NATO’s
Digital Cinema Resolution
The following resolution was unanimously
approved by NATO’s board of directors at its Nov.
18 board meeting in Dana Point, Calif.
Whereas, technology is
being developed for motion pictures to be exhibited at
movie theatres in a
digital format; and,
Whereas, from 1999 to the present, digital versions of
motion pictures have been exhibited to the public on an
experimental basis; and,
Whereas, in March 2002, the major Hollywood
studios formed a joint venture, “Digital Cinema Initiatives (DCI),” to
establish and document voluntary technical specifications
for an open architecture for digital cinema that ensures
a uniform and high level of technical performance, reliability
and quality control, and to examine and facilitate the
development of business plans and strategies for the transition
to digital cinema; and,
Whereas, DCI has sought and received the input of the
National Association of Theatre Owners (NATO), individual
movie theatre companies, and other segments of the motion
picture industry in its process; and,
Whereas, DCI has shared its work on technical specifications
with the Society of Motion Picture and Television Engineers
(SMPTE), an organization that is engaged in the process
of developing technical standards for digital cinema; and,
Whereas, on September 8, 2004, DCI announced both the
completion of its overall system requirements and specifications
for digital cinema with the upcoming release of Version
5.0 of the voluntary DCI Technical Specification, and the
end of any significant business planning activities by
DCI staff; and,
Whereas, DCI staff later announced that Version 5.0 will
not be the final DCI Technical Specification, and no final
technical specification has actually been released by DCI
to date; and,
Whereas, recent press reports have indicated that several
different business models are now being discussed by some
of the major Hollywood studios; and,
Whereas, the members of the Board of Directors of the
National Association of Theatre Owners believe that planning
for digital cinema is at a critical juncture; now, therefore,
in order to maintain competition and promote the interests
of movie patrons,
Be it Resolved, that the members of the Board of Directors
of the National Association of Theatre Owners do hereby
describe some fundamental objectives regarding the potential
transition to digital cinema, including but not limited
to the following:
With respect to quality, that
The large-scale introduction of digital cinema must significantly
enhance the theatrical experience and thus bring real benefits
to theatre audiences; and that,
Digital cinema systems must provide a theatrical experience
that is better than what can be achieved today with a 35mm
answer print; and that,
Digital cinema systems must provide quality levels superior
to the quality levels available in home entertainment systems;
and that,
Movie studios and movie exhibitors
should investigate a manner of “branding” the
digital cinema experience exclusively for theatrical
exhibition; and that,
With respect to standards and competition, that
The components and technologies used must be based on
open and global standards that foster competition amongst
multiple vendors of equipment and services and ensure that
content can be distributed and exhibited anywhere in the
world; and that,
Each of the components of the system must be built around
clearly defined standards that ensure interoperability
between different makes of equipment; and that,
The hardware used in the system must be easily upgraded
at reasonable cost as advances in technology are made;
and that,
The hardware used in the system must meet reliability
requirements that equal or exceed the reliability of 35
mm film hardware; and that,
The digital cinema systems must permit a single inventory
of content to be distributed and exhibited on all equipment
installations; and that,
With respect to security and operational control, that
Content decryption keys must be delivered for all auditoriums
within an exhibition complex for each movie; and that,
The digital cinema system must support
a policy of “No
Dark Screen,” such that movies will play in a non-repudiate
manner unless the exhibitor attempts to play the movie
in a different exhibition complex, or outside the licensed
play period (to include a reasonable testing period); and
that,
The delivery of movie security keys to a playback system
must irrevocably enable the playback of the movie for the
duration of the engagement; and that,
The system must allow the exhibitor to have full discretion
over the selection of auditorium, schedules, and presentation
of advertisements, trailers, features and other content;
and that,
Audit logs shall be owned and maintained by the exhibitor;
and that,
With respect to financing, equipment selection, roll out
and ownership, that
Because the installation of digital cinema equipment will
result in significant savings to motion picture studios
and significant costs to motion picture theatres, the motion
picture studios should develop a universal financing plan
pursuant to which the motion picture studios will be responsible
for paying all costs related to the purchase and installation
of digital cinema equipment as part of the initial roll-out,
and operation, maintenance and upgrades of the equipment
to the extent that those costs exceed ordinary operation,
maintenance and upgrade costs of 35 mm film projectors;
and that,
A universal financing plan must be supported by all major
motion picture studios through one financial entity or
a consortium of financial entities, and that all other
motion picture studios willing to participate in the plan
must be given the opportunity to do so; and that,
As part of their support for the universal financing plan,
studios must commit to provide digital content where digital
cinema equipment is available; and that,
The financing plan must permit participation of all exhibitors
and all movie complexes and auditoriums, regardless of
size or geographic location, within a reasonable time;
and that,
Exhibitors must be able to select the equipment to be
installed and to own the equipment at the end of the financing
period; and that,
Exhibitors must be able to acquire playback equipment
with confidence and knowledge that all studios will authorize
movie playback for the life of the equipment; and that,
Equipment manufacturers should provide exhibitors with
costs analysis related to the maintenance, upkeep, life
expectancy and likely obsolescence of any equipment prior
to equipment selection; and that,
Complete digital cinema systems, based on specifications
and standards, must be installed and tested for a reasonable
time in a beta market prior to the initiation of a wide-scale
roll-out; and that,
The roll-out sequence must ensure competitive fairness
between all exhibitors and distributors willing to participate,
with a region-to-region or market-by-market roll-out to
be considered.
Approved by unanimous vote of the Board of Directors of
the National Association of Theatre Owners, November 18,
2004.
