Wednesday, November 17, 2004

Disney, Sony, Warner mull digital cinema deal

Disney, Sony, Warner mull digital cinema deal

Blog note

As much as I endorse the idea of having the studios bankroll the installation of digital cinema equipment on a large scale, in order for the industry (not just the studios) to realize the
full financial benefits of the technology, it must be assured that some limit will be placed on the structure of the business deals used to put the equipment in place. While it will certainly
be necessary to compensate for the cost of the new equipment by factoring this cost into film distribution deals to the exhibitors, once the cost of the equipment is paid off, then deals
should be resutructure to more accurately reflect the contributions of the distributor.

UNLESS, it is the plan of the studios to keep providing dcinema equipment on a regular basis, refurnishing the technology as new films take technological leaps and processes continue to make the distribution effort more efficient. If the new model of distribution can keep the overhead costs of equipment maintenance down by gradually recouping the costs (essentially renting the equipment like a satellite dish or cable box) then this could be a way to pass on savings to the exhibitors.

It doesn't solve the problem for smaller exhibitors whose shipping costs/equipment costs could not justify having the studios pay attention to them. But they would benefit from a widespread acceptance of the format and could broker much more cost effective deals for first run films (sans equipment). The studios could further cash in on the widespread effects of their investment and there would be greater possibility for profitable businesses for smaller exhibitors.


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