[opendtv] News: Film Studios Said to Agree on Digital Standards

http://www.nytimes.com/2005/07/27/business/media/27movie.html?th&emc=th

Film Studios Said to Agree on Digital Standards

By LAURA M. HOLSON

Published: July 27, 2005


  LOS ANGELES, July 26 - Hollywood's major film studios are expected 
to announce on Wednesday that they have agreed to new technical 
standards that will make it easier for movie theaters to show 
digitally produced movies, according to two studio executives 
apprised of the announcement.

For years Hollywood has discussed how to create and distribute 
digital films with little success, in part because the parties could 
not agree on a standard technology for projectors or on who would pay 
to replace the equipment. Movie theater owners did not want to foot 
the bill, fearing the $100,000 projectors would become obsolete 
without a consensus about the standards. The movie industry, for its 
part, has resisted paying to replace projectors because studios do 
not own the theaters.

  But as it gets more expensive to make and market movies, studios 
have become more interested in the cost savings achieved with digital 
distribution. According to one of the executives, who requested 
anonymity because the agreement has not been announced yet, a movie 
film print costs $1,000 to $1,200 to make. A digital version costs a 
fraction of that as it can be either on a disc or transferred 
electronically.

  A spokesman for Digital Cinema Initiatives, the group that developed 
the standards, declined to discuss the agreement. But according to 
the two executives, studio executives agreed that the projectors 
should not only have digital capabilities now, but be compatible with 
higher resolution, next-generation projectors.

  Financing, a major sticking point between movie theater owners and 
the movie studios, is still being worked out. It is unclear how 
quickly theater owners will convert to digital technology; it could 
take years, according to some industry estimates. (Piracy will remain 
a problem because of illegal camcorder use.)

  One plan being discussed is having a group of studios work with a 
financing partner to help pay for the new projectors. As each 
projector is replaced, the savings associated with lower film costs 
would be used to pay down the debt. The theater owners would then be 
responsible for maintenance and upkeep.
 
 
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