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HD programming to come to a theater near you

While broadcasters are primarily focused on their final preparations for the DTV conversion next February, a new opportunity may be emerging for those willing to experiment with a new distribution platform — at least one that’s new to broadcasters.

While broadcasters busily have been rebuilding their transmission infrastructure, installing new HD control rooms and master control and putting HD news sets in place, a transformation in the way movie studios distribute content and exhibitors display releases has been ongoing.

According to Curtis Tilly, manager of digital cinema distribution for Microspace, this transformation to digital cinema is beginning to reach critical mass, a point at which studios and theater owners have a real economic incentive to build out their digital infrastructure nationwide.

Microspace is a subsidiary of Capitol Broadcasting, the same company that owns HD pioneering station WRAL-TV in Raleigh-Durham, NC. Given the company’s corporate connection to WRAL, it seemed appropriate to talk to Tilly about the state of digital cinema distribution and whether there are opportunities for broadcasters to pursue theatrical distribution of HD content they originate.

HD Technology Update: Where do we stand right now with distribution of theatrical releases via alternate means, such as digitally via satellite?

Curtis Tilly: Satellite and hard drive digital locations are getting close to 6000 screens in the United States, and somewhere between 500 and 600 theaters are digitally equipped.

HD Technology Update: What sorts of savings are those digitally equipped theaters reaping studios?

Curtis Tilly: The studios aren’t currently saving any money because they are financing the digital deployment. In other words, instead of paying the 35mm film duplication fees, they are taking that $800 to $1000 and spending it on the digital equipment in the theater. It’s called the virtual print fee. But the digital workflow is producing benefits they are starting to see even if they are paying for that equipment.

What is projected is that they will pay these virtual print fees for a period of five to 10 years. After that, they save $1000 per screen every time they send a movie out.

HD Technology Update: Microspace is owned by Capitol Broadcasting, owner of HD pioneer WRAL. Do see the shift to digital cinema distribution as an opportunity for broadcasters to distribute entertainment, sports or other sorts of HD programming to theaters?

Curtis Tilly: Absolutely, we’ve done some work along those lines with broadcasters already and with HD content owners by putting that content onto these digital projectors.

We’ve done multiple sporting events, and we’re in discussions with a number of other alternative content providers. It can really be any organization that has compelling content including those who have accumulated HD content libraries. So there’s certainly a place and a business model for that with these digital projectors. Other than the pilot locations we’ve done, there really hasn’t been a business model that’s come along yet that’s made a go of doing a national distribution.

HD Technology Update: I would imagine this opportunity is so new that most broadcasters haven’t even considered whether this is an avenue worth pursuing.

Curtis Tilly: That’s absolutely correct. An example of this is one of our CBS stations that did a one-hour long special on the moving of the Cape Hatteras Lighthouse, which was all HD. Whether that type of content will be compelling enough for a Sunday afternoon matinee at two dozen theaters along the southeast coast, and whether you can fill some seats, is unknown. But that’s the type of content and the types of situations that will start to pop up with digital delivery.

HD Technology Update: Microspace has distributed a 3-D movie and a 4K movie digitally. What sorts of bandwidth are required for those types of projects?

Curtis Tilly: I can tell you that right now the maximum encode rate per the DCI (Digital Cinema Initiative) specification is 250Mb/s. Whether it’s 2K or 4K, the maximum encode rate is 250Mb/s. So we typically are seeing file sizes between the 100GB and 250GB level. Those file sizes are on the decrease because more variable bit rate encoding systems are out there. So although the maximum is 250Mb/s, we very rarely see a constant bit rate encode of 250Mb/s these days.

HD Technology Update: Are you using new technologies to make distribution of that via satellite more cost-effective — for instance, DVB-S2 modulation?

Curtis Tilly: Right now, the delivery system we are using is still DVB-S based. We’ve done DVB-S2 deliveries and testing. We just haven’t rolled out S2 across our entire network yet. We just simply haven’t had the need to. We’re not delivering enough content across the network right now that we need that bandwidth that S2 would give us. However, it’s certainly in our development plan. S2, when we need it, is certainly ready and available.

HD Technology Update: What is Microspace’s commercial offer?

Curtis Tilly: We actually have two stakeholders in this process. Obviously, the content owner has to move content out digitally via satellite with Microspace or they have to stock hard drives for physical delivery. On the exhibition side, they also have physical delivery issues. They can either pay in and out fees on these hard drives and deal with the associated workflow of having someone at the theater checking the drive in, ingesting the content, inventorying the drive and then sending the drive back out, or they can take care of all that workflow with electronic delivery with a system like ours.

Both sides — the theaters and the studios — have an interest in that process. What we’ve done is put the equipment in theaters, and the theaters essentially pay us back for the equipment per delivery that they receive across the system. That’s how we populated the theater side, and that’s how we’ve gotten the number of theaters and screens to the point where they are.

On the studio side, they have been very good in supplying us the content as we’ve grown the theater side. Now that we have a significant number of screens out there, we can actually save studios and content providers money on their deliveries.

As we increase the number of locations with satellite delivery, the cost per location decreases. If the studio is dong physical delivery with hard drives, the total cost of the delivery increases with every additional booking.

HD Technology Update: Has content security been a concern?

Curtis Tilly: Thankfully, the Digital Cinema Initiative (DCI) came up with a security specification. We only handle the content in its fully encrypted form; we never break out the content at Microspace.

We get an encrypted digital cinema package, known as a DCP, at Microspace that goes across the system. We verify at each theater location that the DCP has been recreated exactly as we got it. It then goes through decryption at the theater. So again, it is handled encrypted throughout the entire Microspace process.

HD Technology Update: Is there anything else you would like to add?

Curtis Tilly: Just the fact that we’ve been very successful in going out and essentially following the installation of digital projection equipment in theaters by providing these value-added services — the electronic workflow, the potential for live and alterative content and a reduction in the cost of sending content out on hard drives for the studios and the theaters. On the exhibitors’ side, exhibitors are seeing these multiple advantages.

On the studio side, we are just getting to the point with the number of theaters that we have installed that we are able to start showing the studios these same advantages of satellite delivery.

We’ve taken multiple industries through this process before, including the weather information industry, the hospitality industry and the paging industry, and have helped them get to the point where critical mass is reached. Then from every point and every installation beyond that critical mass, they are saving money.

So we are just getting to that point with the motion picture industry, and it’s kind of a nice threshold to be at.

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