WASHINGTON -- The shift
to direct digital transmission of first-run movies from Hollywood to movie
theaters across the country via satellite took a step forward when Microspace
Communications Corp., of Raleigh, N.C., reached a deal to distribute movies to
theaters owned by Carmike Cinemas of Columbus, Ga., the nation's fourth-largest
theater chain.
As part of
a pilot program, Microspace will install satellite and server equipment in
more than 200 Carmike theaters, making it possible for digital satellite
transmissions to reach more than 2,000 screens, Microspace officials said.
Neither Carmike nor Microspace would divulge the cost of the agreement.
The deal, reached
on March 7, will enable Carmike, already the biggest user of digital technology
in the movie theater business, to accept films from more Hollywood studios.
Carmike entered the deal with Microspace because some studios have preferences
as to which satellite delivery company they use, said Tony Reed, senior vice
president at Carmike.
Carmike has
had a deal in place with Access IT of Morristown, N.J., since March 2004, to
receive digital transmissions of movies directly via satellite.
Of
Carmike's 2,447 total screens in 289 theaters, 1,711 screens in 85 theaters are
set up for digital, Reed said.
"Access IT,
to date, has delivered films to Carmike theaters from Buena Vista, Universal
and a couple of others," he said.
Microspace
executives say their company has delivered 10 first-run films -- "Glory Road,"
"World Trade Center," "Dream Girls," "Over the Hedge," "Mission
Impossible III," "Eight Below," "The Shaggy Dog," "She's the Man," "Flushed
Away" and "Cars" -- to eight theater chains across the country. The movies
played on more than 2,000 screens at some 250 locations, said Curt Tilly,
manager of digital cinema distribution for Microspace.
Using
satellites to deliver films to movie houses enables all parties involved --
studios, distributors and cinema chains -- to handle complete, virtually
pristine versions of films without having to rely on overland delivery
services. Because the films are transmitted directly into servers at each
cinema via rooftop satellite dishes, chains do not have to rely upon staff to
be on hand to receive and upload films.
"Frankly,
when theater owners and studios say we're the next generation trucking company,
we don't think of ourselves in that way," said Joe Amor, Microspace's vice
president and general manager. "But in the movie industry model, yes, we are."
"With a
satellite, you deliver directly into the theater's server," said Chuck
Goldwater, media services group president for Access IT. The practicality
manifested itself when a recent spate of bad weather hindered film delivery in
much of the country's northern tier, he said.
"We
delivered some films that were supposed to be delivered via hard-drive but
didn't make it to theaters," Goldwater said.
While
satellite companies like Microspace and Access IT believe their service should
ultimately become the industry standard, there is a long way to go.
Of the
38,500 movie screens in the United States, only 2,300 are digital, according to
the National Association of Theater Owners, a Washington-based trade
organization. More work needs to be done before satellite transmission becomes
the industry standard, said John Fithian, the association's president.
"The
industry -- cinema companies, studios and equipment manufacturers -- are working
to come up with technical standards and business models," Fithian said.
One problem
that had hindered the spread of satellite transmissions -- the high cost of
equipment -- has been resolved, Fithian said, at least in North America. "Fees
[for new equipment] are paid by the studios."
The future
largely will be determined when a group made up of the three largest cinema
companies and two major Hollywood studios decide which platform for
distribution they will use, Fithian said.
"The movie
chains -- Regal, AMC and Cinemark along with Warner Brothers and Universal --
are still exploring what the [digital] distribution platform should be:
satellite, broadband, disc or tape," Fithian said. "Those three companies
represent 14,000 screens.
"Most
observers believe that satellite transmission will play an important role, but
because it's in the early stages of rollout, those distribution factors haven't
been decided yet," Fithian said.
Carmike's
Reed concurs.
In the
context of Carmike's deal with Microspace, he is taking a wait-and-see
approach.
"The
Microspace deal is still only a pilot program for satellite delivery," Reed
said. "If everyone is satisfied [after Dec. 31 when the pilot agreement ends],
then we'll do a real contract."
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