Boeing Plans to Sell Its Digital Cinema Division

Unwilling to wait for Hollywood to distribute more movies digitally, Boeing Co. announced Thursday that it was looking for a buyer for its El Segundo-based digital cinema division.

Boeing will continue delivering digital versions of movies via satellite to the 30 theaters that use its technology. Instead of relying on reels of film and conventional projectors, these theaters store movies on hard drives and display them with computerized projectors.

But so-called digital cinema won’t take off, spokesman Fernando Vivanco said, until the industry adopts standards and comes up with the right business model for it. “Ultimately, market forces are going to decide how best to deploy the technology that we’ve developed.”

Boeing is the second major company in the field to head for the exits early. Qualcomm Inc. of San Diego announced in August that it was dropping out of its digital-cinema partnership with Technicolor, a Camarillo-based subsidiary of Thomson.

Boeing got into the arena about three years ago, a few months after Technicolor and Qualcomm joined forces. Vivanco said it had delivered more than 18 feature films in digital form since then, while Technicolor Digital Cinema, which delivers movies digitally to 57 theaters, has handled more than 50.

Although studio executives say digital distribution could save hundreds of millions of dollars, the industry has been divided over how much detail digital projectors need to deliver and who should pay for the equipment, which costs up to $200,000 per screen.

On Thursday, though, the industry moved a step closer to an industrywide standard. The seven major Hollywood studios agreed to pursue a specification for digital cinema that works both with the best projectors on the market today and those that deliver twice as much detail.

“It’s evidence that the studio community is coming together with a recommendation, an approach, a process,” said Dave Elliott, chief executive of Technicolor Digital Cinema. “It suggests a road map is emerging.”

But the pace still isn’t swift enough for Boeing, whose digital cinema unit employs about 12 people. Vivanco declined to say how much the company has invested in the effort.