Cinema, has announced its own VPF deals with some of the Hollywood studios and hopes to launch up to 2,000 screens in the near future.

Japan has several hundred DCI-capable systems installed and broad conversion plans are being considered by various companies where there is interest in securing VPF studio support that will inevitably move things along faster.

The digital scene throughout Asia is covered in detail in this edition of Film Journal International, and if you happen to be in Hong Kong, catch the latest edition of CineAsia to learn firsthand about this revolution in movie theatre technology.