Gary Johns is senior vice president of Sony Electronics’ Digital Cinema Solutions group which is a division of Sony’s Professional Solutions of America group. I recently spoke with Johns about the present and future of digital cinema. Digital Cinema Report: Describe the scope of Sony’s digital cinema operations. As the person charged with running that effort what do you feel are the benefits for Sony? Gary Johns: Our vision is to offer the widest range of products services and solutions to the motion picture exhibition community. We’re not just a projector and server manufacturer but a full service organization. Yes we provide our excellent Sony 4K projection systems as well as the software and servers to run them but we also provide a “managed services” approach for our customers. There are several ways we can do business with a customer. We can accommodate them if they just want to buy a product or we can work with them to deliver a complete solution including installation maintenance and financing options through Virtual Print Fee deals with the studios. In addition customers can turn to Sony for digital signage including displays controllers software installation monitoring maintenance content creation and distribution. If an exhibitor wants to do highly customized advertising by working with our newly acquired partner Convergent Media Systems we can put together a system for them and push content out to their locations. We can also work with our exhibitor partners to provide security solutions. Soon we will announce additional initiatives to support the exhibition community which will take advantage of the digital transition for improved customer experiences and revenue opportunities for exhibitors. DCR: What are the benefits for your customers? GJ: It’s truly a one-stop-shop approach; one voice to the industry and one call from the customer to us. As a partner we are interested in how we can apply Sony’s broad technology and services strengths to help improve overall cinema operations. DCR: Does each division in the group have its own head? GJ: While I’m responsible for Sony’s overall digital cinema operations our division also comprises business development sales marketing and technology groups that are headed up by extremely talented professionals; Tim Smith is responsible for our alternative content and business development initiatives; Susie Beiersdorf is head of sales; Dianne LaGuardia leads our marketing team and Rich Reames is head of technology solutions. DCR: Sony is unique in the industry in that the corporation encompasses almost every facet of the motion picture business including a movie studio a music company a manufacturing division that makes a lot of the technology used to create digital cinema and now another division that makes installs and services the technology to exhibit digital cinema. If I’ve left out anything please correct me. How does Sony maximize the potential synergy in all of that? GJ: Sony is a premier technology and entertainment company. We are known for making some of the best products in the world - high-quality and high-performance and for delivering the best entertainment available. For the past five years we’ve been applying that knowledge and expertise to digital cinema and are continuing to expand our offerings to get our customers all the way from acquisition to the screen – and everything in between. It’s an ambitious goal but we will accomplish it by working together in a spirit of close collaboration both internally throughout Sony - with our colleagues at Sony Pictures Entertainment Sony Music Entertainment and Sony Computer Entertainment of America – and with a full range of companies involved with digital cinema: studios exhibitors production companies and more – to ensure that we offer best-in-class solutions. DCR: The exhibition industry is as you well know undergoing an unprecedented global transformation the end result of which no one can confidently predict. However it is safe to say that within a very few years the main transition currently underway and driven largely by 3D will reach a saturation point. I don’t believe that will signal the end of the transformation of exhibition but rather will more likely signal its real beginning as sophisticated exhibitors fully comprehend the full potential of digital technology. I believe they will begin to demand technology solutions that are not obvious today. What does Sony digital cinema have on the drawing board to anticipate some of those demands? GJ: Of course we’d like to tell you everything we have planned but it’s just a little premature for us to do that – at least right now. We are taking a holistic approach to the industry looking at all the areas of technology where Sony may be able to fulfill the needs of our cinema customers. We are confident that we bring more to the table in this respect than our competitors as we’re unique in having a breadth and depth of products and technology that can be applied to this industry that can’t be matched. DCR: Can you provide an update on Sony’s Digital Cinema Business and also what’s in the works? GJ: We’re doing extremely well. We’re working with a number of theater chains for ongoing deployment and with new customers as well. By the end of 2011 we expect to have approximately 10 000 4K screens in the U.S. with about 60 percent of those 3D-equipped. We’re thinking big and we have taken all the necessary steps to ensure that we’re not capacity-limited. We’re currently shipping around 500-plus systems a month and we have room to substantially increase that quantity. Our largest roll-outs currently underway are with Regal Entertainment Group and AMC Theatres the two largest theatre chains in North America and most recently we signed a global VPF deployment deal with National Amusements. We’re also working with many other national and regional theatre chains to implement 4K projection technology and other Sony solutions. In the U.S. these exhibitors include Alamo Drafthouse Camera Cinemas Channelside Cinemas Cinemagic Theatres Frank Theatres Hollywood Theaters Landmark Theaters Lincoln Square Cinemas Muvico Theaters Paragon Theaters Prytania Signature Theatres SR Entertainment Group (North American Cinemas) Uptown Entertainment Wildwood Theatres – and look for more names to be added to the list in the coming months. Internationally our exhibitors include Apollo Cinemas and Cinepolis. We’ll also expand our efforts in alternative content helping exhibitors to provide exciting additional programming to complement their current offerings and augment their non-peak times. We had tremendous success this past fall with our alternative content pilot programs in gaming and music and we’re looking forward to continuing that success in the near future. So it’s safe to say that we will continue to innovate continue to help our customers with their transition to digital and we’ll continue to surprise the industry with exciting new solutions.