Coming Soon to Theaters: An All-Digital Film World?

“Welcome to the theater of the future.”

That’s how Craig Winter greeted visitors to his company’s exhibit touting an ambitious vision of an all-digital, user-friendly movie universe.

In this electronic future, distributors can instantly put movies into theaters worldwide at the touch of a button; moviegoers touch interactive screens in theater lobbies to view trailers and offer comments; and theater owners can boost revenues by showing pay-per-view events on their digital screens or by hosting corporate video conferences or large-scale audience-participation games.

What’s more, Winter says, this future--or at least a big enough part of it to allow exhibitors to profit--is available now. “We’re ready to launch,” he said in an interview. “We hope to be, in April, actually putting in systems.”

But, while Winter’s AndAction exhibit and other demonstrations of digital systems and hardware drew a steady stream of curious exhibitors and distribution executives during the four-day ShoWest convention that ended here Thursday, evidence abounded that for most of the several thousand people in attendance the future is something they’d rather not be bothered with right now.

“There’s a tendency on the part of exhibitors to deal with the issues that are right in front of us,” said Leroy Mitchell, president of the Texas-based Cinemark Theater chain and part of the National Assn. of Theater Owners, which sponsors ShoWest.

For many exhibitors, the issue in front of them is survival. They’re struggling to climb out of the red after a financial squeeze caused in part by growing competition from other media and an ambitious period of new theater construction and refurbishment designed to lure customers. Even while movie box-office revenue reaches unprecedented highs--a record $7.5 billion in 1999--theater owners have been hurting.

Since 1995, U.S. theater companies have added 9,000 new screens, bringing the count to 37,185, and added such improvements to existing theaters as stadium-seating and state-of-the-art sound systems and projectors. “Those costs have driven many exhibitor bottom lines into the red and publicly held company stocks to low levels,” said John Fithian, president of the theater owner association.

The refrain heard throughout the convention was that, while digital cinema looks interesting and definitely is on the horizon, the conversion won’t take place until the studios--who theater owners say will reap most of the benefits--agree to pay for it.

Still, talk of the computerized future couldn’t be avoided, even though there was nothing at ShoWest this week to match the excitement of last year’s unveiling of a sneak preview for the all-digital “Star Wars: Episode I The Phantom Menace.”

“It’s all in the air,” said Mitchell of the “digital revolution” that was being touted and debated in every corner of the convention. Winter’s company owns one of the 10 U.S. theaters currently equipped with Texas Instruments’ DLP Cinema, the leading digital projection system. And it’s been among the first to experiment with online ticketing.

Comparing Digital, Celluloid Images

Winter’s demonstration of his system was one of many exhibits of computer systems and hardware. There were demonstrations by Texas Instruments and others designed to show how digital images compare to celluloid. There were displays of new projection systems. There were new smart-cards to allow customers to open accounts with distributors--and allow movie companies to keep track of spending patterns and moviegoing preferences. There also were speeches with such titles as “The Future of Cinema” and seminars like one called “Marketing Movies and Moviegoing Online.”

What sometimes gets forgotten in all the talk of the future is what the advantages of digital cinema will be for the moviegoer. Greater convenience will be one advantage. Another is a supposed increase in entertainment value because customers can electronically browse through trailers and previews in theater lobbies. These also are advantages for distributors and exhibitors, because they can keep tabs on what customers view and track which trailers appeal to the patrons of which movies.

Filmmakers and studios remain concerned that the technology offer image quality equal to that of film and be consistent from theater to theater. Many of the demonstrations this week have been to show that the images are virtually identical to celluloid.

But as Eastman Kodak executive Robert J. Mayson said, “Digital cinema needs to be better than film--not just as good.”

Kodak, the primary supplier of film stock to the movie industry, would seem to have the most to lose from a conversion to digital, but the company has been moving in a big way into the field. Mayson said that all 45 of the Oscar-nominated movies this year were filmed on Kodak stock, but the company also supplied digital services and special effects help to 11 of them.

A New Push for Online Ticket Sales

Meanwhile, in a perhaps belated acknowledgment of where things are headed, six major theater chains announced during ShoWest that they were forming a joint company to compete with AOL Moviefone and other Internet companies to sell movie tickets online. That’s because, as one exhibitor said, “the biggest concern of theatergoers is standing in line waiting at the box office.” They’re hoping this greater convenience will help lure movie lovers back to theaters and away from their VCRs.

Of all the announcements and demonstrations, however, Winter’s was perhaps the most complete--that’s because Encino-based And-Action offered a fully integrated service that he said would cost exhibitors and distributors almost nothing. The company would supply the hardware, maintain it, upgrade it when necessary and train theater employees to operate it.

“We will do everything,” Winter said, for a usage-based fee. “We’re a service provider. . . . The bottom line is we don’t make money unless exhibitors and distributors are making money”

He’s working with the AMC chain currently to install demonstration systems in several cities, including Woodland Hills in Los Angeles.