Film Business On The Brink Of Digital

June 8, 2011

On Sunday afternoon at the PGA’S conference on the Disney lot in Burbank, a stark message came through loud and clear from the panel of ‘Digital Cinema and the New Entertainment Model’ — the message being that the film business is at a digital tipping point.

All the panel speakers concurred that the latest developments, not least the penetration of digital projection to about 50% of total screens in the USA, along with the rapid growth of VOD, are spearheading the radical transformation, in the way content is distributed, produced and consumed.

Adam Devejian of CAA said, “Exhibition would greatly benefit by going entirely digital and switching to a network addressable model, in which content is sent to theaters digitally rather than via cumbersome, expensive 35mm film prints.”

Chris McGurk is the new topper at Cinedigm Digital Cinema, which works with the aim of expanding digital technology. McGurk is a panel moderator observing that digital technology is enabling many kinds of new alternative content for exhibitors whose theatres are empty most of the time particularly on Monday to Thursday.

John Penotta of GreenStreet Films said, “Enlightened production shingles are prepping for the changes to come. Including distribution via VOD,” he added, “We’re still a traditional film company, looking for product, doing budgets, finding P&A financing partners but now we’re also building digital distribution dollars into our budgets, which we’ve never done before.”

Marco Weber, producer of Igby Goes Down (2002), has the VOD release model firmly in his cross hairs. He said, “Today, I would never do a theatrical release on a smaller movie. I would on a $10 million movie, but on a lower budget, a strong VOD situation would give me a better upside than a traditional big release with a big P&A. On those pictures, theatrical can eat up your profit.”

“Digital home distribution numbers are now significant,” said Clear Scope Partners Clark Hallren, adding, “They range between $1 million and $2 million for many films, and can rise as high as $10 million for some.”

However, it was curious to note that the panelists were all pretty neutral about the future growth of 3D within the film business, seeing as this is the greatest change that theaters which convert to digital projection technology can actually bring about. Mysterious indeed.

According to Weber, “3D isn’t a game-changer for the indie world.” Clark Hallren said, “It’s an add-on.”

When McGurk brought up the subject of VOD, Hallren replied, “It wouldn’t want to be an exhibitor.” Approximately 60 days after its theatrical release date, studios will make a film available for domestic download at around $30. Over time this will most likely be lowered to say 55 or even 50 days after the official release date. The price too could fall as low as $20 or less. Only time will tell. Amidst all the exciting technological innovations swamping the film industry at present, all we can do is speculate, but it’s most likely that the consumer will be the biggest winner.

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