ShoWest review - digital 3D goes mainstream

It is difficult to tackle the ShoWest cinema trade show in Las Vegas earlier this month in one review, so I'm breaking it down into a few sections.

The most obvious one to start with is digitial stereoscopic cinema, or digital 3D, as this was by far the biggest topic. By now, pretty much everyone has woken up to the fact that digital 3D is the only visible differentiator that digital cinema has over 35mm film. This despite the fact that I attended my first digital 3D demo at ShoWest 2004, i.e. three years ago, albeit of a prototype set-up in a hotel room in Flamingo. What is perhaps most remarkable is how long it took Texas Instruments, maker of the DLP Cinema chip and hence keepers of the digital cinema flame, to wake up to this USP of their technology. Now even Sony are trying to get in on it with their SXRD projectors. But more about that in a minute.

We've only had three digital 3D features to day: Chicken Little, Tim Burton's The Nightmare Before Christmas and Monster House and as any of the studio technologists who had worked on either will tell you, there were heaps of problems to be overcome, not least in creating the 8-12 versions that had to be sent out (that's DCPs, not local language versions). But now we have Disney's Meet the Robinsons out and playing in digital 3D in over 600 locations, so we have reached the tipping point where digital 3D crosses over into the mass market. This article from the Detroit Free Press confirms this:

There are only about 600 theaters whose owners have been convinced that the new 3-D is not a fad or a gimmick, useful only for making an audience duck when baseballs or other objects seem to be hurled from the screen.

But if "Meet the Robinsons" is a success, more theater owners will be induced to buy the necessary projection equipment. (At present, theater owners want the studios to foot the bill, just as they do with basic digital projection.)

What it will take to bring about this change is the release of a blockbuster exclusively in 3-D digital. (Most theaters will show "Meet the Robinsons" in the flat, two-dimensional version). And that is exactly what is promised in 2009, when "Titanic" director James Cameron releases the live-action sci-fi fantasy-adventure "Avatar."

The hype and hoopla around "Avatar" is certain to be on a "Star Wars" level, which will mean every theater chain will want to have it on three or four screens. And once that technology is in place, more filmmakers will embrace it, first for animated films and action-driven spectacle -- as in "Mission: Impossible IV: 3-D" or the resurrection of the "Star Trek" franchise -- and then, as we adjust to and expect it, for everything that comes after.

At the pre-ShoWest meeting of EDCF Bob Kisor of Paramount predicted that by 2009 there would be enough digital 3D films out to keep at least one screen in a multiplex occupied full time with nothing but 3D films. Paramount will be the third studio to release a digital 3D title when Beowulf comes out later this year, by which time there will be over 1,000 screens equipped to show it in digital 3D. The Financial Times has a good, if not too deep, summary of the situation in an its article 'Hollywood sees its box office future in 3D revival'. A further note of optimism was injected by Jeffrey Katzenberg of Dreamworks Animation, who are going into CGI digital 3D in the near future, according to the article in Hollywood Reporter:

Katzenberg, CEO of DreamWorks Animation, which is readying two 3-D films for 2009, predicted that moviegoers will some day own their own glasses for 3-D viewing much like they own sunglasses today.

He said that moviegoers will gladly pay up to a 50% premium to watch 3-D films in a theater and that such a scenario will make the debate over collapsing distribution windows largely irrelevant. He noted that the exhibition industry hasn't used variable pricing strategies to boost it fortunes nearly to the extent that other industries have.

And one more added benefit: 3-D movies can't be easily pirated.

He also added some interesting news./gossip, such as the Pixar and Disney were considering releasing Toy Story 3 in digital 3D and that given enough screens, Dreamwork's 2009 title Monsters vs Aliens would only be released in digital 3D in cinemas and 2D would be saved for the DVD.

So what did we actually see at ShoWest? There were three major digital 3D events. The company that is behind most of the installations in the US and around the world, Real D, showed clips from films (the Robinson trailer). But as the Thursday event was billed as 'Hollywood and Beyond' they also went into some ODS (other digital stuff), primarily the two documentaries that they will be releasing with National Geographics, so expect lions and sea monsters in digital 3D at your local multiplex. More interestingly we were shown clips from the U2 concert in 3D. It was impressive, but to truly have been blown away I would have want to have seen it live.

The live digital 3D was the promise of the other major event, supported by Sony and post-poned a day after 'electrical' problems, “3-D and Alternative Content – Not Just for Movies Anymore”:

Presented by Sony Electronics
Alternative content for your digital theater moves to the next level with live events in 3-D. As demonstrated during the NBA All-Star Game weekend, sporting and concert events captured - live - by 3D Digital Camera Systems and exhibited - live - in 3D provide a new and more compelling theater experience. Game enthusiasts competing together in multiple HD windows on a single 4K projector can provide a way to monetize off-hours in your theater. A panel of Industry Experts will discuss the moneymaking implications of these new content avenues. Examples of gaming content and 3D "live" sports content will be exhibited during the session.

Sony caught some flack for pulling of this demo by stacking two SXRD 4K projectors, something that no-one is likely to be doing in their projection booth. I have less of a problem with this, as I'm sure that the technology will be good enough to be doing it with one projector within a couple of years. Also, the event was not about the Sony projector but about the ODS potential of digital 3D, as demonstrated by the 3ality production. Yet, there was a 'us-too' aspect to it in the fact that Sony does not want to be seen to be left behind in the rush to digital 3D.

Seeing the NBA basketball game in digital 3D was a revelation, even for an anti-sports person like myself, because it proved the valibity of the less-is-more adage. In this case it proved that less close ups, fast cuts, fast pans and zooms and general camera trickery, made for a more involving experience. The cinema screen is not your television at home and it is large enough for the audience to look where they want and let the eye follow the ball, rather than the camera. The whole event was captured with just six cameras and I didn't feel it needed any more. Plus, both Wayne Newton, Christina Aguillera and the cheerleeders looked great in digital 3D.

The third and last event was an invitation only demo in the Dolby room, where the company gave a preview of the new technology for displaying digital 3D that they are still working on in their lab. While it is far form ready for prime time, it has advanced much foruther than I thought it had. Put briefly, it combines the advantages of using cheap plastic glasses with not having to put in place a silver screen but keeping your normal old and dirty single-gain perf screen.

The clips were unimportant (Spy Kids 3-D and IMAX documentary Bugs), the techonlogy interesting (a spinning colour wheel between the lamp and the DLP Cinema chips that could allow for higher light output), but the business model was a killer. Unlike Real D, Dolby will not tie you in to a long-term licence fee. You buy the 3D-enabled digital cinema server and that's it. Other than the glasses, which will be cheap, there are no recurring fees. This is a return to the traditional Dolby business model of selling boxes and making money on mastering services.

I will return to this issue in the next ShoWest summary in discussing the technology and particularly why the server future belongs to Dolby, Doremi and Qube.

What keeps John Fithian awake at night

I found out the answer to the above question in a chat I had with John, the head of the National Association of Theater Owners (NATO - yes, but without the nukes), a few years ago. No, it was not digital cinema, nor film piracy/theft and not even Al Quaida targeting your local multiplex (but, yes they had one scare). It was the aging cinema population.

At this year the message from both Fithian and MPAA's Glickman was upbeat: 2006 had been better than 2005, box office takings had gone up, the summer was full of sequels that would drive the hoards back to the popcorn tills, the death of cinema was greatly exaggerated. What no one mentioned was that attendance in 2006 was DOWN on 2007, it's just ticket price inflation that grew the box office. And when I talked to cinema owners, they were more downbeat about the prospects beyond Spider-Man 3, Shrek 3, Pirates 3, etc. Kids just aren't going to the cinemas. It's not cool. Not like mobiles or MySpace.

What to do in this scenario? Embrace the oldies, that's what. At least, that's the message in a perceptive article from the Friday's Film section of the UK's The Guardian newspaper, by the very knowledgeable Geoffrey Macnab (he also writes for Time Out and helps program the National Film Theatre in London). Here is what he has to say:

The older audience is already the fastest growing sector in the market: recent research suggested that close to 60% of those clamouring to see Stephen Frears' The Queen were 55 or over - "77% female, mean age 59" is the official breakdown of the audience. Tellingly, only 1% of the film's audience were 18 and 19-year-olds and, if the statistics are to be believed, not a single per cent were 15 and 16-year-olds.

Films like Mrs Henderson Presents (audience: 62% female, mean age 59), The History Boys (57% male, mean age 51), Gosford Park, Calendar Girls, Ladies In Lavender and Miss Potter have also successfully attracted the older cinemagoer. "Five years ago, 38% of the cinema audience was 35 or over, whereas last year it was 46%," says Film Distributors' Association chief executive Mark Batey.

This is the audience that the digital cinema of the future will have to cater to. [Notice also that these films are cheaper to make and therefor have a better chance of a good return-on-investment ratio]. I myself do not think that cinema will ever die, but I fear that it is in danger of becoming jazz. That is, appreciated only by a small number of people in vanishingly marginal elite venues and too often looking back rather than innovating.

The fact that the future belongs to the old timers has already been spotted by the particularly clever exhibitors, such as Vue's Tim Richards. Yes, he is quoted in the article, but he has made these observations earlier too. I had a chance to speak to him briefly at both the BSAC conference before ShoWest and in Vegas. Vue may not have been first or even second to set up an all-digital multiplex in the UK, but when they do I bet that they will have the most innovative programming when it comes ot catering to the widest possible age bracket.

ShoWest review part 1 - EDCF trip to LA

Prior to the annual ShoWest cinema trade show a small group of Europeans make a tour of Hollywood studios, companies and places of interest in a two day event put together by the European Digital Cinema Forum (EDCF). This year turned out to be the best yet, thanks to stellar organising and planning by John Graham (EDCF), Thomas MacCalla (VisionInMotion) and Dave Monk (EDCF).

The first stop was perhaps the most important one as it was an informal summit between the various studio representatives (only Universal and WB were missing but sent their regards) hosted by Twentieth Century Fox, and a delegation of 30=odd Europeans. One nation dominated above all. I counted no less than 13 Norwegians at the first meeting, to which you could add three to four 'honorary Norwegians', people who work in, with or for Norwegians (myself included, given my Unique Digital consultancy clients). What was amazing was not the sheer numbers but that spread of interests they represented, including as they did exhibitors/cinemas, film distributors, public bodies, trade organisations, education and research institutions, cinema advertising providers, film archives, cinema installation and service companies and others.

Norway is serious about becoming the first country in the world to switch over all of its cinemas to digital and this gathering amply demonstrated that commitment to the Hollywood studios. Contrast it with Italy and France, who sent no representatives, or Spain and Germany who only had one small delegation each, both of them smaller than the Swedish delegation, which together with the British one was the second largest.

I won't go into detail of the discussion that was held as it Chatham House Rules applied. Sufficient to say that there remain plenty of digital cinema issues still to be resolved.

Lunch was held at the Academy of Motion Pictures Arts and Science (AMPAS). While best known for handing out the Oscars, AMPAS is true to the 'Science' in its title and Andy Maltz (the man with the greatest job in Hollywood - though not the easiest) gave an overview of efforts to preserve the past while also helping future developments of image capture.

The day finished in Chatsworth, home to the television series '24', the US porn industry and (the purpose of our trip) the up-link facility of AccessIT. It not only beams films to cinemas all over te Us but also handles television feeds. It impressed us all, not because it was slick and glitzy - it isn't - but because of its GTD (get things done) approach that had made it the world's largest digital cinema operation.

Next day started at an old United Artists multiplex on the outskirts of LA (La Canada Flintridge, anyone?), where we got to see National CineMedia's FirstLook cinema advertising programme. It has improved significantly since I saw it a year ago, when it was known as The 2wenty, but re-christened as people got the idea that it was 20 minuted of pre-show. It was now 720p resolution and slicker look. But as Dave Spilde from Unique pointed out, the good adverts are what caught the European audiences' attention, while the brief making-of proto-trailers left them cold. Maybe it's just a culture difference, or maybe it is the reason that US audiences don't like pre-show where most European don't seem to mind or even like cinema advertising.

No lunch from Technicolor, only coffee, so instead I got acquainted with the culinary delights of Panda Express in Burbank before heading to the digital cinema testing lab that Technicolor has created out of the old Disney animation screening rooms. The projectors and server testing was very impressive and the chief tester was surprisingly frank in his admissions about some of the technologies and systems, so I definitely won't be repeating that here. Technicolor is doing the industry a great service. My only worry for them is that they are losing track of their core business of film serives (last year they ranked third, behind Deluxe and AccessIT in mastering and distributing digital cinema copies!), while not rolling out fast in the US and struggling to get the Hollywood studios to sign on to the European plans that they announced prematurely last June.

The last stop of the second day was DTS Digital Cinema, which is being spun off from the consumer/audio bit of DTS. Everyone was very impressed with the image restoration business that is done by what was formerly done by Lowry Digital. I'm not sure what their plans are for the digital cinema server side, following the acquisition of Avica. Apparently they distributed a JPEG2000 version of 'Dirty Dancing' recently in Ireland and will also show Disney's 'Meet the Robinsons'. The reason they are able to do that is because they have swapped out the Avica MPEG servers for JPEG2000-enabled servers from Doremi. Watch this space for more announcements from them as we get into the review of ShoWest itself next week.

What's the digital cinema future for Éclair?

The above question is merited by the news that fell like a bomb on the European attendees of ShoWest last week that almost half of the shares (43 per cent) in French post-production and digital cinema pioneer Éclair had been bought up by Tarak Ben Amar. Who he? You wouldn't know it from his brief Wikipedia entry, but he is the 83 per cent owner of France's Quinta Industries, whose ownership includes both LTC and Duran Dubois, i.e. Éclair's greatest competitors in France's post production market. From an artcle in Cineuropa:

The buyout, through Holland Coordinator Italia, was made possible after Philippe Dormoy, father of Bertrand Dormoy, left his posts of CEO of Éclair Laboratoires and vice-president of the Éclair Group in September 2005. "I became close to Mr Ben Ammar, who I’ve known since 1975, in order to ensure the longevity and the name of a group founded by my family in 1907, to which I remain much attached," said the seller.

. . .

The Éclair Group (Éclair Laboratories and Télétota) has a presence on all audiovisual markets (features, shorts, television features, advertising, documentaries, magazines), from production to distribution (set rentals, photochemical processing and sorting, audiovisual post-production, print production and archive restoration).

The article neglects to mention that the company has also done a lot of work in digital cinema, mastering over twenty movies (including a 4K title), with an average output of two a month. The company has also announced plans for a 4,000 screen digital cinema roll-out in France, Germany, Italy, Spain and Scandinavia and has the support of at least two Hollywood studios.
Much of this thanks to Gwendal Auffret.

This is where things get interesting, because Tarak is also head of Technicolor at Quinta Industries. In fact, the bond between Technicolor and Quinta go very deep, as this press release from 2004 reveals:

Thomson and Quinta Enter Into Partnership for Post-Production and Film Activities in France

Quinta Benefits from Access to Thomson’s Skills and Technology Expertise Thomson Strengthens Presence in Post-Production and Film Activities in France
Paris, November 11th 2004 - Thomson and Quinta, a company controlled by Mr Tarak Ben Ammar, have entered into an exclusive partnership agreement covering post-production and film release activities in France.

The agreement will create strong commercial and technical ties between Quinta’s post-production and film activities (Duran Duboi, SIS and LTC) and Thomson’s Technicolor Entertainment Services, a leading player in the field of film replication and digital post-production worldwide. Through the partnership, film producers and directors in France will be able to benefit from state-of-the art technology.

Quinta will draw on the technical expertise of TechnicolorTM and Grass ValleyTM to offer its customers the highest quality services in the film industry. This arrangement will reinforce Quinta’s position in the French market and strengthen its ability to adapt to the industry’s fast-changing technological environment.

That is why people kept coming up to me at ShoWest and asking if Gwendal is out of a job. What is clear is that this must be the end for the go-it-alone digital cinema strategy of Éclair. There are a lot of smart people at Technicolor, though they are outnumbered by the not-so-smart-people, with the latter too often in charge of digital cinema strategy in the past. Technicolor and Tarak would do well to keep Gwendal and his expertise on board. But that is not always how these things work.

One thing is for sure and that is that digital cinema just got a whole lot more interesting in France, which I had previously predicted would one of the last countires in Europe to go digital.

3ality gets real in Burbank

Digital 3D was this year's biggest thing at ShoWest, which I promise I will write about soon, but in the meantime the opening of 'Meet the Robinsons' (in "Disney Digital 3-D") and the unveiling of 3eality's new facility prompted the following article in the Hollywood Reporter, 3-D gets 3ality check with new production digs. This company 3ality is serious about the potential of digital 3D ('D-3D', 'd3D'?) and is planting itself in the heart of the film industry Burbank/North Hollywood with its new facility:

3ality is building a dedicated 20,000-square-foot 3-D production facility in Burbank that will house parent company 3ality Digital's two units: 3ality Digital Entertainment, a feature film development and production company, and 3ality Digital System, a 3-D production, postproduction and technology development unit. Partners in 3ality Digital are Art, David and John Modell; Jon and Peter Shapiro; Steve Schklair; and Sandy Climan.

"3-D over the years has been like a carnival sideshow," Schklair says. "We built this building to legitimize this business."

The new facility will include a 24-seat, 3-D-ready digital-cinema theater equipped with a Barco 2K digital-cinema projector and Real D 3-D system in order to screen the productions the way they would be seen in theaters.

Interestingly the article reveals that the company is branching out from concerts and is looking to do live sports within six months. While it may be interesting to watch a canned performance of Bono & Co. in Mexico City most sports fans are not known for sitting through repeats, whether in HDTV or 3D. But more on this in the ShoWest summary.

Russia gets first d-cinema mastering install

Russia has become the latest country to acquire digital cinema mastering capability, courtesy of Doremi of course. It thus joins the growing band of territories and companies that can offer 'DCI-grade' mastering for domestic titles , including France (Eclair), UK (Deluxe/CFX), Germany (Bewegte Bilder) and Norway (BUG/Unique). It's also not just any Russian company, the press release tells us:

The first Digital Cinema mastering station in Russia has been installed as a part of the national Digital Rollout programme developed by the Head Data-Computing Centre (GIVC) of the Federal Agency of Culture and Cinematography and the ComSat company, with the support of the Russian Ministry of Culture.

This installation means that now, not only foreign, but also national films can be projected onto digital screens with DCI-rated image quality. Coming only a few months after the opening of the first digital cinema in Saint Petersburg, this installation is a big step towards a full-scale digital rollout in Russia.

Russia is also only one of a growing number of emerging markets that could see faster digital cinema roll-out than several 'Old Europe' countries, to use Donald Rumsfeld's memorable description of France et al.

Why NCM is worth a cool billion

Many of you may have been amazed at NCM's stock market floatation at well over a billion dollars. Is this possible for a company that is responsible for what many consider to be the least popular form of advertising in the US? Yes it is and here is why, based on their own press release:

Total revenue of NCM LLC for the fourth quarter increased to $74.1 million from $44.6 million, primarily driven by the conversion of founding member legacy contracts to NCM LLC contracts, a 30.8% increase in advertising network theatre screens and a large CineMeetings multi-site event. National advertising inventory utilization was 100.2% and CPMs (cost per thousand) decreased 2.8% from the fourth quarter 2005. Net income increased to $0.7 million from a loss of $3.0 million in 2005 due primarily to the higher revenue, partially offset by increased payments to founding member theatre circuits, higher severance costs and option plan costs, and increased administrative costs associated with the digital cinema initiative and preparing the Company for its IPO. The increase in payments to founding members was driven by higher advertising revenue, as 68% of NCM LLC's advertising revenue was paid to its founding members in 2006, and 65% was paid in 2005.

Overall total revenue for NCM in the last year increased from $98.8m to $219.3m. Even if the previous year only counted nine months, that's still an adjusted near doubling!

But what is interesting is that NCM is now so rich that it cannot be in charge of digital cinema for Regal et al. Otherwise the studios would tell it to spend some of its own riches on 2K projectors and servers. Instead they set up Digital Cinema Implementation Partners (DCIP) and poached some of the smartest people from NCM as well as appointing Travis Reid.

Just don't expect DCIP to float for a coll billion any time soon.

Disney family believes in 3D

Given that they've christened digital stereoscopics after themselves (as in 'Presented in Disney Digital 3D') it should come as no surprise that Disney feel strongly about 3D. However, not just the company like it but so too does the investment company of Uncle Walt's nephew Roy. Shamrock Capital has invested $50m in Real D, which has been responsible for the majority of digital stereoscopic installations to date. From the LA Times article:

The investment will give Shamrock and its partners a minority stake in the Beverly Hills company. Real D's overall value is believed to be more than $200 million. Neither company would confirm the figure.

"We've been sniffing around the digital cinema space for a while," Shamrock Capital Growth's managing director, Stephen Royer, said. "It's really the only viable mass-market solution."

Based in Burbank, Shamrock Holdings is the investment vehicle for the family of Roy Disney, nephew of the late Walt Disney.

Shamrock's bet comes as Hollywood has become enamored again with 3-D movies, which some cinema owners believe could help smooth their volatile box-office returns.

Given that Real D's installation underpinned the digital 3D, sorry, Disney Digital 3D releases of 'Chicken Little', 'A Nightmare Before Christmas' and the upcoming 'Meet the Robinsons', it should perhaps be no surprise.

But I wonder if Roy has seen Dolby's new digital 3D solution. The technology is far from perfect - yet - but it has an attractive business model, which is buy the server box and never pay any licence fee. Real D has a good technical solution but a licensing fee that few exhibitors are happy with. More about this in my upcoming ShoWest 2007 summary.

Au revoir Deluxe, hello Electronovision

The business cards did not arrive back from the printer in time for ShoWest, the e-mail took me forever to sort and Vodafone takes a week to migrate numbers even internally, but now it is done. I can proudly announce my new venture. Having spent eight years reading, digesting, breathing and living digital cinema for three great and best-in-class companies (Screen Digest, Unique Digital and Deluxe) I have now outsourced my expertise and am about to sell it back to the industry though Electronovision Consulting.


Does the world need another digital cinema consultancy? No - but it does need electronovision, i.e. the ability to see clearly in the digital landscape. As my former US boss and mentor Steve Bergman put it, digital cinema is 'big drama, little money'. Most of the companies fighting to get into or stay in this small market will not make it. If you are going to succeed in the long run you cannot expect to do business as you have in other markets or as you used to do it in the film/cinema market.

Already I have my first client and it's none other than my old friends at Unique Digital. We have just come back from a very productive trip to LA and ShoWest, more about which I will come to in a later posting. So expect to see me around and if you want to get in touch just drop me a line. If you can tell me where I got the name from and the significance of it I will even by you a drink.

Empire Cinemas (UK) get all-digital multiplex

Hot on the heels of Odeon's two all-digital multiplexes, The-Spun-Off-Cinema-Chain-Formerly -Known-As-UCI, Empire has launched it's own all-digital multiplex at a six-screen site in High Wycombe in Buckinghamshire, according to Screendaily:

The theatre chain, which has 16 sites across the UK, has partnered with Kodak, Barco and Bell Theatre Services to install the latest in digital cinema projection technology for all six screens at its 1697-seat multiplex in High Wycombe.

Justin Ribbons, CEO, Empire Cinemas said: "Empire Cinemas is the largest private cinema operator in the UK and the switch to all digital at High Wycombe demonstrates our commitment to delivering an improved and outstanding entertainment experience to our customers."

Kodak and BTS already supported one of Odeon's two all-digital multiplex sites near London and I wonder if, as rumoured, they are contributing to this one free of charge as well.