Some of you have noticed that USVO is sponsoring a panel at the George Gilder produced technology investment conference Telecosm later this month. Walt Ordway will be telling the USVO story on that panel, which has some very impressive participants. Our agenda at this conference has a number of elements and let me start with giving some background on Walt, and his singular (as in the only time ever) accomplishment while leading the Digital Cinema Initiative.
So first let me tell you about the Digital Cinema Initiative.
Some time ago, right down the street from you, or wherever you went to see a movie in a theater, the movie was delivered as film on reels in cans. For most of you, this is still true today. Those prints cost about $10,000 each. With the emergence of wide or world wide release ( a movie being in 3500 theaters simultaneously) a distributors’ cost of releasing a film became much more expensive (previously a ‘big’ release had required about 1200 prints). For most of you, this is still true today.
About a decade ago, some folks got the idea to put a high quality digital projector in the booth, and present the movie using high definition images using technology from computing. At the time the resolution was super VGA. While film purists agonized, audiences praised the stability of the picture ( no weaving or jitter) and lack of scratches. There were a number of challenges, but the thinking emerged that if the industry could change the third of theaters in the most densely populated areas of the United States to this type of presentation, then the distributors could save about a billion dollars annually on prints.
That’s right a BILLION dollars a year. Consider that at the time the theatrical gross revenue was just over $8 billion annually (today that is just over $9 billion).That kind of savings proportional to that gross is significant. There were a number of issues to overcome. Technical, as in how good must the image projected really be? How will the product be delivered? And financial as in if the distributors are saving the money, but the equipment that enables that savings is in the theater, who should pay for it, and who should own it?
For a little more than three years, these and other questions just sort of hung there. At one point a projector manufacturer brought in a bank that was willing to finance the entire project for the lease revenue on the equipment. The industry couldn’t say yes.
It didn’t take long for there to be agreement around some of these questions. For instance, there had to be multiple vendors, but a single standard form much like 35mm film. There had to security both in transport and delivery. These last two consensus led the studios to go to Congress and get the special permission required for competitors to join together in a venture. That was the beginning of the Digital Cinema Initiative (2002). Walt Ordway was given charge of this project.
One would think that now, with all of the studios committing to DCI, that the engineering, manufacturing, financial and business issues would get settled forthwith. But it took four years, not counting getting to the beginning of DCI. And it was a miraculous accomplishment even then.
It wasn’t just getting agreement between the studios. As mentioned elsewhere in this blog, the studios are not single entities led by all seeing dominant executives. Within each is a technical staff, a content security team, sales teams for all the different markets and windows the products emerge from, as well as an archive department charged with keeping the value of the products viable for as long as possible. All of these groups and individuals have their own priorities and concerns, and they all had to come to agreement about what the DCI recommendation (they gave up on the term “specification”) would be.
By the way, forensic watermarking is a part of the DCI recommendation, with every presentation of a digital ‘performance’ watermarked so that a camcorded pirated film can be traced back to its time and place of origin.
Now in spite of the fact that there were literally a BILLION DOLLARS on the table, the industry took a decade to pick it up. In fact it is still in the process, as the DCI recommendation has been out for 2 years (and was recently updated), and the second wave of converting that first third of theater projection rooms to digital is just starting.
The DCI represents the first time that the studios have in fact ever agreed on anything technical. They had different versions of sound when that first came in (1929). They had different technologies for wide screen, color, and, most recently, multi track sound. Parallel to the digital change is the advent of 3D, and there are multiple systems for this too. For digital projection, they were brought to agreement by DCI, who in the details was really Walt Ordway.
In the end, it was Walt Ordway’s engineering, business, and most significantly, diplomatic skills that made the DCI recommendation a success.
Shifting the industry to a new concept, even when it is a significant financial benefit to the industry, is a big challenge, one that we understand lies before the watermarking community as well. DCI proved that it can be done, and we expect to gain a great deal by our association with Walt Ordway.
Next- why Telecosm?
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