Irish cinemas switch to digital projection

/ Source: The Associated Press

While digital projectors have been slow in making their entrance into American movie theater, Ireland is forging ahead to become the first country to convert all its movie theaters to digital projection.

Under a deal announced this week by the Irish Film Board, investors led by privately held Avica Technology Corp. of Santa Monica, Calif., will convert 500 Irish cinema screens to digital projection, at an estimated cost of $50 million.

Separately, the British Film Council awarded a $22 million contract to privately held Arts Alliance Digital Cinema of London to install 250 digital screens this year.

It's no accident that the announcements came at the same time as ShoWest, the film industry's annual trade show in Las Vegas. While the numbers in Ireland and England are small compared with the 36,000 movie screens in the United States, the campaigns are aimed at Hollywood.

Seven major film studios working as the Digital Cinema Initiative have produced technical standards for digital projection but no business plan for sharing the savings.

Studios spend $750 million annually supplying copies of films to U.S. theaters and $1.5 billion for theaters elsewhere in the world. Distributing films by satellite could cut that bill in half.

But the problem of doing so without creating digital haves and have-nots among studios, theaters and distributors has stymied Hollywood.

Weary of delays, technology makers are finding it easier to work abroad.

Digital cinema has been "struggling to get going for a number of years," says Nicholas Clay, chairman and chief executive of Avica, the company leading the conversion of Irish cinemas. Avica's hardware and software distributes, stores and manages digital content in about 100 theaters worldwide.

"It's no longer a technology issue," he says. "We've created a technical model and a business model and decided to demonstrate how it can be done by building a system and operating it ourselves."

Calling themselves Digital Cinema Limited Ireland, a consortium of investors led by Avica will install Avica's digital storage servers, players and management software along with digital projectors made by NEC Electronics Corp. of Japan. The NEC projectors employ the Digital Light Projection technology developed by Texas Instruments Inc.

In addition, Avica will build and operate a satellite distribution system to deliver content to theaters. Clay estimated the total cost would approach $100,000 per screen. All of the equipment and procedures will comply with technical standards, including film encryption, set by Hollywood.

Installations have begun, he says, and will be complete in 12 months.

Theater owners and film distributors will continue to do business as they do now, says Clay, only instead of shipping bulky film reels, distributors will turn to Avica to ship specified digital files to specific theaters for specific dates. Film studios will pay a "digital print fee" that Avica and partners in Digital Cinema Ltd. will share in proportion to their investment.

Clay wouldn't disclose the amount, but said the digital fee was less than current film print fees, which average between $1,500 and $3,000 per copy.

In addition to Avica, Clay says investors in Digital Cinema Ltd. include theater chains, film distribution companies and European investment banks. The partners intend to learn from the Irish exercise and market their skill in launching digital cinema elsewhere around the world.