Market Watch

Deluxe and Echostar Move Jointly into Digital Cinema Distribution

October 25, 2010

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Deluxe Digital Cinema, a subsidiary of global cinema services company Deluxe Entertainment Services, is partnering Echostar Satellite Services, a subsidiary of Echostar and a sister company of US TV provider Dish Network, to create a joint ven­ture for digital delivery of content to cinemas, including feature films and a range of other content, such as live events and even digital signage. The cinema will need to have a Theatre Management System (TMS) in place for the full benefits to be felt, as content will be delivered directly into the central system, where it can then be moved around the site. Theatres must install two dish antennas and a receiver in their cinemas, although Deluxe/Echostar will retain ownership of this equip­ment. Two dishes are needed in order to cope with multiple deliveries of a range of content-eg, for live events reception if also receiving a set of Digital Cinema Packages (DCPs). The system will be an open one, meaning that it can be used by other distribution compa­nies seeking to get content into cinemas, for a fee. Discussions began about a year ago and around 20 beta sites are now up and running. A two-way service for gaming is being considered but not currently possible.

The industry assumption is that satellite is the most effective and efficient way to get films and other content into cinemas, and the market direction to date backs this up. Digital distribution has always been a fundamental part of the wider digitisation of cinema but one that was put on the back burner while the financial aspects of the roll-out were worked out. With the wider 2D digital roll-out now taking place, digital distribution is coming to the fore. Europe has seen a number of initiatives in this area. Satellite delivery into cinemas has been undertaken in the US for some years, Cinedigm developing a network among its exhibitor clients. Another company, Microspace, is also actively developing its satellite capability for the film industry. Technicolor has a satellite distribution network, largely used to deliver advertising. For Deluxe, the US move may be a precursor to a similar move in Europe, although this is by no means guaranteed. Europe is a far more fragmented space and, given that Deluxe already has distribution deals with specialist operators Arqiva and Smartjog, this may be a preferred longer-term route for delivery.

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