The interview covers the waterfront from Avatar to windows.

As you may have noticed, there's a bit of a controversy right now over who will shoulder the costs of disposable 3D glasses.

Marketplace has the story.

Some people think the future of the movie industry is in 3-D films. But a battle is brewing between Fox and theater chain Regal Entertainment Group over who will pick up the tab for 3-D glasses. Jill Barshay reports.

Our good friend George Solomon continues to tell it as he sees it.

Listen in.

I would be deeply remiss if I didn't bring your attention to this post on the digital cinema self-financing panel at ShoWest.

Sperling Reich must have the fastest typing fingers in the West to nail down as much detail as he does here from a fast-paced lunch-time discussion.

When Macdowell turned to Solomon to get an exhibitor's opinion the discussion turned somewhat acrimonious, in a friendly sort of way. "I happen not to be a proponent of 2K [projector resolution] and I have not been a big proponent of integrators," said Solomon. "I believe we should be able to band together and form our own consortium and go negotiate for our own VPFs. I don't believe in giving a cut to an integrator."

CBG's Campbell, like Christiansen, isn't as down on integrators as Solomon and is of the opinion such third parties might be necessary, especially in the short-term. "Self financing is not going to happen for a long time," said Campbell. "I think self-financing is going to be done through the integrators and if we have to pay a small fee of the VPF then so be it."

Solomon, whose smooth New Orleans drawl had Macdowell comparing him to a slick southern lawyer, is not the retiring type and is almost always quotable. Given the chance to air a few thoughts, he let his grievances fly. His comments received the biggest audience reaction by far. "If 2K is the way we're going, then 35mm is better," he argued. "Apparently digital helps distribution, but it doesn't do a thing for exhibition. If distributors want to go with 2K then give us the money and we'll get on with it, otherwise we're going to have to go at our own pace. If distribution wants 2K, give us the money!"

Solomon went on to get a huge laugh when he recounted asking one of his regional managers, "What's the difference between a 35mm film print and a digital cinema hard drive? He said, 'about 40 pounds'."

Levin attempted to diffuse Solomon by pointing out that two of the studios were present and on stage, ready to talk about giving Southern VPFs, but Solomon got the last word in during this exchange as well by snapping back "I know, but I have to figure out how I'm going to pay for [3D] glasses with one of them."

In one instant Solomon made public the rumor that Fox had been telling North American exhibitors that after "Ice Age 3" the studio would no longer be paying for disposable 3D glasses. Presently none of the studios pay for disposable glasses in Europe, though they have been footing the bill in the U.S., Canada and at times Mexico.

 Read the whole thing. It will be well worth your time.

ShoWest 09 marked a change in  programming. Monday has in recent years been "International Day," but with the increasing interconnectedness of the industry, it no longer made sense to separate out the international programming. Hence, Monday became the official opening day instead of the traditional Tuesday.

Fox's Jim Gianopulos kicked off the Opening Day luncheon with an overview of the health of the exhibition industry:

Gianopulos' Keynote Address was a speech laced with charts and graphs showing how the theatrical moviegoing experience continues to grow despite the recent economic upheaval and recession. He noted that despite the dramatic increase in home technology like HD televisions and Blu-ray, those who own five or more pieces of home theater technology are still more likely to go to the movie theater every weekend than less. He mentioned that movie attendance continues to be the #3 choice for most people going out for their entertainment and that it made up a larger audience of those going to sporting events, Broadway theater and other activities, which tend to be more costly. International growth was also a large factor, noting that North America made up roughly half of the over $18 billion grossed at the box office worldwide in 2008, and that there was a lot of room for growth.

A picture of James and the Giant Graph is here. A chart showing how people who use 5 or more home entertainment technologies go to more movies is here and another one showing what the inside of my brain looks like is here.

Wednesday saw a bit of fireworks with a luncheon panel discussing digital cinema financing:

Moderated by G. Kendrick Macdowell, VP, general counsel and director of government affairs at NATO, the panel featured two studio execs who have pledged support in the form of virtual print fees to individual exhibitors. Mark Christiansen, executive VP of operations at Paramount Pictures, deemed his studio’s plan “incredibly easy…something you can do now.” But Fox exec VP of digital exhibition Julian Levin, who is also reaching out to individual cinema owners, bluntly criticized the streamlined Paramount offer document as having “a lot of holes,” contrasting the Fox approach as that of “a grown-up business.”

Even more contentious was exhibitor George Solomon, CEO of Southern Theatres. Dismissing the role of third-party integrators like Cinedigm and Digital Cinema Implementation Partners, he declared, “I believe that mid-size circuits should be able to negotiate virtual print fees directly or have their own consortiums… I don’t believe in giving a cut to an integrator.”

The plain-speaking Solomon, whom Macdowell at one point compared to a crafty Southern lawyer, proved not much of a champion of the digital revolution. “35mm is still better,” he contended. “What’s the difference between a hard drive and 35mm film? Forty pounds!” Arguing that the benefits of digital accrue mainly to the studios, he challenged, “If distribution wants 2K, give us the money!”

And as ever, the Closing Night awards were star-packed and festive. Lots of pictures here.

Digital Cinema Implementation Partners (DCIP), a consortium of exhibitors Regal Entertainment Group, AMC Theatres and Cinemark, announced they have struck a deal with five Hollywood studios to support their digital cinema rollout. According to AP:

Five Hollywood studios have agreed to help pay for a $1 billion-plus rollout of digital technology on about 20,000 movie screens in North America, a precursor to showing movies in 3-D.

Digital Cinema Implementation Partners, a consortium of major theater chains, announced the deal Wednesday. The rollout in the U.S. and Canada, covering about half of all screens, is planned to start early next year.

DCIP topper Travis Reid noted that the rollout remains contingent on securing financing for the deal - a difficult task in the midst of the ongoing credit crisis.

"We'll be needing to execute in the debt markets and we hope to do that during the fourth quarter," Reid said. "We don't believe that the markets will be closed forever."

NATO applauded the agreement, but noted there are numerous theaters and screens not covered by the agreement.

With a deal in place for the largest U.S. theater chains, it is time to conclude a similar digital cinema agreement for the hundreds of independent cinemas and thousands of screens not covered by this agreement. It is imperative for the health of the industry and for the millions of moviegoers in small towns and cities that the benefits of digital cinema be spread as widely as possible.

NATO, through the Cinema Buying Group (CBG) and its selected digital cinema integrator Access Integrated Technologies, Inc. (AIX), continues to work with the studios to ensure that CBG members, who are smaller and independent exhibitors, often in small towns, are not left behind.

CBG's website is here. 

Before getting outside the box office, they get right into it:

THE HOLLYWOOD REPORTER: Will summer 2008 set another new boxoffice record?

CAMPBELL: We have a strong slate of films this summer, but what you’re missing is what I’d call the three money-in-the bank films you saw last year in May. There’s a lot of diversity in product this summer, but will it be a record summer? I can’t say that.

FITHIAN: This year we have a few more unknowns. Some of those will surprise on the upside and some on the downside.

THR: And the year?

CAMPBELL: What I would say about the fourth quarter is that last year that was our weakest quarter, so on a comparable basis I think there’s more powerful product in that quarter of this year.

FITHIAN: I don’t disagree at all. I think it’s also important to remember we are coming off two up years in a row.

 On ratings:

THR: Exhibitors tend to like less restrictive ratings, yet there continues to be a regular flow of R-rated movies. Are you OK with that?

CAMPBELL: From a selfish, economic point of view as an exhibitor, we do better with PG and PG-13 films, and on any given year you generally see 17 or 18 of the top 20 films as PG or PG-13. There is still a place for R-rated films, but we do better at the boxoffice and at the concessions with PG and PG-13 films.

FITHIAN: I am mystified why everybody in Hollywood wants to be Quentin Tarantino instead of trying to sell movie tickets.

 
THR: Any other specific advice for Hollywood on the kind of pictures they should make?

FITHIAN: More family titles of any genre. When you take an action film and decided to make it PG-13 instead of R, it does better. And in most cases, if you have a comedy and decide to make it PG-13 it does better, although there certainly is a role for the harder-edge comedies as well. But as the father of a 5-year-old, there are times I am looking to go to the movies with my child and can’t.

Year-round movie-going: 

THR: You like to encourage “ 12-month releasing.” Isn’t there a limit to how many tentpoles can open while school is in session?

FITHIAN: Yes, but we’re still doing it wrong. Virtually every school in the country is still in session the first weekend in May, and the biggest movies in 2007 were released over the first weekend in May. Yet we leave April almost entirely off the table, and the circumstances of school are very similar in April and May.

There are only so many blockbusters you can tolerate in the year, but in summer when they are so close together we are losing money. With those huge titles last May, we lost— in my estimation —$50 million$100 million because we had them all in one month. If one of those had been in April, I think we would have made a lot more money.

CAMPBELL: We could increase the boxoffice several percentage points by having a release schedule that was spread a little more evenly.

Read the rest here. 

 Publisher Nick Dager starts it off with a bang:

The answer lies in the fact that the studios, either by happenstance or by design, are taking a very passive-aggressive approach in their negotiations with DCIP. Several studios are demanding higher virtual print fees, which exhibitors insist they can’t afford. Other studios are demanding that exhibitors convert to digital now in order to justify the costs of the 3D features due out next summer.

In some cases that passive-aggressive attitude exists in the same studio. In interview after interview Jeffrey Katzenberg, CEO of Dreamworks Animation has led the charge all but demanding that exhibitors waste no time in converting to digital, this of course so that his 3D movies can make more money. Yet his long-time partner Steven Spielberg tried to block the digital release of Indian Jones and the Kingdom of the Crystal Skull. In a recent story on the topic reported in the Chicago Tribune Spielberg is quoted as saying, “Making a film on celluloid, as I like to do with all of my pictures, but then transferring it and releasing it and projecting it digitally is a very inferior image.”

Where does that leave the transition to digital cinema, and by necessity, 3D? 

 
Scylla, meet Charybdis:

John Fithian, president of the National Association of Theatre Owners, says the situation has placed exhibitors squarely between a rock and a hard place. "Several studio leaders currently hope to reduce substantially the virtual print fee support they are willing to provide for the digital cinema transition, at the same time that several other studio leaders demand that exhibition install many systems rapidly for the 3D slate in 2009,” he says.  “And at the same time one of the industry's filmmaking icons refuses to release a big summer picture on digital cinema screens except for locations where that is the only option. So, should we or should we not move faster with the digital roll out? How do they possibly believe that exhibitors will do anything less than push back? Maybe they should get their act together first before they try to tell us what to do."

So when do we put the "budge" in budget? Insiders differ. Some suggest the deals are dependent on a successful resolution to SAG/AMPTP negotiations, others ascribe the hold-up to the credit crunch fueled by the home mortgage meltdown.

What seems crystal clear (and you don't need special glasses to see it) is that the delay is all about the Benjamins. The 2009-2010 3D slate has only upped the urgency of resolving the basic calculation with a concrete and near-term demonstration of how much (and whose) money is at stake.