In Greek mythology Pandora's Box contained all the evils of mankind – greed vanity slander envy to name a few – as well as all the hope. It was only after she opened the Box and released everything that Pandora realized she could never get things back into the Box again. There was no turning back. The question now which more than a few people raised last month during ShoWest is this: Is digital cinema in fact Hollywood’s own Pandora’s Box? Even when it went unspoken that question hovered over much that happened at the event and it put a bit of a damper on what was in fact an energized and largely upbeat show that featured a long list of significant business announcements. We’ll take a closer look at those announcements in our next Report but the bigger story is why so many people came away from ShoWest feeling perplexed. There are three basic reasons. First many people whose companies have been involved in digital cinema since Day One (and before) said privately that they’re discouraged that the roll out isn’t happening as fast as they had expected or would like. In that respect there was a lot of black humor directed at Travis Reid and the ongoing (and many would say slow-moving) efforts of the Digital Cinema Implementation Partners to finally press the Go button. That’s to be expected because so much forward motion depends on DCIP’s decision. After all the company represents roughly half of all the movie screens in North America. Also to be expected is the fact that it is taking them so long to make what are in fact several very large decisions. Just don’t try telling that to vendors who have spent nearly a decade developing digital cinema and are increasingly anxious for a share of DCIP’s business. Second the reality that the U.S. economy is in the doldrums did nothing to provide encouragement even to those attendees that for the most part seemed upbeat and optimistic. The third reason is that Hollywood and to be fair some related technology issues stand in the way of moving quickly to an all-encompassing global transition to digital cinema. Hollywood currently refuses to relax the DCI standards in any way and that is critical if a more affordable implementation of digital cinema is ever going to happen. Currently it’s 2K or the highway. The stated reason for this is the need to protect the studios’ content from theft. Fair enough but can’t 1K content be encrypted as well? The technology issues are these. Manufacturers simply can’t trim much more off the current price of 2K technology. Prices will continue to fall as the roll out proceeds but it is almost certain that 2K prices will never be low enough to make them affordable for all independent single-screen theatres. The economics simply don’t work. Purists will argue long and loud that 1K does not deliver an acceptable image for something as precious as a Hollywood movie even on a relatively small screen. However many of those purists have never set foot in a small rural theatre. If they had they would realize that the dirty damaged prints that smaller theatres often receive – here and around the world – aren’t delivering a very acceptable image either. And when they are aware of those conditions film purists typically blame exhibitors and the buttery fingered lackadaisical people they supposedly hire. That argument has some merit but it ignores the reality that film except under the most stringent and pristine conditions begins to break down after multiple screenings. So under current economic and technical conditions smaller independent theatres in the United States and around the world – a significant number of movie theatres – will be locked out of the digital cinema future. All of this in and of itself is not necessarily a problem for Hollywood if the studios are prepared to live without the sizable incremental revenues that small theatres around the world provide. That could turn out to be a big “if.” There are options. First Hollywood could relax the standards. That isn’t likely to happen soon for at least two reasons and both are defensible. One is that Hollywood needs to first adjust to a 2K digital system worldwide before it adds more to the mix. Second manufacturers have a vested – and fairly earned right – to reap some 2K benefits before they start selling lower-priced technology to the world at large. A second option is that the Cinema Buyers Group will finally succeed in working out a Virtual Print Fee agreement with the studios that will make 2K digital cinema viable for at least a majority of independent theatres in North America. A third option is that the larger chains will absorb many of the small independent theatres in the country. But none of the options change the fact that in any scenario a sizable number of small independent neighborhood theatres will close their doors forever and that charming chapter in American history will close with them.
