DCI Breakdown

Intermittent Issues:
Digital Projection (Finally) Gets A Standard
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"Digital Cinema Initiatives (DCI -- http://www.dcimovies.com/), an organization that was founded in 2002 by the major Hollywood studios, released their standards document for digital cinema in late July 2005. It outlines the essential elements of a digital projection package, from post-production at the studio to controling the lights and curtains in the theater. The document can be found at: http://www.dcimovies.com/DCI_Digital_Cinema_System_Spec_v1.pdf. This article will attempt to summarize key items from the DCI document, and try to put them into the larger context of what it means for the moviegoing public."

This article delivers as promised. I wouldn't do it justice to try to summarize it here, but if you're interested in how the DCI standard will impact the exhibition industry and don't want to read through the entire spec, this piece does the trick.

I did come up with one question while reading the article which I sent off to it's author. I'll let you know how he responds to:

"One thing that wasn't mentioned in the article was if there were any considerations in the spec for producers that don't work in the studio system -- i.e. independent film makers. How much access will the need to specialized equipment and postproduction facilities in order to participate in this digital standard? I'm not a filmmaker myself, but I think having content producers that can compete with the big studios will be better for the moviewatching economy as a whole."

My "Home" Theater Experiment

A lot of important things have been coming together recently and leading me to some great ideas about how to shape the prospect of my movie theater.

First, I ran across a fantastic article a few weeks ago (that I wasn't able to blog about) by Edward Jay Epstein, 'The Hollywood Economist". Of all the articles about the recent/current box office slump, this one has been the only one that shed any real light on the issue. In addition to being far more well informed than every other critique of this issue, Epstein provides the only perspective that doesn't involve some sort of doomsday prediction. For Mr. Epstein, everything is simple evolution, for better or worse, and all there is to do is to understand the mechanics and forces that are driving this evolution.

Obviously I was intrigued. He seems to know more about what's going on than anyone, and driven to comprehend it not by some emotional attachment (like me or say the movie critics) or desire to see Hollywood fail (like the public who is pissed about being sold overpriced garbage at the movies) but by his own (almost twisted) fascination with the monster that is Hollywood. For those two things, I value his perspective very highly. I bought his book "The Big Picture: The new logic of money and power in hollywood" and it's fantastic. I know I recommend a lot of things on this blog, but this book is fabulous. I haven't finished it (I'm only about 3 chapters in) but I can't put it down. Like the way most people would read Harry Potter. The Non-fiction equivalent of crack.

In any event, the major idea of the book so far is that studio's care very little about their theatrical release platform as a way of generating revenue. All of their interest is in the endless possibility of home entertainment (well really in capitalizing on the long term success of their marketable intellectual property -- such as characters and personages that can be sold as books, movies, toys, etc). So I've been mulling over that for a while (since one of my principal ideas about having this theater and necessarily doing business with studios is that they need to have a vested interest in getting some return from operations like mine so they'll be eager to help out when they're needed)

The other thing that has been going on, is that I finally bought a home theater grade projector which is great for a couple reasons (aside from the obvious one which is that I have a totally sweet projector for watching movies.) 1.) I can finally check out the quality of these devices, train my eyes and ears to detect quality, survey their long term maintenance needs, etc. 2.) I can now test out all of my concepts about small groups watching movies.

So with all that in mind, here's the thought that has been brewing. Epstein asserts that the studios are no longer movie production factories, but giant multi-media home entertainment conglomerates. The reason they will always be relevant in the near future (until all media becomes public domain -- which doesn't appear to be the trend) is that they control all content. Even independent movies eventually end up in their domain thanks to their independent distribution arms (i.e. Miramax, Sony Classic, Fox Searchlight). But if the trend is to maximize the experience for home entertainment (which is essentially the personalization of content) the next step for public venues should be to become a client of these home entertainment services and options. It should just improve on the home experience by offering better audiovisuals, accommodating more people, and making it easy to access more content.

I envision these ubiquitous media screening rooms where you can sit down in front of a small to medium sized screen, and watch anything from the Lakers game, to your favorite TV show, to the newest Spielberg release , to your email. You can bring your own content (on DVDs, memory cards, whatever) or purchase it there by renting, downloading, buying discs, or buying a ticket to watch a premade selection. The role of the theater would be to maintain the complex schedule of how to rent out the time in the theaters, how to help people get access to whatever movies they want, maintaining the quality of the theater experience. Obviously these places would be the perfect places to sell dvds (for example, you go in to rent a movie you've never seen, but after you watch it, you decide you'd rather keep the movies, you can waive your rental after you purchase the dvd on your way out) or home theater equipment (since the venue is essentially a showroom for products) but selling these things should not be the primary business. One, despite what the profits may be, there are already companies that do it better and you can just hook up to their websites and collect a commission for helping the process. Also it removes the potentially costly and volatile dependency on specific technologies that are bound to change.

So here's one part that could be really cool about this. Since people would be choosing their own content for the theater, they become business partners. If you can capture their imaginations with this idea, they can take ownership of individual shows, or festivals (for profit or just interest) and provide innovative programming, local interest, diversity, and marketing all in one logical, scalable package. Let's say local kid wants to show his favorite cartoon series. He sells the idea to all of his friends who show up and diffuse the cost of the rental. Or the local filmmaker who wants an audience. He'll do all the necessary things to draw attention to his movies. Meanwhile, all these people are coming through your doors and enjoying all nature of cultural communal experience.

I think I'm starting to get really close to the exact model of what I want to do. This is similar to what I did with my dvd collection college, and I think that's a good sign. It's also respectful of the logic of Hollywood which is an even better sign.

And before I forget, one other thing I learned from the 100 movies Saturday, when watching the abbreviated version of movies, always fast forward instead of chapter skipping so you always get to watch the good parts. Also the "I get it" progression of influential movies to the masterpieces that refer to them is a great way to string together a day a movies (Like Ray Ray's the 10 movies that explain all of the jokes in the simpsons, or watching prince of Egypt and Indiana Jones temple of doom in one sitting). It'll certainly be something I'll put on the program for my "media centers". Our version of employee picks.

Take me out...to the movie theater

Big league screen
Cinema shows Red Sox in HD
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"The ticket sellers wore Red Sox caps and the usher told us to enjoy the game.

This wasn’t a typical movie night at Showcase Cinemas North. Major League Baseball has long been known as “The Show,” but that was never more true than Tuesday night when the Red Sox played the Texas Rangers at Fenway Park and NESN’s High Definition broadcast was shown on one of the big screens at the theater complex. "

I don't know if this fits in with all the stuff I usually say about a theater needing to identify it's personality and purpose, and it's probably just the fact that I love watching basketball on TV, but this is just so awesome! I can't remember if I've talked about this before, but I'm totally enchanted by the use of movie theaters as alternative venues to sports events and concerts (specifically) because they offer the benefit of making watching an event more special than putting it on TV (maybe on par with or a step up from a sports bar for games,) but can be MUCH cheaper than actually attending the event live. And the movie screen and super sound system may actually provide a BETTER viewing experience than actually going.

This reminds me that a lot of the reason I want to have a movie theater is the multimedia possibilities that you can get out of the combo of big picture/big sound/big room. My fascination with this concept is, I think, the same part of me that likes the idea of building out home theaters into commercial venues because I love home theater technology.

Maybe this only makes sense to me. But I think one of the other clearcut purposes of the modern theater should be to take all of the possibility and value of home entertainment and package it so that people can have shared experiences. Movies are the natural entry point (for me because primarily I love movies and the exhibition industry because that's what people understand) but the content shouldnt have to stop at feature length films

Conflict of Interests

The show must go on, even if it's 10:30 a.m.
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"If a movie sticks around at the Garden, it's an indicator it is profitable, Ms. Stephens said. She adds that many complain that the Garden Theater shows movies for too long, but that is the key to making money.
"The longer they're there, that means we're doing well with it," she says."

This is a pretty tired topic by now, and I'm sure anyone who reads this blog knows how I feel about the issue of the theater-distributor revenue split, but I thought that this statement captures the precise problem with the way the distribution/exhibition deal is structured.

Simply put, the interests of the theater should align more naturally with the people that go.

The fact that they don't is just a result of convoluted business architecture. While this is a model that has been viable for a long time, as I've expressed in recent posts, the people watching movies are no longer going to tolerate things like this in the face of all of the other choice they know is possible.

But philosophically, this is a call for more intuitive and direct business relationships. Technology is the new middleman and his cut tends to be pretty small

How J Lo saved the Movie Theaters

THE HALL OF MOCTESUMA

With Maya Cinemas, a movie producer plans to bring films to Latino areas
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"Katz and Esparza met in 1984 through a relative of Katz's and they have been working together ever since. They knew the film, which launched a film career for Jennifer Lopez, had been a general success. But when the box office numbers showed that the movie was selling out in theaters far from Latino communities, a lightbulb went on.

"We realized Latinos were driving miles and miles to see the movie because there were no theaters in their area," Katz said. "We started checking Latino theaters on the map. (There were) very few in Latino areas. The theater companies just didn't understand the Latino market."

Their revelation got the pair rolling."

I wasn't very excited when I first saw the headline for this article. Despite my obvious connection to the targeted community (I'm half Mexican) I thought efforts like this and like Magic Johnson's theaters in Urban Black markets were ot really up my alley or of any real interest to me. I saw them as business savvy moves, and paying attention to underserved communities, but not really about the movies themselves.

But this article put it all together for me. And what came together is really encouraging. The market for moviegoers isn't saturated, like everyone is saying it is now. The distribution and exhibition arms just don't know how to get the right content to the right people right now. People were driving miles to see a movie they could relate to. If only the movies were more readily available (closer) and if there were more movies of interest (more latino films). And that's what efforts like this are all about.

Interestingly, this is starting to sound a lot like the long tail. The only thing that's missing is that things be cheap. Hopefully they'll work that in. But since this is slowly making it's way down the long tail, it's really an idea that's forward thinking in the same way that high-technology solutions such as netflix and on-demand video are. Currently, Netflix is better at it, but you can't ignore the fact that physical movie theaters can position theselves to operate in the mode of the movie content providers of the future.

Specialty theaters are an interesting middle ground between hit-based content (hollywood blockbusters) and all the available movie content (netflix). Really, no one is going to watch all the movies ever made. They're only going to watch the onss that are interesting and that they have time for. And communities of people are more likely to be the same than they are to be different. They're just less likely to be the same as the soulless, oommercially driven 'movies' that one might make only in Los Angeles, CA :) So idetifying that subset is probably enough to keep a theater in business, even if it can't show all movies all the time.

Booyah

Tax Included!

In case you didn't catch it in the comments, I got some great feedback regarding the question of whether sales tax is indeed included in the price of movie tickets. This would have been out earlier, except I have been pretty slow about checking my emal, lately :)

Here's what my well-informed anonymous contributor says:

Check your local sales tax regulations. You might be surprised to learn that theaters do, indeed, pay sales tax even if they do not appear to charge it.

For example, in the state of Florida, theaters pay sales tax on ticket sales. However, most theaters still show a price with an amount divisible by $0.25 and do not display any additional sales tax charges on the customer's receipt. A matinee price of $6.00 means the theater gets $5.63 and the state gets $0.37 (at the sales tax rate of 6.5% in my area).

So there you have it. Thank you anonymous contributor! I hope you come back often!

Cinema-On-Demand: Theater as Social Software
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"I love going to the movies with people, even people I don’t know. I love to hear others’ reactions, and discuss the movie with people afterwards...

...What this means is that films can potentially be shown to smaller audiences. And this, in turn, means that those audiences could select the film that they want to view and schedule the theater in advance. Moreover, there’s no reason to think that audiences merely want to watch only new films. Imagine a small (but big enough) cadre of film buffs pitching in to watch Citizen Kane on the big screen for a Saturday night. Or how about an all-day Star Wars or Star Trek marathon?

...So, in effect, the local movie theater evolves into a kind of watering hole where audiences can reserve a time-slot and a film for their own purposes. This could prompt a change in theater architecture, from large pack-the-house-to-get-back-your-costs sardine boxes to smaller lounge-style spaces with movie controls, tables, sofas, and such organized around comfort, convenience, and the whole experience. As we move towards the “experience economy” theaters will have to consider these issues carefully."

Here are some excerpts from an group blog entry that I find really exciting. Not only necessarily because they’re ideas that are new to me, but because other people are feeling the way I do about the social element of going to the movies. Here’s what I wanted to post on their site (by the time I got to it, they were no longer accepting comments -- at least not from me).

"I discovered this post because I write a blog about movie theaters and regularly monitor relevant news sources (via google news). You’ll be happy to know what you write here is news 

In any event, the reason I have this blog is because I desperately want to own a movie theater some day. And I believe, precisely, in what you wrote about. These days, all industry coverage is about how much people hate going to the movies because of all of the various irritants present. But this celebrates all of the things that makes going to the movies… going to the movies.

So I fully support you in developing this idea, and am committed to make this happen when I have my movie theater. I’d also like to add a couple of related ideas that haven’t been mentioned yet.

Audiovisually (and not to mention socially) I think movies are actually optimally viewed in small group sizes. The high end (and even not so high end) home theaters people typically build in their homes are really the best places to watch movies. You have a better chance at getting balanced sound and optimal viewing distance and angles in more intimate rooms.

Also, when building a theater, having a lot of small screens is cheaper than building one big one (like how two 17 inch monitors is cheaper than one 25 inch monitor) and you get the best of all worlds. A theater with multiple screens can use their capacity to show 5 different movies or one movie, all at the highest possible quality. And you can capitalize on “consumer” products and the low price points they offer and make it easier to scale your business up or down depending on the particular market.

If a reasonable deal for digital distribution could be met, these low barriers to entry for theater owners could mean that small theaters could pop up everywhere and anywhere, and the capital advantage held by the big chains wouldn’t be as crucial to surviving in the industry. Anyone who could afford a home theaters had the ability to intelligently pick movies and serve their communities could start one.

And if I save up enough money, I should be able to afford a home theater."

Decisions, Decisions

Consultant hired to decide whether to renovate theater or build new one
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Meanwhile....

For some communities, having a pure movie theater is still the best option for watching movies. Rural communities and less developed places will always need some sort of movie theater if they want to watch films. But it's only a matter of time and convenience until they outgrow the old mode. Theaters, like I say in my last post, need to be reimagined from the ground up. Everywhere.

Doomsday?

In a theater near you: the box-office blues : Will death become theatres? : Some fear that rotten box-office revenues will lead to theatres closing. : The end of the movie is nigh : Movie critic Chris Vognar discusses the box office slump : Theaters Hope Hollywood Takes Page From This Script : Movie fans surrendering the multiplex to barbarians : Drop in moviegoers could send industry reeling


I realized something yesterday. Nobody wants to go to the movies anymore. Now don't misunderstand me here. People still want to see movies. And there are some (like me) who have always loved going to the movies and go the same way you have to go to your hometown every few years. And, as Martha pointed out there are some who go because the movie needs to be big - like when we saw Batman on the IMAX. But everyone else just goes because they have to. Because there's no other place to see a particular film. Because there's nothing else to do on a Friday night. Because there's no other place where people can go without their parents. And everyone resents the fact that they know they don't HAVE to be there, yet they are... almost against their will. From there, it doesn't take much to push people over the edge. And every one of the articles above touches on one or all of the reasons that people find to make them miserable while they are forced to go to the movies. And anyone who has an out, takes it. If they have a serviceable home theater and a netflix account, they more than make do.

It's not laziness, despite what I quoted in a previous post. It's the human exercise of gravitating towards an optimum. People want to do what's easiest, not because they don't want to do anything, but because they want to make the most out of their time and money.

The piece that Ty Burr wrote is probably the best of this bunch, and gives the industry transformation the most context, and I think the most hope.

Like any industry that has given way to it's more convenient and in some cases better suited successors, the movies as we know it have no reason to go on existing. Small restaurants that serve bad expensive food can't and shouldn't compete against McDonalds where you can get bad cheap food or any top tier restaurant where you can get good food. There's just no place for them... and right now that's what movie theaters are.

--------------------------------------

So where is there hope? For one, we need to stop doing this

"The medium has evolved, as mediums do, in the direction of ease and efficiency. If there's still a reason to go to a movie theater -- call it communal dreaming -- exhibitors are chipping away at it to make their weekly payroll."

One of the great ironies of this whole situation with theaters is that as theaters start losing viewers naturally (to the shift in home video availability, etc) they compensate for the loss by doing things that only turn more people away. They continue to raise ticket prices because they have no choice, they increase the margins on their concessions even more. They show more prominent ads when they didn't before. And now they're losing people through their own doing.

If a theater isn't going to be committed to making it easier for people to go to the movies... really easier, then it should just go out of business. Because they have to realize that people just don't need to go anymore.

So if everyone would rather watch their movies at home, why not just shut down all the theaters and let them? There are three reasons. And a theater needs to do all three of these or, like I said before, it should just close it's doors and turn off the marquis.

1.) People need to be around other people while watching movies.

If all of the world's knowledge can be put into books or on the internet, why go to universities? Because being around other people open up avenues for interpreting, understanding and enjoying that would never even be possible by yourself. Movies, as much as Hollywood may try to convince us are business, are literature. They're more accessible to most than printed books, and available on more media. People need to be able to tell other people what they thought was funny or what they thought was sad, or what blew their minds.

2.) Some movies need to be big. There are movies whose art is so large or so universal that they need to swallow you up with huge screens and immersive sounds to demonstrate that they're more than entertainment, they're modern monuments.

3.) People need to see movies they wouldn't normally see. Not only does seeing movies with fresh perspecitives, open up the world, they also remind seasoned movie-watchers of the joy of watching films. The great moments in film watching happen when they're unexpected. when you didn't think a movie would be that good, when you didn't expect that a scene would move you, when you didn't expect to root for the bad guys. If people only watch the movies they're used to watching, chances are they'll be expecting most of what they get.

And these are the things that a physical space such as a movie theater can do better than sitting at home (at least right now).

3 years ago when I first realized that I wanted to own a movie theater, I couldn't sleep because I was so excited about all the ideas I had. I wanted to have a theater that also sold home theater equipment (my other obsession) and had equipment demo rooms that doubled as movie screening rooms. The place would be able to print on-demand dvds so that literally any movie would be available to take home with you if you were suddenly inspired to watch a movie's prequel, sister film, or original source material.

I abandoned most of these ideas, because I thought that I might have to adopt a more pure definition of movie theater to have it be successful at first. But now it seems that I was right on with my first instincts. Maybe what the industry needs to evolve into is precisely the movie-megastore that would combine every imagineable way of bringing movies to people and have each individual medium benefit from the cross pollination.

The hope, as I see it, lies here in what Rick Munarriz of Motley Fool says:

"The fact that so many movie chains have either filed for bankruptcy or have been taken private in desperation doesn't bother me. In fact, if you read my article "5 Pretty Stocks in Ugly Places," you may appreciate my position that the harder a sector struggles, the more likely it is that a true innovator will emerge and reshape the industry."

If someone doesn't beat me to it, he's talking about me. I'm sure of it. I always wanted to innovate because I thought it could be done better. I didn't think the industry would ever need saving. But now that it has to happen, I want to be a part of it.