Technicolor sets rollout of digital: company needs to build confidence of theaters.

In a tan and brown building in a Burbank office complex, Technicolor engineers work seven days a week on what will be the future of film distribution.

In a projection booth that spans the length of two screening rooms in the company's theater building, digital projectors and servers undergo tests that will determine if they qualify to be used in movie theaters.

When the equipment passes muster, it will be rolled out this spring in up to 250 screens operated by Century Theatres, Inc. to put it under real world conditions.

Key to Camarillo-based Technicolor's foray into digital cinema is ensuring theater owners that the confidence they have in the current 35 millimeter format of showing films will translate to digital, said Joe Berchtold, president of Technicolor's electronic distribution services.

"Thirty-five millimeter works. You ship a print out Tuesday, you know it's going to get there by Thursday and you know it's going to work when you put it up on the projector," Berchtold said. "We need to make sure both studios and exhibitors have the same level of confidence that digital cinema is going to work that way in the future."

Technicolor is owned by Paris-based Thomson Corp.

Jim Kozak, editor of In Focus magazine, the monthly publication of the National Association of Theater Owners, called Technicolor's plans the most ambitious of the companies moving toward digital cinema.

"They're looking at 15,000 screens over the next decade," Kozak said. "There are a lot fewer now so that is quite an increase. Other companies are doing quite a bit but are less ambitious."

Under its financing plan, Technicolor will provide the digital equipment for theaters and recoup the cost through distribution and virtual print fees paid by the studios and exhibitor contributions. The company would also provide maintenance and service on the equipment.

The battery of 144 tests the projectors and servers will undergo will look at their compatibility with each other, alternative content playback such as live television, three-dimensional capabilities, why the equipment would fail and how quickly it can be brought back online.

Even with all the tests, there is the potential for equipment breakdowns after it's installed in theaters, Berchtold said.

"It's not as though this stuff is breaking down all the time," Berchtold said. "But when was the last time a 35 millimeter film broke down when you went to the theater. We need to make sure we have the same confidence in this system."

There are 36,000 indoor movie screens in the United States, according to NATO, yet only about 200 of those screens are equipped to show digital films.

In the Valley, digital projection is available at theaters in Van Nuys, Sherman Oaks, Glendale and Universal City.

The transition to the digital format will change how entertainment companies distribute their films as well as provide higher quality prints, a means to increase revenues through more showings, and a better method for long-time film storage.

"The distributors will save a fortune because they'll no longer have to ship heavy film containers; they can transmit electronically or ship disc drives," Kozak said. "The cost of prints is substantial. You have to spend millions to strike enough prints for a wide release. You multiply that out by the number of wide release films and you can see how the millions add up."

Five major film studios--DreamWorks SKG, Sony Pictures, Universal Pictures, Warner Bros. Entertainment, 20th Century Fox--have partnered with Technicolor in support of its rollout. The company is in negotiations to get New Line Cinema and The Weinstein Co. on board as well.

Buena Vista Pictures Distribution, a division of Burbank-based Walt Disney Co., has signed on with rival digital cinema firm Christie/Access Integrated Technologies to release its films in a digital format.

While 20th Century Fox has also signed on with Christie/Access IT, the company was also supporting Technicolor because in the next 10 to 20 years theaters will be using both 35 millimeter film and digital formats and Technicolor has shown reliability in providing both, said Fox Executive Vice President of digital exhibition Julian Levin said.

"Thomson and Technicolor have also demonstrated they have poured enormous amounts of money into research and testing and effectively transitioning the entire environment," Levin said.

Warner Bros. Pictures Theatrical Distribution President Dan Fellman touted digital cinema's ability to thwart piracy because the content will be protected by data encryption.

In addition, a special watermark will be placed on a digital print allowing studios to determine where and when a film was pirated or copied, Fellman said.

With digital cinema, exhibitors have the option for films to be delivers via data tape, on a disk or hard drive or through a satellite feed.

But to make theater owners have equipment to accommodate all the formats would be difficult to manage and inefficient, said Fox's Levin.

"Ultimately the industry will have to converge on one medium, perhaps two but not four or five," Levin said.

MARK R. MADLER

Staff Reporter