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Tuesday, February 22, 2011


3DTV is of interest because it impacts cinema 3D, so it's always prudent to have a look-see at what's going in the the TV broadcast world.

Reported last week by Deborah McAdams, our friend at TVTechnology, at this year's Hollywood Post Alliance's (HPA)Tech Retreat (the broadcast industry's annual tech lovefest) there was a whole lot of discussion about a whole lot of things but there was (conspicuously) not one mention, let alone discussion, on 3DTV !

What is the HPA? Glad you asked. With its very benign moniker the HPA is composed of the elite in media. Each year the HPA holds a (by invitation only) pow-wow called the Tech Retreat, which provides a forum where all manner of issues impacting the media industries (film, TV, radio, print etc.) are discussed and information shared.

At this year's Retreat, when queried about 3DTV, Jim DeFilippis, Fox's head tech honcho, summed it up, stating, "We don't have enough bandwidth". And that is the crux of the 3DTV issue. In short, today's 3DTVs use a frame-compatible format - meaning that dual images are displayed side-by-side and viewed through active shutter glasses. If broadcasters were to transmit content in frame-compatible 3D, everyone with a non-3DTV would see dual on-screen images. So, to accommodate, the 2D and 3D video feeds are squeezed and transmitted together, but the result is a substancial loss of quality in both the 2D and 3D images.

The other way to transmit 3DTV (which is more bandwidth efficient) is to utilize what is termed, service-compatible formatting. This format supports 3D through the addition of data to the 2D signal - termed "2D Plus Delta". With 2D+Delta, every viewer gets the left eye view. The right eye view gets electronically subtracted from the left eye view to create a different signal or delta, which is encoded and transmitted.

Europe currently uses the 2D+Delta format; however, U.S. broadcasters are stimied as the National Broadcast Plan (the recently approved master plan for use of the broadcast spectrum) calls for freeing up 40% of the TV spectrum for wireless broadband - which places 3DTV transmission, for most broadcasters, on the back burner.

What a shame. So, for the foreseeable future, 3D will only be available at cinemas. I hope the U.S. cinema industry takes full advantage of this unexpected opportunity for however long it lasts.

Best and Happy Movie Going
Jim Lavorato

Sunday, February 20, 2011


I thought it would be informative and entertaining to publish a recurring post on financial and investment issues pertaining to the cinema industry.

So, starting in March, and monthly thereafter, the Cinema Mucho Gusto Moola Report will be posted. Highlighted on the Report will be the CMG Cinema Stock Index, timely commentary and analysis on the cinema industry, the "What's Hot/What's Not Trendsetter, and a wide variety of other moola related issues.

The Cinema Mucho Gusto Moola Report will launch on March 1st - look for it. It will be a lot like nothing else!


As a follow-up to my last post, I received an email from a cinema buddy, Michael Karagosian, who informed me that the Cinema Buying Group (CBG) was working hard to get their screen count up as the contract with Cinedigm (the company which acts as the middle man in the virtual print fee scheme) and the studios expires in 2012.

Michael, astutely, points out that the VPF equals the cost of the film print less the cost of the digital print. So, the cost of the digital print (under the VPF scheme) is the same as the cost of a film print, as long as the VPF is paid out. Therefore the more logical scenario would be that the "trigger" to eliminate film prints will be the end of the VPF scheme and not the end of Cinedigm's contract period.
Many thanks Michael.

Best and Happy Movie Going
Jim Lavorato

Saturday, February 19, 2011


Several clients, who attended the annual Drive-In Theatre Convention (which is held every February in Florida), called me to inquire about my take on the Cinema Buying Group (CBG) informing the Convention attendees that by the end of 2012 or thereabout, movies will only be available in digital format, and as such if drive-ins do not convert to D-Cinema they will effectively be out of business.

I did not attend the Drive-In Convention but am well aware of the CBG's scare tactics. First, the studios cannot pull the plug on film distribution. I'm not a corporate attorney but I believe that allowing only some folks access to your product (in this case movies) to the benefit of others is termed "restraint of trade" and is illegal.

However, for the sake of argument, let's say the studios do go only digital in 18 months. Well, the question then becomes why go with D-Cinema format. Why not let cinemas purchase inexpensive HD video projectors (priced in the $8-10,000 range) and distribute Blu-Ray DVDs for movie exhibition? OK, that's easy to figure. The studios and CBG want exhibitors to purchase a complicated, expensive, and controllable projection system (D-Cinema) because they want to maintain reign over movie distribution while reaping the benefits of a cheaper technology. They know that releasing movies to cinemas on DVDs - and there is no reason they can't be - they would lose distribution control. It's the old, have your cake and eat it too.

Exhibitors, especially independents, need to stand up. Forget about NATO fairly representing your interests, NATO is in the pocket of the studios. Let's face it, if it were just about cost savings the DVD scenario would prevail as this would save the studios and the industry even more.

The CBG.s fear tactics , revealed at the Drive-In Convention, are a throwback in today's market and price driven business environment. Why the CBG even exists is a bit of a mystery. The answer is probably a legal one as they function solely as a buffer between the exhibs and the distribs. Why don't the studios deal directly with exhibs. on the virtual print fee fiasco? Why have a middleman?

The fear factor is in full swing, don't get caught up in the rhetoric and hyperbole. The CGBs days are numbered and they are desperate. They are reminiscent of a county fair huckster or a late night infomercial announcer - "Don't be left behind. Step right up and get your D-Cinema system. It's easy, fun, free, and guarantees your cinema's survival.

It's the ShamWow spiel of the cinema industry - don't be conned. If it sound too good to be true, well, remember Bernie Madoff.