The Reel Blog

Prime 3D evangelist Jeffrey Katzenberg, NATO president John Fithian and Classic Cinema's Chris Johnson talked 3D at ShowEast Tuesday.

Katzenberg was enthusiastic:

(T)he advent of 3-D filmmaking and exhibition also is "an opportunity for a game-changer for your business," he told exhibitors filling a large ballroom at the Orlando Marriott World Center.

But unlike digital cinema systems, distributors are unwilling to pay for the installation of 3D equipment. Katzenberg asserted that exhibitors will be able to charge a premium for 3D content of at least $1 a ticket. Classic Cinema's Johnson noted

With "Chicken Little," the chain enjoyed grosses more than one-third higher than would have been true without 3-D availability, Johnson said.

"Literally, with one picture, you will have paid for the cost of the installation of one screen," Katzenberg said.

Johnson, however, couldn't let the opportunity for some good-natured ribbing of his podium partner slip by.

"The unfortunate part is, you have to share some of that (extra) gross with the studio," he jibed.

NATO's Fithian made the point that a broad and stable base of digital cinema systems is the first priority, both as a requirement for 3D and for the health of the industry - a point backed up by an independent exhibitor in the audience.

The majors have agreed to underwrite the rollout of thousands of d-cinema systems by paying third-party installers the equivalent of what distributors will save in print costs during the next few years. Such agreements have been dubbed virtual film print agreements, or VPFs.

"Let's remember that digital is the dog, and 3-D is the tail -- a very important, wagging tail," Fithian said.

Katzenberg replied that the metaphor might fairly be reversed and went on to predict that within just a few years two-thirds of all major movies will be released in 3-D -- about 40 or more 3-D titles per year.

"Let's get the digital-cinema platform there, so we're not doing hodgepodge 3-D installations," Fithian said.

Indeed, exhibitors in smaller markets are still waiting for help with digital startup costs.

Greg Razmus, who operates an eight-screen theater in Corbin, Ky., said the closest digital screens in his area are in distant Lexington, Ky., and Knoxville, Tenn.

"We're still struggling with digital," Razmus said. "I think the 3-D part of that is going to be great, but at this point it's still a dream."

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The Cinema Buying Group (CBG), a semi-autonomous buying program under the NATO umbrella for small and medium-sized independent theaters, took a big step forward in making digital cinema equipment available for independent theater operators by issuing a request for proposals for digital cinema equipment and service providers.

CBG-NATO members (representing more than 4,000 screens) desire to acquire digital cinema equipment and service on favorable terms, funded in whole or part through "virtual print fee" (VPF) arrangements, that ensure their ability to provide high quality and reliable digital exhibition service to patrons in their markets. The purpose of this RFP is to solicit proposals from qualified vendors to provide digital cinema equipment and service to the members of the CBG, and to determine as promptly as possible thereafter which vendor's proposal best suits the needs and interests of the members of the CBG.

Simply put, the RFP announces the intention of small and medium independent theaters to be fully included in the accelerating rollout of digital cinema.

To be considered, all proposals must be received by the CBG not later than 12 noon (EDT), Friday, September 28, 2007.  The CBG intends to make a selection of vendors before the end of 2007.

The press release is here.

The CBG is here.

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Performance-capture studio Mova and Gentle Giant Studios unveiled a new "persistence of motion" 3D system at Sigggraph this week.

What that means is that the system allows 3D mdeling of images in the round - not just on a flat screen. Star Trek: TNG here we come. According to Mova founder Steve Perlman:

"(In time) we will be seeing something that is more like theater in the round, where you can either walk around the scene or move into the scene itself. One of the first things that you are going to see like that is what people are calling navigable cinema ... which will still give you a single point of view -- either flat or with glasses in stereo -- but you'll be able to navigate around it while the story progresses."

Perlman say that we'll be seeing such interactive 3D experiences "in our lifetime". I don't know how old Perlman is, but a lifetime can be a pretty long time. Don't rip out the stadium seating just yet.

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Jeffrey Katzenberg continued his 3d evangelism at Cinema Expo in Amsterdam this week. Katzenberg is so high on the technology that he vowed all DreamWorks releases will be in 3d from 2009 onward.

Katzenberg, a regular attendee at the European exhibition confab, said Monday that he regards the opportunities offered by 3-D digital as "unmissable" for exhibitors. But he noted that to take advantage of 3-D digital, operators will have to adopt 2-D digital technology first and faster overseas.

"There's a chance to change the economics of (exhibition) for the first time in 17 years," Katzenberg told a packed audience during a Paramount Pictures International-hosted discussion alongside NATO boss John Fithian and Steve Knibbs, COO of U.K. exhibition outfit Vue Entertainment.

The enthusiastic DreamWorks chief, who earlier thrilled the audience by bringing Jerry Seinfeld to the stage to buzz about his "Bee Movie," said that with all the big-name filmmakers backing 3-D technology, his studio will be using it to make all its movies from 2009.

"We're taking on the additional costs, which are estimated to be $15 million a film, for us to author our films this way from 2009," he said. "These opportunities come once in a lifetime."

Katzenberg also pointed to the fact that 3-D movies are pirate-proof as handycam recordings simply don't work.

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One of the big hopes for digital cinema is the opportunity it provides for alternative content.  If it can be digitized, it can be shown in a digitally-equipped movie theater.

The L.A. Times takes a look at one of the early movers - Bigger Picture (a division of digital cinema aggregator AccessIT) - in what may prove to be an important source of revenue for theater owners.

The technology also enables theaters to easily switch what's being shown in a theater, opening venues up to specialized shows so they can sell tickets and popcorn when they aren't showing Hollywood's latest blockbusters. Although major studio movies attract big crowds on weekends, Dern said that over the course of a typical week auditoriums are often filled to only 10% to 15% of capacity.

"If we can move the dial 1%, that's a big number," Dern said.

Bigger Picture started three years ago, when Dern and Rutkowski came up with the "Kidtoons" animation programs. A typical program might include a G-rated feature, such as this spring's "Strawberry Shortcake: Berry Blossom Festival," plus cartoon shorts, music videos and singalongs.

Concerts, opera and sports have all taken a turn at the alternative content turnstile, with live theater simulcasts from New York's Metropolitan Opera proving a surprising success. Still, we're early in the exploration of just what sort of content will drive audiences to movie theaters in off-peak hours. As digital cinema grows and approaches a critical mass, well see a lot more companies looking to turn alternative digital content into a sustainable business.

Michael Karagosian, a Calabasas-based consultant to the theater industry, sees several challenges. Niche offerings may end up playing best in rural areas where access to concerts and other events is limited, he said, but prove a tough sell in cities.

Competition is heating up, he notes. National CineMedia, for example, a digital theater advertising company, distributes concerts and other events under its Fathom brand.

Still, Karagosian said, what Access is doing boosts the appeal of digital technology to exhibitors.

"Content will drive the business more than equipment," Karagosian said. "It's recurring revenue, and a company like Access IT is looking to sell razor blades, not just razors."

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